internal_revenue_service number release date index number ------------------------ -------------- ---------------------------------------------------- ------------------------- --------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no ------------ telephone number -------------------- refer reply to cc corp b05 plr-137358-13 date date legend distributing controlled controlled llc sub sub sub sub -------------------------------------------------- ----------------------------- --------------------- -------------------------------------- --------------------------------------------- --------------------- ------------------- ------------------------------- --------------------- -------------------------------- ----------------------------- --------------------- --------------------------------- ------------------------------- --------------------- --------------------------- ------------------------------- --------------------- plr-137358-13 sub sub sub sub sub sub sub sub sub ---------------------------- ------------------------- --------------------- ------------------------------------ ------------------------------- --------------------- --------------------- ------------------------- --------------------- ------------------------------------ ----------------------------- --------------------- --------------------------- ----------------------------- --------------------- ---------------------------------------------------- ----------------------------- --------------------- ------------------------------------------------------- ----------------------------- --------------------- --------------------------------------------------------- --------------------------------------------------------------------- ----------------------------- --------------------- ---------------------------------- ----------------------------- --------------------- sub ------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ----------------------------- --------------------- plr-137358-13 sub ----------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ----------------------------- --------------------- fsub fsub fsub fsub fsub fsub fsub fsub fsub fsub ------------------------------- -------------------------------------------- ----------- --------------------------------------------------- -------------------------------------------------------- --------------------- ------------------------------------------------ --------------------------------------------------------- --------------------- ------------------------------------ ---------------------------------------------------------- ----------- ---------------------------------- ---------------------------------------------------------- ----------- -------------------------- ---------------------------------------------------------- ----------- ------------------------------------------------------------------ ---------------------------------------------------------- ----------- ------------------------------------------- ---------------------------------------------------------- ----------- ------------------------------------ ---------------------------------------------------------- ----------- ---------------------------- ----------------------------------------------- ----------- plr-137358-13 fsub fsub fsub fsub fsub fsub fsub fsub fsub fsub -------------------------------- ----------------------------------------------- --------------------- -------------------------------------------------------- --------------------------------- ----------- ------------------------- --------------------------------- ----------- --------------------------------------------------------- ---------------------------------------------- ----------- ------------------------------------------------------------ -------------------------------------------------- ----------- ------------------------------------------------------------------ -------------------------------------------------------------------------- ---------- ----------- ------------------------------------------ --------------------------------------------------------------------------------- --------- ----------- -------------------------------------------------------------------- -------------------------------------------------------------------------- ---------- ----------- ------------------------------------ ----------------------------------------------- ----------- ----------------------------------------------------- --------------------------------- ----------- plr-137358-13 fsub p sec_1 p sec_2 p sec_3 p sec_4 p sec_5 fde fde fde fde busine sec_1 busine sec_1a ------------------------------------ ----------------------------------------------- ----------- ------------------------------------ --------------------------------------------- --------------------- -------------------------------- ----------------------------- --------------------- --------------------------------------- ----------------------------- --------------------- ---------------------------------------------------- --------------------------------------------------------------------------------- --------- --------------------- --------------------------------------------------- ----------------------------------------------------------------- --------------------- -------------------------------------- ---------------------------------------------------- --------------------- ------------------------------------ ----------------------------------------------- --------------------- ------------------------------------ ----------------------------------------------- --------------------- ---------------------------------------------------------- ---------------------------------------------- --------------------- ------------------------------------------ -------------------------------------- plr-137358-13 busine sec_1b busine sec_1c busine sec_2 busine sec_3 ------------------------------------ ----------------------------- ----------------------------------------- ----------------------------------------- -------------------------------------------------------------------------------- busine sec_1 entities ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------- ---------------------------------------------------------------------------- -------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------- additional busine sec_1 entities ------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- --------------------------------------------------------------- -------------------------------------------------- state a state b state c state d country a country b country c country d country e country f ------------ ------------- -------- ------------ -------------------- --------- -------------- ---------------- --------------- ----------- plr-137358-13 country g country h date date date date date date date date date date date date date date date month a b --------- ------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- ---------------------- -------------------------- ------------------------- ------------------------- ----------------------- ----------------------- ----------------------- ----------------------- ------------------ ------------------ ---------------- ---------------- ------------------ ------------------ ------------------------ ------------ -- --- plr-137358-13 c d e f g h i j k l m n o p q r s t --- ------ ---- --- --------------------- ------ ------ ---- ------ ------- ----------- ---------- --- --- --- ------------ -- -- dear ------------------ this letter responds to your letter dated date submitted by your authorized representatives requesting rulings on certain u s federal_income_tax consequences of a proposed transaction the proposed transaction as described below the material information submitted in that request and in subsequent correspondence is summarized below plr-137358-13 the rulings contained in this letter are based on facts and representations submitted by the taxpayer and accompanied by a penalties of perjury statement executed by an appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process moreover this office has not verified any information pertaining to and has made no determination regarding whether any of the internal distributions or the external distribution each as defined below i satisfies the business_purpose requirement of sec_1_355-2 of the income_tax regulations ii is used principally as a device for the distribution of the earnings_and_profits of any distributing_corporation or any controlled_corporation or both see sec_355 of the internal_revenue_code the code and sec_1_355-2 and iii is part of a plan or series of related transactions pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest in any distributing_corporation or any controlled_corporation see sec_355 and sec_1_355-7 overview facts distributing is a publicly traded state a corporation and the parent of a worldwide group of entities the distributing worldwide group distributing also is the common parent of an affiliated_group_of_corporations filing a consolidated u s federal_income_tax return the distributing consolidated_group distributing has a single class of common_stock outstanding the distributing common_stock and two series of publicly traded preferred_stock outstanding collectively the distributing preferred_stock the distributing preferred_stock represents less than a of the combined value of the distributing common_stock and the distributing preferred_stock distributing also has various stock-based compensatory arrangements outstanding including stock_options restricted_stock units dividend_equivalent units performance-based stock units and stock appreciation rights collectively stock-based compensation the distributing worldwide group is engaged in various businesses that are aggregated into reportable segments these reportable segments include busine sec_1 busine sec_2 and busine sec_3 among others in turn busine sec_1 is composed of three business lines-busine sec_1a busine sec_1b and busine sec_1c the distributing worldwide group’s businesses other than busine sec_1 are collectively referred to herein as the retained businesses and the assets used in such businesses are referred to herein as the retained business_assets organizational structure relevant to domestic separation transactions plr-137358-13 distributing wholly and directly owns the stock of sub a state b corporation and sub a state a corporation distributing also directly owns b of the outstanding interests in p sec_1 a state a limited_liability_company that is treated as a partnership for u s federal_income_tax purposes an unrelated third party owns the remaining interests in p sec_1 sub wholly and directly owns the stock of sub and sub each a state b corporation and sub a state c_corporation sub also wholly and directly owns certain other u s_corporations none of which own material assets or conduct material operations sub wholly and directly owns the stock of sub a state b corporation sub a state c_corporation and sub a state d corporation in turn sub wholly and directly owns the stock of sub a state d corporation which wholly and directly owns the stock of fsub a country a entity that is treated as a corporation for u s federal_income_tax purposes sub and sub own c and a respectively of the outstanding interests in p sec_2 a state a partnership sub sub and sub also own d e and f respectively of the outstanding interests in p sec_3 a state a partnership sub indirectly conducts busine sec_1b and busine sec_1c through sub sub also indirectly conducts busine sec_3 through sub fsub and p sec_3 sub sec_1 through described above and subs through described below are members of the distributing consolidated_group organizational structure relevant to country b separation transactions distributing wholly and indirectly owns the stock of fsub a country c entity that is treated as a corporation for u s federal_income_tax purposes fsub directly owns shares possessing g of the vote and h of the value of the stock of fsub a country d entity that is treated as a corporation for u s federal_income_tax purposes the remaining stock of fsub is owned by another member of the distributing worldwide group prior to the country b separation transactions described below fsub and fsub directly owned i and j respectively of the interests in p sec_4 a country b entity that is treated as a partnership for u s federal_income_tax purposes fsub will retain its interest in p sec_4 after the proposed transaction distributing also directly owns i of the issued and outstanding_stock of fsub a country b entity that is treated as a corporation for u s federal_income_tax purposes prior to the country b separation transactions described below the remaining j of the stock of fsub was owned by p sec_4 plr-137358-13 fsub directly owns i of the issued and outstanding_stock of both fsub and fsub each a country b entity that is treated as a corporation for u s federal_income_tax purposes the remaining j of the stock of these entities is owned by distributing fsub also directly owns k of the issued and outstanding_stock of both fsub and fsub each a country b entity that is treated as a corporation for u s federal_income_tax purposes together the joint ventures the remaining stock of the joint ventures is owned by unrelated third parties in addition fsub directly owns l of the issued and outstanding_stock of fsub a country b entity that is treated as a corporation for u s federal_income_tax purposes prior to the country b separation transactions described below fsub and distributing owned the remaining stock of fsub fsub conducts among other businesses busine sec_1 and busine sec_2 in country b distributing also wholly and directly owns the stock of fsub a country e entity that is treated as a corporation for u s federal_income_tax purposes fsub wholly and directly owns fde a country f entity that is disregarded as an entity separate from fsub for u s federal_income_tax purposes fde conducts among other businesses busine sec_1 in country f organizational structure relevant to country g separation transactions distributing wholly and directly owns the stock of sub a state a corporation sub wholly and directly owns the stock of fsub a country e entity and fsub a country g entity each of which is treated as a corporation for u s federal_income_tax purposes in turn fsub wholly and directly owns the common and preferred_stock of fsub a country g entity treated as a corporation for u s federal_income_tax purposes fsub and fsub both conduct busine sec_1a in country g fsub also conducts busine sec_2 among other businesses organizational structure relevant to country h separation transactions distributing wholly and directly owns the common and preferred_stock of sub a state a corporation sub wholly and directly owns the stock of fsub a country h entity that is treated as a corporation for u s federal_income_tax purposes fsub conducts busine sec_1 in country h and other countries fsub also conducts busine sec_2 among other businesses sub through its subsidiaries also indirectly owns all of the interests in p sec_5 a country d entity that is treated as a partnership for u s federal_income_tax purposes sub also owns directly or indirectly all or a portion of the stock of the busine sec_1 entities each of which is a non-u s entity engaged in busine sec_1 additional information regarding organizational structure plr-137358-13 as of month distributing was the debtor on intercompany notes due to sub sub p sec_1 and p sec_2 sub was the debtor on an intercompany note due to distributing sub was the debtor on an intercompany note due to sub and p sec_3 was the debtor on an intercompany note due to sub as of date distributing had approximately dollar_figurem of long-term debt to unrelated parties outstanding the distributing date debt distributing also wholly and indirectly owns the stock of the additional busine sec_1 entities each of which is a u s or non-u s entity engaged in busine sec_1 the stock of the additional busine sec_1 entities will be distributed to distributing prior to the global separation transactions as described below proposed transaction as part of a broader restructuring of the distributing worldwide group distributing has undertaken or will undertake the following series of transactions together the proposed transaction for the following corporate business purposes i to more closely align the distributing worldwide group’s businesses with its evolving strategic direction and ii to free busine sec_1 of capital and other constraints necessarily applicable to a business that no longer aligns closely with the distributing worldwide group’s strategic direction the domestic separation transactions and the separation transactions in country b country g and country h will precede the global separation transactions each as described below domestic separation transactions the following is a description of the steps of the domestic separation transactions which will be completed in the order specified below the domestic separation transactions will facilitate the global separation transactions by separating the retained businesses from busine sec_1 distributing will transfer cash to p sec_2 in repayment of a of p sec_2’s note receivable due from distributing p sec_2 will distribute i to sub p sec_2’s note receivable due from distributing and ii to sub the cash received from distributing in step of the domestic separation transactions the p sec_2 distribution sub will distribute to sub the cash received from p sec_2 in step of the domestic separation transactions plr-137358-13 sub will convert from a state b corporation to a state b domestic single- member limited_liability_company that will be disregarded as an entity separate from sub the sub conversion for u s federal_income_tax purposes sub will distribute to sub i the note receivable due from distributing and ii its f partnership_interest in p sec_3 this transaction will be disregarded for u s federal_income_tax purposes in exchange for no additional consideration sub will transfer to sub i the note receivable due from distributing and ii its f partnership_interest in p sec_3 the first sub contribution sub will distribute all of the stock of sub to sub the first sub distribution and together with the first sub contribution the first sub separation the first sub distribution may be undertaken as a pro_rata distribution on the sub stock owned by sub or alternatively as a non-pro rata distribution in exchange for specifically identified shares of sub stock owned by sub in partial exchange for sub 8’s assumption of sub 1’s note payable due to sub sub will transfer to sub