Alvarez & Marsal Taxand, LLC,a tax-advisory affiliate of management consulting firm Alvarez & Marsal, recently surveyed top financial executives of U.S. multinational companies to solicit perspectives and priorities with respect to tax competitiveness and tax reform.

1. CFO MATTERS:
TAX PERSPECTIVES
SURVEY HIGHLIGHTS
ALVAREZ & MARSAL TAXAND

2. Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Survey Methodology and Demographics . . . . . . . . . . . . . . . . . . . . 2
Results and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8
Contact Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

3. EXECUTIVE SUMMARY
“While the contentious debate Amidst political, economic and regulatory change, CFOs say certainty in
over what proper tax reform the tax code has become even more important than a reduction in corporate
should look like drags on, there tax rates, according to a new survey conducted by Alvarez & Marsal Taxand
is no question about what is (A&M). A&M Taxand directly reached out to more than 800 financial executives
most important to the industry. For across the U.S. to solicit their perspectives and priorities with respect to tax
companies to plan, to invest, to competitiveness and tax reform.
create jobs and to grow, they must
have certainty. In fact, confidence While CFOs generally believe tax rates should be reduced to ensure the
in knowing precisely what the U.S. remains competitive in an increasingly global economy, when given the
tax code will require has become opportunity to eliminate or significantly change one aspect of the tax code,
more important than how much it most chose to increase certainty in the tax system. The vast majority also said
will cost them. As our research that tax considerations have a direct impact on their business decisions. They
reveals, as long as proposed named Texas, Florida and Nevada as the most tax competitive states and
changes remain up in the air, California, New Jersey and New York as the least competitive states in which
companies will be forced to to operate.
continue to burn fuel operating
The following survey highlights tax issues that are top of mind to today’s U.S.
in holding patterns rather than
corporate financial leaders.
charting productive courses
forward.”
Robert N. Lowe
CEO, Alvarez & Marsal Taxand
Alvarez & Marsal Taxand would like to thank The Financial Executives
Networking Group (FENG) and its members for participating in this survey.
CFO MATTERS: GLOBAL TAX PERSPECTIVES SURVEY 1

4. SURVEY METHODOLOGY AND DEMOGRAPHICS
A&M Taxand • A&M Taxand directly reached out to more than 800 financial executives and
shared the survey with the members of The Financial Executives Networking
directly reached out Group (FENG). The survey was also promoted in our weekly newsletter
to more than 800
(Tax Advisor Weekly), as well as on www.alvarezandmarsal.com.
• A&M Taxand received 302 responses.
financial executives • For the purposes of classification in this survey, businesses with less than
across the U.S. $1 billion in annual revenue are categorized as “small,” and those with more
than $1 billion in annual revenue are categorized as “large.”
to understand their perspectives • The respondents to this survey were privately owned companies (51%),
on tax competitiveness, tax public and private equity owned (49%).
department issues and tax reform. • Businesses with annual revenues of less than $1 billion comprise 74% of
the respondents.
Demographics of Respondents
2011 Revenue Percent Industry Percent HQ Location Percent
< $1 billion 74.00 Energy 4.71 Texas 12
> $1 billion 26.00 Financial Services 16.84 California 11
Grand Total 100.00 Healthcare 6.40 New York 10
High Tech 12.46 New Jersey 7
Ownership Percent Manufacturing 25.25 Massachusetts 7
Closely Held 51.34 Other 20.20 Illinois 5
Equity Owned 20.47 Services 11.78 Pennsylvania 4
Public 28.19 Transportation 2.36 North Carolina 4
Grand Total 100.00 Grand Total 100.00 Florida 3
Connecticut 3
Tax Employees Percent Georgia 3
Professionals Percent
< 500 58.84 Delaware 2
< 5 86.94
500-1,000 8.50 Virginia 2
5-10 8.93
1,000-10,000 21.77 Minnesota 2
10-25 1.37
> 10,000 10.88 Ohio 2
> 25 2.75
Grand Total 100.00 Other – U.S. 14
Grand Total 100.00
International 7
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5. RESULTS AND ANALYSIS
Q What effective tax rate
would make the U.S.
Large Business
Federal corporate rate 7% 2% 5%
competitive with foreign 18%
income tax rates? 17%
Financial executives from both
large and small companies view an 30-35%
effective tax rate of 20%-25% as 25-30%
necessary to make the U.S. federal
20-25%
corporate rate competitive with
15-20%
global tax rates, while a significant
percentage of small businesses, 10-15%
with generally a higher percentage <10%
of domestic income, view an even 51%
lower rate 15%-20% as necessary.
Small Business
“The view among CFOs is that we
have sat here for the last 20 years 7%
15%
and have watched other countries
lower their top corporate tax rates
16%
while we have done nothing – thus,
impacting our ability to compete
effectively in a global economy.
Aligning our corporate tax system
with the rest of the developed
world should enable U.S.-based 30-35%
companies to compete effectively 28%
25-30%
on a global scale and create more
20-25%
business opportunities in the
United States.” 15-20%
34% 10-15%
Ernesto R. Perez
Managing Director,
Transaction Tax and International Tax
51% of large company CFOs believe a U.S. effective tax rate of between
20%-25% is necessary to allow the U.S. federal tax rate to be competitive
with foreign corporate tax rates.
Small company CFOs also most often choose the 20%-25% range as the
rate required to make the U.S. rate competitive (34%); however, a slightly
smaller percentage (28%) believe the rate needs to be even lower, 15%-20%,
to make the U.S. competitive.
CFO MATTERS: GLOBAL TAX PERSPECTIVES SURVEY 3

