CINERGY CORP. AND SUBSIDIARY COMPANIES
AGREEMENT FOR FILING CONSOLIDATED
INCOME TAX RETURNS AND FOR
ALLOCATION OF CONSOLIDATED INCOME
TAX LIABILITIES AND BENEFITS
Cinergy Corp., a registered public utility holding company, and its Subsidiaries
hereby agree to join annually in the filing of a consolidated Federal income tax
return and to allocate the consolidated Federal income tax liabilities and
benefits among the members of the consolidated group in accordance with the
provisions of this Agreement.
1. DEFINITIONS
"Consolidated tax" is the aggregate current Federal income tax
liability for a tax year, being the tax shown on the consolidated
Federal income tax return and any adjustments thereto, as described in
section 5 hereof.
"Corporate taxable income" is the positive taxable income of an
associate company for a tax year, computed as though such company had
filed a separate return on the same basis as used in the consolidated
return, except that dividend income from associate companies shall be
disregarded, and other intercompany transactions, eliminated in
consolidation, shall be given appropriate effect.
"Corporate taxable loss" is the taxable loss of an associate company
for a tax year, computed as though such company had filed a separate
return on the same basis as used in the consolidated return, except
that dividend income from associate companies shall be disregarded,
and other intercompany transactions, eliminated in consolidation,
shall be given appropriate effect.
"Corporate tax credit" is a negative separate regular tax of a
subsidiary company for a tax year, equal to the amount by which the
consolidated regular tax is reduced by including the corporate taxable
loss of such subsidiary company in the consolidated tax return.
"Separate return tax" is the tax on the corporate taxable income or
loss of an associate company as though such company were not a member
of a consolidated group. Attached hereto as Exhibit A is a true,
correct and complete copy of the By-Laws of the Investor (the
"By-Laws"), as in full force and effect on and as of the date hereof.
No amendment or other document relating to or affecting the By-Laws
has been authorized by the Board of Directors of the Investor and no
action has been taken by the Investor or the Board of Directors of the
Investor in contemplation of any such amendment.
These definitions shall apply, as appropriate, in the context of the regular
income tax and the Alternative Minimum Tax ("AMT") unless otherwise indicated in
the Agreement.
2. TAX ALLOCATION PROCEDURES
The consolidated tax shall be allocated among the members of the group
consistent with Rule 45(c) of the Public Utility Holding Company Act
of 1935, utilizing the separate "corporate taxable income" method, in
the following manner:
a) Each subsidiary, which has a corporate taxable loss, will be
entitled to a corporate tax credit equal to the amount by which
the consolidated regular income tax is reduced by including the
corporate tax loss of such subsidiary in the consolidated tax
return. The members having corporate taxable income will be
allocated an amount of regular income tax liability equal to the
sum of the consolidated regular tax liability and the corporate
tax credits allocated to the subsidiaries having corporate tax
losses based on the ratio that each such member's corporate
taxable income bears to the total corporate taxable income of all
members having corporate taxable income.
If the aggregate of the members' corporate tax losses are not
entirely utilized on the current year's consolidated return, the
consolidated carry back or carry forward of such losses to the
applicable taxable year(s) will be allocated to each member
having a corporate taxable loss in the ratio that such member's
separate corporate tax loss bears to the total corporate tax
losses of all members having corporate taxable losses.
b) The consolidated Environmental Tax will be allocated among the
members of the group by applying the procedures set forth in
subsection a) above, except that the basis for allocation will be
Alternative Minimum Taxable Income ("AMTI") rather than regular
corporate taxable income.
c) The consolidated AMT will be allocated among the members in
accordance with the procedures and principles set forth in
Proposed Treasury Regulation section 1.1502-55 in the form such
Regulation existed on the date on which this Agreement was
executed.
d) Tax benefits such as general business credits, foreign tax
benefits, or other tax credits shall be apportioned directly to
those members whose investments or contributions generated the
credit or benefit.
If the credit or benefit cannot be entirely utilized to offset
current consolidated tax, the consolidated credit carry back or
carry forward shall be apportioned to those members whose
investments or contributions generated the credit or benefit in
proportion to the relative amounts of credits or benefits
generated by each member.
e) If the amount of consolidated tax allocated to any subsidiary
under this Agreement, as determined above, exceeds the separate
return tax of such subsidiary, such excess shall be reallocated
among those members whose allocated tax liability is less than
the amount of their respective separate return tax liabilities.
