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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 27, 2014 and June 28, 2013 were as follows (in millions):
2014 2013
Deferred tax assets:
Sales related reserves and accrued expenses not currently deductible ............... $ 38 $ 45
Accrued compensation and benefits not currently deductible .................... 190 182
Domestic net operating loss carryforward ................................... 130 103
Business credit carryforward ............................................. 155 123
Long-lived assets ..................................................... 58 47
Other .............................................................. 65 71
Total deferred tax assets .............................................. 636 571
Deferred tax liabilities:
Long-lived assets ..................................................... (152) (156)
Other .............................................................. (11) —
Total deferred tax liabilities ........................................... (163) (156)
Valuation allowances .................................................. (128) (133)
Deferred tax assets, net ............................................... $345 $282
Deferred tax assets:
Current portion (included in other current assets) ............................. $184 $160
Non-current portion (included in other non-current assets) ..................... 452 411
Total deferred tax assets .............................................. 636 571
Deferred tax liabilities:
Current portion (included in other current assets) ............................. (2) —
Non-current portion (included in other non-current assets) ..................... (161) (156)
Total deferred tax liabilities ........................................... (163) (156)
Valuation allowances (included in non-current portion of deferred tax assets) ........ (128) (133)
Deferred tax assets, net ............................................... $345 $282
The net deferred tax asset valuation allowance was $128 million as of June 27, 2014. The valuation allowance is
based on the Company’s 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 $11 million and $13 million at June 27, 2014 and June 28, 2013,
respectively. During the current year, the Company generated an additional $66 million of benefits related to stock-
based compensation deductions, of which $60 million were utilized in the current year and recorded as a credit to
shareholder’s equity.
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