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Income Taxes
 12 Months Ended
Sep. 27, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table presents the components of our consolidated income taxes for continuing operations for years ended September 27, 2024, September 29, 2023 and September 30, 2022 (in thousands):
 For the Years Ended
 September 27, 2024September 29, 2023September 30, 2022
Current income tax expense (benefit) from continuing operations:   
Federal$102,702 $13,852 $(87,163)
State46,881 16,825 (6,529)
Foreign100,421 142,177 53,980 
Total current tax expense (benefit) from continuing operations250,004 172,854 (39,712)
Deferred income tax (benefit) expense from continuing operations:   
Federal(99,686)(28,779)49,093 
State(32,068)4,534 17,015 
Foreign13,243 (47,273)39,932 
Total deferred tax (benefit) expense from continuing operations(118,511)(71,518)106,040 
Consolidated income tax expense from continuing operations$131,493 $101,336 $66,328 
Deferred taxes reflect the tax effects of temporary differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
The following table presents the components of our net deferred tax (liabilities) assets at September 27, 2024 and September 29, 2023 (in thousands):
 September 27, 2024September 29, 2023
Deferred tax assets:  
Other employee benefit plans$110,377 $108,379 
Net operating losses259,335 265,377 
Foreign tax credit42,394 68,874 
Lease liability93,488 102,701 
Unrealized foreign exchange loss11,891 32,090 
Other10,178 1,993 
Valuation allowance(217,397)(199,892)
Gross deferred tax assets310,266 379,522 
Deferred tax liabilities:  
Depreciation and amortization(130,582)(242,366)
Lease right of use asset(41,817)(42,440)
Partnership investment— (61,614)
Hedge investments(13,862)(34,045)
Unrealized foreign exchange gain(12,598)(31,205)
Other(32,656)(36,252)
Gross deferred tax liabilities(231,515)(447,922)
Net deferred tax assets (liabilities)$78,751 $(68,400)
    
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. The Company's total valuation allowances were $217.4 million at September 27, 2024 and $199.9 million at September 29, 2023. This change in the valuation allowances is attributable primarily to a $10.3 million valuation allowance increase due to the change in the realizability of foreign tax credits, a $51.2 million increase due to a capital loss in Australia, offset by a $20.3 million valuation allowance decrease as a result of expiring foreign tax credits and a $26.0 million net operating loss utilization for other foreign assessable income, with an increase of $2.2 million related to various other items.
At September 27, 2024 and September 29, 2023, the Company's domestic and international net operating loss (NOL) carryforwards totaled $915.6 million and $918.7 million, resulting in an NOL deferred tax asset of $259.3 million and $265.4 million, respectively. The Company's net operating losses have various expiration periods between 2025 and indefinite periods. At September 27, 2024, the Company has foreign tax credit carryforwards of $42.4 million (which has a partial valuation allowance of $25.1 million) with $9.5 million expected to expire in 2025 and the remaining by 2033.
The following table reconciles total income tax expense from continuing operations using the statutory U.S. federal income tax rate to the consolidated income tax expense for continuing operations shown in the accompanying Consolidated Statements of Earnings for the years ended September 27, 2024, September 29, 2023 and September 30, 2022 (dollars in thousands):
 For the Years Ended
 September 27, 2024%September 29, 2023%September 30, 2022%
Statutory amount$163,230 21.0 %$109,405 21.0 %$100,274 21.0 %
State taxes, net of the federal benefit21,615 2.8 %13,938 2.7 %9,982 2.1 %
Exclusion of tax on non-controlling interests(5,230)(0.7)%(5,461)(1.0)%(6,871)(1.4)%
Foreign:    
Difference in tax rates of foreign operations17,891 2.3 %4,583 0.9 %(2,514)(0.5)%
(Benefit)/Expense from foreign valuation allowance change(27,780)(3.6)%(1,305)(0.3)%3,043 0.6 %
U.S. tax cost of foreign operations72,887 9.4 %68,662 13.2 %37,443 7.8 %
Derecognition of deferred tax liabilities related to investment in Australian partnership(61,614)(7.9)%— — %— — %
Other Includable Income25,952 3.3 %— — %— — %
Tax differential on foreign earnings27,336 3.5 %71,940 13.8 %37,972 7.9 %
Foreign tax credits(33,402)(4.3)%(36,180)(6.9)%(29,468)(6.2)%
Tax Rate Change(147)— %(9,913)(1.9)%3,210 0.7 %
Valuation allowance12,339 1.6 %(7,169)(1.4)%(59,121)(12.4)%
Uncertain tax positions(1,153)(0.1)%(38,844)(7.5)%(1,439)(0.3)%
Other items:
Disallowed officer compensation5,394 0.7 %7,081 1.4 %6,034 1.3 %
Research and Development Credit(17,110)(2.2)%(2,133)(0.4)%(1,952)(0.4)%
Transaction Costs8,500 1.1 %4 — %1,806 0.4 %
Non-taxable Mark-to-Market Adjustment for Amentum Investment(39,255)(5.1)%— — %— — %
Other items – net(10,624)(1.4)%(1,332)(0.3)%5,901 1.2 %
Total other items(53,095)(6.8)%3,620 0.7 %11,789 2.5 %
Income taxes from continuing operations$131,493 16.9 %$101,336 19.5 %$66,328 13.9 %
Note: Certain amounts have been reclassified to conform to the current year presentation.
