Exhibit D
ALLIANT ENERGY CORPORATION
TAX ALLOCATION AGREEMENT
This Agreement is made by and among Alliant Energy Corporation, a
registered public utility holding company, and its affiliated corporations,
as identified in Exhibit A hereto (collectively, the "Group"; individually,
"member of the Group").
WHEREAS, the members of the Group are affiliated corporations within the
meaning of section 1504 of the Internal Revenue Code of 1986, as amended, and
will join in the annual filing of a consolidated federal income tax return;
WHEREAS, the members of the Group intend to allocate the consolidated
income tax liabilities and benefits to each member of the Group in a fair and
equitable manner; and
WHEREAS, the members of the Group intend to allocate the liabilities and
benefits arising from the Group's annual consolidated income tax returns in
compliance with Title 17, section 250.45(c) of the Code of Federal
Regulations, section 1552(a)(1) of the Internal Revenue Code and Title 26,
section 1.1502-33(d)(2)(ii) of the Code of Federal Regulations;
IT IS THEREFORE AGREED, as follows:
Section 1 Definitions
-----------
For purposes of this Agreement, the following definitions shall apply:
(a) "Consolidated tax" shall mean the Group's aggregate tax liability for a
tax year as shown on the consolidated federal income tax return and any
adjustments thereto thereafter determined.
(b) "Consolidated refund" shall mean the Group's refund for a taxable year
as shown on the consolidated federal income tax return and any
adjustments thereto thereafter determined.
(c) "Separate company taxable income" for this purpose has the meaning as
defined in Regulation section 1.1502-12; such separate company taxable
income will be determined as if each member of the group filed separate
income tax returns. In computing separate company taxable income, it
will be assumed that:
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o dividends received by one member of the group from other members of the
group will qualify for the 100% dividend received deduction
o gain or loss deferred pursuant to the regulations under section 1502
shall be included in separate company taxable income in the same manner
as in the consolidated return
o charitable contribution deductions deferred pursuant to the regulations
under section 1502 shall be included in separate company taxable
income in the same manner as in the consolidated return
(d) A "positive allocation" shall be the obligation of a member of the Group
to make a payment to Alliant Energy Corporation. A "negative
allocation" shall be the right of a member of the Group to receive
payment from Alliant Energy Corporation.
(e) "Cash Call" shall be the notification sent by Alliant Energy Corporation
to each member of the Group indicating the positive allocation or
negative allocation attributable to such member. Such notification
shall be sent within a reasonable time after the occurrence of any of
the following events: the due date for quarterly estimated tax payments;
the unextended due date of the return; the extended due date of the
return; the filing of an amended return; or the resolution of an audit.
Alliant Energy Corporation will send a notification to each member of
the Group even if no payment is due to the Internal Revenue Service.
Section 2 General Allocation Method
-------------------------
The members of the Group shall allocate the consolidated tax or
consolidated refund in accordance with the procedures set forth below. The
result of the following provisions shall be referred to as a positive
allocation or a negative allocation, as the case may be.
(a) The total consolidated tax liability, after all losses and credits
allowed in arriving at the consolidated tax liability, shall be
apportioned initially to each member in an amount equal to the ratio
which that portion of the consolidated taxable income attributable to
each member having positive separate company taxable income bears to the
combined taxable income of those members having positive separate
company taxable income.
(b) If the consolidated tax liability apportioned to a member in paragraph
(a) is less than the consolidated tax liability of such member computed
on a separate return basis, such member shall pay the difference to
Alliant Energy Corporation, in addition to the amount determined under
paragraph (a); the member(s) having separate company taxable loss to
whom tax reduction is attributable shall receive credit for such tax
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reduction and shall receive payment pursuant to such credit from Alliant
Energy Corporation pursuant to the provisions of Section 4.
(c) Alliant Energy Corporation shall not receive payment for any tax
reduction allowed under paragraph (b) above. If Alliant Energy
Corporation receives credit for a tax reduction pursuant to paragraph
(b), then each member having positive taxable income shall be entitled
to receive a portion of the tax reduction using the allocation method in
paragraph (a) above. Members having a taxable loss shall not
participate in the allocation of Alliant Energy Corporation's tax
reduction.
Section 3 Special Allocation Rules
------------------------
(a) Alternative Minimum Tax. In any year in which alternative minimum tax
(AMT) is payable by the Group, the consolidated tax shall be separated
into two parts: regular tax and AMT.