The reallocation shall be proportionate to the respective
reductions in separate return tax liability of such members. Any
remaining unallocated tax liability shall be assigned to Cinergy
Corp. The term "tax" and "tax liability" used in the subsection
shall include regular tax, Environmental Tax and AMT.
3. TAX PAYMENTS AND COLLECTIONS FOR ALLOCATIONS
Cinergy Corp. shall make any calculations on behalf of the members
necessary to comply with the estimated tax provisions of the Internal
Revenue Code of 1986 as amended (the "Code"). Based on such
calculations, Cinergy Corp. shall charge or refund to the members
appropriate amounts at intervals consistent with the dates indicated
by Code section 6655. CINergy Corp. shall be responsible for paying to
the Internal Revenue Service the consolidated current Federal income
tax liability.
After filing the consolidated Federal income tax return and allocating
the consolidated tax liability among the members, Cinergy Corp. shall
charge or credit, as appropriate, the members to reflect the
difference between prior payments or credits and their current tax as
allocated under this Agreement.
4. ALLOCATION OF STATE TAX LIABILITIES OR BENEFITS
State and local income tax liabilities will be allocated, where
appropriate, among members in accordance with principles similar to
those employed in the Agreement for the allocation of consolidated
Federal income tax liability.
5. TAX RETURN ADJUSTMENTS
In the event the consolidated tax return is subsequently adjusted by
the Internal Revenue Service, state tax authorities, amended returns,
claims for refund, or otherwise, such adjustments shall be reflected
in the same manner as though they had formed part of the original
consolidated return. Interest paid or received, and penalties imposed
on account of any adjustment will be allocated to the responsible
member.
6. NEW MEMBERS
If, at any time, any other company becomes a member of the Affiliated
Group, the parties hereto agree that such new member may become a
party to this Agreement by executing a duplicate copy of this
Agreement. Unless otherwise specified, such new member shall have
similar rights and obligations of all other members under this
Agreement.
7. MEMBERS LEAVING THE AFFILIATED GROUP
In the event that any member of the Affiliated Group at any time
leaves the Group and, under any applicable statutory provision or
regulation, that member is assigned and is deemed to take with it all
or a portion of any of the tax attributes (including, but not limited
to, net operating losses, credit carry forwards, and Minimum Tax
Credit carry forwards) of the Affiliated Group, then, to the extent
the amount of the attributes so assigned differs from the amount of
such attributes previously allocated to such member under this
Agreement, the leaving member shall appropriately settle with the
Group. Such settlement shall consist of payment on a dollar-for-dollar
basis for all differences in credits and, in the case of net operating
loss differences, in an amount computed by reference to the highest
marginal corporate tax rate. The settlement amounts shall be allocated
among the remaining members of the Group in proportion to the relative
level of attributes possessed by each member and the attributes of
each member shall be adjusted accordingly.
8. SUCCESSORS, ASSIGNS
The provisions and terms of the Agreement shall be binding on and
inure to the benefit of any successor or assignee by reason of merger,
acquisition of assets, or otherwise, of any of the members hereto.
9. AMENDMENTS AND TERMINATION
This Agreement may be amended at any time by the written agreement of
the parties hereto at the date of such amendment and may be terminated
at any time by the written consent of all such parties.
10. GOVERNING LAW
This Agreement is made under the law of the State of Ohio, which law
shall be controlling in all matters relating to the interpretation,
construction, or enforcement hereof.
11. EFFECTIVE DATE
This Agreement is effective for the allocation of the current Federal
income tax liabilities of the members for the consolidated tax year
1994 and all subsequent years until this Agreement is revised in
writing.
12. APPROVAL
This Agreement is subject to the approval of the Securities and
Exchange Commission. A copy of this Agreement will be filed as an
exhibit to the Form U5S Annual Report to the Securities and Exchange
Commission by Cinergy Corp. for the year ended December 31, 1994.
