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* * * * * * TUESDAY, MAY 21, 2013 ~ VOL. CCLXI NO. 118 WSJ.com HHHH $2 .00

CONTENTSCFO Journal................. B4Corporate News B2,3,8Global Finance............ C3Heard on the Street C10In the Markets........... C4Leisure & Arts........... D5

Letters to the Editor A16Markets Dashboard C6Opinion.................. A15-17Technology................... B7U.S. News............. A2-4,6Weather Watch...... B10World News.... A8-11,13

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Vital Signs

Some Americans are fall-ing behind on their car loans.The share of auto loansoutstanding with paymentsoverdue by 30 days hit2.36% in the first quarter,up slightly from 2.33% ayear earlier. A surge in loansto car buyers with lowercredit scores has raised con-cerns among regulators, butdelinquency rates remainfar below their prerecessionlevel of 2.60% in the firstquarter of 2006.

Percentage of auto loansoutstanding with payments30 days late, first-quarter data

Source: Experian Automotive

2.8%

2.0

2.2

2.4

2.6

’07’06 ’08 ’09 ’10 ’11 ’12 ’13

>

J .P. Morgan Chase is pre-paring for a shake-up of

its board, even if every di-rector wins re-election attoday’s shareholder meetingand Dimon keeps his dual jobas chairman and CEO. C1n Apple paid little to no cor-porate income tax to any na-tional government on tens ofbillions of dollars in overseasincome over the past fouryears, a Senate probe found. A1n Stocks slipped, taking abreak from their recent rally,with the Dow Jones IndustrialAverage falling 19.12 points,or 0.1%, to 15335.28. C4n GrubHub and Seamless,startups that allow people toorder restaurant takeout usingcomputers and smartphones,said they are merging. B1n Charlie Ergen bid $2 bil-lion for certain spectrumfrom LightSquared, the wire-less venture navigatingbankruptcy proceedings. B2n Sprint Nextel said itagreed to enter into negotia-tions with Dish Network aboutDish’s $25.5 billion bid. B2n Vista Equity Partnersagreed to pay about $1 billionto acquire Websense, an In-ternet-security company. B3n Thomson Reuters andMarkit have teamed up withinvestment banks to build amessaging service to chal-lenge rival Bloomberg. C3n Regulators will soon voteon which big nonbank finan-cial firms will face muchstricter oversight, Lew will tellSenate lawmakers Tuesday. C3n China’s manager of cur-rency reserves has set up aU.S. operation aimed at in-vestments such as privateequity and real estate. C3n Southern Co. replaced thehead of its Mississippi utilityamid growing concern aboutthe cost of a yet-to-be finished“clean coal” power plant. B8n Actavis agreed to acquireWarner Chilcott for about$5 billion in a deal aimed atenlarging its portfolio of spe-cialty pharmaceuticals. B3n Deborah Turness washired as president of NBCNews, making her the firstwoman to lead a U.S. broad-cast news division. B2n The Supreme Court ruledfederal regulators can setdeadlines for local authoritieson cell-tower applications. B3n Hershey is launching Yo-man, a candy brand for thefast-growing China market. B1

n The Syrian army battled toreclaim a rebel-held city.Assad’s forces fought alongsideHezbollahmilitants to take thecity of Qusayr near the Leba-nese border. A government vic-tory there could give the re-gime a corridor of territoryconnecting Damascus to Syria’scoastline and to Lebanese ter-ritory controlled by Hezbollah,splitting rebel forces. A9The fighting sparked newcriticism of the U.S. use of di-plomacy and humanitarianaid to respond to the war.nTornadoes swept throughOklahoma, killing at least 51.One twister leveled an elemen-tary school in Moore, a citysouth of Oklahoma City. A1nWhite House aides learnedin April of a report that theIRS targeted conservativegroups but didn’t share thatinformation with Obama. A4nCar bombings inmostly Shi-ite areas across Iraq killed atleast 95, in one of the nation’sdeadliest weeks since sectarianfighting raged six years ago.A11n Russian security forcessaid they killed two Islamistmilitants in a shootout afterlearning that the men planneda terror attack in Moscow. A11nA suicide bomber killed akey Afghan provincial officialand at least 13 others. The Tali-ban claimed responsibility. A10nObama praised politicalprogress in Myanmar whilecalling for more in talks withthe Asian nation’s leader. A9n India and China playeddown a border dispute as LiKeqiang arrived in Delhi on hisfirst trip abroad as premier. A8nObamawill meet in Junewith Chinese President Xi Jin-ping, theWhite House said. A8nNearly half the rice sold inthe Chinese city of Guangzhouwas contaminated with a toxicmetal, tests indicated. A8nThree Chinese researchersat a New York hospital werecharged with secretly sharingMRI data with competitors. A6nVenezuela’s opposition re-leased a recording of an allegedconversation between a TVhost and a Cuban official aboutcorruption in Caracas. A13nRioting youth and policeclashed in a Stockholm suburbwith a high jobless rate. A13nA Guatemalan court over-turned a genocide convictionagainst a former dictator. A13nDied: RayManzarek, 74, afoundingmember of the Doors.

