2012 TLC_Manuf_Dist_A&D

2. Learning objectives Discuss tax legislation and the effect on the outlook of themanufacturing industry Recognize current industry sector issues andrelated business risks with clients Enhance business discussions with your clients (PurplePage Approach) Identify triggering events that indicate a client need forGrant Thornton services Introduce the appropriate service lineprofessionals to our clients to addressclient needs, issues and risks 2012 Grant Thornton LLP. All rights reserved.2 3. Agenda The (uncertain) tax legislative outlook for manufacturers Business discussions with impact and trigger events Manufacturing Distribution Aerospace & Defense 2012 Grant Thornton LLP. All rights reserved. 3 4. IntroductionDorothy ColemanVice President of Tax and Domestic Economic PolicyNational Association of Manufacturers (NAM)Washington, DC 2012 Grant Thornton LLP. All rights reserved.4 5. Introduction to Grant Thornton ProfessionalsWally Gruenes Lou CrenshawNatl Managing Partner, CIP A&D Practice LeaderManufacturing and DistributionAlexandria, VAPractice LeaderDallas, TXKullen BirkelandMario BonillaManufacturing and DistributionA&D Tax Practice LeaderTax Practice Leader Wichita, KSLos Angeles, CA Don Dismuke Manufacturing and Distribution Tax Practice Leader Southfield, MI 2012 Grant Thornton LLP. All rights reserved. 5 6. The (uncertain)Tax Legislative Outlook forManufacturersDorothy Coleman Vice President, Tax and Domestic Economic Policy National Association of ManufacturersMay 2012 7. Manufacturing Business Outlook100%89.1% 88.7% 90% 86.4%86.1% 84.8%81.9% 80.2%78.4% 78.5% 80% 74.0%73.1% 71.6%69.6% 70%65.4% 60% 52.8% 47.6%46.3% 50% 40%Source: NAM/Industry Week Survey of ManufacturersNote: Percentage of respondents who characterized the current business outlook at somewhat or verypositive. Percentages are annual averages. Q4:2010 and Q1:2011 data are imputed from comparable datausing a regression model. 8. Primary Current Business Challenges, First Quarter 2012Unfavorable business climate 62.2% (e.g., taxes, regulation, etc.)Rising energy and raw material costs for60.0%our products Rising insurance costs 42.5%Weaker domestic economy, sales for our41.9% products Attracting and retaining a quality 39.1% workforce Increased international competition23.7%Challenges with access to capital or other8.2% forms of financing Other 7.2%Source: NAM/Industry Week Survey of ManufacturersNote: Respondents were able to check all that apply. Therefore, responses exceed 100 percent. 9. Short-Term: May 2011Few Tax Issues in Play: Extenders Bonus Depreciation/Expensing Pension Funding Stabilization 10. Looming Ahead: The $600 BFiscal Cliff $84.792001 and 2003 Tax Cuts $165.75 Temporary Payroll Tax Cut$90.00 Alternative Minimum Tax (AMT) Patch Spending Cuts from Sequestration $118.75$124.64Other Tax Increases from Expiring Provisions 11. The $600 B Fiscal Cliff if no action weretaken by the fiscalauthorities, the size of the fiscal cliff is suchtheres absolutely no chance that the Fed could or would have any ability to offset,whatsoever, that effect on the economy. Federal Reserve Chairman Ben Bernanke April 25, 2012 12. The $600 B Fiscal Cliff Expirations of the 2001-03 Tax Relief: Individual Tax Rates Estate Tax Tax on Investment Income Marriage Penalty Child Tax Credit 13. The $600 B Fiscal Cliff Other Tax Provisions: Payroll Tax Cut AMT Patch Tax Cuts from 2009 Stimulus 2011 Expiring Provisions Enhanced Expensing 14. The $600 B Fiscal Cliff The Sequester A-T-B Cuts: 50% defense; 50% nondefense Medicaid, Medicare beneficiaries exempt Medicare providers covered Effective 1/13 for FYs 2013-2021 15. Tax ReformNAM Priorities: Corporate Tax Rate of 25 % or lower Permanent, strengthened R&D credit Territorial tax system Permanent lower tax rates for small business 16. Tax ReformChairmans Camps Proposal (October 2011) 95% Dividend-Received Deduction 25 Percent Corporate Tax Rate Expanded Subpart F Thin Capitalization Rules Mandatory Repatriation 17. Tax ReformPossible Options: Lower corporate tax rate Base-broadening R&D incentive Territorial System Add-on Tax ? 