Summary
Marriott International, Inc. (MAR) filed an 8-K on October 12, 2004, to report material amendments to its agreements with a synthetic fuel partner. These amendments significantly alter the allocation of tax credits related to four synthetic fuel facilities. Specifically, for a facility not under IRS review, the partner's share of tax credits will temporarily increase to 90% for six months, with Marriott receiving a higher price for the additional share. However, for three facilities currently under IRS review, the partner's allocation will decrease substantially to an average of 5% for the next six months.
Key Highlights
- 1Marriott entered into amendments impacting tax credit allocations with its synthetic fuel partner.
- 2For a facility not under IRS review, the partner's tax credit allocation increases to 90% for six months.
- 3The partner will pay Marriott a higher price for the increased share of tax credits on the unaffected facility.
- 4For three facilities under IRS review, the partner's tax credit allocation is reduced to an average of approximately 5% for six months.
- 5The partner has the option to return ownership of the three IRS-reviewed facilities to Marriott if the 'placed-in-service' challenge is not resolved by March 31, 2005.
- 6If the IRS challenge is resolved by March 31, 2005, the partner's tax credit share for all four facilities will revert to approximately 50%.
- 7The tax credit allocation for the unaffected facility will return to approximately 50% for Marriott on March 31, 2005.