(1) Regular tax shall be allocated in accordance with the general
allocation method set forth in Section 2, above.
(2) AMT will be allocated to each member of the Group based on the
proportion of:
(a) the excess of a member's separate company alternative minimum
taxable income over its separate company regular taxable income,
to
(b) the aggregate of the excesses of such companies' alternative
minimum taxable income over their regular taxable income.
(3) Each member whose regular taxable income exceeds its alternative
minimum taxable income on a separate company basis shall be excluded
from this calculation and shall not be impacted by the Group's AMT
liability.
(4) The minimum tax credit shall be allocated to the members of the Group
to which the associated AMT was allocated, equal to the associated
AMT allocated to such members.
(b) General Business Credit, Section 1341 credit, Capital Loss Carryover,
Other Tax Benefits and Items Taxed at Different Rates. Any general
business credit, section 1341 credit, capital loss carryover, other tax
benefit and items taxed at rates other than the rate applicable to
corporate taxable income shall be allocated on a separate return basis
to those members whose investments or contributions generated the
credit, capital loss carryover, benefit, or item taxed at a different
rate. If the credit, capital loss carryover, benefit, or item taxed at
a different rate cannot be entirely utilized in the year the item is
generated, then the item shall be allocated on a separate return basis
to those members whose investments or contributions generated the
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credit, capital loss carryover, benefit or item taxed at a different
rate. Any general business credit, section 1341 credit, capital loss
carryover, other tax benefit and item taxed at a different rate that is
required to be carried forward will be included in a Cash Call in the
year that the unused portion is utilized in the consolidated tax return.
Section 4 Payments
--------
Each member of the Group is responsible for its own tax liability. Payment
of such liability shall be made in accordance with the following procedure:
(a) A member of the Group with a positive allocation shall pay Alliant
Energy Corporation, upon receipt of a Cash Call, the amount allocated.
(b) A member of the Group with a negative allocation shall receive payment
from Alliant Energy Corporation, upon receipt of a Cash Call, in the
amount of the negative allocation.
(c) Alliant Energy Corporation shall pay to the Internal Revenue Service the
Group's consolidated tax, or receive from the Internal Revenue Service
the Group's consolidated refund.
(d) Alliant Energy Corporation shall make any calculations on behalf of the
members of the Group necessary to comply with the estimated tax
provisions of section 6655 of the Internal Revenue Code. Based on such
calculations, Alliant Energy Corporation shall charge the members
appropriate amounts at intervals consistent with the dates in that
section.
(e) If the Group has a consolidated net operating loss ("NOL") for a taxable
year (the "loss year") and the NOL cannot be used in full by being
carried back to a prior taxable year, the unused portion of the NOL
shall be allocated to the members of the Group having separate company
losses for the loss year in proportion to the relative magnitude of such
separate company losses for the loss year. Each such member shall carry
the separate company loss from the loss year forward to the following
taxable year and combine it with its allocation for such following
taxable year. Any unused portion of an NOL that is required to be
carried forward will be included in a Cash Call in the year that the
unused portion of the NOL is utilized in the consolidated tax return.
(f) A member shall make any payment required by this section within 10 days
after receiving a Cash Call from Alliant Energy Corporation. Alliant
Energy Corporation also shall make any payment required by this section
within 10 days after receiving a cash call from a member. To facilitate
the Cash Call process, Heartland Properties, Inc. may receive cash from
or make a payment to Alliant Energy Corporation on behalf of itself and
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all members of the Group that are directly or indirectly owned by
Heartland Properties, Inc. Such members shall receive cash from or make
payment to Heartland Properties, Inc. within a reasonable time
thereafter.
(g) If any member is delinquent in making payment to Alliant Energy
Corporation, or if Alliant Energy Corporation is delinquent in making
payments to any member, such member will be charged or credited with
interest at the prime rate for the period of delinquency.
Section 5 Adjustments to Tax Liability Shown on Returns
---------------------------------------------
(a) In the event that the consolidated tax or consolidated refund is
subsequently adjusted by an amended income tax return, the Internal
Revenue Service, or a court decision, the consolidated tax, consolidated
refund and separate company taxable income shall be adjusted
accordingly, consistent with the methodology set forth previously in
this Agreement. Any prior payments among the members of the Group shall
be adjusted to conform to the change.
