Revised Annual Margin Adjustment Payment Clause Samples
The Revised Annual Margin Adjustment Payment clause defines the process for recalculating and settling margin payments on an annual basis to reflect updated financial or operational data. Typically, this clause outlines how parties will review actual performance or costs at the end of each year, compare them to initial estimates or projections, and then determine if additional payments or refunds are necessary to reconcile any differences. Its core practical function is to ensure that both parties are fairly compensated or reimbursed based on actual outcomes, thereby reducing the risk of overpayment or underpayment due to inaccurate forecasts.
Revised Annual Margin Adjustment Payment. Effective for 2008 and each calendar year thereafter, the parties will calculate Pinnacle’s Margin in accordance with Section 5.12(a) and, if required pursuant to Section 5.12(b) below, one party will make a Margin Adjustment Payment to the other party.
Revised Annual Margin Adjustment Payment. Effective for 2008 and each calendar year thereafter, the parties will calculate Pinnacle's Margin in accordance with Section 5.12(a) and, if required pursuant to Section 5.12(b) below, one party will make a Margin Adjustment Payment to the other party.
(a) Calculation of the Total Operating Cost and the Margin. Not later than ninety (90) days following the end of 2008 and each subsequent calendar year during the term of this Agreement, Pinnacle shall deliver to Northwest its audited financial statements including the calculation of its operating margin for Regional Airline Services provided under this Agreement for the prior year (the "Margin") by dividing (x) Pinnacle's Total Operating Income for Regional Airline Services for such year by (y) Pinnacle's Total Operating Revenue for Regional Airline Services for such year, subject to the following: In calculating the Margin, the amount of any penalties (accounted for as a reduction to revenue) pursuant to Section 5.05, Section 5.13 and/or Section 5.14 below and any Saab 340 Aircraft rental revenue will not be included in Pinnacle's Total Operating Revenue, and the following expenses will not be included in Pinnacle's Total Operating Cost:
(1) Increment above predicted employee bonuses and incentives as set forth in Exhibit C hereto. Predicted bonus and incentive levels are the amounts used in calculating the Block Hour, Cycle and Fixed cost rates for 2007, grown each year by multiplying by (1 + CPPI).
(2) The amount of any penalties pursuant to Section 5.14 (if not accounted for as a reduction to revenue).
(3) The amount of any depreciation expense associated with capital expenditures in excess of $250,000 which are designated by Northwest as Section 5.13(a)(3) items because Northwest has determined that such capital expenditures are not necessary after taking into consideration the Annual Operating Plan and Pinnacle's obligations under this Agreement, within seventy-five (75) days after receiving written notice from Pinnacle of such capital expenditure pursuant to Section 6.01(a)(iv) below.
(4) The amount of any Fuel Burn Penalty Payment pursuant to Section 5.05(d) (if not accounted for as a reduction to revenue).
(5) The amount of any asset write-downs (excluding normal depreciation) or extraordinary charges as defined by GAAP.
(6) Rental expense associated with the Saab 340 Aircraft not flown by Pinnacle.
(7) The amount of any fines or penalties paid by Pinnacle to any governmental entity.
(8) The CRJ 2...