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Income Taxes | 12 Months Ended
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Sep. 26, 2025
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 26, 2025, September 27, 2024 and September 29, 2023 (in thousands):
| For the Years Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Current income tax expense from continuing operations: |  |  |  |  |
Federal | $ | 135,862 |  |  | $ | 102,702 |  |  | $ | 13,852 |
State | 40,445 |  |  | 46,881 |  |  | 16,825 |
Foreign | 138,015 |  |  | 100,421 |  |  | 142,177 |
Total current tax expense from continuing operations | $ | 314,322 |  |  | $ | 250,004 |  |  | $ | 172,854 |
Deferred income tax (benefit) expense from continuing operations: |  |  |  |  |
Federal | $ | (71,540) |  |  | $ | (99,686) |  |  | $ | (28,779) |
State | (21,809) |  |  | (32,068) |  |  | 4,534 |
Foreign | (5,418) |  |  | 13,243 |  |  | (47,273) |
Total deferred tax benefit from continuing operations | $ | (98,767) |  |  | $ | (118,511) |  |  | $ | (71,518) |
Consolidated income tax expense from continuing operations | $ | 215,555 |  |  | $ | 131,493 |  |  | $ | 101,336 |
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 26, 2025 and September 27, 2024 (in thousands):
| September 26, 2025 |  | September 27, 2024 (1)
Deferred tax assets: |  |  |
Other employee benefit plans | $ | 112,906 |  |  | $ | 110,377 |
Net operating losses | 207,377 |  |  | 259,335 |
Foreign tax credit | 38,989 |  |  | 42,394 |
Lease liability | 78,386 |  |  | 93,488 |
Capitalized research costs | 184,394 |  |  | 112,652 |
Unrealized foreign exchange loss | 11,244 |  |  | 11,891 |
Other | 32,693 |  |  | 10,178 |
Valuation allowance | (193,050) |  |  | (217,397) |
Gross deferred tax assets | 472,939 |  |  | 422,918 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (211,627) |  |  | (243,234) |
Lease right of use asset | (37,078) |  |  | (41,817) |
Defined benefit pension plans | (16,102) |  |  | (4,540) |
Hedge investments | (12,259) |  |  | (13,862) |
Unrealized foreign exchange gain | (947) |  |  | (12,598) |
Other | (20,933) |  |  | (28,116) |
Gross deferred tax liabilities | (298,946) |  |  | (344,167) |
Net deferred tax assets | $ | 173,993 |  |  | $ | 78,751 |
(1) Prior period amounts have been reclassified to conform with the current period presentation 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 $193.1 million and $217.4 million at September 26, 2025 and September 27, 2024, respectively. This change in the valuation allowances is primarily attributable t o a $24.2 million decrease resulting from the expiration and other adjustments of certain net operating losses and foreign tax credits and an offsetting elimination of their related valuation allowances. At September 26, 2025 and September 27, 2024, the Company's U.S. and international net operating loss carryforwards totaled $732.4 million and $915.6 million, resulting in a net operating loss deferred tax asset of $207.4 million and $259.3 million, respectively. The Company's net operating losses have various expiration periods between 2026 and indefinite periods. At September 26, 2025, the Company has foreign tax credit carryforwards of $39.0 million (which has a partial valuation allowance of $22.4 million) with $5.8 million expected to expire in 2026 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 26, 2025, September 27, 2024 and September 29, 2023 (dollars in thousands):
| For the Years Ended
| September 26, 2025 |  | % |  | September 27, 2024 |  | % |  | September 29, 2023 |  | %
Statutory amount | $ | 114,130 |  |  | 21.0 | % |  | $ | 163,230 |  |  | 21.0 | % |  | $ | 109,405 |  |  | 21.0 | %
State taxes, net of the federal benefit | 15,852 |  |  | 2.9 | % |  | 21,615 |  |  | 2.8 | % |  | 13,938 |  |  | 2.7 | %
Exclusion of tax on non-controlling interests | (880) |  |  | (0.2) | % |  | (5,230) |  |  | (0.7) | % |  | (5,461) |  |  | (1.0) | %
Foreign: |  |  |  |  |  |  |  |  |  |  |
Difference in tax rates of foreign operations | 11,458 |  |  | 2.1 | % |  | 17,891 |  |  | 2.3 | % |  | 4,583 |  |  | 0.9 | %
Expense/(Benefit) from foreign valuation allowance change | 415 |  |  | 0.1 | % |  | (27,780) |  |  | (3.6) | % |  | (1,305) |  |  | (0.3) | %
U.S. tax cost of foreign operations | 76,014 |  |  | 14.0 | % |  | 72,887 |  |  | 9.4 | % |  | 68,662 |  |  | 13.2 | %
Derecognition of deferred tax liabilities related to investment in Australian partnership | — |  |  | — | % |  | (61,614) |  |  | (7.9) | % |  | — |  |  | — | %
Other Includable Income | 1,344 |  |  | 0.2 | % |  | 25,952 |  |  | 3.3 | % |  | — |  |  | — | %
Tax differential on foreign earnings | 89,231 |  |  | 16.4 | % |  | 27,336 |  |  | 3.5 | % |  | 71,940 |  |  | 13.8 | %