18. Tax ReformOpen Issues: Revenue Neutral Both individual & corporate tax reform Timing Transition 19. Possible Scenarios for 2012 Mid- 2012 Tax Bill Movement on Tax Reform Kick the Can until 2013 Mega End of the Year Deal Nothing 20. Key Factors The Economy Jobs Manufacturing Financial Markets Election 2012 White House Congress 21. Thank YouDorothy ColemanVice President, Tax and Domestic Economic PolicyNational Association of [email protected](202) 637-3077 22. Manufacturing 2012 Grant Thornton LLP. All rights reserved. 23. Business Discussions with ImpactManufacturing Strategy/Process/Structure Legislative Matters On/near-shoring Tax reform Compression of Supply Chain Export Controls Revenue growth exports, services Information Security and IP rights High energy costs EPA overregulation Rising transportation costs Conflict Minerals Underinvestment in Cap Ex and IT People/Culture GT Services Shortage of skilled talent CAMP Repair Regs, Accounting Reliability of Suppliers methods Impact of Healthcare Reform (2014) TAS Supply Chain Compliance Propane tax credit Transfer Pricing Studies Business Intelligence 2012 Grant Thornton LLP. All rights reserved.23 24. Source: Bloomberg Businessweek 2012 Grant Thornton LLP. All rights reserved.24 25. Business Discussions with ImpactManufacturing Strategy/Process/Structure Legislative Matters On/near-shoring Tax reform Compression of Supply Chain Export Controls Revenue growth exports, services Information Security and IP rights High energy costs EPA overregulation Rising transportation costs Conflict Minerals Underinvestment in Cap Ex and IT People/Culture GT Services Shortage of skilled talent CAMP Repair Regs, Accounting Reliability of Suppliers methods Impact of Healthcare Reform (2014) TAS Supply Chain Compliance Propane tax credit Transfer Pricing Studies Business Intelligence 2012 Grant Thornton LLP. All rights reserved.25 26. The biggest time in the life cycle of gettinga shoe to the U.S. market is the time itspends on a boat coming from Asia. Matt Powell, SportsOneSource 2012 Grant Thornton LLP. All rights reserved.26 27. Business Discussions with ImpactManufacturing Strategy/Process/Structure Legislative Matters On/near-shoring Tax reform Compression of Supply Chain Export Controls Revenue growth exports, services Information Security and IP rights High energy costs EPA overregulation Rising transportation costs Conflict Minerals Underinvestment in Cap Ex and IT People/Culture GT Services Shortage of skilled talent CAMP Repair Regs, Accounting Reliability of Suppliers methods Impact of Healthcare Reform (2014) TAS Supply Chain Compliance Propane tax credit Transfer Pricing Studies Business Intelligence 2012 Grant Thornton LLP. All rights reserved.27 28. Measuring, evaluating and partnering with suppliers for competitive advantage How close do you stay to your suppliers? % of ManufacturersCost, Quality, and Delivery 38.6%Strategic Planning and Identifyingand Responding to New Markets 3.8% Continuous Improvement, and Product Development Efforts16.6%Trust and Flexibility 30.0%Total Acquisition Cost11.0%010 20304050Source: Next Generation Manufacturing Study, the MPI Group, 2011 2012 Grant Thornton LLP. All rights reserved. 28 29. Business Discussions with ImpactManufacturing Strategy/Process/Structure Legislative Matters On/near-shoring Tax reform Compression of Supply Chain Export Controls Revenue growth exports, services Information Security and IP rights High energy costs EPA overregulation Rising transportation costs Conflict Minerals Underinvestment in Cap Ex and IT People/Culture GT Services Shortage of skilled talent CAMP Repair Regs, Accounting Reliability of Suppliers methods Impact of Healthcare Reform (2014) TAS Supply Chain Compliance Propane tax credit Transfer Pricing Studies Business Intelligence 2012 Grant Thornton LLP. All rights reserved.29 30. Apple report puts spotlight onoverseas factory conditions 2012 Grant Thornton LLP. All rights reserved.30 31. Business Discussions with ImpactManufacturing Strategy/Process/Structure Legislative Matters On/near-shoring Tax reform Compression of Supply Chain Export Controls Revenue growth exports, services Information Security and IP rights High energy costs EPA overregulation Rising transportation costs Conflict Minerals Underinvestment in Cap Ex and IT People/Culture GT Services Shortage of skilled talent CAMP Repair Regs, Accounting Reliability of Suppliers methods Impact of Healthcare Reform (2014) TAS Supply Chain Compliance Propane tax credit Transfer Pricing Studies Business Intelligence 2012 Grant Thornton LLP. All rights reserved.31 32. 