Common use of Allocation Conventions Clause in Contracts

Allocation Conventions. (a) For purposes of determining the amount of any Centuri Separate Tax Liability following the Separation Date: (i) except as provided in Section 2.2(a)(iii), all elections, accounting methods and conventions used on the Parent Federal Consolidated Income Tax Return (or applicable state law Combined Return in which a member of the Parent Group is the taxpayer of record) shall be used; (ii) the highest statutory marginal corporate income Tax rate in effect for such taxable period shall be applied (unless Parent determines in its sole discretion that a lower rate is applicable); and (iii) it shall be assumed that the Centuri Group elects not to carry back any Tax Attributes. (b) In the case of any Straddle Period in which there is a Deconsolidation, the following conventions shall apply (in addition to those conventions in clause (a)): (i) all Taxes shall be allocated in accordance with the Closing of the Books Method; provided, however, that if any Centuri Group member does not close its taxable year on the Deconsolidation Date, the Taxes attributable to the Post-Deconsolidation Period shall be computed using a hypothetical closing of the books consistent with the Closing of the Books Method; (ii) any Tax Item of any Centuri Group member arising from a transaction engaged in outside of the ordinary course of business on the Deconsolidation Date shall be allocable to Centuri and any such transaction by or with respect to any Centuri Group member occurring on the Deconsolidation Date shall be treated for all Tax purposes (to the extent permitted by applicable Tax Law) as occurring at the beginning of the day following the Deconsolidation Date in accordance with the principles of Treasury Regulations Section 1.1502-76(b) (assuming no election is made under Treasury Regulations Section 1.1502-76(b)(2)(ii) (relating to a ratable allocation of a year’s Tax Items)) or any similar state or local Tax Law; and (iii) any deferred Tax liability that is attributable to the Centuri Business and that is accelerated or otherwise required to be reported on any Joint Return as a result of the Deconsolidation shall be treated as arising in the Post-Deconsolidation Period. (c) The amount of any Centuri Separate Tax Liability shall not be less than zero. (d) Centuri shall reimburse Parent for all reasonable costs and expenses paid or incurred by the Parent Group in connection with determining the amount of any Centuri Separate Tax Liability. (e) In the event of any redetermination of a Tax liability in respect of any Joint Return, the Centuri Separate Tax Asset or Centuri Separate Tax Liability applicable to such Joint Return shall be recomputed. If, as a result of such recalculation, Centuri would be allocated additional Taxes pursuant to Section 2.1, Centuri shall promptly pay over to Parent such amounts in accordance with Section 3.8. If, as a result of such recalculation, Centuri would be allocated less Taxes pursuant to Section 2.1 than it previously paid, Parent shall promptly pay over to Centuri such amounts in accordance with Section 3.8.

Allocation Conventions. (a) For purposes of determining the amount of any Centuri Separate Tax Liability following the Separation Date: (i) except as provided in Section 2.2(a)(iii), all elections, accounting methods and conventions used on the Parent Federal Consolidated Income Tax Return (or applicable state law Combined Return in which a member of the Parent Group is the taxpayer of record) shall be used; (ii) the highest statutory marginal corporate income Tax rate in effect for such taxable period shall be applied (unless Parent determines in its sole discretion that a lower rate is applicable); and (iii) it shall be assumed that the Centuri Group elects not to carry back any Tax Attributes. (b) In the case of any Straddle Period in which there is a Deconsolidation, the following conventions shall apply (in addition to those conventions in clause (a)3(a): (i) all Taxes The amount of any Tax of any Emerson Contributed Subsidiary with respect to a Straddle Period that is based on or measured by income, sales, use, receipts, or other similar items shall be allocated in accordance with between the Pre-Closing Period and the Post-Closing Period based on the Closing of the Books MethodMethod as of the end of the Closing Date; provided, however, that if any Centuri Group member Applicable Law does not permit an Emerson Contributed Subsidiary to close its taxable Taxable year on the Deconsolidation Closing Date, the Taxes Tax attributable to the Postoperations of such Emerson Contributed Subsidiary for any Pre-Deconsolidation Closing Period shall be the Tax computed using a hypothetical closing of the books consistent with the Closing of the Books Method;Method (except to the extent otherwise agreed upon by Emerson and Newco). (ii) The amount of any Tax of any Emerson Contributed Subsidiary with respect to a Straddle Period other than Taxes described in Section 3(b)(i) shall be allocated between the Pre-Closing Period and the Post-Closing Period by multiplying the total amount of such Tax for the entire Straddle Period by a fraction, the numerator of which is the number of calendar days in the Straddle Period ending on, and including, the Closing Date, and the denominator of which is the number of calendar days in the entire Straddle Period, and allocating the result to the Pre-Closing Period and the remainder of such Tax to the Post-Closing Period. (iii) Notwithstanding the provisions of Section 3(b)(i), any Tax Item of any Centuri Group member an Emerson Contributed Subsidiary arising from a transaction engaged in outside of the ordinary course of business on the Deconsolidation Closing Date after the Closing shall be allocable to Centuri the Post-Closing Period, and any such transaction by or with respect to Newco or any Centuri member of the Newco Group member occurring on after the Deconsolidation Date Closing shall be treated for all Tax purposes (to the extent permitted by applicable Tax Applicable Law) as occurring at the beginning of the day following the Deconsolidation Closing Date in accordance with the principles of Treasury Regulations Section 1.1502-76(b) (assuming no election is made under Treasury Regulations Section 1.1502-76(b)(2)(ii) (relating to a ratable allocation of a year’s Tax Items)) ); provided that, for the avoidance of doubt, the foregoing shall not include any action expressly described in or contemplated by any similar state Transaction Document or local Tax Law; and (iii) any deferred Tax liability that is attributable undertaken pursuant to the Centuri Business and that is accelerated or otherwise required to be reported on Pre-Closing Restructuring, any Joint Return as a result of the Deconsolidation shall be treated as arising in the Post-Deconsolidation Period. (c) The amount of any Centuri Separate Tax Liability shall not be less than zero. (d) Centuri shall reimburse Parent for all reasonable costs and expenses paid or incurred by the Parent Group in connection with determining the amount of any Centuri Separate Tax Liability. (e) In the event of any redetermination of a Tax liability in respect of any Joint ReturnDeferred Closing, the Centuri Separate Tax Asset Emerson Contributions or Centuri Separate Tax Liability applicable to such Joint Return shall be recomputed. If, as a result of such recalculation, Centuri would be allocated additional Taxes pursuant to Section 2.1, Centuri shall promptly pay over to Parent such amounts in accordance with Section 3.8. If, as a result of such recalculation, Centuri would be allocated less Taxes pursuant to Section 2.1 than it previously paid, Parent shall promptly pay over to Centuri such amounts in accordance with Section 3.8the Merger Exchange.

