v3.24.3
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
202420232022
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)
Current202420232022
Federal$1,393  $1,475  $436  
State237  402  282  
Foreign, including foreign withholding taxes
973  867  846  
2,603  2,744  1,564  
Deferred
Federal(764) (1,180) 407  
State54  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 LiabilitiesSeptember 28, 2024September 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 property6,584  7,581  
Investment in U.S. entities(2)
1,102  1,271  
Right-of-use lease assets
692  751  
Investment in foreign entities465  482  
Other78  81  
Total deferred tax liabilities8,921  10,166  
Net deferred tax liability before valuation allowance2,631  3,400  
Valuation allowance2,991  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 credits822  
State net operating losses and tax credit carryforwards533  
Other559  
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 ChangesBalance 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
202420232022
Federal income tax rate21.0  % 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 
Other0.2 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:
202420232022
Balance at the beginning of the year$2,517  $2,449  $2,641  
Increases for current year tax positions82  98  48  
Increases for prior year tax positions209  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.