Western Digital 2010 Annual Report Download - page 76

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Stock Purchase Rights
On April 6, 2001, the Company adopted a plan to protect shareholders’ rights in the event of a proposed takeover of
the Company. Under the plan, each share of the Company’s outstanding common stock carries one Right to Purchase
Series A Junior Participating Preferred Stock (the “Right”). The Right enables the holder, under certain circumstances, to
purchase Series A Junior Participating Preferred Stock of Western Digital at an exercise price of $50.00 per share ten days
after a person or group publicly announces it has acquired or has tendered an offer for 15%, or more, of the Company’s
outstanding common stock. The Rights are redeemable by the Company at $0.001 per Right. The 2001 Rights plan
expires April 6, 2011.
Stock Reserved for Issuance
The following table summarizes all shares of common stock reserved for issuance at July 2, 2010 (in millions):
Number
of Shares
Maximum shares issuable in connection with:
Outstanding awards and shares available for award grants ......................... 27.9
ESPP .............................................................. 5.4
Total............................................................... 33.3
Note 9. Income Taxes
Pre-tax Income
The domestic and foreign components of income before income taxes were as follows for the three years ended
July 2, 2010 (in millions):
2010 2009 2008
Foreign................................................... $1,418 $459 $812
Domestic . . . .............................................. 102 42 169
Income before income taxes .................................. $1,520 $501 $981
Income Tax Provision
The components of the provision for income taxes were as follows for the three years ended July 2, 2010 (in
millions):
2010 2009 2008
Current:
Foreign ................................................... $ 9 $13 $ 12
Domestic-federal ............................................ 101 (7) 103
Domestic-state .............................................. 1 1 1
Deferred:
Domestic-federal ............................................ 37 24 (2)
Domestic-state .............................................. (10) — —
Income tax provision ....................................... $138 $31 $114
Remaining net undistributed earnings from foreign subsidiaries at July 2, 2010 on which no U.S. tax has been
provided amounted to approximately $4.0 billion. The net undistributed earnings are intended to finance local operating
70
WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)