Income Taxes

12 Months Ended

Sep. 28, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income (Loss) Before Income Taxes by Domestic and Foreign Subsidiaries

Income Before Income Taxes	2024		2023		2022
Domestic subsidiaries (including U.S. exports)	$	5,754	$	3,086	$	5,955
Foreign subsidiaries	1,815		1,683		(670)
Total income from continuing operations	7,569		4,769		5,285
Loss from discontinued operations	—		—		(62)
	$	7,569	$	4,769	$	5,223

Provision for Income Taxes: Current and Deferred

Income Tax Expense (Benefit)
Current	2024		2023		2022
Federal	$	1,393	$	1,475	$	436
State	237		402		282
Foreign, including foreign withholding taxes	973		867		846
	2,603		2,744		1,564
Deferred
Federal	(764)		(1,180)		407
State	54		4		26
Foreign	(97)		(189)		(265)
	(807)		(1,365)		168
Income tax expense on income from continuing operations	1,796		1,379		1,732
Income tax expense on loss from discontinued operations	—		—		(14)
	$	1,796	$	1,379	$	1,718

Deferred Tax Assets and Liabilities

Components of Deferred Tax (Assets) and Liabilities	September 28, 2024		September 30, 2023
Deferred tax assets
Net operating losses and tax credit carryforwards(1)	$	(3,444)	$	(3,841)
Accrued liabilities	(1,199)		(1,335)
Lease liabilities	(862)		(852)
Licensing revenues	(130)		(115)
Other	(655)		(623)
Total deferred tax assets	(6,290)		(6,766)
Deferred tax liabilities
Depreciable, amortizable and other property	6,584		7,581
Investment in U.S. entities(2)	1,102		1,271
Right-of-use lease assets	692		751
Investment in foreign entities	465		482
Other	78		81
Total deferred tax liabilities	8,921		10,166
Net deferred tax liability before valuation allowance	2,631		3,400
Valuation allowance	2,991		3,187
Net deferred tax liability	$	5,622	$	6,587

(1)Further details on our net operating losses and tax credit carryforwards are as follows:

	September 28, 2024
International Theme Park net operating losses	$	1,530
U.S. foreign tax credits	822
State net operating losses and tax credit carryforwards	533
Other	559
Total net operating losses and tax credit carryforwards(a)	$	3,444

(a)    Approximately $2.2 billion of these credits do not expire. Approximately $1.1 billion expire between fiscal 2026 and fiscal 2034, primarily consisting of U.S. foreign tax credits.

(2)Amounts are, in part, due to the tax status of these entities and if the tax status of certain legal entities changes, a significant portion of this balance may reverse.

The following table details the change in valuation allowance for fiscal 2024, 2023 and 2022 (in billions):

	Balance at Beginning of Period		Increases (Decreases) to Tax Expense		Other Changes		Balance at End of Period
Year ended September 28, 2024	$	3.2	$	(0.3)	$	0.1	$	3.0
Year ended September 30, 2023	2.9		0.2		0.1		3.2
Year ended October 1, 2022	2.8		0.4		(0.3)		2.9

Reconciliation of the effective income tax rate for continuing operations to the federal rate

	2024		2023		2022
Federal income tax rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit(1)	2.2		5.8		3.1
Non-tax deductible impairments	8.8		3.5		—
Foreign derived intangible income	(3.6)		(4.3)		(3.4)
Income tax audits and reserves	(2.4)		1.3		2.7
Tax rate differential on foreign income	(1.6)		0.1		4.3
U.S. research and development credits	(1.1)		(1.1)		(0.6)
Tax impact of equity awards	0.8		2.1		—
Valuation allowance	(0.6)		(1.8)		4.5
Legislative changes	—		—		1.7
Other	0.2		2.3		(0.5)
	23.7	%	28.9	%	32.8	%

(1)Fiscal 2023 includes an adjustment related to certain deferred state taxes

Unrecognized tax benefits

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

	2024		2023		2022
Balance at the beginning of the year	$	2,517	$	2,449	$	2,641
Increases for current year tax positions	82		98		48
Increases for prior year tax positions	209		273		103
Decreases in prior year tax positions	(423)		(144)		(98)
Settlements with taxing authorities	(239)		(153)		(235)
Lapse in statute of limitations	(194)		(6)		(10)
Balance at the end of the year	$	1,952	$	2,517	$	2,449

Balances at September 28, 2024, September 30, 2023 and October 1, 2022 include $1.4 billion, $1.8 billion and $1.9 billion, respectively, that if recognized, would reduce our income tax expense and effective tax rate. These amounts are net of the offsetting benefits from other tax jurisdictions.

At September 28, 2024, September 30, 2023 and October 1, 2022 accrued interest and penalties related to unrecognized tax benefits were $0.9 billion, $1.0 billion and $1.0 billion, respectively. During fiscal 2024, 2023 and 2022, the Company recorded additional interest and penalties of $157 million, $210 million and $157 million, respectively, and recorded reductions in accrued interest and penalties of $151 million, $241 million and $119 million, respectively. The Company’s policy is to report interest and penalties as a component of income tax expense.

The Company is generally no longer subject to U.S. federal examination for years prior to 2018. The Company is no longer subject to examination in any of its major state or foreign tax jurisdictions for years prior to 2008.

In the next twelve months, it is reasonably possible that our unrecognized tax benefits could change due to the resolution of open tax matters, which would reduce our unrecognized tax benefits by $0.9 billion.

Other

In fiscal 2024 and 2023, the Company recognized income tax expense of $55 million and $93 million, respectively, for the shortfall between equity-based compensation deductions and amounts recorded based on the grant date fair value. In fiscal

2022, the Company recognized income tax benefits of $2 million for the excess of equity-based compensation deductions over amounts recorded based on the grant date fair value.