Allocation Conventions. (a) For purposes of determining the amount of any Centuri Separate Tax Liability following the Separation Date: (i) except as provided in Section 2.2(a)(iii), all elections, accounting methods and conventions used on the Parent Federal Consolidated Income Tax Return (or applicable state law Combined Return in which a member of the Parent Group is the taxpayer of record) shall be used; (ii) the highest statutory marginal corporate income Tax rate in effect for such taxable period shall be applied (unless Parent determines in its sole discretion that a lower rate is applicable); and (iii) it shall be assumed that the Centuri Group elects not to carry back any Tax Attributes. (b) In the case of any Straddle Period in which there is a Deconsolidation, the following conventions shall apply (in addition to those conventions in clause (a)3(a): (i) all Taxes The amount of any Tax of any Emerson Contributed Subsidiary with respect to a Straddle Period that is based on or measured by income, sales, use, receipts, or other similar items shall be allocated in accordance with between the Pre-Closing Period and the Post-Closing Period based on the Closing of the Books MethodMethod as of the end of the Closing Date; provided, however, that if any Centuri Group member Applicable Law does not permit an Emerson Contributed Subsidiary to close its taxable Taxable year on the Deconsolidation Closing Date, the Taxes Tax attributable to the Postoperations of such Emerson Contributed Subsidiary for any Pre-Deconsolidation Closing Period shall be the Tax computed using a hypothetical closing of the books consistent with the Closing of the Books Method;Method (except to the extent otherwise agreed upon by Emerson and Newco). (ii) The amount of any Tax of any Emerson Contributed Subsidiary with respect to a Straddle Period other than taxes described in Section 3(b)(i) shall be allocated between the Pre-Closing Period and the Post-Closing Period by multiplying the total amount of such Tax for the entire Straddle Period by a fraction, the numerator of which is the number of calendar days in the Straddle Period ending on, and including, the Closing Date, and the denominator of which is the number of calendar days in the entire Straddle Period, and allocating the result to the Pre-Closing Period and the remainder of such Tax to the Post-Closing Period. (iii) Notwithstanding the provisions of Section 3(b)(i), any Tax Item of any Centuri Group member an Emerson Contributed Subsidiary arising from a transaction engaged in outside of the ordinary course of business on the Deconsolidation Closing Date after the Closing shall be allocable to Centuri the Post-Closing Period, and any such transaction by or with respect to Newco or any Centuri member of the Newco Group member occurring on after the Deconsolidation Date Closing shall be treated for all Tax purposes (to the extent permitted by applicable Tax Applicable Law) as occurring at the beginning of the day following the Deconsolidation Closing Date in accordance with the principles of Treasury Regulations Section 1.1502-76(b) (assuming no election is made under Treasury Regulations Section 1.1502-76(b)(2)(ii) (relating to a ratable allocation of a year’s Tax Items)) ); provided that, for the avoidance of doubt, the foregoing shall not include any action expressly described in or contemplated by any similar state Transaction Document or local Tax Law; and (iii) any deferred Tax liability that is attributable undertaken pursuant to the Centuri Business and that is accelerated or otherwise required to be reported on any Joint Return as a result of the Deconsolidation shall be treated as arising in the PostPre-Deconsolidation Period. (c) The amount of any Centuri Separate Tax Liability shall not be less than zero. (d) Centuri shall reimburse Parent for all reasonable costs and expenses paid or incurred by the Parent Group in connection with determining the amount of any Centuri Separate Tax Liability. (e) In the event of any redetermination of a Tax liability in respect of any Joint ReturnClosing Restructuring, the Centuri Separate Tax Asset Emerson Contributions or Centuri Separate Tax Liability applicable to such Joint Return shall be recomputed. If, as a result of such recalculation, Centuri would be allocated additional Taxes pursuant to Section 2.1, Centuri shall promptly pay over to Parent such amounts in accordance with Section 3.8. If, as a result of such recalculation, Centuri would be allocated less Taxes pursuant to Section 2.1 than it previously paid, Parent shall promptly pay over to Centuri such amounts in accordance with Section 3.8the Merger Exchange.