Western Digital 2012 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2012 Western Digital annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Deferred Taxes
Temporary differences and carryforwards, which give rise to a significant portion of deferred tax assets and
liabilities as of June 29, 2012 and July 1, 2011 were as follows (in millions):
2012 2011
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible ............... $ 61 $ 51
Accrued compensation and benefits not currently deductible .................... 166 69
Domestic net operating loss carryforward ................................... 112 49
Business credit carryforward ............................................. 154 145
Other .............................................................. 90 53
Total deferred tax assets ................................................ 583 367
Deferred tax liabilities:
Depreciation ......................................................... (191) (116)
Other .............................................................. (18) (10)
Total deferred tax liabilities ............................................. (209) (126)
Valuation allowances .................................................. (40) —
Deferred tax assets, net ............................................... $334 $241
2012 2011
Deferred tax assets:
Current portion (included in other current assets) ............................. $159 $108
Non-current portion (included in other non-current assets) ..................... 424 259
Total deferred tax assets ................................................ 583 367
Deferred tax liabilities:
Current portion (included in other current assets) ............................. (3) (2)
Non-current portion (included in other non-current assets) ..................... (206) (124)
Total deferred tax liabilities ............................................. (209) (126)
Valuation allowances (included in non-current portion of deferred tax assets) ........ (40) —
Deferred tax assets, net ............................................... $334 $241
The net deferred tax asset valuation was $40 million as of June 29, 2012. This $40 million increase in valuation
allowance was recognized as part of the Acquisition. The valuation allowance is based on our assessment that it is more
likely than not that certain deferred tax assets will not be realized in the foreseeable future.
In addition to the deferred tax assets presented above, the Company had additional NOL benefits related to
stock-based compensation deductions of $33 million and $110 million at June 29, 2012 and July 1, 2011,
respectively. The net decrease in NOL benefits relates to the current year and prior year stock based compensation
deductions which resulted in a current benefit of $82 million. This $82 million was recorded as a credit to share-
holders’ equity.
76