i all of the stock of each of sub and sub and ii sub 1’s notes receivable due from distributing and p sec_3 the second sub contribution sub will distribute all of the stock of sub to distributing the second sub distribution and together with the second sub contribution the second sub separation the second sub distribution may be undertaken as a pro_rata distribution on the sub stock owned by distributing or alternatively as a non- pro_rata distribution in exchange for specifically identified shares of sub stock owned by distributing for purposes of the first sub separation sub will rely on its direct conduct of businesse sec_1b and sec_1c collectively sub busine sec_1 to satisfy the active_trade_or_business_requirement of sec_355 and sub will rely on busine sec_3 as conducted by sub sub busine sec_3 sub will be a member of the sub sag as defined below for purposes of the second sub separation sub will rely on sub busine sec_1 sub will be a member of the sub sag as defined below and sub will rely on sub busine sec_3 financial information has been submitted indicating that each of sub busine sec_1 and sub busine sec_3 has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the past five years country b separation transactions plr-137358-13 the following is a description of the steps of the country b separation transactions which have been completed or will be completed in the order specified below the country b separation transactions will facilitate the global separation transactions by separating the retained businesses from busine sec_1 on date distributing formed sub a state a holding_company on date fsub sold its fsub stock which had nominal value to fsub on date p sec_4 distributed its cash on hand approximately dollar_figuren to fsub and fsub following this step the value of the assets held by p sec_4 was nominal on date p sec_4 sold its fsub stock which had nominal value to fsub on date fsub sold all of its p sec_4 interests which had nominal value to distributing on date distributing transferred all of its fsub stock to sub in exchange for additional stock therein on date distributing formed a new state a limited_liability_company controlled llc that is disregarded as an entity separate from distributing for u s federal_income_tax purposes on date distributing transferred all of its sub stock to controlled llc this transaction is disregarded for u s federal_income_tax purposes on date distributing sold all of its p sec_4 interests which had nominal value to fsub on date sub formed a new country f entity fsub that is treated as a corporation for u s federal_income_tax purposes on date sub formed a new state a corporation sub on date and date respectively fsub formed fsub and fsub each a country b entity that is treated as a corporation for u s federal_income_tax purposes on date fsub formed a new country b entity fsub that is treated as a corporation for u s federal_income_tax purposes sub will transfer cash to fsub in exchange for additional stock therein plr-137358-13 fde will transfer its assets related to busine sec_1 to fsub in exchange for the cash received by fsub in step of the country b separation transactions p sec_4 will file a u s entity classification election to be treated as a corporation for u s federal_income_tax purposes the value of p sec_4’s assets at the time of the election will be nominal in exchange for additional equity interests in p sec_4 fsub will transfer to p sec_4 i its fsub stock and ii its stock of the joint ventures fsub will enter into a demerger transaction under country b law pursuant to which fsub will transfer minimal assets to fsub in succession i fsub will transfer cash and or a note receivable to fsub in exchange for additional stock therein ii fsub will transfer its retained business_assets to fsub in exchange for the cash and or the note receivable transferred to fsub by fsub and iii fsub will distribute the cash and or the note receivable to fsub fsub will transfer all of its stock in fsub to p sec_4 in exchange for additional equity interests therein together with steps and of the country b separation transactions the p sec_4 contribution fsub will enter into a demerger transaction under country b law pursuant to which fsub will transfer minimal assets to fsub in succession i fsub will transfer cash and or a note receivable to fsub in exchange for additional stock therein ii fsub will transfer its assets related to busine sec_1b and busine sec_1c to fsub in exchange for the cash and or the note receivable transferred to fsub by fsub and iii fsub will distribute the cash and or the note receivable to fsub fsub will transfer the land used in country b busine sec_1a to fsub in exchange for cash sub will transfer a nominal amount of cash to fsub in exchange for stock therein fsub will transfer the employees in country b busine sec_1 to fsub in totality the transactions between the p sec_4 sag and the fsub sag each as defined below in step sec_23 and sec_25 of the country b separation transactions will be value-for-value exchanges appropriate consideration will be paid in the plr-137358-13 aggregate by each sag and appropriate adjustments will be made to reflect the consideration paid_by each sag member as necessary fsub will distribute all of its p sec_4 interests representing i of the vote and value of all p sec_4 interests to sub the p sec_4 distribution and together with the p sec_4 contribution the p sec_4 separation the p sec_4 distribution may be undertaken as a pro_rata distribution on the fsub stock owned by sub or alternatively as a non-pro rata distribution in exchange for specifically identified shares of fsub stock owned by sub in the case of a pro_rata distribution fsub will distribute cash or additional shares of fsub stock each of which will have nominal value to its minority shareholder fsub in exchange for no additional consideration sub will transfer all of its p sec_4 interests to sub the sub contribution together with sub will distribute all of the stock of sub to controlled llc the sub distribution and the sub separation the sub distribution may be undertaken as a pro_rata distribution on the sub stock owned by controlled llc or alternatively as a non-pro rata distribution in exchange for specifically identified shares of sub stock owned by controlled llc the sub contribution controlled llc will distribute all of the stock of sub to distributing this transaction will be disregarded for u s federal_income_tax purposes fsub will sell its fsub stock which will have nominal value to controlled llc in exchange for cash for purposes of the p sec_4 separation fsub will rely on busine sec_1a as conducted by fsub fsub busine sec_1a fsub will be a member of the fsub sag to satisfy the active_trade_or_business_requirement of sec_355 and p sec_4 will rely on busine sec_2 as currently conducted by fsub and as will be conducted by fsub after the country b separation transactions fsub busine sec_2 fsub will be a member of the p sec_4 sag in addition for purposes of the sub separation sub will rely on fsub busine sec_1a fsub will be a member of the sub sag as defined below and sub will rely on fsub busine sec_2 fsub will be a member of the sub sag as defined below financial information has been submitted indicating that each of fsub busine sec_1a and fsub busine sec_2 has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the past five years country g separation transactions plr-137358-13 the following is a description of the steps of the country g separation transactions which have been completed or will be completed in the order specified below the country g separation transactions will facilitate the global separation transactions by separating busine sec_1 from the retained businesses on date sub formed a new state a corporation sub on date fsub formed a new country e entity fsub that is treated as a corporation for u s federal_income_tax purposes on date sub formed a new country e entity fde that is disregarded as an entity separate from sub for u s federal_income_tax purposes on date fsub formed a new country g entity fsub that is treated as a corporation for u s federal_income_tax purposes and transferred nominal assets thereto in exchange for all of its stock in transactions that will be disregarded for u s federal_income_tax purposes i fsub will distribute a portion of its stock to fsub which will immediately transfer that stock back to fsub and ii fsub will distribute a portion of its stock to sub which will immediately transfer that stock back to fsub fsub will transfer all of its assets associated with busine sec_1 to fsub in exchange for i fsub 20’s assumption_of_liabilities associated with busine sec_1 in country g the fsub contribution and ii cancellation of a proportionate amount of fsub 11’s common and preferred_stock of fsub the fsub distribution and together with the fsub contribution the fsub separation fsub will transfer all of the stock of fsub to fsub in exchange for additional stock therein the fsub contribution fsub will distribute all of the stock of fsub to sub the fsub distribution and together with the fsub contribution the fsub separation the fsub distribution may be undertaken as a pro_rata distribution on the fsub stock owned by sub or alternatively as a non-pro rata distribution in exchange for specifically identified shares of fsub stock owned by sub sub will transfer i all of the stock of fsub to sub in exchange for additional stock therein and ii all of the stock of fsub to fde in exchange for additional stock of sub the sub contribution plr-137358-13 sub will transfer all of the stock of fsub to fde this transaction will be disregarded for u s federal_income_tax purposes together with sub will distribute all of the stock of sub to distributing the sub distribution and the sub separation the sub distribution may be undertaken as a pro_rata distribution on the sub stock owned by distributing or alternatively as a non- pro_rata distribution in exchange for specifically identified shares of sub stock owned by distributing the sub contribution for purposes of the fsub separation fsub will rely on its direct conduct of busine sec_2 fsub busine sec_2 to satisfy the active_trade_or_business_requirement of sec_355 and fsub will rely on busine sec_1a as currently conducted by fsub and as will be conducted by fsub after the country g separation transactions fsub busine sec_1a for purposes of the fsub separation fsub will rely on fsub busine sec_2 fsub will be a member of the fsub sag as defined below and fsub will rely on fsub busine sec_1a fsub will be a member of the fsub sag as defined below for purposes of the sub separation sub will rely on fsub busine sec_2 fsub will be a member of the sub sag as defined below and sub will rely on fsub busine sec_1a fsub will be a member of the sub sag as defined below financial information has been submitted indicating that each of fsub busine sec_2 and fsub busine sec_1a has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the past five years country h separation transactions the following is a description of the steps of the country h separation transactions which have been completed or will be completed in the order specified below the country h separation transactions will facilitate the global separation transactions by separating busine sec_1 from the retained businesses on date sub formed a new state a corporation sub on date sub formed a new country e entity fsub that is treated as a corporation for u s federal_income_tax purposes and transferred nominal assets thereto in exchange for all of its stock on date fsub formed a new country e entity fde that is disregarded as an entity separate from fsub for u s federal_income_tax purposes on date fsub formed a new country h entity fde that is disregarded as an entity separate from fsub for u s federal_income_tax purposes plr-137358-13 sub will i resolve to increase share premium in fsub as a result of which a payable will come into existence and ii issue to fsub two notes sub note and sub note collectively the sub notes in settlement of the payable the sub notes contribution fsub will transfer sub note to fde in exchange for additional stock therein the disregarded sub note contribution this transaction will be disregarded for u s federal_income_tax purposes fsub will transfer to fde all of its assets associated with busine sec_1 in exchange for sub note and the assumption by fde of liabilities associated with busine sec_1 in country h the country h busine sec_1 transfer fsub will transfer to fsub an amount of cash equal to the amount of sub note in exchange for sub note the country h cash transfer the country h busine sec_1 transfer and the country h cash transfer are collectively referred to herein as the fsub contribution fsub will transfer a portion of the cash received in step of the country h separation transactions to fde this transaction will be disregarded for u s federal_income_tax purposes fde will acquire directly or indirectly certain busine sec_1 assets owned directly or through one or more disregarded entities by p sec_5 in exchange for cash fsub will distribute the sub notes to sub the fsub distribution the fsub distribution may be undertaken as a pro_rata distribution on the fsub stock owned by sub or alternatively as a non-pro rata distribution in exchange for specifically identified shares of fsub stock owned by sub pursuant to this step the sub notes will be cancelled the sub notes contribution the disregarded sub note contribution the country h busine sec_1 transfer the country h cash transfer and the fsub distribution are collectively referred to herein as the fsub separation in exchange for no additional consideration sub will transfer to sub i all of the stock of fsub and ii sub 11’s interests in the busine sec_1 entities the sub contribution sub will distribute to distributing securities issued by a wholly and indirectly owned foreign_subsidiary of sub the fsub securities the distribution of such securities the fsub securities distribution the fsub securities distribution will be undertaken as a pro_rata distribution on the sub common_stock owned by distributing plr-137358-13 together with the sub contribution sub will distribute all of the stock of sub to distributing the sub distribution and the sub separation the sub distribution will be undertaken as a pro_rata distribution on the sub common_stock owned by distributing the sub contribution together with the first sub contribution the second sub contribution the p sec_4 contribution the sub contribution the fsub contribution the fsub contribution the sub contribution the fsub contribution and the contribution as defined below are referred to herein as the contributions the sub distribution together with the first sub distribution the second sub distribution the p sec_4 distribution the sub distribution the fsub distribution the fsub distribution the sub distribution and the fsub distribution are referred to herein as the internal distributions for purposes of the fsub separation fsub will rely on its direct conduct of busine sec_2 fsub busine sec_2 to satisfy the active_trade_or_business_requirement of sec_355 and fsub will rely on busine sec_1a as currently conducted by fsub and as will be conducted by fsub after the country h separation transactions fsub busine sec_1a for purposes of the sub separation sub will rely on fsub busine sec_2 fsub will be a member of the sub sag as defined below and sub will rely on fsub busine sec_1a fsub will be a member of the sub sag as defined below financial information has been submitted indicating that each of fsub busine sec_2 and fsub busine sec_1a has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the past five years global separation transactions the following is a description of the steps of the global separation transactions which will be completed in the order specified below pursuant to an overall plan_of_reorganization prior to the global separation transactions and in addition to the country b country g and country h separation transactions described above the distributing worldwide group will engage in a series of transactions in other jurisdictions that will facilitate the global separation transactions by separating busine sec_1 from the retained businesses distributing will transfer all or a portion of its busine sec_1 assets to one or more state a limited_liability companies the busine sec_1 llcs each of which will be disregarded as an entity separate from distributing for u s federal_income_tax purposes this transaction will be disregarded for u s federal_income_tax purposes plr-137358-13 in certain circumstances and subject prior to the distributing debt acquisition defined below and to ensure that the proposed transaction can be completed in the unlikely event of market disruption distributing and one or more financial institutions the investment banks may enter into a committed exchange_agreement the committed exchange_agreement pursuant to the committed exchange_agreement the investment banks would exchange distributing date debt for certain controlled loans issued to distributing the controlled loans and such exchange the committed exchange to certain conditions the committed exchange would occur in lieu of an exchange of distributing date debt for controlled securities defined below the debt-for- debt exchange and only if i the controlled securities cannot be marketed at all or can be marketed only at a price where the yield_to_maturity is above a predetermined cap the cap and ii distributing effects the external distribution the controlled loans will bear interest at a rate equal to the cap and otherwise will have terms similar to those of the controlled securities any exchange of distributing date debt for controlled loans pursuant to the committed exchange_agreement will comply with the following timing limitations i the investment banks will hold the distributing date debt for a period of at least days prior to the date on which distributing’s board_of directors either declares a dividend effecting the external distribution or offers to its shareholders the right to exchange their stock pursuant to the initial exchange_offer as defined below and ii the investment banks acting as principals for their own account will hold the distributing date debt for at least days before the committed exchange distributing will transfer all of the assets associated with busine sec_1 including but not limited to all of the stock of sub sub sub and sub its b interest in p sec_1 the busine sec_1 llcs its stock in fsub fsub and fsub its stock in the additional busine sec_1 entities and its note receivable due from sub the busine sec_1 assets