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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
Income Tax Provision
The components of the provision for income taxes were as follows for the three years ended June 28, 2013 (in
millions):
2013
2012
2011
Current:
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 57
$ 12
$ 12
Domestic-federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
149
98
21
Domestic-state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
1
Deferred:
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)
18
--
Domestic-federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(46)
25
30
Domestic-state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
(9)
(10)
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$242
$145
$ 54
The Company's income tax provision for 2013 reflects a tax benefit of $37 million as a result of the retroactive
extension of the U.S. Federal research and experimentation tax credit ("R&D credit") that was signed into law on
January 2, 2013 as part of the American Taxpayer Relief Act of 2012. The R&D credit, which had previously expired
on December 31, 2011, was extended through December 31, 2013.
In addition, on November 6, 2012, California voters approved California Proposition 39, which affects California
state income tax apportionment for most multi-state taxpayers for tax years beginning on or after January 1, 2013.
This proposition reduces the Company's future income apportioned to California, making it less likely for the Com-
pany to realize certain California deferred tax assets. As a result, the Company recorded an $88 million charge in 2013
to reduce its previously recognized California deferred tax assets as of December 28, 2012.
Remaining net undistributed earnings from foreign subsidiaries at June 28, 2013 on which no U.S. tax has been
provided amounted to $6.8 billion. The net undistributed earnings are intended to finance local operating require-
ments and capital investments. Accordingly, an additional U.S. tax provision has not been made on these earnings.
The tax liability for these earnings would be $2.3 billion if the Company repatriated the $6.8 billion in undistributed
earnings from the foreign subsidiaries.
78