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What’s News–i i i i i i

Apple Inc. paid no corporate in-come tax to any national govern-ment on tens of billions of dollars inoverseas income over the past fouryears, Senate investigators found, arevelation that fuels the debate overwhether the U.S. tax code needs anoverhaul.

The disclosure follows a lengthyexamination of the technology gi-ant’s tax practices by the U.S. Sen-ate’s Permanent Subcommittee onInvestigations, which is expected toair its findings at a hearing onTues-day. AppleChief ExecutiveTimCookis preparing to testify at the hearing,

and is expected to propose changesto a tax code that provides Ameri-can companies strong incentives tokeepoverseas earnings bottled up atforeign subsidiaries.

Apple used technicalities in IrishandAmerican tax law topay little orno corporate taxes on at least $74billion over the past four years, ac-cording to the Senate panel’s find-ings. The investigation foundno evi-dence that Apple did anythingillegal. Aides to the subcommitteesaid they have never seen a com-pany use a subsidiary that didn’towe corporate income taxes to anycountry.

Apple didn’t dispute that entitiesit set up didn’t pay corporate taxesbut denied they were designed toavoid taxes. The company said it

pays local taxes on overseas earn-ings and U.S. taxes on investmentincomegenerated at its Irish subsid-iaries.

The company pointed to the “ex-traordinary” amount of corporateincome taxes it pays—$6 billion in2012—and said its U.S. effective fed-eral cash tax rate was 30.5% lastyear, notmuchbelow the 35% statu-tory rate.

“What they often leave out is thesecond part of the story, that Appleis one of the largest tax avoiders,”said Sen. John McCain (R., Ariz.),who described Apple as the “mostegregious offender” amongU.S. cor-porations trying to avoid tax bills.Mr. McCain is the ranking Republi-can on the subcommittee headed byMichigan Democrat Carl Levin.

General Electric Co., by compari-son, had a 14.4% consolidated effec-tive income-tax rate and paid $3.2billion in cash income taxes globallylast year. The company said its con-solidated rate reflected lower taxrates on foreign earnings and taxcredits for investments that createdjobs.

The subcommittee has previ-ously taken Hewlett-Packard Co. totask for setting up chains of short-term loans tomakeuse of its foreignsubsidiaries’ cash at home withoutpaying taxes. It has also called Mi-crosoft Corp. out for shifting intel-lectual property—and the income

Pleaseturntothenextpage

By Danny Yadron,Kate Linebaugh

and Jessica E. Lessin

AppleAvoidedTaxonOverseasBillions

Note: €1 = $1.28 Source: Mayor’s office

Town Hall on a DietThe mayor of Torrelodones,Spain, slashed operating costsin 2011. Cuts included:Renegotiate trash pickup and otherpublic contracts

Elimination of four appointedmayor's advisers

Decrease full-time city councilmembers to two from five and lowerthe salary

Reduce mayor's salary 21%

€400,000

€12,821

€170,500

€152,783

TORRELODONES, Spain—Thestench of raw sewage was ElenaBiurrun’s political wake-up call.

The stay-at-home mom be-came a civic gadfly after local au-thorities refused to fix a brokensewer pipe, and one cause led toanother: She formed a group todefend a forest against real-estatedevelopers. After six years offighting Town Hall, Ms. Biurrunwas elected mayor.