to controlled llc in exchange for i additional membership interests in controlled llc ii the assumption of certain fixed liabilities of distributing associated with busine sec_1 the assumed fixed liabilities and iii the assumption of certain contingent liabilities of distributing associated with busine sec_1 the assumed contingent liabilities this transaction will be disregarded for u s federal_income_tax purposes if distributing proceeds with either the debt-for-debt exchange or the committed exchange then the investment banks will purchase an amount of distributing date debt in the secondary market the distributing debt acquisition in their capacity as principals acting for their own account sub together with one or more of the busine sec_1 entities and additional busine sec_1 entities will merge with and into sub the mergers plr-137358-13 if distributing proceeds with the debt-for-debt exchange then no less than days after the distributing debt acquisition distributing will enter into an exchange_agreement the debt-for-debt exchange_agreement with the investment banks pursuant to which distributing will retire some or all of the distributing date debt in exchange for long-term debt securities to be issued by controlled the controlled securities the debt-for-debt exchange_agreement will provide that the exchange will occur at least days after the distributing debt acquisition controlled llc will convert under state a law into a corporation controlled the controlled conversion the deemed contribution of the busine sec_1 assets by distributing to controlled in exchange for i controlled’s deemed issuance of stock ii controlled’s deemed assumption of the assumed fixed liabilities and the assumed contingent liabilities iii the controlled securities or the controlled loans as described in step of the global separation transactions and iv the controlled cash as defined in step of the global separation transactions is referred to herein as the contribution most or all of the assumed contingent liabilities will be deductible by controlled or capitalized into the basis of an asset of controlled under controlled’s normal method_of_accounting following the separation as defined below the global assumed deductible liabilities following the contribution one or more of the busine sec_1 llcs may make a u s entity classification election to be treated as a corporation for u s federal_income_tax purposes if distributing proceeds with the debt-for-debt exchange or the committed exchange controlled will issue the controlled securities or the controlled loans respectively to distributing as partial consideration for distributing’s deemed contribution of the busine sec_1 assets in step of the global separation transactions controlled will borrow cash from third-party lenders the controlled borrowing if distributing proceeds with the debt-for-debt exchange or the committed exchange respectively then no less than days after the distributing debt acquisition distributing will the investment banks in repayment of all or a part of the distributing date debt the debt-for-debt exchange or ii the controlled loans to the investment banks in repayment of all or a part of the distributing date debt the committed exchange the controlled securities transfer i to controlled will distribute all or a portion of the cash from the controlled borrowing the controlled cash to distributing as partial consideration for the busine sec_1 assets deemed contributed in step of the global separation transactions the controlled cash transfer distributing will use the controlled cash to repay its plr-137358-13 existing debt including interest or fees thereon as well as borrowings under a revolving credit facility or other short-term debt facility that may be incurred prior to the distribution commercial paper and ordinary course liabilities to pay dividends including regular quarterly dividends to its shareholders and or to repurchase shares of distributing stock in all cases within o months following the controlled cash transfer distributing will not maintain the controlled cash in a separate_account thus references to controlled cash in the preceding sentence and in the representations below are to an equivalent amount of cash immediately prior to the external distribution in a transaction that qualifies as a reorganization within the meaning of sec_368 controlled will recapitalize its capital structure into the number of shares of common_stock needed to accommodate the required number of shares for distribution in the external distribution the b offer one-step distribution or distributing will either a distribute on a pro_rata basis with respect to its common_stock all of the stock of controlled to distributing’s shareholders on a single date to distributing’s shareholders on one or more occasions the right to exchange shares of distributing common_stock for shares of controlled stock the first such exchange the initial exchange_offer all such exchanges collectively the exchange offers if the transaction is effected as one or more exchange offers and if distributing’s shareholders subscribe for less than all of controlled’s stock in the exchange offers then distributing will distribute any unsubscribed controlled stock to distributing’s shareholders on a pro_rata basis within p months of the date of the controlled conversion the clean-up distribution the term external distribution herein refers to either the one- step distribution or the clean-up distribution in turn the contribution and the external distribution together are referred to herein as the separation fractional shares of controlled stock will not be distributed but instead will be aggregated by a distribution agent and sold on the market with the applicable distributing shareholders receiving their respective share of the proceeds the exchange offers together with for purposes of the separation distributing will rely on busine sec_2 as conducted by the distributing sag as defined below to satisfy the active_trade_or_business_requirement of sec_355 and controlled will rely on busine sec_1a as currently conducted by the distributing sag and as will be conducted by the controlled sag as defined below following the global separation transactions financial information has been submitted indicating that each of busine sec_2 and busine sec_1a has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the past five years additional information regarding the proposed transaction plr-137358-13 immediately following the external distribution a majority of directors on the board_of controlled will be persons that are not directors officers employees or principal shareholders of distributing and vice-versa it is expected that no officer of a distributing subsidiary will be an officer of a controlled subsidiary if such officer is responsible for strategic planning or direction of the business of either subsidiary in connection with the proposed transaction distributing and controlled expect to enter into certain agreements and arrangements concerning the relationship between distributing and its subsidiaries and controlled and its subsidiaries after the proposed transaction collectively the continuing arrangements the continuing arrangements are expected to include the following i ii iii iv a separation and distribution agreement that governs the terms of the separation of busine sec_1 from the retained businesses and certain post- distribution matters the separation and distribution agreement also provides for a post-closing adjustment to the amount of cash deemed contributed by distributing to controlled in the contribution once a final_determination of the amount of cash and cash equivalents on hand in controlled and its subsidiaries has been made to the extent the amount of cash and cash equivalents either exceeds or is less than the targeted amount specified in the separation and distribution agreement controlled will return such excess to distributing or distributing will make an additional_contribution to controlled as applicable distributing expects to enter into a global separation and distribution agreement with controlled but distributing also may need to enter into local-country separation and distribution agreements for non-u s tax reasons a tax_matters_agreement that governs the parties’ respective rights and obligations with respect to taxes distributing expects to enter into a global tax_matters_agreement with controlled but distributing also may need to enter into local-country tax matters agreements for non-u s tax reasons an employee matters agreement that governs compensation and employee benefit obligations with respect to current and former employees of busine sec_1 distributing expects to enter into a global employee matters agreement with controlled but distributing also may need to enter into local-country employee matters agreements for non-u s tax reasons agreements pursuant to which distributing or its subsidiaries will provide certain non-core services eg human resources information_technology support services etc to controlled or its subsidiaries or vice-versa on a transitional basis the transition service agreements each of the transition service agreements will provide for the provision of services for a period of no more than q months after completion of the proposed transaction and such services will be plr-137358-13 v vi vii viii provided on a cost or cost-plus basis in the event such services are provided beyond the transitional period they will continue to be provided only if the parties bargaining at arm’s length mutually agree at the end of the transitional period and only if such services are provided at fair_market_value agreements that will govern the use of office warehouse or plant space at a limited number of sites that will be shared by distributing or its subsidiaries and controlled or its subsidiaries after the external distribution the shared site agreements the shared site agreements generally will be priced on a basis intended to effect a bona_fide sharing of costs intellectual_property agreements that will provide for licenses of shared or overlapping intellectual_property whereby controlled or its subsidiaries will have a royalty-free license to use certain distributing intellectual_property and vice- versa after the proposed transaction in specified fields of use the amount of such shared or overlapping intellectual_property comprises a small portion of the intellectual_property portfolio to be retained by distributing or transferred to controlled in the proposed transaction distributing expects to enter into one or more global intellectual_property agreements with controlled but distributing also may need to enter into local-country intellectual_property agreements for non-u s tax reasons agreements that will govern commercial relationships between distributing and its subsidiaries and controlled and its subsidiaries after the proposed transaction these may include agreements relating to the manufacture supply and distribution of select products in certain markets payments made under any such agreements will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length transactions conducted under such agreements will account over time for a relatively small percentage of distributing’s and controlled’s overall commercial activity the continued guarantee by distributing of certain p sec_1 leases until the leases terminate or the third-party lessors permit controlled to replace distributing as the guarantor at a reasonable cost whichever happens sooner distributing expects that it will be obligated to guarantee approximately dollar_figurer of p sec_1’s lease obligations with terms of up to s years controlled will indemnify distributing against liabilities under these continuing guarantees distributing also expects that for those employees who will be employed by controlled after the proposed transaction outstanding stock-based compensation of distributing will be converted into stock-based compensation of controlled finally distributing expects that controlled will establish a new global holding_company structure after completion of the proposed transaction more specifically distributing plr-137358-13 expects that controlled will own a domestic holding_company which will own a foreign holding_company that will be treated as a corporation for u s federal_income_tax purposes foreign holdco distributing expects that foreign holdco will own directly or indirectly the majority of controlled’s foreign operating companies and that some of those operating companies will be treated or will elect to be treated as entities disregarded as separate from foreign holdco for u s federal_income_tax purposes sub conversion representations the following representations are made with respect to the sub conversion 1a 1b 1c 1d 1e 1f 1g sub and sub will adopt a plan_of_liquidation by conversion of sub into a limited_liability_company under state b law the sub plan_of_liquidation and the sub conversion will occur pursuant to such plan sub on the date of adoption of the sub plan_of_liquidation and at all times until the effective date of the sub conversion will be the owner of at least percent of the total combined voting power of all classes of sub stock entitled to vote and at least percent of the total value of all classes of sub stock excluding nonvoting_stock if any that is limited and preferred as to dividends and otherwise meets the requirements of sec_1504 no shares of sub stock will have been redeemed during the three years preceding the date of adoption of the sub plan_of_liquidation the distribution by sub to sub that will be deemed to occur pursuant to the sub plan_of_liquidation will take place on the effective date of the sub conversion and will be with respect to sub 3’s ownership of sub 6’s stock as of the effective date of the sub conversion sub will cease to be an entity that is treated as separate from sub for u s federal_income_tax purposes sub will not have acquired assets in any nontaxable_transaction at any time except for acquisitions made pursuant to the p sec_2 distribution and acquisitions occurring more than three years prior to the date of adoption of the sub plan_of_liquidation except with respect to dispositions made pursuant to the first sub contribution as described in the domestic separation transactions no assets of sub have been or will be disposed of by either sub or sub except for dispositions occurring in the ordinary course of business and plr-137358-13 1h 1i 1j 1k 1l 1m 1n dispositions occurring more than three years prior to the date of adoption of the sub plan_of_liquidation except with respect to the transfer to sub of the f partnership_interest in p sec_3 and the note receivable due to distributing pursuant to the first sub contribution as described in the domestic separation transactions and the transfer of sub to controlled pursuant to the contribution as described in the global separation transactions the sub conversion will not be preceded or followed by the reincorporation in or transfer or sale to a recipient corporation recipient of any of the businesses or assets of sub if persons holding directly or indirectly more than percent in value of the sub stock also hold directly or indirectly more than percent in value of the stock in recipient for purposes of this representation ownership will be determined by application of the constructive_ownership rules of sec_318 as modified by sec_304 prior to adoption of the sub plan_of_liquidation no assets of sub will have been distributed in_kind transferred or sold to sub except for i transactions occurring in the ordinary course of business and ii transactions occurring more than three years prior to the date of adoption of the sub plan_of_liquidation sub will report all earned_income represented by assets that will be deemed distributed to sub such as receivables being reported on a cash_basis unfinished construction contracts commissions due etc the fair_market_value of the assets of sub will exceed its liabilities both at the date of adoption of the sub plan_of_liquidation and immediately before the sub conversion occurs there is no intercorporate debt existing between sub and sub and none has been cancelled forgiven or discounted except for transactions that occurred more than three years prior to the date of adoption of the sub plan_of_liquidation sub is not an organization that is exempt from u s federal_income_tax under sec_501 or any other provision of the code all other transactions undertaken contemporaneously with in anticipation of in conjunction with or in any way related to the sub conversion have been fully disclosed first sub separation plr-137358-13 the following representations are made with respect to the first sub separation 2a 2b 2c 2d 2e 2f 2g 2h sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by sub or any member of the sub sag to sub or any member of the sub sag after the first sub separation will not constitute stock_or_securities if the first sub distribution is effected as an exchange for specifically identified shares of sub stock owned by sub the fair_market_value of the sub stock to be received by sub will be approximately equal to the fair_market_value of the sub stock surrendered by sub in the first sub distribution no part of the consideration to be distributed by sub in the first sub distribution will be received by sub as a creditor or an employee or in any capacity other than that of a shareholder of sub the years of financial information submitted with respect to sub busine sec_1 is representative of the present operation of sub busine sec_1 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to sub busine sec_3 is representative of the present operation of sub busine sec_3 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither sub busine sec_1 nor control of an entity conducting sub busine sec_1 will have been acquired during the five-year period ending on the date of the first sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from plr-137358-13 2i 2j 2k 2l 2m 2n another member of the affiliated_group as contemplated by sec_1 b iii neither sub busine sec_3 nor control of an entity conducting sub busine sec_3 will have been acquired during the five-year period ending on the date of the first sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the first sub separation the sub sag will continue the active_conduct of sub busine sec_1 and the sub sag will continue the active_conduct of sub busine sec_3 independently and with their separate employees except as provided pursuant to the continuing arrangements the first sub separation will be carried out for the corporate business_purpose of facilitating the separation the first sub separation is motivated in whole or substantial part by this corporate business_purpose the first sub separation is not being used principally as a device for the distribution of the earnings_and_profits of sub or sub or both the distribution of sub stock to sub in the first sub distribution is with respect to sub 1’s ownership of sub stock any money property or stock transferred by sub to sub in the first sub contribution will be exchanged or deemed exchanged solely for stock of sub the total fair_market_value of the assets that will be transferred by sub to sub in the first sub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the first sub separation ii the amount of liabilities if any owed to sub by sub that will be discharged or extinguished in connection with the first sub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by sub from sub in connection with the first sub separation the fair_market_value of the assets of sub will exceed the amount of its liabilities immediately after the first sub contribution plr-137358-13 2o 2p 2q 2r 2s 2t 2u 2v the total adjusted_basis of the assets that will be transferred by sub to sub in the first sub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by sub other than liabilities to which sec_357 applies in connection with the first sub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by sub from sub and transferred to sub 3’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the first sub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the first sub separation sub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the first sub separation no intercorporate debt will exist between sub or any member of the sub sag and sub or any member of the sub sag at the time of or subsequent to the first sub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements immediately before the first sub distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d at the time of the first sub distribution there will not be an excess_loss_account in the stock of sub except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between sub or any member of the sub sag and sub or any member of the sub sag following the first sub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv sub sub and sub each will pay its own expenses if any incurred in connection with the first sub separation plr-137358-13 2w 2x 2y 2z 2aa no party to the first sub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the first sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the first sub distribution for purposes of sec_355 immediately after the first sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the first sub distribution or ii attributable to distributions on sub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the first sub distribution the first sub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither sub nor sub will be a disqualified_investment_corporation within the meaning of sec_355 second sub separation the following representations are made with respect to the second sub separation plr-137358-13 3a 3b 3c 3d 3e 3f 3g 3h sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business sub will treat all members of the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by sub or any member of the sub sag to sub or any member of the sub sag after the second sub separation will not constitute stock_or_securities if the second sub distribution is effected as an exchange for specifically identified shares of sub stock owned by distributing the fair_market_value of the sub stock to be received by distributing will be approximately equal to the fair_market_value of the sub stock surrendered by distributing in the second sub distribution no part of the consideration to be distributed by sub in the second sub distribution will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of sub the years of financial information submitted with respect to sub busine sec_1 is representative of the present operation of sub busine sec_1 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to sub busine sec_3 is representative of the present operation of sub busine sec_3 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither sub busine sec_1 nor control of an entity conducting sub busine sec_1 will have been acquired during the five-year period ending on the date of the second sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii plr-137358-13 3i 3j 3k 3l 3m 3n neither sub busine sec_3 nor control of an entity conducting sub busine sec_3 will have been acquired during the five-year period ending on the date of the second sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the second sub separation the sub sag will continue the active_conduct of sub busine sec_1 and the sub sag will continue the active_conduct of sub busine sec_3 independently and with their separate employees except as provided pursuant to the continuing arrangements the second sub separation will be carried out for the corporate business_purpose of facilitating the separation the second sub separation is motivated in whole or substantial part by this corporate business_purpose the second sub separation is not being used principally as a device for the distribution of the earnings_and_profits of sub or sub or both the distribution of sub stock to distributing in the second sub distribution is with respect to distributing’s ownership of sub stock any money property or stock transferred by sub to sub in the second sub contribution will be exchanged or deemed exchanged solely for stock of sub and the assumption_of_liabilities by sub the total fair_market_value of the assets that will be transferred by sub to sub in the second sub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the second sub separation ii the amount of liabilities if any owed to sub by sub that will be discharged or extinguished in connection with the second sub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by sub from sub in connection with the second sub separation the fair_market_value of the assets of sub will exceed the amount of its liabilities immediately after the second sub contribution 3o the total adjusted_basis of the assets that will be transferred by sub to sub in the second sub contribution will equal or exceed the sum of i any plr-137358-13 liabilities that will be assumed within the meaning of sec_357 by sub other than liabilities to which sec_357 applies in connection with the second sub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by sub from sub and transferred to sub 1’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the second sub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the second sub separation sub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the second sub separation no intercorporate debt will exist between sub or any member of the sub sag and sub or any member of the sub sag at the time of or subsequent to the second sub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements immediately before the second sub distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d at the time of the second sub distribution there will not be an excess_loss_account in the stock of sub except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between sub or any member of the sub sag and sub or any member of the sub sag following the second sub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv sub sub and distributing each will pay its own expenses if any incurred in connection with the second sub separation 3p 3q 3r 3s 3t 3u 3v plr-137358-13 3w 3x 3y 3z 3aa no party to the second sub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the second sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the second sub distribution for purposes of sec_355 immediately after the second sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the second sub distribution or ii attributable to distributions on sub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the second sub distribution the second sub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither sub nor sub will be a disqualified_investment_corporation within the meaning of sec_355 p sec_4 separation the following representations are made with respect to the p sec_4 separation plr-137358-13 4a 4b 4c 4d 4e 4f 4g 4h fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business p sec_4 will treat all members of its separate_affiliated_group within the meaning of sec_355 the p sec_4 sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by p sec_4 or any member of the p sec_4 sag to fsub or any member of the fsub sag after the p sec_4 separation will not constitute stock_or_securities if the p sec_4 distribution is effected as an exchange for specifically identified shares of fsub stock owned by sub the fair_market_value of the p sec_4 stock to be received by sub will be approximately equal to the fair_market_value of the fsub stock surrendered by sub in the p sec_4 distribution no part of the consideration to be distributed by fsub in the p sec_4 distribution will be received by sub as a creditor or an employee or in any capacity other than that of a shareholder of fsub the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on the date of the p sec_4 distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii plr-137358-13 4i 4j 4k 4l 4m 4n neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the p sec_4 distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the p sec_4 separation the fsub sag will continue the active_conduct of fsub busine sec_1a and the p sec_4 sag will continue the active_conduct of fsub busine sec_2 independently and with their separate employees except as provided pursuant to the continuing arrangements the p sec_4 separation will be carried out for the corporate business_purpose of facilitating the separation the p sec_4 separation is motivated in whole or substantial part by this corporate business_purpose the p sec_4 separation is not being used principally as a device for the distribution of the earnings_and_profits of fsub or p sec_4 or both the distribution of p sec_4 equity interests to sub in the p sec_4 distribution is with respect to sub 12’s ownership of fsub stock any money property or stock transferred or deemed transferred by fsub to p sec_4 in the p sec_4 contribution will be exchanged or deemed exchanged solely for equity interests in p sec_4 the total fair_market_value of the assets that will be transferred or deemed transferred by fsub to p sec_4 in the p sec_4 contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by p sec_4 in connection with the p sec_4 separation ii the amount of liabilities if any owed to p sec_4 by fsub that will be discharged or extinguished in connection with the p sec_4 separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by fsub from p sec_4 in connection with the p sec_4 separation the fair_market_value of the assets of p sec_4 will exceed the amount of its liabilities immediately after the p sec_4 contribution 4o the total adjusted_basis of the assets that will be transferred or deemed transferred by fsub to p sec_4 in the p sec_4 contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of plr-137358-13 sec_357 by p sec_4 other than liabilities to which sec_357 applies in connection with the p sec_4 separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by fsub from p sec_4 and transferred to fsub 4’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by p sec_4 in connection with the p sec_4 separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the p sec_4 separation fsub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the p sec_4 separation no intercorporate debt will exist between fsub or any member of the fsub sag and p sec_4 or any member of the p sec_4 sag at the time of or subsequent to the p sec_4 separation other than any debt that arises in the ordinary course of business or under the continuing arrangements except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between fsub or any member of the fsub sag and p sec_4 or any member of the p sec_4 sag following the p sec_4 separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv fsub p sec_4 and sub each will pay its own expenses if any incurred in connection with the p sec_4 separation no party to the p sec_4 separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the p sec_4 distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total value of shares of all classes of fsub stock that was acquired by purchase as defined in sec_355 and during the five-year period 4p 4q 4r 4s 4t 4u 4v 4w plr-137358-13 determined after applying sec_355 ending on the date of the p sec_4 distribution for purposes of sec_355 immediately after the p sec_4 distribution no person determined after applying sec_355 will hold equity interests possessing percent or more of the total combined voting power of all classes of p sec_4 equity interests entitled to vote or percent or more of the total value of shares of all classes of p sec_4 equity interests that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the p sec_4 distribution or ii attributable to distributions on fsub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the p sec_4 distribution the p sec_4 separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock or other equity interests representing a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or p sec_4 including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or p sec_4 ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither fsub nor p sec_4 will be a disqualified_investment_corporation within the meaning of sec_355 fsub 4’s actual or deemed transfer of assets to p sec_4 in actual or deemed exchange for additional p sec_4 stock in the p sec_4 contribution is not an exchange described in sec_1_367_b_-4 -4 b i or -4 b fsub and p sec_4 will be controlled_foreign_corporations within the meaning of sec_957 immediately before and after the p sec_4 distribution sub will be a sec_1248 shareholder within the meaning of sec_1 b - b with respect to each of fsub and p sec_4 immediately before and after the p sec_4 distribution fsub and p sec_4 will not be passive foreign investment companies within the meaning of sec_1297 immediately before or after the p sec_4 distribution 4x 4y 4z 4aa 4bb 4cc 4dd plr-137358-13 4ee p sec_4 will not hold any united_states real_property interests as defined in sec_897 immediately before or after the p sec_4 distribution sub separation the following representations are made with respect to the sub separation 5a 5b 5c 5d 5e 5f 5g 5h sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by sub or any member of the sub sag to sub or any member of the sub sag after the sub separation will not constitute stock_or_securities if the sub distribution is effected as an exchange for specifically identified shares of sub stock owned by distributing through controlled llc the fair_market_value of the sub stock to be received by distributing will be approximately equal to the fair_market_value of the sub stock surrendered by distributing in the sub distribution no part of the consideration to be distributed by sub in the sub distribution will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of sub the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on plr-137358-13 the date of the sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the sub separation the sub sag will continue the active_conduct of fsub busine sec_1a and the sub sag will continue the active_conduct of fsub busine sec_2 independently and with their separate employees except as provided pursuant to the continuing arrangements the sub separation will be carried out for the corporate business_purpose of facilitating the separation the sub separation is motivated in whole or substantial part by this corporate business_purpose the sub separation is not being used principally as a device for the distribution of the earnings_and_profits of sub or sub or both the distribution of sub stock to distributing in the sub distribution is with respect to distributing’s ownership of sub stock any money property or stock transferred by sub to sub in the sub contribution will be exchanged or deemed exchanged solely for stock of sub the total fair_market_value of the assets that will be transferred by sub to sub in the sub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the sub separation ii the amount of liabilities if any owed to sub by sub that will be discharged or extinguished in connection with the sub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities 5i 5j 5k 5l 5m 5n plr-137358-13 5o 5p 5q 5r 5s 5t permitted to be received under sec_361 without the recognition of gain that will be received by sub from sub in connection with the sub separation the fair_market_value of the assets of sub will exceed the amount of its liabilities immediately after the sub contribution the total adjusted_basis of the assets that will be transferred by sub to sub in the sub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by sub other than liabilities to which sec_357 applies in connection with the sub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by sub from sub and transferred to sub 12’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the sub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the sub separation sub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the sub separation no intercorporate debt will exist between sub or any member of the sub sag and sub or any member of the sub sag at the time of or subsequent to the sub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements immediately before the sub distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d at the time of the sub distribution there will not be an excess_loss_account in the stock of sub except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between sub or any member of the sub sag and sub or any member of the sub sag following the sub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length plr-137358-13 5u 5v 5w 5x 5y 5z 5aa no two parties to the transaction are investment companies as defined in sec_368 and iv sub sub and distributing each will pay its own expenses if any incurred in connection with the sub separation no party to the sub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution for purposes of sec_355 immediately after the sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution or ii attributable to distributions on sub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution the sub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither sub nor sub will be a disqualified_investment_corporation