Western Digital 2001 Annual Report Download - page 57

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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Note 5. Income Taxes
The domestic and international components of net income (loss) before income taxes are as follows (in
thousands):
1999 2000 2001
United StatesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(399,006) $(214,316) $(114,817)
International ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (93,684) 6,800 15,954
Net loss excluding income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(492,690) $(207,516) $ (98,863)
The components of the provision (beneÑt) for income taxes are as follows (in thousands):
1999 2000 2001
Current
United StatesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (3,519) $ (15,302) $ (1,800)
International ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,352 2,623 1,620
State ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 167 179 180
Ì (12,500) Ì
Deferred, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (7,000) Ì
Provision (beneÑt) for income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ (19,500) $ Ì
The tax beneÑts associated with employee exercises of non-qualiÑed stock options, disqualifying
dispositions of stock acquired with incentive stock options, and disqualifying dispositions of stock acquired
under the employee stock purchase plan reduced taxes currently payable. However, no tax beneÑts were
recorded to additional paid-in capital in 1999, 2000 and 2001 because their realization was not more likely
than not to occur and, consequently, a valuation allowance was recorded against the entire beneÑt.
During 2000, the Company reversed $19.5 million of tax accruals and certain deferred tax amounts.
These accruals were previously established over time and primarily related to unremitted income of foreign
subsidiaries. However, based upon a review of the Company's tax positions after the substantial international
operations restructurings in 2000, and due to the signiÑcant balances of net operating losses in recent years, the
Company believed these accruals were no longer necessary.
Income tax payments amounted to $5.5 million, $4.6 million and $1.5 million in 1999, 2000 and 2001,
respectively.
47