2012 Grant Thornton LLP. All rights reserved. 32 33. Business Discussions with ImpactManufacturing Strategy/Process/Structure Legislative Matters On/near-shoring Tax reform Compression of Supply Chain Export Controls Revenue growth exports, services Information Security and IP rights High energy costs EPA overregulation Rising transportation costs Conflict Minerals Underinvestment in Cap Ex and IT People/Culture GT Services Shortage of skilled talent CAMP Repair Regs, Accounting Reliability of Suppliers methods Impact of Healthcare Reform (2014) TAS Supply Chain Compliance Propane tax credit Transfer Pricing Studies Business Intelligence 2012 Grant Thornton LLP. All rights reserved.33 34. Trigger event: Acquisitions or divestituresWhat service opportunities do the following present? Acquisition or divestiture of a company 2012 Grant Thornton LLP. All rights reserved.34 35. Trigger event: Acquisitions or divestituresWhat can GT do to help companies?TAS Financial Due DiligenceBAS Operational Due Diligence and Merger IntegrationFVS Purchase Price AllocationTax Structuring of Transaction Federal, InternationalSALT Real Property Transfer Taxes, Payroll Taxes, Property TaxInternational Tax - International tax consulting, & global tax complianceWho do I contact?Regional TAS Leader Tax Practice LeaderRegional BAS Leader SALT Practice LeaderRegional FVS Leader International Tax Practice Leader 2012 Grant Thornton LLP. All rights reserved. 35 36. Trigger event: Poor operating performanceWhat service opportunities do the following present? Operating performance below peer benchmarks 2012 Grant Thornton LLP. All rights reserved.36 37. Trigger event: Poor operating performanceWhat can GT do to help companies? APQC Benchmarking Performance Improvement analytics, process, finance function,procurement Software Solution SelectionWho do I contact?Regional BAS Leaders: Scot Glover West Steve Siemborski Midwest Kris Ruckman Southeast Michael Rose Northeast David Hazels Central 2012 Grant Thornton LLP. All rights reserved.37 38. Trigger event: Conflict mineralsWhat service opportunities do the following present? Use of tin, tungsten or gold in products held for sale 2012 Grant Thornton LLP. All rights reserved.38 39. Trigger event: Conflict mineralsUse of tin, tungsten or goldUse of minerals such a tin, tungsten, gold and others sourced from the Republicof Congo and surrounding countries are referred to as "Conflict Minerals." UnderDodd-Frank, public companies will be required to report whether they are usingsuch conflict minerals in their products and what they are doing to verify.What can GT do to help companies? Supply Chain Due Diligence Supplier AuditsWho do I contact? Jim Welsh, NE Region Leader Chip Schweiger, Central Region Leader Jason Rogers, SE Region Leader Anthony Leung, West Region Leader Jeff French, MW Region Leader Dorsey Baskin 2012 Grant Thornton LLP. All rights reserved. 39 40. Trigger event: Manufacturer doing business inCaliforniaWhat service opportunities do the following present? Manufacturer doing business in California who has annual global gross receipts in excess of $100 million 2012 Grant Thornton LLP. All rights reserved.40 41. Trigger event: Manufacturer doing business in CaliforniaCalifornia Transparency Act in Supply Chain ActUnder this Act, companies must disclose what efforts they are making towarderadicating slavery and human trafficking from their direct supply chains.What can GT do to help companies? Supply Chain Due Diligence Supplier AuditsWho do I contact? Jim Welsh, NE Region Leader Chip Schweiger, Central Region Leader Jason Rogers, SE Region Leader Anthony Leung, West Region Leader Jeff French, MW Region Leader Dorsey Baskin 2012 Grant Thornton LLP. All rights reserved. 41 42. Trigger event: Allegation of illegal actWhat service opportunities do the following present?Allegation of illegal act by an officer or agent ofthe company 2012 Grant Thornton LLP. All rights reserved. 