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STATEMENT OF QUALIFICATIONS IN THE ENERGY INDUSTRY

I.       CORPORATE PROFILE

ACG is a national leader in valuation, economic analysis, and tax consulting. We have offices in California, Texas, and New Jersey, from which we serve an international clientele. Our organization is founded on the principles of:

  • Providing the highest quality independent analysis and support.
  • Utilizing a technical staff composed entirely of established, senior consultants.
  • Offering multidisciplinary solutions to complex problems.
  • Maintaining straightforward, responsive client relationships.

We maintain a staff of economists, appraisers, engineers, CPA's, financial analysts, and lawyers, who work together to provide complete solutions to difficult and complex client problems.  Our major practice areas are financial analysis:  financial, economic, and tax analysis, including valuation of business enterprises, tangible and intangible assets, and financial instruments, and solvency and fairness opinions;  transfer pricing for federal tax purposes; cost segregation analysis of construction for federal tax purposes; property tax representation, including analysis of economic and technological obsolescence; and  minimization of sales and use taxes.

Our clients are primarily multinational corporations, large U.S. corporations, law firms, financial institutions, and government agencies. We also have represented the Internal Revenue Service on many issues regarding valuation, taxation, and international tax issues.

II.      SERVICES TO ENERGY COMPANIES

In today's challenging marketplace, energy companies are facing significant issues, including  restructuring and acquiring businesses abroad.  ACG can assist companies in these critical areas:

R       Mergers, Joint Ventures, and Acquisitions
Change fosters opportunity in a world of market-driven competition.  Mergers, joint ventures and acquisitions can provide a host of marketing and investment opportunities.  They are becoming even more common as utility companies endeavor to acquire customers and exploit potential economies of scale. 

ACGprovides a full range of pre-acquisition planning and post-acquisition valuation services for energy companies.

R        Taxes
ACG's experts provide well-documented studies that will stand up to third-party scrutiny.   Property tax studies and excise tax audits, particularly for multi-site operations, can provide significant tax recovery.  Tax planning is another important area, especially for companies moving into foreign businesses - - in which cases IRC§ 864(e) and IRC§ 482 studies are highly beneficial, for the following reasons:

Under the provisions of IRC§ 864(e), companies may choose between two bases for the allocation of worldwide interest expense, for U.S. federal tax purposes.  The appropriate choice reduces a company's federal tax liability substantially - - sometimes, millions of dollars a year.  

IRC §482 concerns the transfer of products across national boundaries.  Under this provision, the pricing of products  and services must meet a test of "fairness" (arm's-length standard).  Companies failing to meet the arm's-length standard may have their taxable income adjusted by the IRS, with severe penalties imposed.

III.  INDUSTRY EXPERIENCE

ACG has a thorough knowledge of energy and its related industries, along with extensive experience in valuing these assets and businesses.

Power Generation Valuation Projects

We have considerable experience valuing generation assets, particularly in the deregulated environment.  To highlight this experience, we have included ( Section V.) a recent report published by the Public Utilities Fortnightly; it summarizes the 40 major divestiture transactions related to deregulation in 1999.  ACG consulted on about one-fourth of the total transactions.  This represents approximately 20,000 megawatts (one-third) of the total capacity sold and more than $10 billion (one-half) of the total of $21 billion in purchase price.   We also have significant expertise in valuing generation assets located outside the U.S.  A small sampling of recent and current engagements is provided on the page which follows, click here to view.

 

 

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