6. RESULTS AND ANALYSIS
Q If you could eliminate
Large and Small Businesses
or significantly change
9%
one aspect of the current
tax code, what would it be?
37%
While our survey indicates that
financial executives believe the U.S.
Eliminate uncertainty tax rate needs to be reduced to be
34% globally competitive, CFOs would
Reduce rates and
adopt territorial rather have certainty within the tax
system system as opposed to a reduction
Reduce rates and in rates. Does this suggest that
eliminate incentives / companies can overcome the
credits
complexity and high tax rates of
Other the U.S. tax system and still be
20% competitive?
When given the opportunity to eliminate or significantly change one aspect of “It isn’t surprising that ‘certainty’
the current tax code, CFOs most frequently choose to eliminate uncertainty
ranks so high with CFOs.
related to tax situations. This response is interesting, given that it tops a
reduction in tax rates coupled with an elimination of incentives and credits. Significant volatility or unexpected
bumps in EPS can be traced to
the impact of income taxes. This
volatility is more pronounced
than ever due in large part to the
impact of ASC 740. CFOs are also
keenly aware that restatements
are often caused by material
weaknesses in the area of income
taxes. I believe that some of our
respondents must think that if
the U.S. tax code was built on a
bedrock of stability and certainty,
then weaknesses in tax internal
controls would be greatly
diminished.”
James M. Eberle
Managing Director,
Federal Tax and Research Credits
and Incentives
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7. RESULTS AND ANALYSIS
Q To what extent do
tax considerations Large Business
influence your global 8%
business decisions?
The tax implications of business
decisions are consistently
considered by businesses of 48%
all sizes. As businesses grow
in complexity and increase their
global reach, tax increasingly 44%
impacts decision making as financial
Major consideration
executives give tax greater
consideration. Companies with Minor consideration
greater complexity and global reach Not a consideration
have more opportunities to include
tax favorable jurisdictions in their
operations; generally have greater
pressure to reduce their effective tax Small Business
rates; and have more tax resources to
develop and maintain complex
tax structures. 23%
26%
“These results show that it
isn’t whether companies are
influenced by their tax cost, but
rather the degree to which taxes
impact business choices. Whether
it’s hiring, relocation, expansion
incentives, or the tax implications of
Major consideration
improvements in the organization,
Minor consideration
companies clearly look at all the
aspects of tax cost when making Not a consideration
decisions on where to do business. 51%
These results confirm that larger
companies view the impact of tax
92% of large companies consider tax implications in global business decisions;
as a significant or major driver of
48% give tax “major” consideration. In contrast, only 77% of small companies
their business decisions.” consider tax implications, with major consideration given by just 26%.
Carolyn Shantz
Managing Director,
Sales and Use Tax
CFO MATTERS: GLOBAL TAX PERSPECTIVES SURVEY 5

