Income Taxes

12 Months Ended

Oct. 03, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The (provision) benefit provision for income taxes consists of the following:

	For the years ended
(Amounts in millions)	October 3, 2025		September 27, 2024		September 29, 2023
Current income tax (provision):
Federal	$	(54)	$	(44)	$	(30)
State	(23)		(13)		(5)
Foreign	(26)		(18)		(9)
Total current income tax (provision)	(103)		(75)		(44)
Deferred income tax benefit (provision):
Federal	28		110		49
State	12		10		13
Foreign	7		(5)		1
Total deferred income tax benefit	47		115		63
(Provision) benefit for income taxes	$	(56)	$	40	$	19

The major elements contributing to the difference between the U.S. federal statutory rate and the effective tax rate are as follows:

	For the years ended
	October 3, 2025				September 27, 2024				September 29, 2023
(Dollars in millions)	Amount		%		Amount		%		Amount		%
Statutory Rate	$	(24)	21.0	%	$	26	21.0	%	$	72	21.0	%
State income tax, net of the federal benefit	(9)		7.8	%	(2)		(2.0)	%	7		2.2	%
Non-controlling interests	(2)		1.7	%	—		(0.2)	%	(2)		(0.5)	%
Goodwill impairment	—		—	%	—		—	%	(39)		(11.5)	%
Transaction costs	—		—	%	(1)		(0.8)	%	—		—	%
Stock-based compensation	—		—	%	(4)		(3.0)	%	—		—	%
Nontaxable or nondeductible items	(3)		2.6	%	1		0.4	%	—		(0.1)	%
Divestitures	(21)		18.2	%	—		—	%	—		—	%
Tax differential on foreign operations	(1)		0.9	%	(1)		(0.5)	%	(4)		(1.0)	%
Tax credits	5		(4.3)	%	5		4.6	%	2		0.6	%
Valuation allowance	(7)		6.1	%	16		13.0	%	(17)		(5.1)	%
Unrecognized tax benefits	5		(4.4)	%	—		—	%	—		—	%
Other	1		(0.9)	%	—		—	%	—		—	%
(Provision) benefit for income taxes	$	(56)	48.7	%	$	40	32.5	%	$	19	5.6	%

Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting and income tax purposes. The following table presents the components of Total deferred tax liabilities, net as October 3, 2025 and September 27, 2024:

	As of
(Amounts in millions)	October 3, 2025		September 27, 2024
Deferred tax assets:
Operating lease liabilities	$	55	$	60
Reserves	48		37
Accrued compensation and benefits	81		92
Interest expense	177		160
Foreign tax credit	9		27
Research expenditures	30		23
Net operating losses and capital losses	45		76
Other	15		11
Valuation allowance	(86)		(76)
Total deferred tax assets	374		410
Deferred tax liabilities:
Acquired intangible assets	(441)		(573)
Operating lease right-of-use assets	(51)		(58)
Property and equipment, net	(9)		(13)
Equity method and consolidated investments	(116)		(113)
Other	(17)		(18)
Total deferred tax liabilities	(634)		(775)
Total deferred tax liabilities, net	$	(260)	$	(365)

Total deferred tax liabilities, net consists of deferred tax liabilities of $260 million and $370 million as of October 3, 2025 and September 27, 2024, respectively, and a net deferred tax asset of $0 million and $5 million recorded within other long-term assets as of October 3, 2025 and September 27, 2024, respectively.

Included in net deferred tax assets are valuation allowances of $86 million and $76 million as of October 3, 2025 and September 27, 2024, respectively, primarily attributable to net operating losses and disallowed interest expense. The increase of

$10 million in valuation allowance for the year ended October 3, 2025 was primarily related to the recognition of valuation allowances related to disallowed interest in the United States. Valuation allowances are recorded to reduce deferred tax assets to the amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. We expect to realize the benefit of these deferred tax assets primarily through future reversals of our deferred tax liabilities. Although realization is not assured, we believe it is more likely than not that all deferred tax assets for which valuation allowances have not been established will be realized.

On July 4, 2025, the One Big, Beautiful Bill Act (“OBBBA”) was enacted, introducing several significant amendments to U.S. income tax legislation including the permanent restoration of EBITDA as the basis for computing business interest expense limitations and the immediate expensing of research expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have incorporated these amendments into our fiscal year 2025 income tax provision, as applicable, which impacted the realizability of our deferred tax assets and valuation allowance assessment.

We have approximately $45 million and $76 million of tax effected loss carryforwards related to the domestic and foreign income tax returns as of October 3, 2025 and September 27, 2024, respectively. The federal and foreign net operating losses have an indefinite carryforward. The state net operating loss carryforward will begin to expire in 2026. We also have $9 million of foreign tax credit carryforwards that will begin to expire in 2035, if unutilized.

We have not recognized a U.S. deferred tax liability for the outside basis differences of certain foreign subsidiaries because we have asserted that these earnings are permanently reinvested outside of the U.S. It is not practicable to determine the amount of the unrecognized deferred tax liability associated with these earnings.

We account for uncertain tax positions in accordance with ASC 740, Income Taxes, which prescribes the more likely than not threshold for recognition of a tax position in the financial statements.

The following table summarizes the activity related to unrecognized tax benefits:

(Amounts in millions)	Unrecognized Tax Benefits
Balance at September 30, 2022	$	15
Reductions for tax positions related to prior years	(1)
Balance at September 29, 2023	14
Additions for tax positions related to prior years	9
Reductions for tax positions related to prior years	(7)
Additions for tax positions related to current years	2
Lapse of statute of limitations	(5)
Settlements	(4)
Balance at September 27, 2024	9
Additions for tax positions related to current years	2
Lapse of statute of limitations	(5)
Balance at October 3, 2025	$	6

We file income tax returns in the U.S. and various foreign jurisdictions. With few exceptions, the statute of limitations for these jurisdictions is no longer open for audit or examination for the years before 2020 for federal income taxes in the U.S. and before 2016 with respect to various foreign jurisdictions. We are also subject to taxation in various states. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities.