1. 1 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Current Issues in Tax As a Result of the American Recovery and Reinvestment Act of 2009 March 12, 2009 Tax

2. 2 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Agenda Overview of the American Recovery and Reinvestment Act of 2009 Highlight several key provisions of the act Q&A

3. 3 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. The American Recovery and Reinvestment Act of 2009 President Obama signed the Act into law on February 17, 2009 Total cost of $787 billion for the period 2009 through 2019 Tax Provisions account for $301 billion Tax incentives for businesses amount to $6.1 billion Business provisions Provisions concerning bonds Energy provisions Trade provisions

4. 4 Several Tax Incentives Can Impact Cash Flow

5. 5 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. American Recovery and Reinvestment Tax Act Principal Tax Incentives for Business One-year extension of 50% bonus depreciation 5-year NOL carryback of 90% of losses Expanded target group for the work opportunity tax credit Section 179 expensing provision

6. 6 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. American Recovery and Reinvestment Tax Act Principal Tax Incentives for Business Election to forego bonus depreciation and to accelerate the use of AMT and R&E credits Prospective repeal of Notice 2008-83 regarding use of acquired company’s tax attributes after an ownership change Three percent withholding on government contractors Deferral of certain cancellation of debt income

7. 7 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Extension of Bonus Depreciation The Act extends by one year the 50% bonus depreciation deduction available for qualified property Qualified property placed in service before 2010 (2011 for certain property with a long production period, and certain aircraft) would be eligible. Qualified property includes MACRS property with a recovery period of 20 years or less Water utility property Certain computer software Qualified leasehold improvement property

8. 8 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Temporary Increase in Limitations on Expensing of Certain Depreciable Business Assets Amends IRC Section 179(b)(7) to include taxable years beginning in 2009 for immediately expensing up to $250,000 of eligible depreciable business assets Subject to a phase-out if Section 179 property placed in service exceeds $800,000 Other Section 179 rules still apply Applies to Section 1245 depreciable tangible personal property and software Taxable income limitation

9. 9 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Election to Forego Bonus Depreciation and to Accelerate the Use of Certain Credits Extends the availability of an election that allows a corporation to forego the bonus depreciation deduction on qualified property, beginning in the first tax year ending after March 31, 2008, and instead allows the use of additional research credits and alternative minimum tax (AMT) credits carried over from years before 2006 (the additional credits are refundable, if they exceed tax liability) If a taxpayer elected Section 168(k)(4) to accelerate AMT and research credits for its first taxable year ending after March 31, 2008 (eligible qualified property), then it may continue or discontinue such treatment for its first taxable year ending after December 31, 2008

10. 10 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Five-year NOL Carryback of Operating Losses of Small Business An “eligible small business” can elect to carry back net operating losses in one tax year ending in 2008 or beginning in 2008 for three, four, or five years An “eligible small business” is a corporation, partnership, or sole proprietorship with average annual gross receipts of no more than $15 million for the first three tax years ending with the NOL year

11. 11 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Five-year NOL Carryback of Operating Losses of Small Business Taxpayers are allowed until 60 days after the February 17, 2009 enactment date to make the new election relating to an NOL for a tax year ending before the date of enactment in 2008 or in 2009. Taxpayer also has until 60 days after the date of enactment to revoke an earlier election not to carryback an NOL from such a tax year, or to file an application for a tentative refund of a carryback NOL (on Form 1139 or Form 1045) for such a tax year

12. 12 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Work Opportunity Credit Expansion Businesses may claim a Work Opportunity Tax Credit of 40% of the first $6,000 of wages paid to employees of one of nine targeted groups The Act creates two additional targeted groups of prospective employees Unemployed veterans Must have been discharged or released from active duty at any time in the five-year period before hiring Have drawn unemployment benefits for more than four weeks in the year before hiring “Disconnected youths” Youths aged 16 through 24 who have not been regularly employed or in school for the preceding six months

13. 13 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Trade Provisions Expansion of Trade Adjustment Assistance (TAA) Programs: Extends TAA to trade-affected services sector workers and workers affected by offshoring or outsourcing to all countries, including China or India Increases training funds available to states by 160% to $575 million per fiscal year Creates a new TAA program for trade-affected communities

14. 14 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Trade Provisions Expansion of Trade Adjustment Assistance (TAA) Programs: Allows for automatic TAA eligibility for workers suffering from import surges and unfair trade, makes training, healthcare, and reemployment TAA benefits more accessible and flexible Enhances the TAA for Firms and TAA for Farmers programs Reauthorizes all TAA programs (which expired December 31, 2007) through December 31, 2010

15. 15 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Trade Provisions Duty Fund Recollection: The Act prohibits U.S. Customs and Border Protection (CBP) from demanding that U.S. lumber, steel, and other companies repay duties that CBP collected on Canadian and Mexican imports, and then distributed to the companies between 2001 and 2005.

16. 16 Tax planning - Issues to consider in this economic climate

17. 17 ©2009 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Tax planning Strategic tax planning can provide the following significant opportunities to businesses affected by the financial crisis: Taxpayers may be able to recalculate estimated federal and state tax payments. A “quick” refund of estimated taxes paid might be available based on reduced expectations of income Taxpayers wishing to claim losses related to decline in investment value should seek appropriate tax counsel immediately to determine whether losses can be deducted Provision allowing for bonus depreciation in 2008 can provide substantial cash savings for the current taxpayers Taxpayers should be aware of new statutory and regulatory initiatives and keep track of guidelines as it is issued to fully realize the benefits of new rules

18. 18 Q&A

19. 19 ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

20. 20 You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

21. 21 Thank you! Presenter’s contact details P. Paul Percent KPMG LLP 631-425-6532 Ppercent@kpmg.com www.us.kpmg.com