42 43. Trigger event: Allegation of illegal actWhat are we doing to help companies? Anti-corruption compliance services and transaction monitoring Anti-corruption due diligence services FCPA investigationsWho do I contact?Gary Goldman (NE Region FVS Leader)Dave Wedding (SE Region FVS Leader)Bryan Benoit (Central Region FVS Leader)Mark Sullivan (MW Region FVS Leader)Massimo Messina (West Region FVS Leader)Bill Olsen, McLean 2012 Grant Thornton LLP. All rights reserved.43 44. Trigger events: Disparate data and inaccuratereports reportsWhat service opportunities do the following present? Reports not accurate and/or not timely ERP and disparate transaction systems not integrated Using disparate reporting technologiesand/or spot solutions 2012 Grant Thornton LLP. All rights reserved.44 45. Trigger events: Disparate data and inaccuratereportsWhat are we doing to help companies?Business intelligence/analytics Turns raw data into actionable information (e.g. enhanced customerinsight, internal process and performance improvement,procurement efficiency) Executive dashboards, metrics/KPIs ScorecardsWho do I contact? Tony Hernandez, Philadelphia 2012 Grant Thornton LLP. All rights reserved.45 46. Trigger events: Property additions, Repairs topropertyWhat service opportunities do the following present? Property additions Repairs to property 2012 Grant Thornton LLP. All rights reserved.46 47. Trigger events: Property additions, Repairs to propertyWhat can GT do to help companies? New Repair Regulations effective 1/1/2012 Cost Segregation StudyWho do I contact? Regional Corporate SFTS Leader Mark Andrus West Rick Stezenski Midwest Joe Brown Southeast Jim Wittmer Northeast Janet Wong Central 2012 Grant Thornton LLP. All rights reserved.47 48. Trigger events: Inventory & A/R Bad debt reserveWhat service opportunities do the following present? Inventory Valuation Reserves (LCM, E&O) LIFO Inventory Method A/R Bad debt reserve 2012 Grant Thornton LLP. All rights reserved. 48 49. Trigger events: Inventory & A/R Bad debt reserveAccounting MethodsWhat can GT do to help companies? Some of these inventory reserves can be deducted currently IPIC higher inflation for LIFO inventory Some portions may be currently deductible if specific accounts arereserved (i.e. not general or formula reserve)Who do I contact? Regional Corporate SFTS Leader Mark Andrus West Joe Brown Southeast Janet Wong Central 2012 Grant Thornton LLP. All rights reserved.49 50. Trigger events: Acquisition or expansion in a stateWhat service opportunities do the following present? Acquisition or expansion in a state 2012 Grant Thornton LLP. All rights reserved.50 51. Trigger events: Acquisition or expansion in a stateWhat can GT do to help companies? Perform a reverse sales tax audit utilizing proprietary software Investigate whether there are credits to be obtained for newemployment/building expansion Look for real/personal property tax valuation/exclusion benefitsWho do I contact?Regional SALT Practice Leader Scot Grierson West Brian Murphy Midwest Mike Stoke Southeast Matt Melinson Northeast John Laborde Central 2012 Grant Thornton LLP. All rights reserved.51 52. Trigger event: Transfer/sale of inventory to/fromCompany locations outside the USWhat service opportunities do the following present? Transfer/sale of inventory to/from Company locations outside the US 2012 Grant Thornton LLP. All rights reserved. 52 53. Trigger event: Transfer /sale of inventory to/fromCompany locations outside the USWhat are we doing to help companies? Transfer pricing study to satisfy US and foreign taxingjurisdictionsWho do I contact? David Bowen (Washington, DC) 2012 Grant Thornton LLP. All rights reserved. 53 54. Industry resources and trainingThought Leadership Five factors for manufacturing growth in an uncertain economy Manufacturing Executive Summary A well-oiled machine: Maximizing machinery and equipmentopportunities, minimizing risks Supply Chain Insights (formerly Supply Chain Solutions) International taxation for manufacturing: A comparative reviewTraining Manufacturing Basic Industry Training Manufacturing Intermediate Industry Training (Summer/Fall 2012) 2012 Grant Thornton LLP. All rights reserved.54 55. Other resources KSource Timely business discussion topics Performance Driver Review questions IBIS World (includes sample questions) NAM.org Industry Week Magazine 2012 Grant Thornton LLP. All rights reserved. 55 56. Questions? 2012 Grant Thornton LLP. All rights reserved. 56 57. DistributionWally GruenesNational Distribution Practice Leader 2012 Grant Thornton LLP. All rights reserved. 58. Business Discussions with ImpactDistributionStrategy/Process/StructureLegislative Matters More DCs closer to customer NLRBs "Notice of Employee Rights" More "services" demanded(April 30, 2012) Increased use of analytics OSHAs Injury and Illness Prevention 3PL Competition Program (I2P2) High energy costs EEOC is considering limiting the use of Disruption in supply chainbackground checks on prospective Excess warehouse space is available: good employees.time to buy/enter into long-term leasesPeople/CultureGT Services Evolution of inside/outside sales CAMP Repair Regulations,professionals Accounting methods Healthcare and other benefits TAS Employee retention is key in 2012 Supply Chain Compliance Propane tax credit Business Intelligence ABC consulting CRM, SFA or WHS consulting 2012 Grant Thornton LLP. All rights reserved. 58 59. Trigger event: Company utilizes industrial equipmentWhat service opportunities do the following present? Company utilizes industrial equipment (including forklifts and similar equipment) 2012 Grant Thornton LLP. All rights reserved. 59 60. Trigger event: Company utilizes industrial equipmentAlternative Fuels Tax CreditWhat are we doing to help companies? Sales of propane for use in forklifts and other industrialequipment remain exempt from federal excise tax andaccordingly may be eligible for the 50 cent per gallon credit. Refundable even if in a loss positionWho do I contact? Randolph Smith, Charlotte 2012 Grant Thornton LLP. All rights reserved.60 61. Trigger event: Unknown profitabilityWhat service opportunities do the following present? Profitability of individual products or SKUs is unknown 2012 Grant Thornton LLP. All rights reserved. 61 62. Trigger event: Unknown profitabilityActivity Based Costing Consulting What are we doing to help companies? Activity Based Costing Who do I contact? Brian Larsh, Milwaukee Regional BAS Leaders: Scot Glover West Steve Siemborski Midwest Kris Ruckman Southeast Michael Rose Northeast David Hazels Central 2012 Grant Thornton LLP. All rights reserved.62 63. Trigger events: Technology/organizational changesWhat service opportunities do the following present? Any organization undertaking a substantial technologyor organizational change Upgrade/change in talent level or nature of sales force Upgrade or replacement of existing applications (i.e.Warehouse Management) 2012 Grant Thornton LLP. All rights reserved. 63 64. Trigger events: Technology/organizational changesSoftware selection and integration What are we doing to help companies? CRM, SFA solutions selection and consulting Who do I contact? Regional BAS Leaders: Scot Glover West Steve Siemborski Midwest Kris Ruckman Southeast Michael Rose Northeast David Hazels Central 2012 Grant Thornton LLP. All rights reserved.64 65. Trigger event: Healthcare reformWhat service opportunities do the following present? Client/target does not use a nationally recognized Healthcare consultant 2012 Grant Thornton LLP. All rights reserved. 65 66. Trigger event: Healthcare reformWhat are we doing to help companies?Healthcare Diagnostic Tool Concise summary of the rules that apply to companys plan List of actions that they are required to take List of actions that arent mandatory, but may be desirable List of key decisions that the company will need to makeWho do I contact? Eddie Adkins, Washington, DC 2012 Grant Thornton LLP. All rights reserved. 66 67. Trigger event: Company is a US subsidiary and hasa foreign parentWhat service opportunities do the following present? Company is a US subsidiary and has a foreign parent that may or may not be audited by Grant Thornton 2012 Grant Thornton LLP. All rights reserved. 67 68. Trigger event: Company is a US subsidiary and hasa foreign parentAudit IFRS Conversion What are we doing to help companies? IFRS for Foreign-owned or foreign-listed Companies IFRS for SEC registrants IFRS for US nonpublic companies Who do I contact? Nate Vander Hamm, Kansas City April Little, Houston 2012 Grant Thornton LLP. All rights reserved. 