The following table presents the components of our consolidated earnings from continuing operations before taxes for the years ended September 27, 2024, September 29, 2023 and September 30, 2022 (in thousands):
 For the Years Ended
 September 27, 2024September 29, 2023September 30, 2022
United States earnings$333,902 $115,509 $137,242 
Foreign earnings443,384 405,466 340,255 
 $777,286 $520,975 $477,497 

We do not record a deferred tax liability for unremitted earnings of our foreign subsidiaries to the extent that the earnings meet the indefinite reversal criteria. The decision as to the amount of unremitted earnings that we intend to maintain in non-U.S. subsidiaries considers items including, but not limited to, forecasts and budgets of financial needs of cash for working capital, liquidity plans, and expected cash requirements in the U.S. As of September 27, 2024, we had not recognized a deferred tax liability on approximately $194.4 million of undistributed earnings for certain foreign subsidiaries, because these earnings are intended to be indefinitely reinvested. If such earnings were distributed, some countries may impose additional taxes. The Company also has various long-term foreign currency denominated intercompany loans not anticipated to be settled in the foreseeable future, which are considered indefinitely reinvested as
they are viewed as part of the Company’s net investment in the subsidiary. The unrecognized deferred tax liability (the amount payable if distributed) for both the unremitted earnings and intercompany loans, which are indefinitely reinvested, is approximately $15.5 million.
In December 2021, the Organization for Economic Cooperation and Development “"OEC”") released the Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion “"GloBE”" rules), which were designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each jurisdiction in which they operate. Several jurisdictions in which we operate have enacted these rules, which are effective for the first quarter of the fiscal year ending September 26, 2025. The Company is continually monitoring developments and evaluating the potential impacts. At this time, the Company does not anticipate a material impact to income tax expense as a result of implementation of these rules.
The Company accounts for unrecognized tax benefits in accordance with ASC Topic 740, Income Taxes. It accounts for interest and penalties on unrecognized tax benefits as interest and penalties reported above the line (i.e., not as part of income tax expense). The main driver of the current year increase relates to uncertain tax positions on R&D credits, which is offset by the release of uncertain tax positions whose statute of limitation expired during FY24. At September 27, 2024 and September 29, 2023, if recognized, $27.1 million and $28.4 million, respectively, would affect the Company’s consolidated effective income tax rate. The Company had $22.6 million and $37.7 million in accrued interest and penalties at September 27, 2024 and September 29, 2023, respectively. The Company estimates that, within twelve months, we may realize a decrease in our uncertain tax positions of approximately $4.9 million as a result of concluding various tax audits and closing tax years.
The amount of income taxes the Company pays is subject to ongoing audits by tax jurisdictions around the world. In the normal course of business, the Company is subject to examination by taxing authorities worldwide, including such major jurisdictions as Australia, Canada, India, the Netherlands, the United Kingdom, and the United States. As of September 27, 2024, the Company has certain US tax returns open to audit from 2009 through 2011 and 2019 through 2023. For the jurisdictions outside the US, primarily UK and Australia, various returns are open for audit for tax years 2014 through 2023. Although the Company believes the reserves established for the tax positions are reasonable, the outcome of tax audits could be materially different, both favorably and unfavorably.
The following table presents the reconciliation of the beginning and ending amount of unrecognized tax benefits, for continuing operations, for the years ended September 27, 2024, September 29, 2023 and September 30, 2022 (in thousands):
 For the Years Ended
 September 27, 2024September 29, 2023September 30, 2022
Balance, beginning of year$32,319 $82,446 $107,186 
Acquisitions— — 192 
Additions based on tax positions related to the current year6,572 1,190 1,136 
Additions for tax positions of prior years5,750 2,537 1,207 
Reductions for tax positions of prior years(11,755)(53,854)(3,672)
Settlements— — (23,603)
Balance, end of year$32,886 $32,319 $82,446