Question
From: (redacted)
Sent: Thursday, November 03, 2005 10:41 AM
To: Ovuka, Nancy M.
Subject: Clarifiedinterpretation regarding intracompany transfers under Item 5
Nancy,
I am writing toconfirm the guidance and interpretation that you have provided regarding theneed to report, under Item 5 of the Notification and Report Form, revenues thatare attributable to transfers between entities within the same ultimate parent.
As I explainedin our phone call earlier today, my client is engaged in the mining andprocessing of coal for sale to third parties. It conducts this business throughseveral different subsidiaries that perform services for one another, typicallyfor a fee. For instance, while one subsidiary may own the rights to the coal,it may pay a fee to a different subsidiary which processes the coal.
In ourconversation, you explained that, for purposes of Item 5, the PremergerNotification Office is only interested in revenues from intracompany transferswhen one subsidiary sells a manufactured product to a different facility orentity. Therefore, you advised that unless my client is engaged inmanufacturing, it need not report intracompany transfers under Item 5 and caninstead rely upon its consolidated revenue data which reflects sales to thirdparties.
I understandthat the Premerger Notification Office does not generally confirm informaladvice in writing. However, if this letter misconstrues our conversations or isinaccurate in any way, I would appreciate it if you would please contact me assoon as possible. As always, thank you for your advice and assistance.