within the meaning of sec_355 plr-137358-13 fsub separation the following representations are made with respect to the fsub separation 6a 6b 6c 6d 6e 6f 6g 6h fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by fsub or any member of the fsub sag to fsub or any member of the fsub sag after the fsub separation will not constitute stock_or_securities the fair_market_value of the fsub stock deemed received by fsub in the fsub distribution will be approximately equal to the fair_market_value of the fsub stock cancelled by fsub in the fsub distribution no part of the consideration deemed to be distributed by fsub in the fsub distribution will be received by fsub as a creditor or an employee or in any capacity other than that of a shareholder of fsub the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the fsub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by plr-137358-13 6i 6j 6k 6l 6m 6n sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on the date of the fsub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the fsub separation the fsub sag will continue the active_conduct of fsub busine sec_2 and the fsub sag will continue the active_conduct of fsub busine sec_1a independently and with their separate employees except as provided pursuant to the continuing arrangements the fsub separation will be carried out for the corporate business_purpose of facilitating the separation the fsub separation is motivated in whole or substantial part by this corporate business_purpose the fsub separation is not being used principally as a device for the distribution of the earnings_and_profits of fsub or fsub or both the deemed_distribution of fsub stock to fsub in the fsub distribution is with respect to fsub 11’s ownership of fsub stock any money property or stock transferred by fsub to fsub in the fsub contribution will be exchanged or deemed exchanged solely for stock of fsub and the assumption_of_liabilities by fsub the total fair_market_value of the assets that will be transferred by fsub to fsub in the fsub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by fsub in connection with the fsub separation ii the amount of liabilities if any owed to fsub by fsub that will be discharged or extinguished in connection with the fsub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by fsub from fsub in connection with the fsub separation the fair_market_value of the assets plr-137358-13 of fsub will exceed the amount of its liabilities immediately after the fsub contribution the total adjusted_basis of the assets that will be transferred by fsub to fsub in the fsub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by fsub other than liabilities to which sec_357 applies in connection with the fsub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by fsub from fsub and transferred to fsub 13’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by fsub in connection with the fsub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the fsub separation fsub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the fsub separation no intercorporate debt will exist between fsub or any member of the fsub sag and fsub or any member of the fsub sag at the time of or subsequent to the fsub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between fsub or any member of the fsub sag and fsub or any member of the fsub sag following the fsub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv fsub fsub and fsub each will pay its own expenses if any incurred in connection with the fsub separation no party to the fsub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 6o 6p 6q 6r 6s 6t 6u 6v plr-137358-13 6w 6x 6y 6z for purposes of sec_355 immediately after the fsub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total value of shares of all classes of fsub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution for purposes of sec_355 immediately after the fsub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total value of shares of all classes of fsub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution or ii attributable to distributions on fsub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution the fsub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or fsub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or fsub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither fsub nor fsub will be a disqualified_investment_corporation within the meaning of sec_355 6aa neither fsub 13’s transfer of assets to fsub in actual or deemed exchange for stock of fsub in the fsub contribution nor any actual or deemed_distribution by fsub of its fsub stock to fsub is an exchange described in sec_1_367_b_-4 -4 b i or -4 b fsub separation the following representations are made with respect to the fsub separation plr-137358-13 7a 7b 7c 7d 7e 7f 7g 7h fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by fsub or any member of the fsub sag to fsub or any member of the fsub sag after the fsub separation will not constitute stock_or_securities if the fsub distribution is effected as an exchange for specifically identified shares of fsub stock owned by sub the fair_market_value of the fsub stock to be received by sub will be approximately equal to the fair_market_value of the fsub stock surrendered by sub in the fsub distribution no part of the consideration to be distributed by fsub in the fsub distribution will be received by sub as a creditor or an employee or in any capacity other than that of a shareholder of fsub the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the fsub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from plr-137358-13 7i 7j 7k 7l 7m 7n another member of the affiliated_group as contemplated by sec_1 b iii neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on the date of the fsub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the fsub separation the fsub sag will continue the active_conduct of fsub busine sec_2 and the fsub sag will continue the active_conduct of fsub busine sec_1a independently and with their separate employees except as provided pursuant to the continuing arrangements the fsub separation will be carried out for the corporate business_purpose of facilitating the separation the fsub separation is motivated in whole or substantial part by this corporate business_purpose the fsub separation is not being used principally as a device for the distribution of the earnings_and_profits of fsub or fsub or both the distribution of fsub stock to sub in the fsub distribution is with respect to sub 10’s ownership of fsub stock any money property or stock transferred by fsub to fsub in the fsub contribution will be exchanged solely for stock of fsub the total fair_market_value of the assets that will be transferred by fsub to fsub in the fsub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by fsub in connection with the fsub separation ii the amount of liabilities if any owed to fsub by fsub that will be discharged or extinguished in connection with the fsub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by fsub from fsub in connection with the fsub separation the fair_market_value of the assets of fsub will exceed the amount of its liabilities immediately after the fsub contribution plr-137358-13 7o 7p 7q 7r 7s 7t 7u 7v 7w the total adjusted_basis of the assets that will be transferred by fsub to fsub in the fsub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by fsub other than liabilities to which sec_357 applies in connection with the fsub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by fsub from fsub and transferred to fsub 11’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by fsub in connection with the fsub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the fsub separation fsub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the fsub separation no intercorporate debt will exist between fsub or any member of the fsub sag and fsub or any member of the fsub sag at the time of or subsequent to the fsub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between fsub or any member of the fsub sag and fsub or any member of the fsub sag following the fsub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv fsub fsub and sub each will pay its own expenses if any incurred in connection with the fsub separation no party to the fsub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the fsub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total plr-137358-13 value of shares of all classes of fsub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution for purposes of sec_355 immediately after the fsub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total value of shares of all classes of fsub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution or ii attributable to distributions on fsub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution the fsub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or fsub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or fsub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither fsub nor fsub will be a disqualified_investment_corporation within the meaning of sec_355 fsub 11’s transfer of fsub stock to fsub in exchange for additional fsub stock in the fsub contribution is not an exchange described in sec_1_367_b_-4 -4 b i or -4 b fsub and fsub will be controlled_foreign_corporations within the meaning of sec_957 immediately before and after the fsub distribution sub will be a sec_1248 shareholder within the meaning of sec_1 b - b with respect to each of fsub and fsub immediately before and after the fsub distribution 7x 7y 7z 7aa 7bb 7cc plr-137358-13 7dd 7ee fsub and fsub will not be passive foreign investment companies within the meaning of sec_1297 immediately before or after the fsub distribution fsub will not hold any united_states real_property interests as defined in sec_897 immediately before or after the fsub distribution sub separation the following representations are made with respect to the sub separation 8a 8b 8c 8d 8e 8f 8g sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by sub or any member of the sub sag to sub or any member of the sub sag after the sub separation will not constitute stock_or_securities if the sub distribution is effected as an exchange for specifically identified shares of sub stock owned by distributing the fair_market_value of the sub stock to be received by distributing will be approximately equal to the fair_market_value of the sub stock surrendered by distributing in the sub distribution no part of the consideration to be distributed by sub in the sub distribution will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of sub the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted plr-137358-13 8h 8i 8j 8k 8l 8m 8n neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on the date of the sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the sub separation the sub sag will continue the active_conduct of fsub busine sec_2 and the sub sag will continue the active_conduct of fsub busine sec_1a independently and with their separate employees except as provided pursuant to the continuing arrangements the sub separation will be carried out for the corporate business_purpose of facilitating the separation the sub separation is motivated in whole or substantial part by this corporate business_purpose the sub separation is not being used principally as a device for the distribution of the earnings_and_profits of sub or sub or both the distribution of sub stock to distributing in the sub distribution is with respect to distributing’s ownership of sub stock any money property or stock transferred by sub to sub in the sub contribution will be exchanged solely for stock of sub the total fair_market_value of the assets that will be transferred by sub to sub in the sub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the sub separation ii the amount of liabilities if any plr-137358-13 8o 8p 8q 8r 8s owed to sub by sub that will be discharged or extinguished in connection with the sub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by sub from sub in connection with the sub separation the fair_market_value of the assets of sub will exceed the amount of its liabilities immediately after the sub contribution the total adjusted_basis of the assets that will be transferred by sub to sub in the sub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by sub other than liabilities to which sec_357 applies in connection with the sub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by sub from sub and transferred to sub 10’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the sub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the sub separation sub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the sub separation no intercorporate debt will exist between sub or any member of the sub sag and sub or any member of the sub sag at the time of or subsequent to the sub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements immediately before the sub distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d at the time of the sub distribution there will not be an excess_loss_account in the stock of sub further any excess_loss_account in the stock of any member that is a direct or indirect subsidiary of sub will be taken into income immediately before the members cease to be members of the distributing consolidated_group in the external distribution to the extent required by regulations see sec_1 plr-137358-13 8t 8u 8v 8w 8x 8y 8z except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between sub or any member of the sub sag and sub or any member of the sub sag following the sub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv sub sub and distributing each will pay its own expenses if any incurred in connection with the sub separation no party to the sub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution for purposes of sec_355 immediately after the sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution or ii attributable to distributions on sub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution the sub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub including any predecessor of or successor to any such corporation plr-137358-13 8aa immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither sub nor sub will be a disqualified_investment_corporation within the meaning of sec_355 fsub separation the following representations are made with respect to the fsub separation 9a 9b 9c 9d 9e 9f 9g fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business fsub will treat all members of its separate_affiliated_group within the meaning of sec_355 the fsub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by fsub or any member of the fsub sag to fsub or any member of the fsub sag after the fsub separation will not constitute stock_or_securities if the fsub distribution is effected as an exchange for specifically identified shares of fsub stock owned by sub the fair_market_value of the fsub stock deemed received by sub will be approximately equal to the fair_market_value of the fsub stock surrendered by sub in the fsub distribution no part of the consideration deemed distributed by fsub in the fsub distribution will be received by sub as a creditor or an employee or in any capacity other than that of a shareholder of fsub the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub business plr-137358-13 9h 9i 9j 9k 9l 9m 1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the fsub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on the date of the fsub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the fsub separation the fsub sag will continue the active_conduct of fsub busine sec_2 and the fsub sag will continue the active_conduct of fsub busine sec_1a independently and with their separate employees except as provided pursuant to the continuing arrangements the fsub separation will be carried out for the corporate business_purpose of facilitating the separation the fsub separation is motivated in whole or substantial part by this corporate business_purpose the fsub separation is not being used principally as a device for the distribution of the earnings_and_profits of fsub or fsub or both the deemed_distribution of fsub stock to sub in the fsub distribution is with respect to sub 11’s ownership of fsub stock any money property or stock transferred by fsub to fsub in the fsub contribution will be exchanged or deemed exchanged solely for stock of fsub and the assumption_of_liabilities by fsub plr-137358-13 9n 9o 9p 9q 9r 9s the total fair_market_value of the assets that will be transferred by fsub to fsub in the fsub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by fsub in connection with the fsub separation ii the amount of liabilities if any owed to fsub by fsub that will be discharged or extinguished in connection with the fsub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by fsub from fsub in connection with the fsub separation the fair_market_value of the assets of fsub will exceed the amount of its liabilities immediately after the fsub contribution the total adjusted_basis of the assets that will be transferred by fsub to fsub in the fsub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by fsub other than liabilities to which sec_357 applies in connection with the fsub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by fsub from fsub and transferred to fsub 14’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by fsub in connection with the fsub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the fsub separation fsub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the fsub separation no intercorporate debt will exist between fsub or any member of the fsub sag and fsub or any member of the fsub sag at the time of or subsequent to the fsub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between fsub or any member of the fsub sag and fsub or any member of the fsub sag following the fsub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length plr-137358-13 9t 9u 9v 9w 9x 9y 9z no two parties to the transaction are investment companies as defined in sec_368 and iv fsub fsub and sub each will pay its own expenses if any incurred in connection with the fsub separation no party to the fsub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the fsub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total value of shares of all classes of fsub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution for purposes of sec_355 immediately after the fsub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of fsub stock entitled to vote or percent or more of the total value