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Income Taxes
 12 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The domestic and foreign pretax income from continuing operations is as follows:
Fiscal Year Ended September 30,
202520242023
(in millions)
Domestic$137 $67 $218 
Foreign353 534 391 
Income before income taxes$490 $601 $609 
Current and deferred income tax expense provided are as follows:
Fiscal Year Ended September 30,
202520242023
(in millions)
Federal:
Current$33 $26 $36 
Deferred(28)(45)(5)
Foreign:
Current (a)163 137 128 
Deferred(62)3 (3)
U.S. State:
Current14 8 19 
Deferred— (6)(5)
Income tax expense$120 $123 $170 
______________________________________
(a)Includes withholding taxes of $46 million, $28 million and $38 million for the fiscal years ended September 30, 2025, 2024 and 2023, respectively.
The differences between the U.S. federal statutory income tax rate of 21.0% for each of the fiscal years ended September 30, 2025, 2024 and 2023 and income taxes provided are as follows:
Fiscal Year Ended September 30,
202520242023
(in millions)
Taxes on income at the U.S. federal statutory rate$103 $126 $128 
U.S. state and local taxes6 1 12 
Foreign income taxed at different rates, including withholding taxes
22 29 33 
Valuation allowance
26 — (5)
Change in tax rates— 3 — 
GILTI and FDII
(4)(3)(4)
Federal research and development credits(2)(3)(8)
Uncertain tax positions2 (3)7 
Non-deductible compensation
7 11 8 
Wind down of O&O media properties
— (17)— 
Return to provision adjustments
(5)(15)4 
Nontaxable income from partnerships
(1)(9)(1)
Change in indefinite reinvestment assertion
(34)3 — 
Other— — (4)
Total income tax expense
$120 $123 $170 

During the fiscal year ended September 30, 2025, the Company recognized a tax benefit of $37 million due to impairment and held for sale designation of its EMP business. $14 million of this benefit was recognized as a result of change in indefinite reinvestment assertion, for which the Company established a deferred tax asset of $38 million with a valuation allowance of $24 million. During the fiscal year ended September 30, 2024, the Company recognized a tax benefit of $15 million primarily related
to change in prior year estimate for allowable costs for reported foreign derived intangible income. During the fiscal year ended September 30, 2023, the Company recognized a tax benefit of $8 million related to Federal research and development credits, which was partially offset by $7 million of income tax expense arising from an increase in uncertain tax positions in various jurisdictions.
For the fiscal years ended September 30, 2025 and September 30, 2024, the Company incurred losses in certain foreign territories and has offset the tax benefit associated with these losses with a valuation allowance as the Company has determined that it is more likely than not that these losses will not be utilized. Significant components of the Company’s net deferred tax liabilities are summarized below:
September 30,
2025		September 30,
2024
(in millions)
Deferred tax assets:
Allowance and reserves$26 $27 
Employee benefits and compensation82 80 
Other accruals66 45 
Property, plant and equipment61 61 
Operating lease liabilities62 69 
Tax attribute carryforwards74 62 
Deferred revenue and debt9 14 
Investment in subsidiaries
27 — 
Total deferred tax assets407 358 
Less: Valuation allowance(51)(25)
Deferred tax assets, net of valuation allowance356 333 
Deferred tax liabilities:
Royalty advances(52)(34)
Operating lease right-of-use assets(49)(57)
Accrued royalties(50)(52)
Intangible assets(236)(284)
Debt and other(22)(49)
Total deferred tax liabilities(409)(476)
Net deferred tax liabilities$(53)$(143)
At September 30, 2025, the Company has no remaining U.S. federal tax net operating loss carryforwards and $21 million tax net operating loss carryforwards in U.S. state and local jurisdictions that expire in various periods. The Company also has tax net operating loss carryforwards, with no expiration date, in France and the United Kingdom of $1 million and $4 million, respectively, and other tax net operating loss carryforwards in foreign jurisdictions that expire in various periods.
Deferred income taxes have not been recorded on indefinitely reinvested earnings of certain foreign subsidiaries of approximately $1 billion at September 30, 2025. Distribution of these earnings may result in foreign withholding taxes and U.S. state taxes. However, variables existing if and when remittance occurs make it impracticable to estimate the amount of the ultimate tax liability, if any, on these accumulated foreign earnings.
The Company classifies interest and penalties related to uncertain tax position as a component of income tax expense. As of September 30, 2025 and September 30, 2024, the Company had accrued $2 million and $1 million of interest and penalties, respectively.
The following table reflects changes in the gross unrecognized tax benefits:
Fiscal Year Ended September 30,
202520242023
(in millions)
Gross unrecognized tax benefits - beginning of period$10 $13 $8 
Additions for current year tax positions2 2 3 
Additions for prior year tax positions1 — 9 
Subtractions for prior year tax positions(1)(3)(7)
Settlements— (2)— 
Gross unrecognized tax benefits - end of period$12 $10 $13 
Included in the total unrecognized tax benefits at September 30, 2025 and September 30, 2024 are $14 million and $11 million, respectively, that if recognized, would reduce the effective income tax rate. The Company has determined that it is reasonably possible that the gross unrecognized tax benefits as of September 30, 2025 could decrease by up to approximately $2 million related to various ongoing audits and settlement discussions in various foreign jurisdictions during the next twelve months.
The Company and its subsidiaries file income tax returns in the U.S. and various foreign jurisdictions. The Company has completed tax audits in the U.S. for tax years ended through September 30, 2013, in the UK for the tax years ended through September 30, 2020, in Germany for the tax years ended through September 30, 2019 and in France for the tax years ended through September 30, 2018. The Company is at various stages in the tax audit process in certain foreign and local jurisdictions.
The Organization Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, have enacted legislation as of January 1, 2025 and others are expected to enact legislation in the next few years. The Company has evaluated the potential impact of the rules based on the most recently available information. For the fiscal year ended September 30, 2025, the impact on the Company was immaterial. The Company will continue to monitor legislative developments to determine if there are significant changes to Pillar 2 rules that could lead to a material impact.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act, which introduces a wide-ranging set of tax reform provisions. These provisions are scheduled to take affect beginning in our fiscal year 2026. The Company is currently evaluating the potential impact of this law. The most significant and beneficial provisions to the Company include changes to the business interest expense deduction limitation, restored expensing for domestic research and development costs, and changes to GILTI.