Two years into her term, Ms.Biurrun has become a nationalfigure, a role model for a fledg-ling clean-government movementtaking root in Spain. The 39-year-old mayor has opened the TownCouncil to more citizen input,abolished many official perks andplowed the savings into schooland road repairs, with enoughleft over to build bike lanes andrefurbish a soccer field.

“Those who govern need toknow that the legitimacy of thevote doesn’t mean they have ablank check for four years,” Ms.Biurrun said.

She regularly receives invita-tions to speak at forums aroundthe country, appears on radio andhas been profiled by one ofSpain’s leading TV news maga-zines.

“People are starting to get re-ally fed up,” Ms. Biurrun said.“You’re starting to see initiativeslike ours.”

Rather than tuning out a polit-PleaseturntopageA14

BY ILAN BRATAND CHRISTOPHER BJORK

AsEurope Slumps,Grass-Roots Grow

People are daft about DaftPunk, crazy enough to spendthousands of dollars on helmetsresembling what the two popstars are usually wearing.

When the French electronicmusic duo release their new CD,“Random Access Mem-ories,” on Tuesday it islikely to become one ofthe world’s top-sellingrecords of the year.The first single, “GetLucky,” has alreadytopped the charts in 55countries.

Despite the hypeand the pair’s massivepopularity—they havebeen around since the1990s—Guy-Manuel deHomem-Christo, 39, and ThomasBangalter, 38, can still strollthrough throngs of die-hard fansat their own shows, entirely un-noticed. Some concertgoersdoubt the pair is really on stageat all.

That is because, for the pastdecade, Messrs. Bangalter and deHomem-Christo have rarely ap-peared on stage or at other pub-lic events without the Space Age,face-obscuring helmets, some-times decorated with light-emit-ting diodes programmed to dis-play text and images.

Now, as fans awaitedthe release of DaftPunk’s first new albumin eight years, demandhas soared for facsimi-les of their iconic head-gear. Some cash-strapped fans areproposing long-termpayment plans; othersare fretting overwhether they will beable to find models thatfit their heads.

“Price is not an object,” wrote27-year-old Boston-area fanTrevor Bates in a recent postingon a popular Daft Punk fan site,saying he was prepared to spendat least $2,000 and warning he

PleaseturntopageA14

Daft Punk helmet

BY HANNAH KARP

View live coverage of Tim Cook’stestimony today at WSJ.com.

MOORE, Okla.—Violent torna-does swept through towns justsouth of Oklahoma City Mondayafternoon, killing at least 51 peo-ple, including at least 20 chil-dren, and laying waste to numer-ous buildings, including more

than one elementary school.One tornado leveled Plaza

Towers Elementary, a school inMoore, a city of 55,000 peopleabout 15 miles south of Okla-homa City, the state capital.Jerry Lojka, an official with theOklahoma Department of Emer-gency Management, said Mondayevening that rescue workerswere “trying to turn over everystick to find survivors” at theschool. The estimated number offatalities was as of late evening.

The Moore Medical Centertook a direct hit from a tornado,forcing 30 patients to evacuateto hospitals in Norman, about 10miles to the south. All of the pa-tients are believed to have sur-vived, said Melissa Herron of theNorman Regional Health System,which owns the Moore MedicalCenter.

“It’s very sad and chaoticright now,” said Ms. Herron, whosaid the company’s two hospitalsin Norman treated about 60 peo-ple injured in the tornadoes. Atleast 100 people were injured in

the storms, officials said.The Department of Emer-

gency Management said at leastthree tornadoes touched downMonday in Oklahoma, includingin Oklahoma City, Moore and

Duncan, farther southwest. ButMoore seemed to bear the fullbrunt, with some neighborhoodsreduced to rubble, broken carswrapped around trees and

PleaseturntopageA6

By Nathan Koppel,Ana Campoy

and Heide Brandes

TwistersBlastOklahomaTornadoes Kill at Least 51 and Leave Broad Swath of Destruction; Schools Hit

Fans Lose Their HeadsIn Pursuit of Daft Punk Helmets

i i i

Pop Duo’s Followers Are Willing to SpendBig to Ape the Style; Warning: ‘Large Head’

Continuous CoverageSee updates at WSJ.com

A woman carries a child near the collapsed Plaza Towers school in Moore, Okla., amid the storm’s devastation.

AssociatedPress

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