The above procedure for apportioning the consolidated annual net current federal
and state tax liabilities and tax benefits of Cinergy Corp. and its consolidated
affiliates have been agreed to by each of the below listed members of the
consolidated group as evidenced by the signature of an officer of each company.
Cinergy Corp.
By: s/J. Xxxxx Xxxxxxx Date: 1-23-95
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Cinergy Services, Inc.
By: s/J. Xxxxx Xxxxxxx Date: 1-23-95
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The Cincinnati Gas & Electric Co.
By: s/Xxxxxxx X. Xxxxxxx Date: 1-23-95
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PSI Energy, Inc.
By: s/J. Xxxxx Xxxxxxx Date: 1-23-95
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South Construction Company, Inc.
By: s/J. Xxxxx Xxxxxxx Date: 1-23-95
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The Union Light, Heat & Power Co.
By: s/Xxxxxxx X. Xxxxxxx Date: 1-23-95
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Miami Power Corp.
By: s/Xxxxxxx X. Xxxxxxx Date: 1-23-95
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Lawrenceburg Gas Co.
By: s/Xxxxxxx X. Xxxxxxx Date: 1-23-95
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Tri-State Improvement Co.
By: s/Xxxxxxx X. Xxxxxxx Date: 1-23-95
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KO Transmission Co.
By: s/Xxxxxxx X. Xxxxxxx Date: 1-23-95
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Cinergy Investments, Inc.
By: s/J. Xxxxx Xxxxxxx Date: 1-23-95
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Cinergy Telecommunications Holding Company, Inc.
(formerly Cinergy Communications, Inc.)
By: s/Xxxxxxx X. Xxxxxx Date: 12-27-96
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Cinergy Technology, Inc.
By: s/Xxxxxxx X. Xxxxxx Date: 12-27-96
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Cinergy UK, Inc.
By: s/Xxxxxxx X. Xxxxxx Date: 12-27-96
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Cinergy Engineering, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 12-31-97
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Cinergy Solutions Holding Company, Inc.
(formerly Cinergy Solutions, Inc.)
By: /s/Xxxxxxx X. Xxxxxx Date: 12-31-97
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Cinergy-Cadence, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Capital & Trading
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Global Power, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Global Resources, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Supply Network, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Vestar, Inc.
(formerly Cinergy Business Solutions, Inc.)
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Centrus Communications, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Centrus, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Global Holdings, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Global San Gorgonio, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Global Xxx, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Solutions of Tuscola, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 4-16-99
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Cinergy Global Xxxxx Creek, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 3-29-00
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Cinergy Global Xxxxx Creek II, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 3-29-00
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Cinergy Telecommunications Networks Holdings, Inc.
By: /s/Xxxxxxx X. Xxxxxxx Date: 3-29-00
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Cinergy Marketing & Trading, LLC
By: /s/Xxxxxxxxx X. Xxxxxx Date: 3-30-00
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CinCap IX, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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CinCap X, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Beckjord, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Conesville, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Dicks Creek, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy East Bend, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Energy Solutions, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy e-Supply Network, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy GASCO Solutions, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Global Xxxxxxxx Holding, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Global Xxxxxxxx I, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Global Xxxxx Creek IV, Inc.
By: /s/Xxxx Xxxxxx Date: 2-7-01
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Cinergy Global One, Inc.
By: /s/Xxxxx X. Xxxxx Date: 2-7-01
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Cinergy Xxxxxx, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Miami Fort, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy One, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Power Generation Services, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Power Investments, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Solutions, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Solutions of Boca Raton, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Stuart, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Technologies, Inc.
(formerly Cinergy Ventures Holding Company, Inc.)
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Transportation, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Two, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Ventures, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Ventures II, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Wholesale Energy, Inc.
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Woodsdale, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Cinergy Xxxxxx, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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CinTec LLC
(formerly CinTech LLC)
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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CinTec I LLC
(formerly CinTech I LLC)
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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eVent Resources I LLC
(formerly Event Capital I LLC)
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Lansing Grand River Utilities, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Oklahoma Arcadian Utilities, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Shreveport Red River Utilities, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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SynCap I, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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SynCap II, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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TCS-USFOS of Lansing LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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Trigen-Cinergy Solutions of Elmgrove, LLC
By: /s/Xxxx X. Xxxxxxx Date: 2-7-01
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