Accounting Policy on Income Taxes
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

Source: 10-K (filing date: 2019-11-20).

Walt Disney Co., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended	Sep 28, 2019		Sep 29, 2018		Sep 30, 2017		Oct 1, 2016		Oct 3, 2015		Sep 27, 2014
	Federal
	State
	Foreign
	Current
	Federal
	State
	Foreign
	Deferred
	Income taxes from continuing operations

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Walt Disney Co.’s current decreased from 2017 to 2018 and from 2018 to 2019.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Walt Disney Co.’s deferred decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Income taxes from continuing operations	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Walt Disney Co.’s income taxes from continuing operations decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Walt Disney Co., effective income tax rate (EITR) reconciliation

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	Federal income tax rate
	State taxes, net of federal benefit
	Foreign derived income
	Domestic production activity deduction
	Earnings in jurisdictions taxed at rates different from the statutory U.S. federal rate
	Disneyland Paris recapitalization
	Other, including tax reserves and related interest
	Effective income tax rate, before Tax Act
	Tax Act
	Effective income tax rate

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Item	Description	The company
Effective income tax rate, before Tax Act	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Walt Disney Co.’s effective income tax rate, before Tax Act decreased from 2017 to 2018 and from 2018 to 2019.

Walt Disney Co., components of deferred tax assets and liabilities

US$ in millions

		Sep 28, 2019		Sep 29, 2018		Sep 30, 2017		Oct 1, 2016		Oct 3, 2015		Sep 27, 2014
	Net operating losses and tax credit carryforwards
	Accrued liabilities
	Foreign subsidiaries
	Other
	Deferred tax assets before valuation allowance
	Valuation allowance
	Deferred tax assets
	Depreciable, amortizable and other property
	Investment in U.S. entities
	Licensing revenues
	Investment in foreign entities
	Other
	Deferred tax liabilities
	Net deferred tax asset (liability)

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Item	Description	The company
Deferred tax assets before valuation allowance	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Walt Disney Co.’s deferred tax assets before valuation allowance decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Walt Disney Co.’s deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Net deferred tax asset (liability)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Walt Disney Co.’s net deferred tax asset (liability) increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Walt Disney Co., deferred tax assets and liabilities, classification

US$ in millions

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	Current deferred tax assets
	Non-current deferred tax liabilities

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Item	Description	The company
Non-current deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Walt Disney Co.’s non-current deferred tax liabilities decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Walt Disney Co., adjustments to financial statements

US$ in millions

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Disney Shareholder’s Equity
	Total Disney Shareholder’s equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Disney Shareholder’s equity (adjusted)
	Adjustment to Net Income Attributable To The Walt Disney Company (Disney)
	Net income attributable to The Walt Disney Company (Disney) (as reported)
	Add: Deferred income tax expense (benefit)
	Net income attributable to The Walt Disney Company (Disney) (adjusted)

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Walt Disney Co., Financial Data: Reported vs. Adjusted

Walt Disney Co., adjusted financial ratios

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Walt Disney Co.’s adjusted current ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Walt Disney Co.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walt Disney Co.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Walt Disney Co.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Walt Disney Co.’s adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Walt Disney Co.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Walt Disney Co., Financial Ratios: Reported vs. Adjusted

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Current assets
	Current liabilities
	Liquidity Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted current assets
	Current liabilities
	Liquidity Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Walt Disney Co.’s adjusted current ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income attributable to The Walt Disney Company (Disney)
	Revenues
	Profitability Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income attributable to The Walt Disney Company (Disney)
	Revenues
	Profitability Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

¹ Net profit margin = 100 × Net income attributable to The Walt Disney Company (Disney) ÷ Revenues
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income attributable to The Walt Disney Company (Disney) ÷ Revenues
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Walt Disney Co.’s adjusted net profit margin ratio improved from 2017 to 2018 and from 2018 to 2019.

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Revenues
	Total assets
	Activity Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Revenues
	Adjusted total assets
	Activity Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Walt Disney Co.’s adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Total Disney Shareholder’s equity
	Solvency Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted total assets
	Adjusted total Disney Shareholder’s equity
	Solvency Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

¹ Financial leverage = Total assets ÷ Total Disney Shareholder’s equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Disney Shareholder’s equity
= hidden ÷ hidden = hidden

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Walt Disney Co.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income attributable to The Walt Disney Company (Disney)
	Total Disney Shareholder’s equity
	Profitability Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income attributable to The Walt Disney Company (Disney)
	Adjusted total Disney Shareholder’s equity
	Profitability Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

¹ ROE = 100 × Net income attributable to The Walt Disney Company (Disney) ÷ Total Disney Shareholder’s equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income attributable to The Walt Disney Company (Disney) ÷ Adjusted total Disney Shareholder’s equity
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Walt Disney Co.’s adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

		Sep 28, 2019	Sep 29, 2018	Sep 30, 2017	Oct 1, 2016	Oct 3, 2015	Sep 27, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income attributable to The Walt Disney Company (Disney)
	Total assets
	Profitability Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income attributable to The Walt Disney Company (Disney)
	Adjusted total assets
	Profitability Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-11-20), 10-K (filing date: 2018-11-21), 10-K (filing date: 2017-11-22), 10-K (filing date: 2016-11-23), 10-K (filing date: 2015-11-25), 10-K (filing date: 2014-11-19).

2019 Calculations

¹ ROA = 100 × Net income attributable to The Walt Disney Company (Disney) ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income attributable to The Walt Disney Company (Disney) ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Walt Disney Co.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

	Walt Disney Co.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Analysis of Financial Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis of Components of Financial Statements
Financial Reporting Quality

Walt Disney Co. (DIS)

Analysis of Income Taxes

Accounting Policy on Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Walt Disney Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Walt Disney Co., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)