68 69. Industry resources to shape conversationsThought leadership Supply Chain Insights (formerly Supply Chain Solutions)Other resources K Source Timely business discussion topics Performance Driver Review questions IBIS World (includes sample questions) NAW.org World Trade magazine 2012 Grant Thornton LLP. All rights reserved. 69 70. Questions? 2012 Grant Thornton LLP. All rights reserved. 70 71. Aerospace and DefenseLou CrenshawNational A&D Practice LeaderMario BonillaA&D Tax Practice Leader 2012 Grant Thornton LLP. All rights reserved. 72. Business discussions with impactAerospace and Defense Business IssuesLegislative Matters Significant M&A activity expected in 2012 STOCK Act may impact business operations Sales in commercial aerospace gaining strength to Counterfeit Parts legislation in FY12 NDAA offset shrinking Defense budgets creates significant burden and risk to Defense Contract Audit Agency audit outcomes vendors can substantially affect revenue flow New FAR and DFAR regulations included in Focus on business system performance a key toFY12 NDAA audit success Exec Comp legislation with $250K limit Executive compensation limits now tied to allpending company executives Observations GT Services Industry is cyclical, but in an upturn M&A services Slight to modest growth in: Civil aircraft deliveries. Merger integration Reductions in military aircraft, missiles and space Corporate Finance overview Global economic crisis will temper overseas sales Transaction Advisory Services Employment expected to be stable from 2011 CSFTS number of 624K CAMP Demand for unmanned aircraft systems by U.S. BAS Process Improvement military continues to be high. Government Contracting Significant drop in contingency funding will stress DoD sustainment and procurement accounts 2012 Grant Thornton LLP. All rights reserved.72 73. Performance Driver ModelAerospace and Defense CompetitionCompliance & Regulation People RevenueSelection, Development, Retention+ Profit Customers Strategy Process StructurePriorities VisionCommunicationLeadership Expectations GrowthInternal Audit Alignment LoyaltyExperience Risk ManagementTrust/Teamwork BD /B&P CostsCustomer BaseIT SecurityComp/BenefitsCulture Engagement, Alignment, Energy Market & Industry 2012 Grant Thornton LLP. All rights reserved.73 74. Trigger event: DCAA is coming to audit our CASWhat service opportunities do the following present? Defense Contract Audit Agency (DCAA) is coming to audit our Contract Administration Services (CSA) 2012 Grant Thornton LLP. All rights reserved. 74 75. Trigger event: DCAA is coming to audit our CASCAS auditWhat are we doing to help companies? Conduct readiness reviews DCAA audit preparation Be present during audit to adviseWho do I contact? Lou Crenshaw, Alexandria Kerry Hall, McLean 2012 Grant Thornton LLP. All rights reserved. 75 76. Trigger event: DCMA or DCAA is coming to reviewour business systemsWhat service opportunities do the following present?Defense Contract Management Agency (DCMA)or DCAA is coming to review our businesssystems 2012 Grant Thornton LLP. All rights reserved. 76 77. Trigger event: DCMA or DCAA is coming to reviewour business systemsWhat are we doing to help companies? Conduct readiness reviews Internal auditWho do I contact? Lou Crenshaw, Alexandria Kerry Hall, McLean 2012 Grant Thornton LLP. All rights reserved. 77 78. Trigger event: Our company does business overseasWhat service opportunities do the following present? Our company does business overseas 2012 Grant Thornton LLP. All rights reserved. 78 79. Trigger event: Our company does business overseasWhat are we doing to help companies? Conduct risk assessment Violation of Foreign Corrupt Practices Act (CPA) Tax liabilitiesWho do I contact? Bill Olsen, McLean Mario Bonilla, Wichita 2012 Grant Thornton LLP. All rights reserved. 79 80. Trigger event: My company is interested in theprivate equity market or raising capitalWhat service opportunities do the following present? My company is interested in the private equity market or raising capital 2012 Grant Thornton LLP. All rights reserved. 