Foreign tax credits | (48,885) |  |  | (9.0) | % |  | (33,402) |  |  | (4.3) | % |  | (36,180) |  |  | (6.9) | %
Tax Rate Change | 98 |  |  | — | % |  | (147) |  |  | — | % |  | (9,913) |  |  | (1.9) | %
Valuation allowance | 988 |  |  | 0.2 | % |  | 12,339 |  |  | 1.6 | % |  | (7,169) |  |  | (1.4) | %
Uncertain tax positions | 11,153 |  |  | 2.1 | % |  | (1,153) |  |  | (0.1) | % |  | (38,844) |  |  | (7.5) | %
Other items: |  |  |  |  |  |  |  |  |  |  |
Disallowed officer compensation | 5,157 |  |  | 0.9 | % |  | 5,394 |  |  | 0.7 | % |  | 7,081 |  |  | 1.4 | %
Research and Development Credit | (35,637) |  |  | (6.6) | % |  | (17,110) |  |  | (2.2) | % |  | (2,133) |  |  | (0.4) | %
Non-Deductible Incentive Compensation | 18,376 |  |  | 3.4 | % |  | 3,296 |  |  | 0.4 | % |  | 162 |  |  | — | %
Transaction Costs | 675 |  |  | 0.1 | % |  | 8,500 |  |  | 1.1 | % |  | 4 |  |  | — | %
Non-taxable mark-to-market Adjustment for Amentum investment | 51,989 |  |  | 9.6 | % |  | (39,255) |  |  | (5.1) | % |  | — |  |  | — | %
Other items – net | (6,692) |  |  | (1.2) | % |  | (13,920) |  |  | (1.8) | % |  | (1,494) |  |  | (0.3) | %
Total other items | 33,868 |  |  | 6.2 | % |  | (53,095) |  |  | (6.8) | % |  | 3,620 |  |  | 0.7 | %
Income taxes from continuing operations | $ | 215,555 |  |  | 39.7 | % |  | $ | 131,493 |  |  | 16.9 | % |  | $ | 101,336 |  |  | 19.5 | %
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 26, 2025, September 27, 2024 and September 29, 2023 (in thousands):
| For the Years Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
United States earnings | $ | 129,611 |  |  | $ | 333,902 |  |  | $ | 115,509 |
Foreign earnings | 413,866 |  |  | 443,384 |  |  | 405,466 |
| $ | 543,477 |  |  | $ | 777,286 |  |  | $ | 520,975 |
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 26, 2025, we had not recognized a deferred tax liability on approximately $191.1 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. On July 4, 2025, H.R. 1, also referred to as the “One Big Beautiful Bill Act” (“OBBBA”), was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Act, modifications to the international tax framework and pre-Tax Act treatment for certain business provisions. ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The most relevant impact to the Company for fiscal 2025 is the 100% bonus depreciation for qualified property placed in service after January 19, 2025. The Company is currently assessing its impact on the consolidated financial statements for the provisions that will be effective in future periods. 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 were effective for the fiscal year ended September 26, 2025. The Company is continually monitoring developments and evaluating the potential impacts. At this time, implementation of these rules has not generated a material impact on consolidated income taxes. 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 primary driver of the current year increase relates to uncertain tax positions on research and development credits and accrued liabilities, which is partially offset by the release of uncertain tax positions for which the statute of limitations expired or resolved through settlement during FY25. At September 26, 2025 and September 27, 2024, if recognized, $41.1 million and $27.1 million, respectively, would affect the Company’s consolidated effective income tax rate. The Company had $26.7 million and $22.6 million in accrued interest and penalties at September 26, 2025 and September 27, 2024, respectively. The Company estimates that, within twelve months, we may realize a decrease in our uncertain tax positions of approximately $6.6 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 United Kingdom, and the United States. As of September 26, 2025, the Company has certain U.S. tax returns open to audit in 2019 and 2021 through 2024. For jurisdictions outside the U.S., primarily UK and Australia, various tax returns remain open for audit for the years 2018 through 2024. 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 26, 2025, September 27, 2024 and September 29, 2023 (in thousands):
| For the Years Ended
| September 26, 2025 |  | September 27, 2024 |  | September 29, 2023
Balance, beginning of year | $ | 32,886 |  |  | $ | 32,319 |  |  | $ | 82,446 |
Additions based on tax positions related to the current year | 8,966 |  |  | 6,572 |  |  | 1,190 |
Additions for tax positions of prior years | 14,910 |  |  | 5,750 |  |  | 2,537 |
Reductions for tax positions of prior years | (2,941) |  |  | (272) |  |  | (52,046) |
Lapse in statute of limitations | (1,471) |  |  | (11,483) |  |  | (1,808) |
Settlements | — |  |  | — |  |  | — |
Balance, end of year | $ | 52,350 |  |  | $ | 32,886 |  |  | $ | 32,319 |

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