of shares of all classes of fsub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution or ii attributable to distributions on fsub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the fsub distribution the fsub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or fsub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in fsub or fsub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither fsub nor fsub will be a disqualified_investment_corporation within the meaning of sec_355 plr-137358-13 9aa 9bb 9cc 9dd 9ee fsub 14’s transfer of assets to fsub in actual or deemed exchange for stock of fsub in the fsub contribution is not an exchange described in sec_1_367_b_-4 -4 b i or -4 b fsub and fsub will be controlled_foreign_corporations within the meaning of sec_957 immediately before and after the fsub distribution sub will be a sec_1248 shareholder within the meaning of sec_1 b - b with respect to each of fsub and fsub immediately before and after the fsub distribution fsub and fsub will not be passive foreign investment companies within the meaning of sec_1297 immediately before or after the fsub distribution fsub will not hold any united_states real_property interests as defined in sec_897 immediately before or after the fsub distribution sub separation the following representations are made with respect to the sub separation 10a 10b 10c 10d 10e sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business sub will treat all members of its separate_affiliated_group within the meaning of sec_355 the sub sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by sub or any member of the sub sag to sub or any member of the sub sag after the sub separation will not constitute stock_or_securities no part of the consideration to be distributed by sub in the sub distribution will be received by distributing as a creditor or an employee or in any capacity other than that of a shareholder of sub the years of financial information submitted with respect to fsub busine sec_2 is representative of the present operation of fsub busine sec_2 plr-137358-13 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to fsub busine sec_1a is representative of the present operation of fsub busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither fsub busine sec_2 nor control of an entity conducting fsub busine sec_2 will have been acquired during the five-year period ending on the date of the sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii neither fsub busine sec_1a nor control of an entity conducting fsub busine sec_1a will have been acquired during the five-year period ending on the date of the sub distribution in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1 b iii following the sub separation the sub sag will continue the active_conduct of fsub busine sec_2 and the sub sag will continue the active_conduct of fsub busine sec_1a independently and with their separate employees except as provided pursuant to the continuing arrangements the sub separation will be carried out for the corporate business_purpose of facilitating the separation the sub separation is motivated in whole or substantial part by this corporate business_purpose the sub separation is not being used principally as a device for the distribution of the earnings_and_profits of sub or sub or both the distribution of sub stock to distributing in the sub distribution and of fsub securities to distributing in the fsub securities distribution is with 10f 10g 10h 10i 10j 10k 10l plr-137358-13 10m 10n 10o 10p 10q 10r respect to distributing’s ownership of sub stock any money property or stock transferred by sub to sub in the sub contribution will be exchanged or deemed exchanged solely for stock of sub the total fair_market_value of the assets that will be transferred by sub to sub in the sub contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the sub separation ii the amount of liabilities if any owed to sub by sub that will be discharged or extinguished in connection with the sub separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by sub from sub in connection with the sub separation the fair_market_value of the assets of sub will exceed the amount of its liabilities immediately after the sub contribution the total adjusted_basis of the assets that will be transferred by sub to sub in the sub contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 by sub other than liabilities to which sec_357 applies in connection with the sub separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by sub from sub and transferred to sub 11’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 by sub in connection with the sub separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred except pursuant to the elimination or reduction of intercompany balances in connection with the sub separation sub will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the sub separation no intercorporate debt will exist between sub or any member of the sub sag and sub or any member of the sub sag at the time of or subsequent to the sub separation other than any debt that arises in the ordinary course of business or under the continuing arrangements immediately before the sub distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently plr-137358-13 10s 10t 10u 10v 10w 10x in effect sec_1_1502-13 as published by t d at the time of the sub distribution there will not be an excess_loss_account in the stock of sub further any excess_loss_account in the stock of any member that is a direct or indirect subsidiary of sub will be included in income immediately before the members cease to be members of the distributing consolidated_group in the external distribution to the extent required by regulations see sec_1 except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between sub or any member of the sub sag and sub or any member of the sub sag following the sub separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv sub sub and distributing each will pay its own expenses if any incurred in connection with the sub separation no party to the sub separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution for purposes of sec_355 immediately after the sub distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of sub stock entitled to vote or percent or more of the total value of shares of all classes of sub stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution or ii attributable to distributions on sub stock_or_securities that were acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the sub distribution plr-137358-13 10y 10z the sub separation is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in sub or sub ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither sub nor sub will be a disqualified_investment_corporation within the meaning of sec_355 global separation transactions 11a 11b 11c 11d distributing will treat all members of its separate_affiliated_group within the meaning of sec_355 the distributing sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business controlled will treat all members of its separate_affiliated_group within the meaning of sec_355 the controlled sag as one corporation in determining whether it satisfies the requirements of sec_355 regarding the active_conduct_of_a_trade_or_business any indebtedness owed by controlled or any member of the controlled sag to distributing or any member of the distributing sag after the external distribution will not constitute stock_or_securities if the external distribution is effected as an exchange of shares of distributing common_stock owned by its shareholders pursuant to one or more exchange offers the fair_market_value of the controlled stock and cash in lieu of fractional shares to be received by each distributing shareholder in the exchange offers will be approximately equal to the fair_market_value of the distributing common_stock to be surrendered by such shareholder in the exchange offers 11e except for any conversion of stock-based compensation arrangements of distributing into stock-based compensation arrangements of controlled no part of the consideration to be distributed by distributing in the external distribution will be received by any shareholder of distributing as a creditor or plr-137358-13 11f 11g 11h 11i 11j an employee or in any capacity other than that of a shareholder of distributing any shares of controlled stock distributed in the external distribution with respect to the conversion of stock-based compensation arrangements will not represent more than percent of the controlled stock outstanding immediately after the external distribution no part of the consideration to be distributed by distributing in the debt-for- debt exchange or the committed exchange will be received by any security holder as a shareholder or an employee or in any capacity other than that of a security holder of distributing the years of financial information submitted with respect to busine sec_2 is representative of the present operation of busine sec_2 and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted the years of financial information submitted with respect to busine sec_1a is representative of the present operation of busine sec_1a and with regard to such business there have been no substantial operational changes since the date of the last financial statements submitted neither busine sec_2 nor control of an entity conducting busine sec_2 will have been acquired during the five-year period ending on the date of the one-step distribution or the initial exchange_offer as applicable in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1_355-3 neither busine sec_1a nor control of an entity conducting busine sec_1a will have been acquired during the five-year period ending on the date of the one-step distribution or the initial exchange_offer as applicable in a transaction in which gain_or_loss was recognized or treated as recognized for u s federal_income_tax purposes in whole or in part except for acquisitions that constitute expansions or that did not result in a change to the existing business of such a character as to constitute the acquisition of a new or different business as contemplated by sec_1_355-3 and acquisitions by one member_of_an_affiliated_group from another member of the affiliated_group as contemplated by sec_1_355-3 plr-137358-13 11k 11l 11m 11n 11o 11p following the external distribution the distributing sag will continue the active_conduct of busine sec_2 and the controlled sag will continue the active_conduct of busine sec_1a independently and with their separate employees except as provided pursuant to the continuing arrangements the separation will be carried out for the following corporate business purposes i to more closely align the distributing worldwide group’s businesses with its evolving strategic direction and ii to free busine sec_1 of capital and other constraints necessarily applicable to a business that no longer closely aligns with the distributing worldwide group’s strategic direction the separation is motivated in whole or substantial part by one or more of these corporate business purposes the separation is not being used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both the distribution of controlled stock to the shareholders of distributing in the external distribution is with respect to such shareholders’ ownership of distributing common_stock any money property or stock transferred or deemed transferred by distributing to controlled in the contribution will be exchanged or deemed exchanged solely for stock_or_securities of controlled the assumption_of_liabilities by controlled or controlled cash the total fair_market_value of the assets that will be deemed to be transferred by distributing to controlled in the contribution will exceed the sum of i the total liabilities if any that will be assumed within the meaning of sec_357 or deemed assumed by controlled in connection with the separation ii the amount of liabilities if any owed to controlled by distributing that will be discharged or extinguished in connection with the separation and iii the amount of cash and the fair_market_value of the property if any other than stock and securities permitted to be received under sec_361 without the recognition of gain that will be received by distributing from controlled including the controlled cash in connection with the separation the fair_market_value of the assets of controlled will exceed the amount of its liabilities immediately after the contribution the total adjusted_basis of the assets that will be deemed to be transferred by distributing to controlled in the contribution will equal or exceed the sum of i any liabilities that will be assumed within the meaning of sec_357 or deemed assumed by controlled other than liabilities to which sec_357 applies in connection with the separation and ii the total amount of any money and the fair_market_value of any other_property within the meaning of sec_361 that will be received by distributing from plr-137358-13 11q 11r 11s 11t 11u 11v 11w controlled including the controlled cash and transferred to distributing’s creditors and shareholders in connection with the reorganization the liabilities if any that will be assumed within the meaning of sec_357 or deemed assumed by controlled in connection with the separation will have been incurred in the ordinary course of business and will be associated with the assets to be transferred the incurrence of the global assumed deductible liabilities will not have resulted in the creation of or an increase in the basis of any asset of distributing or controlled or the stock of distributing or controlled the global assumed deductible liabilities are liabilities that have been accrued as appropriate for financial_accounting purposes but that will not meet the timing requirements for a deduction by distributing before the contribution under distributing’s method of tax_accounting the global assumed deductible liabilities will meet the timing requirements for a deduction by controlled after the contribution under controlled’s method of tax_accounting the income_tax_liability for the taxable_year in which investment_credit_property including any building to which sec_47 applies is transferred will be adjusted pursuant to sec_50 or a or sec_47 as in effect before amendment by public law title 104_stat_1388 if applicable to reflect an early disposition of the property except pursuant to the elimination or reduction of intercompany balances in connection with the separation distributing will have neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the separation no intercorporate debt will exist between distributing or any member of the distributing sag and controlled or any member of the controlled sag at the time of or subsequent to the separation other than any debt that arises in the ordinary course of business or under the continuing arrangements immediately before controlled and other members of the distributing consolidated_group cease to be members in the external distribution items of income gain loss deduction and credit will be taken into account as required by transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further any excess_loss_account that distributing may have in the stock of controlled or that a member may have in the stock of another the applicable intercompany plr-137358-13 11x 11y 11z 11aa 11bb 11cc member that is required to be taken into account under sec_1_1502-19 will be included in income immediately before controlled and the other members of the distributing consolidated_group cease to be members in the external distribution to the extent required by regulations see sec_1_1502-19 except with respect to certain payments made pursuant to the continuing arrangements payments made in connection with all continuing transactions between distributing or any member of the distributing sag and controlled or any member of the controlled sag following the separation will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length no two parties to the transaction are investment companies as defined in sec_368 and iv distributing controlled and their respective shareholders will pay their own expenses if any incurred in connection with the separation no party to the separation is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 for purposes of sec_355 immediately after the external distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and a during the 5-year period determined after applying sec_355 ending on the date of the external distribution if the external distribution is structured as a one-step distribution or b during the period determined after applying sec_355 beginning years before the date of the initial exchange_offer and ending on the date on which the external distribution is completed if the external distribution is structured as exchange offers for purposes of sec_355 immediately after the external distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and a during the 5-year period determined after applying sec_355 ending on the date of the external distribution if the external distribution is structured as a one-step distribution or b during the period determined after applying sec_355 beginning years before the date of the initial exchange_offer and plr-137358-13 ending on the date on which the external distribution is completed if the external distribution is structured as exchange offers or ii attributable to distributions on distributing stock_or_securities that were acquired by purchase as defined in sec_355 and a during the 5-year period determined after applying sec_355 ending on the date of the external distribution if the external distribution is structured as a one-step distribution or b during the period determined after applying sec_355 beginning years before the date of the initial exchange_offer and ending on the date on which the external distribution is completed if the external distribution is structured as exchange offers the external distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor of or successor to any such corporation immediately after the transaction as defined in sec_355 i no person will hold a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled ii if any person holds a 50-percent_or_greater_interest within the meaning of sec_355 in any disqualified_investment_corporation within the meaning of sec_355 such person will have held such interest in such corporation immediately before the transaction or iii neither distributing nor controlled will be a disqualified_investment_corporation within the meaning of sec_355 the sum of i the amount of distributing date debt exchanged for