80 81. Trigger event: My company is interested in theprivate equity market or raising capitalWhat are we doing to help companies? Due diligence Leading or assisting with a transactionWho do I contact?Ian Cookson, BostonCarlos Ferreira, NY - MidtownRicky White, McLeanWade Kruse, CharlotteSal Fira, Dallas 2012 Grant Thornton LLP. All rights reserved. 81 82. Trigger event: My company wants to acquire adefense companyWhat service opportunities do the following present? My company wants to acquire a defense company 2012 Grant Thornton LLP. All rights reserved.82 83. Trigger event: My company wants to acquire adefense companyWhat are we doing to help companies? Due diligence Transaction assistance & corporate financeWho do I contact? Lou Crenshaw, Alexandria Steve Perkins, Alexandria Ian Cookson, Boston Wade Kruse, Charlotte Carlos Ferreira, NY - Midtown Sal Fira, Dallas 2012 Grant Thornton LLP. All rights reserved.83 84. Trigger event: My company wants to do businesswith DoDWhat service opportunities do the following present? My company wants to do business with Department of Defense (DoD) 2012 Grant Thornton LLP. All rights reserved.84 85. Trigger event: My company wants to do businesswith DoDWhat are we doing to help companies? Rate / fee setting Market landscapeWho do I contact? Lou Crenshaw, Alexandria Chip Schweiger, Denver 2012 Grant Thornton LLP. All rights reserved. 85 86. Trigger event: I need to understand what ishappening to the defense budgetWhat service opportunities do the following present? I need to understand what is happening to the defense budget 2012 Grant Thornton LLP. All rights reserved.86 87. Trigger event: I need to understand what ishappening to the defense budgetWhat are we doing to help companies? Strategy reviews Long term funding strategies Possible restructuring for those who may be on losing endWho do I contact? Lou Crenshaw, Alexandria 2012 Grant Thornton LLP. All rights reserved. 87 88. Trigger event: We are expanding our facilitiesWhat service opportunities do the following present? We are expanding our facilities 2012 Grant Thornton LLP. All rights reserved.88 89. Trigger event: We are expanding our facilitiesWhat are we doing to help companies? Cost Segregation Accelerate tax deductions by reclassify construction/acquisition property topersonal property 39 year vs. 5, 7, 15 year recovery periods Review of Construction Cost Documentation, Blueprints, etc. Possible utilization of IRS approved stat sampling Fixed Asset Review Correct misclassified assets Tax Lives/Asset Classes Bonus Depreciation Repairs and Maintenance Expense (Repair Regs & 1250X) Directly Expense items under 263(a) in current year vs. Capitalize Detailed analysis of specific assets and their supporting documentation Automatic Accounting Method Change (Form 3115)Who do I contact? Lou Crenshaw, Alexandria David Cavin, Atlanta Jim Wittmer, Philadelphia 2012 Grant Thornton LLP. All rights reserved. 89 90. Resources to shape conversations National A&D Sector Team Government Contracting Team (Kerry Hall) GPS Defense and Intelligence (Lou Crenshaw) M&A Corporate Finance Group (Ian Cookson) K Source (i.e., timely business discussion topics) Trade organizations (e.g., NDIA, AIA, state chambers of commerce) Trade publications (e.g., National Defense , Aviation Week andSpace Technology) IBIS World (includes sample questions) Quadrennial Defense Review ("QDR") Report Aerospace & Defense Update: Mergers, Acquisitions and theOperating Environment 2012 Grant Thornton LLP. All rights reserved. 90 91. Questions? 2012 Grant Thornton LLP. All rights reserved. 91 92. We need your feedback!!!Please provide your feedback on the program leaders andcontent for this session Hyperlinks to the evaluation can be found in the session descriptions in the TLC app http://eventmobi.com/2012tlc 1 Agenda 1. Go to Agenda 2. Open session details 2 TLC: Breakout name 3. Click evaluation hyperlink beneath titlePlease note that your view may differ3 http:??www.kamtm.com/rl/.aspx?A9B83F14386098depending on the mobile device in use 2012 Grant Thornton LLP. All rights reserved.92 93. Consumer and Industrial ProductsManufacturing, Distribution and Aerospace & Defense2012 Tax Leadership ConferenceThank you for your participation 2012 Grant Thornton LLP. All rights reserved.