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Income Taxes (Tables)

12 Months Ended

Oct. 01, 2022


Income (Loss) Before Income Taxes	2022		2021		2020

Domestic subsidiaries (including U.S. exports)	$	5,955	$	5,241	$	4,706
Foreign subsidiaries(1)	(670)		(2,680)		(6,449)
Total income (loss) from continuing operations	5,285		2,561		(1,743)
Loss from discontinued operations	(62)		(38)		(42)
	$	5,223	$	2,523	$	(1,785)

(1) Includes goodwill and intangible asset impairment in fiscal 2020.

Income Tax Expense (Benefit)


Income Tax Expense (Benefit)
Current	2022		2021		2020
Federal	$	436	$	594	$	95
State	282		129		148
Foreign(1)	846		554		731
	1,564		1,277		974
Deferred
Federal	407		(526)		279
State	26		(220)		(29)
Foreign	(265)		(506)		(525)
	168		(1,252)		(275)
Income tax expense from continuing operations	1,732		25		699
Income tax expense from discontinued operations	(14)		(9)		(10)
	$	1,718	$	16	$	689

(1)Includes foreign withholding taxes.

Schedule of Deferred Tax Assets and Liabilities


Components of Deferred Tax (Assets) and Liabilities	October 1, 2022		October 2, 2021

Deferred tax assets
Net operating losses and tax credit carryforwards(1)	$	(3,527)	$	(3,944)
Accrued liabilities	(1,570)		(2,544)
Lease liabilities	(748)		(764)
Licensing revenues	(124)		(80)
Other	(819)		(725)
Total deferred tax assets	(6,788)		(8,057)
Deferred tax liabilities
Depreciable, amortizable and other property	8,575		7,916
Investment in U.S. entities	1,798		2,653
Right-of-use assets	676		697

Investment in foreign entities	543		392

Other	64		164
Total deferred tax liabilities	11,656		11,822
Net deferred tax liability before valuation allowance	4,868		3,765
Valuation allowance	2,859		2,795
Net deferred tax liability	$	7,727	$	6,560

(1)Balances as of October 1, 2022 and October 2, 2021 include approximately $1.5 billion and $1.6 billion, respectively, of International Theme Park net operating losses and approximately $1.0 billion at both October 1, 2022 and October 2, 2021 of foreign tax credits in the U.S. The International Theme Park net operating losses are primarily in France and, to a lesser extent, Hong Kong and China. Losses in France and Hong Kong have an indefinite carryforward period and losses in China have a five-year carryforward period. China theme park net operating losses of $0.2 billion may expire between fiscal 2023 and fiscal 2028. Foreign tax credits in the U.S. have a ten-year carryforward period. Foreign tax credits of $1.0 billion may expire beginning fiscal 2026.

Summary of Valuation Allowance

The following table details the change in valuation allowance for fiscal 2022, 2021 and 2020 (in billions):


	Balance at Beginning of Period		Charges to Tax Expense		Other Changes		Balance at End of Period
Year ended October 1, 2022	$	2.8	$	0.4	$	(0.3)	$	2.9
Year ended October 2, 2021	2.4		0.4		—		2.8
Year ended October 3, 2020	1.9		0.6		(0.1)		2.4

Reconciliation of Effective Income Tax Rate to Federal Rate


	2022		2021		2020(1)
Federal income tax rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit	3.1		1.9		4.3
Tax rate differential on foreign income	4.3		12.0		(16.5)
Foreign derived intangible income	(3.4)		(6.4)		—

Excess tax benefits from equity awards	—		(5.3)		3.7
Legislative changes	1.7		(12.2)		4.4
Income tax audits and reserves	2.7		(4.8)		(6.1)
Goodwill impairment	—		—		(41.1)
Valuation allowance	4.5		2.6		(14.6)
Other	(1.1)		(7.8)		4.8
	32.8	%	1.0	%	(40.1	%)

(1)In fiscal 2020, the Company had a pre-tax loss. Positive amounts reflect tax benefits, whereas negative amounts reflect tax expense.

Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits, Excluding Related Accrual for Interest

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding the related accrual for interest, is as follows:


	2022		2021		2020
Balance at the beginning of the year	$	2,641	$	2,740	$	2,952

Increases for current year tax positions	48		51		26
Increases for prior year tax positions	103		556		168
Decreases in prior year tax positions	(108)		(174)		(99)
Settlements with taxing authorities	(235)		(532)		(307)
Balance at the end of the year	$	2,449	$	2,641	$	2,740