Income Taxes (Tables)

12 Months Ended

Aug. 28, 2021

Income Taxes

Components of Income from Continuing Operations

The components of income from continuing operations before income taxes are as follows:

		Year Ended
	August 28,		August 29,		August 31,
(in thousands)	2021		2020		2019
Domestic	$	2,436,548	$	1,960,320	$	1,745,625
International		312,642		256,194		285,708
	$	2,749,190	$	2,216,514	$	2,031,333

Provision for Income Tax Expense

The provision for income tax expense consisted of the following:

	Year Ended
	August 28,		August 29,		August 31,
(in thousands)	2021		2020		2019
Current:
Federal	$	438,686	$	324,156	$	274,504
State		79,271		47,880		45,457
International		95,351		60,429		59,100
		613,308		432,465		379,061
Deferred:
Federal		(21,366)		43,706		25,757
State		(1,707)		12,544		6,914
International		(11,359)		(5,173)		2,380
		(34,432)		51,077		35,051
Income tax expense	$	578,876	$	483,542	$	414,112

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows:

	Year Ended
	August 28,		August 29,		August 31,
(in thousands)	2021		2020		2019
Federal tax at statutory U.S. income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net	2.2	%	2.2	%	2.0	%
Share-based compensation	(1.7)	%	(0.7)	%	(1.8)	%
Impact of tax reform	—		—		(0.4)	%
Global intangible lower-taxed income ("GILTI")	0.8	%	1.0	%	1.3	%
Foreign Tax Credits	(1.7)	%	(1.1)	%	(1.1)	%
Other	0.5	%	(0.6)	%	(0.6)	%
Effective tax rate	21.1	%	21.8	%	20.4	%

Significant Components of Company's Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities were as follows:

	August 28,		August 29,
(in thousands)	2021		2020
Deferred tax assets:
Net operating loss and credit carryforwards	$	41,825	$	41,437
Accrued benefits		126,086		88,226
Operating lease liabilities		646,938		617,002
Other		69,340		69,788
Total deferred tax assets		884,189		816,453
Valuation allowances		(31,098)		(28,373)
Net deferred tax assets		853,091		788,080
Deferred tax liabilities:
Property and equipment		(185,985)		(173,696)
Inventory		(316,736)		(298,585)
Prepaid expenses		(28,676)		(55,827)
Operating lease assets		(609,336)		(581,381)
Other		(8,440)		(4,934)
Deferred tax liabilities		(1,149,173)		(1,114,423)
Net deferred tax liabilities	$	(296,082)	$	(326,343)

Reconciliation of Unrecognized Tax Benefits

At August 28, 2021 and August 29, 2020, the Company had a valuation allowance of $31.1 million and $28.4 million, respectively, on deferred tax assets associated with NOL and tax credit carryforwards for which management has determined it is more likely than not that the deferred tax asset will not be realized. Management believes it is more likely than not that the remaining deferred tax assets will be fully realized.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	August 28,		August 29,
(in thousands)	2021		2020
Beginning balance	$	31,942	$	30,892
Additions based on tax positions related to the current year		10,806		8,512
Additions for tax positions of prior years		4,009		946
Reductions for tax positions of prior years		(886)		(4,124)
Reductions due to settlements		(2,204)		—
Reductions due to statute of limitations		(3,870)		(4,284)
Ending balance	$	39,797	$	31,942