(b) If any interest is paid or received as a result of an adjustment to the
consolidated tax or consolidated refund, it will be allocated to the
parties in the proportion that each member's change in separate company
taxable income in each affected year bears to the change in consolidated
taxable income.
(c) Any penalty shall be paid by the member of the Group that is responsible
for the penalty. If the party at fault cannot be determined, the
penalty shall be allocated in the same manner as if it were additional
tax.
Section 6 New Affiliates
--------------
The members of the Group will cause any corporation which becomes an
affiliated corporation within the meaning of section 1504 of the Internal
Revenue Code to join in this Agreement.
Section 7 Amendment
---------
This Agreement may be amended from time to time as the result of changes in
federal or state law or relevant facts and circumstances.
Section 8 Cooperation of Members
----------------------
Each member shall execute and file any consent, election or other document
that may be required or appropriate for the proper filing of consolidated
income tax returns and for the allocations provided by this Agreement.
Section 9 Effective date
--------------
This Agreement is effective for the allocation of the current income tax
liability of the Group for the tax year ending 12/31/99 and all subsequent
years until amended in writing.
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Section 10 Governing law
-------------
The laws of the state of Wisconsin shall govern this Agreement.
Section 11 Relationship to Other Agreements
--------------------------------
This Agreement supercedes any and all prior Agreements to which any of the
members of the Group may have been a party.
The above procedures for allocating the consolidated income tax liability of
the Group have been agreed to by each of the below listed members of the
Group, as evidenced by the signature of an officer of each member.
Alliant Energy Corporation
Alliant Energy Resources, Inc.
Wisconsin Power & Light Company By: ____________________________
Xxx Xxxxxx
Chief Financial Officer
AEI Holding Company
AER Holding Company
Alliant Energy Generation, Inc.
Alliant Energy Integrated Services, Inc.
Alliant Energy International, Inc.
Alliant Energy Investments, Inc.
Alliant Energy Transportation, Inc.
Cedar Rapids & Iowa City Railway Co.
Cogenex Corporation
Cogenex West, Inc.
Energy Holdings Corporation
Energy Performance Services, Inc.
Energys, Inc.
Heartland Energy Group, Inc.
Heartland Energy Services, Inc.
IEI Barge Services, Inc.
Industrial Energy Applications Delaware Inc.
Industrial Energy Applications, Inc.
Interstate Power and Light Company
Iowa Land and Building Co.
Northeast Energy Management, Inc.
South Beloit Water Gas And & Electric Company
Transfer Services, Inc.
Xxxxxxxx Bulk Transfer, Inc. By: ____________________________
Xxxxxx Xxxxxx
Treasurer
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Alliant Energy Synfuel LLC By: ____________________________
Xxxxxx Xxxxxx
Manager
Alliant Energy Corporate Services, Inc. By: ____________________________
Xxxxx X. Xxxxxxx
Assistant Corporate Secretary
RMT, Inc., Michigan By: ____________________________
Xxxxxxxxx X. Xxxxxx
Vice President
RMT, Inc.
RMT North Carolina, Inc.
RMT International, Inc. By: ____________________________
Xxxxxxx X. Xxxxxxxx
Treasurer
SmartEnergy, Inc.
SmartEnergy Ventures, Inc. By: ____________________________
Xxxxx Xxxx
President
Xxxxxxx-Xxxxxx Gas Corporation
Xxxxxxx Petroleum Corporation
Xxxxxxx Programs, Inc.
WOK Acquisition Company By: ____________________________
Xxxxxxx Xxxxxxx
Treasurer
Capital Square Financial Corporation
Heartland Properties, Inc.
Heartland Affordable Housing - Marshfield Tower Hall II, Inc.
Heartland Affordable Housing - Marshfield, Inc.
Heartland Affordable Housing - Pardeeville II, Inc.
Heartland Affordable Housing - Pardeeville, Inc.
Heartland Affordable Housing - The Falconer, Inc.
Heartland Affordable Housing - Verona, Inc.
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Heartland Capital Management, Inc.
Heartland - XxXxxxxxx XX, Inc.
Heartland Fund IV - Beloit Xxxxxx, Inc.
Heartland Fund IV - Racine Wilmanor, Inc.
Heartland Water Tower, Inc.
Heartland Hearts Managing Member, Inc.
Heartland - Xxxxxxxx Xxxx, Inc.
Heartland Special Limited, Inc.
Heartland Fund I, Inc.