controlled securities in the debt-for-debt exchange or exchanged for controlled loans in the committed exchange and ii the amount of other distributing debt repaid with the controlled cash will not exceed the weighted quarterly average of all distributing debt owed to unrelated third parties for the 12-month_period ending on the day before distributing's board_of directors first discussed the potential separation of busine sec_1 from the retained businesses the distributing date debt was not incurred in connection with or in anticipation of the proposed transaction the controlled securities and the controlled loans will constitute securities within the meaning of sec_361 the receipt by distributing shareholders of cash in lieu of fractional shares of controlled stock if any is solely for the purpose of avoiding the expense and inconvenience to controlled of issuing and maintaining fractional shares and 11dd 11ee 11ff 11gg 11hh 11ii plr-137358-13 will not represent separately bargained for consideration the total cash that will be paid in the external distribution to distributing shareholders in lieu of fractional shares of controlled stock will not exceed t percent of the total consideration that will be distributed in the external distribution any fractional share interests of a distributing shareholder will be aggregated and no distributing shareholder of record will receive cash in an amount equal to or greater than the value of one full share of controlled stock pursuant to the plan_of_reorganization distributing will use all of the controlled cash to repay its existing debt including interest or fees thereon as well as borrowings under a revolving credit facility or other short-term debt facility that may be incurred prior to the distribution commercial paper and ordinary course liabilities to pay dividends including regular quarterly dividends to its shareholders and or to repurchase shares of distributing stock in all cases within o months following the controlled cash transfer 11jj rulings based solely on the information submitted and the representations set forth above and provided that i the distribution of stock of any controlled_corporation to the shareholder s of any distributing_corporation each within the meaning of sec_355 in an internal distribution or the external distribution is with respect to their ownership of the distributing corporation’s stock ii any money property or stock transferred or deemed transferred by a distributing_corporation to a controlled_corporation in any of the contributions is exchanged solely for stock_or_securities in the controlled_corporation the assumption_of_liabilities or in the case of the contribution controlled cash and iii any other transfer of stock money or property between any distributing_corporation any shareholder thereof or any controlled_corporation and any person related to any distributing_corporation any shareholder thereof or any controlled_corporation is respected as a separate transaction we rule as follows sub conversion 1a 1b 1c for u s federal_income_tax purposes the sub conversion will be treated as a distribution in complete_liquidation of sub under sec_332 sec_332 and sec_1_332-2 sub will recognize no gain_or_loss upon the sub conversion sec_332 sub will recognize no gain_or_loss upon the sub conversion sec_337 plr-137358-13 1d 1e 1f 1g 1h sub 3’s basis in each asset deemed received in the sub conversion will equal the basis of that asset in the hands of sub immediately before the sub conversion sec_334 sub 3’s holding_period in each asset deemed received in the sub conversion will include the period during which sub held such asset sec_1223 sub will succeed to and take into account as of the close of the date of the sub conversion the items of sub described in sec_381 subject_to the conditions and limitations specified in sec_381 sec_382 sec_383 and sec_384 and the regulations thereunder as applicable sec_381 and sec_1_381_a_-1 except to the extent sub 6’s earnings_and_profits are reflected in sub 3’s earnings_and_profits sub will succeed to and take into account the earnings_and_profits or deficit in earnings_and_profits of sub as of the close of the date of the sub conversion sec_381 sec_1_381_c_2_-1 and sec_1_1502-33 any deficit in the earnings_and_profits of sub will be used only to offset earnings_and_profits accumulated after the date of the sub conversion sec_381 the contribution of the percent partnership_interest in p sec_3 to sub in the first sub contribution and the contribution of sub to controlled in the contribution will not cause the sub conversion to fail to qualify as a tax-free_liquidation under sec_332 and sec_337 first sub separation 2a 2b 2c 2d the first sub contribution together with the first sub distribution will be a reorganization within the meaning of sec_368 sub and sub each will be a_party_to_a_reorganization within the meaning of sec_368 sub will recognize no gain_or_loss upon the first sub contribution sec_361 sub will recognize no gain_or_loss upon the first sub contribution sec_1032 sub 8’s basis in each asset received in the first sub contribution will equal the basis of that asset in the hands of sub immediately before the first sub contribution sec_362 plr-137358-13 2e 2f 2g 2h 2i 2j 2k sub 8’s holding_period in each asset received in the first sub contribution will include the period during which such asset was held by sub sec_1223 sub will recognize no gain_or_loss upon the first sub distribution sec_361 sub will recognize no gain_or_loss and no amount will be includible in its income upon the first sub distribution sec_355 if the first sub distribution is made as a pro_rata distribution with respect to the stock of sub owned by sub the basis of the sub stock and the sub stock in the hands of sub immediately after the first sub distribution will equal the basis of the sub stock owned by sub immediately before the first sub distribution allocated between the stock of sub and sub in proportion to the fair_market_value of each in accordance with sec_1 a iv sec_358 b and c if instead the first sub distribution is made as an exchange of shares of sub stock for specified shares of sub stock the basis of the sub stock in the hands of sub immediately after the first sub distribution will equal the basis of the sub stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c sub 1’s holding_period in the sub stock received in the first sub distribution will include the holding_period of the sub stock exchanged therefor or with respect to which the first sub distribution is made provided that sub holds the sub stock as a capital_asset on the date of the first sub distribution sec_1223 sub 3’s earnings_and_profits will be allocated between sub and sub in accordance with sec_312 and sec_1_312-10 and sec_1_1502-33 except for purposes of sec_355 any payments made between sub or its affiliates and sub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the first sub distribution or for a taxable_period beginning before but ending after the first sub distribution and ii will not become fixed and ascertainable until after the first sub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the first sub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 second sub separation plr-137358-13 3a 3b 3c 3d 3e 3f 3g 3h 3i the second sub contribution together with the second sub distribution will be a reorganization within the meaning of sec_368 sub and sub each will be a_party_to_a_reorganization within the meaning of sec_368 sub will recognize no gain_or_loss upon the second sub contribution sec_357 and sec_361 sub will recognize no gain_or_loss upon the second sub contribution sec_1032 sub 8’s basis in each asset received in the second sub contribution will equal the basis of that asset in the hands of sub immediately before the second sub contribution sec_362 sub 8’s holding_period in each asset received in the second sub contribution will include the period during which such asset was held by sub sec_1223 sub will recognize no gain_or_loss upon the second sub distribution sec_361 distributing will recognize no gain_or_loss and no amount will be includible in its income upon the second sub distribution sec_355 if the second sub distribution is made as a pro_rata distribution with respect to the stock of sub owned by distributing the basis of the sub stock and the sub stock in the hands of distributing immediately after the second sub distribution will equal the basis of the sub stock owned by distributing immediately before the second sub distribution allocated between the stock of sub and sub in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c if instead the second sub distribution is made as an exchange of shares of sub stock for specified shares of sub stock the basis of the sub stock in the hands of distributing immediately after the second sub distribution will equal the basis of the sub stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c distributing’s holding_period in the sub stock received in the second sub distribution will include the holding_period of the sub stock exchanged therefor or with respect to which the second sub distribution is made provided that distributing holds the sub stock as a capital_asset on the date of the second sub distribution sec_1223 plr-137358-13 3j 3k sub 1’s earnings_and_profits will be allocated between sub and sub in accordance with sec_312 and sec_1_312-10 and sec_1_1502-33 except for purposes of sec_355 any payments made between sub or its affiliates and sub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the second sub distribution or for a taxable_period beginning before but ending after the second sub distribution and ii will not become fixed and ascertainable until after the second sub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the second sub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 p sec_4 separation 4a 4b 4c 4d 4e 4f 4g 4h the p sec_4 contribution together with the p sec_4 distribution will be a reorganization within the meaning of sec_368 fsub and p sec_4 each will be a_party_to_a_reorganization within the meaning of sec_368 fsub will recognize no gain_or_loss upon the p sec_4 contribution sec_361 p sec_4 will recognize no gain_or_loss upon the p sec_4 contribution sec_1032 p sec_4’s basis in each asset received or deemed received in the p sec_4 contribution will equal the basis of that asset in the hands of fsub immediately before the p sec_4 contribution sec_362 p sec_4’s holding_period in each asset received or deemed received in the p sec_4 contribution will include the period during which such asset was held by fsub sec_1223 fsub will recognize no gain_or_loss upon the p sec_4 distribution sec_361 sub will recognize no gain_or_loss and no amount will be includible in its income upon the p sec_4 distribution sec_355 if the p sec_4 distribution is made as a pro_rata distribution with respect to the stock of fsub owned by sub the basis of the p sec_4 stock and the fsub stock in the hands of sub immediately after the p sec_4 distribution will equal plr-137358-13 the basis of the fsub stock owned by sub immediately before the p sec_4 distribution allocated between the stock of fsub and p sec_4 in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c if instead the p sec_4 distribution is made as an exchange of shares of p sec_4 stock for specified shares of fsub stock the basis of the p sec_4 stock in the hands of sub immediately after the p sec_4 distribution will equal the basis of the fsub stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c sub 12’s holding_period in the p sec_4 stock received in the p sec_4 distribution will include the holding_period of the fsub stock exchanged therefor or with respect to which the p sec_4 distribution is made provided that sub holds the fsub stock as a capital_asset on the date of the p sec_4 distribution sec_1223 fsub 4’s earnings_and_profits will be allocated between fsub and p sec_4 in accordance with sec_312 and sec_1_312-10 except for purposes of sec_355 any payments made between fsub or its affiliates and p sec_4 or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the distribution or for a taxable_period beginning before but ending after the p sec_4 distribution and ii will not become fixed and ascertainable until after the p sec_4 distribution will be treated for u s federal_income_tax purposes as occurring immediately before the p sec_4 distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 4i 4j 4k sub separation 5a 5b 5c the sub contribution together with the sub distribution will be a reorganization within the meaning of sec_368 sub and sub each will be a_party_to_a_reorganization within the meaning of sec_368 sub will recognize no gain_or_loss upon the sub contribution sec_361 sub will recognize no gain_or_loss upon the sub contribution sec_1032 plr-137358-13 5d 5e 5f 5g 5h 5i 5j 5k sub 13’s basis in each asset received in the sub contribution will equal the basis of that asset in the hands of sub immediately before the sub contribution sec_362 sub 13’s holding_period in each asset received in the sub contribution will include the period during which such asset was held by sub sec_1223 sub will recognize no gain_or_loss upon the sub distribution sec_361 distributing will recognize no gain_or_loss and no amount will be includible in its income upon the sub distribution sec_355 if the sub distribution is made as a pro_rata distribution with respect to the stock of sub owned by distributing the basis of the sub stock and the sub stock in the hands of distributing immediately after the sub distribution will equal the basis of the sub stock owned by distributing immediately before the sub distribution allocated between the stock of sub and sub in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c if instead the sub distribution is made as an exchange of shares of sub stock for specified shares of sub stock the basis of the sub stock in the hands of distributing immediately after the sub distribution will equal the basis of the sub stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c distributing’s holding_period in the sub stock received in the sub distribution will include the holding_period of the sub stock exchanged therefor or with respect to which the sub distribution is made provided that distributing holds the sub stock as a capital_asset on the date of the sub distribution sec_1223 sub 12’s earnings_and_profits will be allocated between sub and sub in accordance with sec_312 and sec_1_312-10 and sec_1_1502-33 except for purposes of sec_355 any payments made between sub or its affiliates and sub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the sub distribution or for a taxable_period beginning before but ending after the sub distribution and ii will not become fixed and ascertainable until after the sub distribution will be treated for u s federal_income_tax purposes plr-137358-13 as occurring immediately before the sub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 fsub separation 6a 6b 6c 6d 6e 6f 6g 6h 6i for u s federal_income_tax purposes the fsub separation will be treated as if i fsub formed fsub and contributed all of fsub 13’s assets associated with busine sec_1 to fsub in exchange for all of the stock of fsub and fsub 20’s assumption of fsub 13’s liabilities associated with busine sec_1 in country g the deemed fsub contribution and then immediately thereafter ii fsub distributed all of the stock of fsub to fsub in exchange for shares of common and preferred_stock of fsub owned by fsub the deemed fsub distribution cf revrul_77_191 1977_1_cb_94 revrul_57_311 1957_2_cb_243 the deemed fsub contribution together with the deemed fsub distribution will be a reorganization within the meaning of sec_368 fsub and fsub each will be a_party_to_a_reorganization within the meaning of sec_368 fsub will recognize no gain_or_loss upon the deemed fsub contribution sec_357 and sec_361 fsub will recognize no gain_or_loss upon the deemed fsub contribution sec_1032 fsub 20’s basis in each asset received in the deemed fsub contribution will equal the basis of that asset in the hands of fsub immediately before the deemed fsub contribution sec_362 fsub 20’s holding_period in each asset received in the deemed fsub contribution will include the period during which such asset was held by fsub sec_1223 fsub will recognize no gain_or_loss upon the deemed fsub distribution sec_361 fsub will recognize no gain_or_loss and no amount will be includible in its income upon the deemed fsub distribution sec_355 the basis of the fsub stock in the hands of fsub immediately after the deemed fsub distribution will equal the basis of the fsub stock deemed exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c plr-137358-13 6j 6k 6l fsub 11’s holding_period in the fsub stock deemed received in the deemed fsub distribution will include the holding_period of the fsub stock deemed exchanged therefor provided that fsub holds the fsub stock as a capital_asset on the date of the deemed fsub distribution sec_1223 fsub 13’s earnings_and_profits will be allocated between fsub and fsub in accordance with sec_312 and sec_1_312-10 except for purposes of sec_355 any payments made between fsub or its affiliates and fsub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the deemed fsub distribution or for a taxable_period beginning before but ending after the deemed fsub distribution and ii will not become fixed and ascertainable until after the deemed fsub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the deemed fsub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 fsub separation 7a 7b 7c 7d 7e 7f the fsub contribution together with the fsub distribution will be a reorganization within the meaning of sec_368 fsub and fsub each will be a_party_to_a_reorganization within the meaning of sec_368 fsub will recognize no gain_or_loss upon the fsub contribution sec_361 fsub will recognize no gain_or_loss upon the fsub contribution sec_1032 fsub 19’s basis in each asset received in the fsub contribution will equal the basis of that asset in the hands of fsub immediately before the fsub contribution sec_362 fsub 19’s holding_period in each asset received in the fsub contribution will include the period during which such asset was held by fsub sec_1223 fsub will recognize no gain_or_loss upon the fsub distribution sec_361 plr-137358-13 7g 7h 7i 7j 7k 7l sub will recognize no gain_or_loss and no amount will be includible in its income upon the fsub distribution sec_355 if the fsub distribution is made as a pro_rata distribution with respect to the stock of fsub owned by sub the basis of the fsub stock and the fsub stock in the hands of sub