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Income Taxes | 12 Months Ended
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Sep. 27, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The domestic and foreign components of Loss before income taxes are as follows:
| For the years ended
(Amounts in millions) | September 27, 2024 |  | September 29, 2023 |  | September 30, 2022
Domestic | $ | (328) |  |  | $ | (526) |  |  | $ | (213) |
Foreign | 205 |  |  | 186 |  |  | 149 |
Loss before income taxes | $ | (123) |  |  | $ | (340) |  |  | $ | (64) |
The Benefit (provision) for income taxes consists of the following:
| For the years ended
(Amounts in millions) | September 27, 2024 |  | September 29, 2023 |  | September 30, 2022
Current income tax (provision): |  |  |  |  |
Federal | $ | (44) |  |  | $ | (30) |  |  | $ | (3) |
State | (13) |  |  | (5) |  |  | (8) |
Foreign | (18) |  |  | (9) |  |  | (10) |
Total current income tax (provision) | (75) |  |  | (44) |  |  | (21) |
Deferred income tax benefit (provision): |  |  |  |  |
Federal | 110 |  |  | 49 |  |  | 9 |
State | 10 |  |  | 13 |  |  | (4) |
Foreign | (5) |  |  | 1 |  |  | 2 |
Total deferred income tax benefit | 115 |  |  | 63 |  |  | 7 |
Benefit (provision) for income taxes | $ | 40 |  |  | $ | 19 |  |  | $ | (14) |
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
| September 27, 2024 |  | September 29, 2023 |  | September 30, 2022
(Dollars in millions) | Amount |  | % |  | Amount |  | % |  | Amount |  | %
Statutory Rate | $ | 26 |  |  | 21.0 | % |  | $ | 72 |  |  | 21.0 | % |  | $ | 13 |  |  | 21.0 | %
State income tax, net of the federal benefit | (2) |  |  | (2.0) | % |  | 7 |  |  | 2.2 | % |  | (10) |  |  | (15.5) | %
Non-controlling interests | — |  |  | (0.2) | % |  | (2) |  |  | (0.5) | % |  | 1 |  |  | 2.0 | %
Goodwill impairment | — |  |  | — | % |  | (39) |  |  | (11.5) | % |  | (23) |  |  | (35.3) | %
Transaction costs | (1) |  |  | (0.8) | % |  | — |  |  | — | % |  | (1) |  |  | (2.1) | %
Equity-based compensation | (4) |  |  | (3.0) | % |  | — |  |  | — | % |  | — |  |  | — | %
Nontaxable or nondeductible items | 1 |  |  | 0.4 | % |  | — |  |  | (0.1) | % |  | 1 |  |  | 0.4 | %
Tax differential on foreign operations | (1) |  |  | (0.5) | % |  | (4) |  |  | (1.0) | % |  | — |  |  | (0.1) | %
Tax credits | 5 |  |  | 4.6 | % |  | 2 |  |  | 0.6 | % |  | 1 |  |  | 1.8 | %
Valuation allowance | 16 |  |  | 13.0 | % |  | (17) |  |  | (5.1) | % |  | 4 |  |  | 5.9 | %
Benefit (provision) for income taxes | $ | 40 |  |  | 32.5 | % |  | $ | 19 |  |  | 5.6 | % |  | $ | (14) |  |  | (21.9) | %
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 September 27, 2024 and September 29, 2023:
|  | As of |  |
(Amounts in millions) |  | September 27, 2024 |  | September 29, 2023 |  |
Deferred tax assets: |  |  |  |  |  |
Operating lease liabilities |  | $ | 60 |  |  | $ | 52 |  |  |
Reserves |  | 37 |  |  | 36 |  |  |
Accrued compensation and benefits |  | 92 |  |  | 45 |  |  |
Interest expense |  | 160 |  |  | 97 |  |  |
Foreign tax credit |  | 27 |  |  | 35 |  |  |
Research expenditures |  | 23 |  |  | 12 |  |  |
Net operating losses and capital losses |  | 76 |  |  | 33 |  |  |
Other |  | 11 |  |  | 10 |  |  |
Valuation allowance |  | (76) |  |  | (51) |  |  |
Total deferred tax assets |  | 410 |  |  | 269 |  |  |
Deferred tax liabilities: |  |  |  |  |  |
Acquired intangible assets |  | (573) |  |  | (220) |  |  |
Operating lease right-of-use assets |  | (58) |  |  | (51) |  |  |
Property and equipment, net |  | (13) |  |  | (14) |  |  |
Equity method and consolidated investments |  | (113) |  |  | (83) |  |  |
Other |  | (18) |  |  | (37) |  |  |
Total deferred tax liabilities |  | (775) |  |  | (405) |  |  |
Total deferred tax liabilities, net |  | (365) |  |  | (136) |  |  |
Total deferred tax liabilities, net consists of deferred tax liabilities of $370 million and $141 million as of September 27, 2024 and September 29, 2023, respectively, and a net deferred tax asset of $5 million and $5 million recorded within other long-term assets as of September 27, 2024 and September 29, 2023, respectively. Included in net deferred tax assets are valuation allowances of $76 million and $51 million as of September 27, 2024 and September 29, 2023, respectively, primarily attributable to net operating losses, capital losses, and disallowed interest expense. The increase of $25 million in valuation allowance for the year ended September 27, 2024 was primarily related to the recognition of valuation allowances for capital loss and net operating losses recorded through acquisition accounting, partially offset by the release of a portion of the valuation allowance 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. We have approximately $76 million and $33 million of tax effected loss carryforwards related to the domestic and foreign income tax returns as of September 27, 2024 and September 29, 2023, respectively. The federal and foreign net operating losses have an indefinite carryforward and the federal capital losses have a five year carryforward. The state net operating loss carryforward will begin to expire in 2025. We also have $27 million of foreign tax credit carryforwards that will begin to expire in 2030, if unutilized. 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 amount of unrecognized tax benefits as of September 27, 2024 and September 29, 2023 was $9 million and $14 million, respectively. 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 |
We file income tax returns in numerous tax jurisdictions, including the U.S., and numerous states and foreign jurisdictions around the world. The statute of limitations varies by jurisdiction in which the Company operates. The statute of limitations is open for U.S. federal income tax returns and certain other foreign tax authorities for years 2015 through 2024. The statute of limitations for state income tax returns is open for years 2019 through 2024, with certain exceptions.

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