Heartland Fund I - Grand Chute, Inc.
Heartland Fund I - Cudahy III, Inc.
Heartland Fund I - Riverplace, Inc.
Heartland Fund I - Sussex, Inc.
Heartland Fund I - Waunakee, Inc.
Heartland Fund I - Eau Claire Oakwood, Inc.
Heartland - Beech Grove, Inc.
Heartland - Landings, Inc.
Heartland - Orchard Place, Inc.
Heartland - Timber Trails, Inc. By: ____________________________
Xxxx X. Xxxxxx
President
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EXHIBIT A
COMPANY NAME
------------
AEI HOLDING COMPANY
AER HOLDING COMPANY
ALLIANT ENERGY CORPORATE SERVICES, INC
ALLIANT ENERGY CORPORATION
ALLIANT ENERGY GENERATION, INC.
ALLIANT ENERGY INTEGRATED SERVICES, INC.
ALLIANT ENERGY INTERNATIONAL, INC.
ALLIANT ENERGY INVESTMENTS, INC.
ALLIANT ENERGY RESOURCES, INC.
ALLIANT ENERGY SYNFUEL LLC
ALLIANT ENERGY TRANSPORTATION, INC.
CAPITAL SQUARE FINANCIAL CORPORATION
CEDAR RAPIDS & IOWA CITY RAILWAY CO.
COGENEX CORPORATION
COGENEX WEST, INC
ENERGY HOLDINGS CORPORATION
ENERGY PERFORMANCE SERVICES
ENERGYS , INC.
HEARTLAND ENERGY GROUP, INC.
HEARTLAND ENERGY SERVICES, INC.
IEI BARGE SERVICES
INDUSTRIAL ENERGY APPLICATIONS DELAWARE INC.
INDUSTRIAL ENERGY APPLICATIONS, INC.
INTERSTATE POWER AND LIGHT COMPANY
IOWA LAND AND BUILDING CO.
NORTHEAST ENERGY MANAGEMENT, INC.
RMT INTERNATIONAL, INC.
RMT NORTH CAROLINA, INC.
RMT, INC.
RMT, INC., MICHIGAN
SMARTENERGY VENTURES, INC.
SMARTENERGY, INC.
SOUTH BELOIT WATER GAS AND & ELECTRIC COMPANY
TRANSFER SERVICES, INC.
XXXXXXX PETROLEUM CORPORATION
XXXXXXX PROGRAMS, INC.
XXXXXXX-XXXXXX GAS CORPORATION
XXXXXXXX BULK TRANSFER, INC.
WISCONSIN POWER & LIGHT COMPANY
WOK ACQUISITION COMPANY
HEARTLAND PROPERTIES, INC.
HEARTLAND AFFORDABLE HOUSING - MARSHFIELD TOWER HALL II
HEARTLAND AFFORDABLE HOUSING - MARSHFIELD, INC.
HEARTLAND AFFORDABLE HOUSING - PARDEEVILLE II, INC.
HEARTLAND AFFORDABLE HOUSING - PARDEEVILLE, INC.
HEARTLAND AFFORDABLE HOUSING - THE FALCONER, INC.
HEARTLAND AFFORDABLE HOUSING - VERONA, INC.
HEARTLAND CAPITAL MANAGEMENT, INC.
HEARTLAND - XXXXXXXXX XX, INC.
HEARTLAND FUND IV - BELOIT XXXXXX, INC.
HEARTLAND FUND IV - RACINE WILMANOR, INC.
HEARTLAND WATER TOWER, INC.
HEARTLAND HEARTS MANAGING MEMBER, INC.
HEARTLAND - XXXXXXXX XXXX, INC.
HEARTLAND SPECIAL LIMITED, INC.
HEARTLAND FUND I, INC.
HEARTLAND FUND I - GRAND CHUTE, INC.
HEARTLAND FUND I - CUDAHY III, INC.
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COMPANY NAME
------------
HEARTLAND FUND I - RIVERPLACE, INC.
HEARTLAND FUND I - SUSSEX, INC.
HEARTLAND FUND I - WAUNAKEE, INC.
HEARTLAND FUND I - EAU CLAIRE OAKWOOD, INC.
HEARTLAND - BEECH GROVE, INC.
HEARTLAND - LANDINGS, INC.
HEARTLAND - ORCHARD PLACE, INC.
HEARTLAND - TIMBER TRAILS, INC.
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