immediately after the fsub distribution will equal the basis of the fsub stock owned by sub immediately before the fsub distribution allocated between the stock of fsub and fsub in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c if instead the fsub distribution is made as an exchange of shares of fsub stock for specified shares of fsub stock the basis of the fsub stock in the hands of sub immediately after the fsub distribution will equal the basis of the fsub stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c sub 10’s holding_period in the fsub stock received in the fsub distribution will include the holding_period of the fsub stock exchanged therefor or with respect to which the fsub distribution is made provided that sub holds the fsub stock as a capital_asset on the date of the fsub distribution sec_1223 fsub 11’s earnings_and_profits will be allocated between fsub and fsub in accordance with sec_312 and sec_1_312-10 except for purposes of sec_355 any payments made between fsub or its affiliates and fsub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the fsub distribution or for a taxable_period beginning before but ending after the fsub distribution and ii will not become fixed and ascertainable until after the fsub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the fsub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 the qualification of the fsub separation under sec_368 and the fsub distribution under sec_355 will not be affected by a subsequent transfer of fsub stock pursuant to sec_351 that occurs in connection with the establishment of a global holding_company structure for the foreign members of the controlled sag following the proposed transaction cf revrul_2003_79 2003_2_cb_80 revrul_98_27 1998_1_cb_1159 plr-137358-13 sub separation 8a 8b 8c 8d 8e 8f 8g 8h the sub contribution together with the sub distribution will be a reorganization within the meaning of sec_368 sub and sub each will be a_party_to_a_reorganization within the meaning of sec_368 sub will recognize no gain_or_loss upon the sub contribution sec_361 sub will recognize no gain_or_loss upon the sub contribution sec_1032 sub 14’s basis in each asset received in the sub contribution will equal the basis of that asset in the hands of sub immediately before the sub contribution sec_362 sub 14’s holding_period in each asset received in the sub contribution will include the period during which such asset was held by sub sec_1223 sub will recognize no gain_or_loss upon the sub distribution sec_361 distributing will recognize no gain_or_loss and no amount will be includible in its income upon the sub distribution sec_355 if the sub distribution is made as a pro_rata distribution with respect to the stock of sub owned by distributing the basis of the sub stock and the sub stock in the hands of distributing immediately after the sub distribution will equal the basis of the sub stock owned by distributing immediately before the sub distribution allocated between the stock of sub and sub in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c if instead the sub distribution is made as an exchange of shares of sub stock for specified shares of sub stock the basis of the sub stock in the hands of distributing immediately after the sub distribution will equal the basis of the sub stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c 8i distributing’s holding_period in the sub stock received in the sub distribution will include the holding_period of the sub stock exchanged therefor or with respect to which the sub distribution is made provided plr-137358-13 8j 8k 8l that distributing holds the sub stock as a capital_asset on the date of the sub distribution sec_1223 sub 10’s earnings_and_profits will be allocated between sub and sub in accordance with sec_312 and sec_1_312-10 and sec_1_1502-33 except for purposes of sec_355 any payments made between sub or its affiliates and sub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the sub distribution or for a taxable_period beginning before but ending after the sub distribution and ii will not become fixed and ascertainable until after the sub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the sub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 the qualification of the sub separation under sec_368 and the sub distribution under sec_355 will not be affected by the merger of sub with and into sub pursuant to the mergers cf revrul_2003_79 2003_2_cb_80 revrul_98_27 1998_1_cb_1159 fsub separation 9a 9b 9c for u s federal_income_tax purposes the transfers of the fsub notes will be disregarded and the fsub separation will be treated as if i fsub formed fsub and contributed all of fsub 14’s assets associated with busine sec_1 and cash to fsub in exchange for all of the stock of fsub and fsub 21’s assumption of the liabilities associated with busine sec_1 in country h the deemed fsub contribution and then immediately thereafter ii fsub distributed all of the stock of fsub to sub the deemed fsub distribution as either a pro_rata distribution on the fsub stock owned by sub or a non-pro rata distribution in exchange for specifically identified shares of fsub stock owned by sub cf revrul_83_142 1983_2_cb_68 revrul_77_191 1977_1_cb_94 revrul_57_311 1957_2_cb_243 the deemed fsub contribution together with the deemed fsub distribution the deemed fsub separation will be a reorganization within the meaning of sec_368 fsub and fsub each will be a_party_to_a_reorganization within the meaning of sec_368 fsub will recognize no gain_or_loss upon the deemed fsub contribution sec_357 and sec_361 plr-137358-13 9d 9e 9f 9g 9h 9i 9j 9k 9l fsub will recognize no gain_or_loss upon the deemed fsub contribution sec_1032 fsub 21’s basis in each asset received in the deemed fsub contribution will equal the basis of that asset in the hands of fsub immediately before the deemed fsub contribution sec_362 fsub 21’s holding_period in each asset received in the deemed fsub contribution will include the period during which such asset was held by fsub sec_1223 fsub will recognize no gain_or_loss upon the deemed fsub distribution sec_361 sub will recognize no gain_or_loss and no amount will be includible in its income upon the deemed fsub distribution sec_355 if the fsub distribution is made as a pro_rata distribution with respect to the stock of fsub owned by sub the basis of the fsub stock and the fsub stock in the hands of sub immediately after the deemed fsub distribution will equal the basis of the fsub stock owned by sub immediately before the deemed fsub distribution allocated between the stock of fsub and fsub in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c if instead the fsub distribution is made as an exchange for specified shares of fsub stock owned by sub the basis of the fsub stock in the hands of sub immediately after the deemed fsub distribution will equal the basis of the fsub stock deemed exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c sub 11’s holding_period in the fsub stock deemed received in the deemed fsub distribution will include the holding_period of the fsub stock exchanged therefor or with respect to which the deemed fsub distribution is made provided that sub holds the fsub stock as a capital_asset on the date of the deemed fsub distribution sec_1223 fsub 14’s earnings_and_profits will be allocated between fsub and fsub in accordance with sec_312 and sec_1_312-10 except for purposes of sec_355 any payments made between fsub or its affiliates and fsub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the plr-137358-13 9m deemed fsub distribution or for a taxable_period beginning before but ending after the deemed fsub distribution and ii will not become fixed and ascertainable until after the deemed fsub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the deemed fsub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 the qualification of the deemed fsub separation under sec_368 and the deemed fsub distribution under sec_355 will not be affected by any subsequent transfer of fsub stock pursuant to sec_351 or reorganization of fsub pursuant to sec_368 that occurs in connection with the establishment of a global holding_company structure for the foreign members of the controlled sag following the proposed transaction cf revrul_2003_79 2003_2_cb_80 revrul_98_27 1998_1_cb_1159 sub separation 10a 10b 10c 10d 10e 10f 10g the sub contribution together with the sub distribution will be a reorganization within the meaning of sec_368 sub and sub each will be a_party_to_a_reorganization within the meaning of sec_368 sub will recognize no gain_or_loss upon the sub contribution sec_361 sub will recognize no gain_or_loss upon the sub contribution sec_1032 sub 15’s basis in each asset received in the sub contribution will equal the basis of that asset in the hands of sub immediately before the sub contribution sec_362 sub 15’s holding_period in each asset received in the sub contribution will include the period during which such asset was held by sub sec_1223 sub will recognize no gain_or_loss upon the sub distribution sec_361 sub will recognize gain if any upon the fsub securities distribution in an amount equal to the difference between the fair_market_value of the fsub securities and sub 11’s adjusted_basis in the fsub securities as if such securities had been sold to distributing sec_361 plr-137358-13 10h 10i 10j 10k 10l 10m distributing will recognize no gain_or_loss and no amount will be includible in its income upon the sub distribution sec_355 distributing will be treated as having received in the fsub securities distribution as a distribution_of_property to which sec_301 applies an amount equal to the fair_market_value of the fsub securities sec_356 the amount of the fsub securities distribution will not be included in the gross_income of distributing to the extent that distributing makes a corresponding negative adjustment to the basis of its sub stock sec_1_1502-13 and sec_1_1502-32 and the basis of the sub stock and the sub stock in the hands of distributing immediately after the sub distribution will equal the basis of the sub stock owned by distributing immediately before the sub distribution as adjusted in connection with the fsub securities distribution allocated between the stock of sub and sub in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c distributing’s basis in the fsub securities immediately after the fsub securities distribution will equal the fair_market_value of the fsub securities sec_301 and sec_358 and sec_1_358-1 distributing’s holding_period in the sub stock received in the sub distribution will include the holding_period of the sub stock with respect to which the sub distribution is made provided that distributing holds the sub stock as a capital_asset on the date of the sub distribution sec_1223 sub 11’s earnings_and_profits as adjusted under sec_312 in connection with the fsub securities distribution will be allocated between sub and sub in accordance with sec_312 and sec_1_312-10 and sec_1 f except for purposes of sec_355 any payments made between sub or its affiliates and sub or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the sub distribution or for a taxable_period beginning before but ending after the sub distribution and ii will not become fixed and ascertainable until after the sub distribution will be treated for u s federal_income_tax purposes as occurring immediately before the sub distribution cf 344_us_6 revrul_83_73 1983_1_cb_84 global separation transactions plr-137358-13 11a 11b 11c 11d 11e 11f 11g 11h 11i together with the contribution the external distribution will be a reorganization within the meaning of sec_368 distributing and controlled each will be a_party_to_a_reorganization within the meaning of sec_368 distributing will recognize no gain_or_loss upon the contribution sec_357 and sec_361 any global assumed deductible liabilities will be excluded in determining the amount of liabilities of distributing assumed by controlled for purposes of sec_357 sec_358 and sec_361 controlled will recognize no gain_or_loss upon the contribution sec_1032 controlled’s basis in each asset received in the contribution will equal the basis of that asset in the hands of distributing immediately before the contribution sec_362 controlled’s holding_period in each asset received in the contribution will include the period during which such asset was held by distributing sec_1223 distributing will recognize no gain_or_loss upon the distribution of the controlled stock in the external distribution sec_361 distributing will recognize no income gain loss or deduction upon the distribution of the controlled securities in the debt-for-debt exchange or the controlled loans in the committed exchange other than any i deductions attributable to the redemption of the distributing date debt at a premium ii income attributable to the redemption of the distributing date debt at a discount or iii interest_expense accrued with respect to the distributing date debt sec_361 distributing’s shareholders will recognize no gain_or_loss and no amount will be includible in their income upon the receipt of controlled stock including any fractional share interest to which distributing’s shareholders may be entitled in the external distribution sec_355 to the extent the external distribution consists of a one-step distribution or a clean up distribution the basis of the controlled stock including any fractional share interest to which the distributing shareholders may be entitled and the distributing stock in the hands of distributing’s shareholders immediately after the one-step distribution or the clean up distribution will equal the basis of the distributing stock owned by distributing’s shareholders immediately before the one-step distribution or the clean up distribution as plr-137358-13 the case may be allocated between the stock of distributing and controlled in proportion to the fair_market_value of each in accordance with sec_1 a iv sec_358 b and c to the extent the external distribution consists of one or more exchange offers the basis of the controlled stock including any fractional share interest to which the distributing shareholders may be entitled in the hands of distributing’s shareholders immediately after such exchange_offer will equal the basis of the distributing stock exchanged therefor allocated in accordance with sec_1_358-2 sec_358 b and c a distributing shareholder’s holding_period in the controlled stock including any fractional share interest to which a distributing shareholder may be entitled received in the external distribution will include the holding_period of the distributing stock exchanged therefor or with respect to which the external distribution is made provided that the distributing shareholder holds the distributing stock as a capital_asset on the date the controlled stock is received sec_1223 the receipt by distributing’s shareholders of cash in lieu of fractional shares of controlled stock will be treated for u s federal_income_tax purposes as if the fractional shares had been distributed to distributing’s shareholders in the external distribution and then had been disposed of by such shareholders for the amount of such cash in a sale_or_exchange pursuant to which gain_or_loss is recognized under sec_1001 if the fractional share interest is a capital_asset in the hands of the recipient shareholder the gain_or_loss will constitute capital_gain or loss sec_1221 and sec_1222 distributing’s earnings_and_profits will be allocated between distributing and controlled in accordance with sec_312 and sec_1_312-10 and sec_1 e except for purposes of sec_355 any payments made between distributing or its affiliates and controlled or its affiliates pursuant to the continuing arrangements with respect to liabilities indemnities or other obligations that i have arisen or will arise for a taxable_period ending on or before the external distribution or for a taxable_period beginning before but ending after the external distribution and ii will not become fixed and ascertainable until after the external distribution will be treated as occurring immediately before cf 344_us_6 revrul_83_73 1983_1_cb_84 the external distribution 11j 11k 11l 11m 11n following the external distribution controlled will not be a successor of distributing for purposes of sec_1504 controlled and its direct and indirect subsidiaries that are includible corporations under sec_1504 plr-137358-13 and satisfy the ownership requirements of sec_1504 will be members of an affiliated_group_of_corporations entitled to file a consolidated u s federal_income_tax return with controlled as the common parent caveats except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter we express no opinion about the tax treatment of the proposed transaction under other provisions of the code and the treasury regulations or the tax treatment of any condition existing at the time of or effect resulting from the proposed transaction that is not specifically covered by the above rulings in particular no opinion is expressed or implied regarding i whether the external distribution or any of the internal distributions satisfies the business_purpose requirement of sec_1_355-2 ii whether the external distribution or any of the internal distributions is being used principally as a device for the distribution of the earnings_and_profits of any distributing_corporation or any controlled_corporation or both see sec_355 and sec_1_355-2 iii whether the external distribution or any of the internal distributions and any acquisition or acquisitions are part of a plan or series of related transactions under sec_355 iv whether the global assumed deductible liabilities are in fact liabilities that will give rise to a deduction by controlled for u s federal_income_tax purposes v vi vii the tax consequences under sec_304 of any acquisitions of stock by related corporations the tax consequences under subchapter_k of any transactions involving partnerships tax the intercompany obligation treatment under sec_1_1502-13 of any transaction involving an viii the tax treatment of any continuing transactions between distributing and controlled and or their respective subsidiaries that will be provided on a cost cost-sharing cost-plus or royalty-free basis including the potential application of sec_482 to these transactions and plr-137358-13 ix the tax consequences under sec_367 of any transaction described in this ruling letter procedural statements this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives sincerely _frances l kelly________________ frances l kelly senior counsel branch office of associate chief_counsel corporate cc