8. RESULTS AND ANALYSIS
Q Which states do you view as
most competitive from
a tax perspective? (Listed
in order of most competitive to least
competitive)
While many factors may play into
financial executives’ perception of
state competitiveness, the states
generally viewed as having complex
tax systems and high tax rates are the
three states listed (by a wide margin)
as the least competitive states.
The states regarded as most
competitive generally have some
CFOs name Texas, Florida and Nevada among the most competitive states in form of tax exclusion or non-income
which to operate from a tax perspective, while California, New York and New based tax systems.
Jersey are viewed as the least competitive states.
“With the states at each end of the
spectrum, it will be interesting to
see if they modify their tax systems
in an aggressive attempt to retain
existing contracts and attract new
business. When companies look
to relocate corporate functions
or expand operations, initial
credits and incentives may be
the most relevant factor from a
tax perspective; although, the
ongoing tax burden must be
considered. Watch for proposals
that are positioned as “pro-
business” such as lowering
statutory tax rates or modifying
state apportionment formulas to
favor in-state businesses.”
Don Roveto
Managing Director,
State and Local Tax
6 ALVAREZ & MARSAL TAXAND

9. RESULTS AND ANALYSIS
Q Which of the following areas
creates the greatest Large Business
risk for your company? 18%
2%
Financial executives of large, global 30%
businesses view compliance efforts
as their biggest risk, specifically
when it comes to coordination of
Transfer pricing
global compliance and transfer 10%
pricing. For small businesses, the Tax audits
compliance function and resultant Global compliance
review by taxing jurisdictions ASC 740-10-25
(external tax audits and global 8%
Accounting for income
compliance) are viewed as the taxes
greatest risks. Other
32%
“Interestingly, tax examinations
concern small companies to a Small Business
much greater degree than large
companies. This contrasting view 3%
is likely caused by the attention 15% 20%
paid to tax and the availability
of tax resources. As companies
grow, do business in multiple
jurisdictions, and leverage both
internal and external tax resources 10%
Transfer pricing
to develop more sophisticated
tax structures, CFOs gain greater Tax audits
awareness and understanding Global compliance
of the tax positions that their ASC 740-10-25
companies are taking. This 29% Accounting for income
understanding seems to translate taxes
into confidence. Smaller company 23%
Other
CFOs don’t seem to have this
same level of confidence,
suggesting that they may need to
spend more time talking with Global compliance is viewed as the area of greatest risk by large company
their tax resources.” CFOs, while tax examinations are viewed as the greatest risk for small
companies.
Robert Filip
Managing Director,
Federal Tax
CFO MATTERS: GLOBAL TAX PERSPECTIVES SURVEY 7

10. RESULTS AND ANALYSIS
Large Business
Q In the past two years,the
members of Congress and
Obama administration have made
numerous fundamental
17%
29%
corporate tax reform
proposals. Do you actively
model the effects of these various
Yes
No Reform likely, but
proposals on your company?
dependent on 2012
30% election The lack of faith in legislative
No Reform unlikely direction and action leads financial
in planning horizon executives to slow efforts to determine
24% No Other the impact of potential proposals.
Does this response support the view
that gridlock is good for business or
that greater clarity and leadership
Small Business by government is required to get
business behind tax legislation and
1%
reform?
15%
23%
“This response underscores
the value executives place on
certainty, and emphasizes the
Yes hesitancy to take action in the face
22% No Reform likely, but of obstacles to legislative reform.
dependent on 2012 Even though the reforms under
election discussion are by any measure
No Reform unlikely fundamental, the impact of these
in planning horizon
reforms is clearly judged to be
No Other too speculative, especially in the
No (blank) face of other more immediate
39%
pressures.”
Kent Wisner
Concern about the lack of certainty in the current tax system is visible in the Managing Director,
way financial executives respond to proposed tax legislation. Only 29% of International Tax
large companies model the impact of tax proposals, while just 15% of small
companies do.
8 ALVAREZ & MARSAL TAXAND

11. CONTACT US
Robert N. Lowe Thomas Aiello Brian Cumberland James M. Eberle
CEO, Managing Director, Managing Director, Managing Director,
Alvarez & Marsal Taxand Federal Tax and State Compensation and Benefits Federal Tax and Research
blowe@alvarezandmarsal.com and Local Tax bcumberland@alvarezandmarsal.com Credits and Incentives
taiello@alvarezandmarsal.com jeberle@alvarezandmarsal.com
Alan Kirschenbaum Ernesto R. Perez Don Roveto
Managing Director, Managing Director, Managing Director,
Business Development Transaction Tax and International Tax State and Local Tax
and Operations eperez@alvarezandmarsal.com droveto@alvarezandmarsal.com
akirschenbaum@alvarezandmarsal.com
Laurie Dicker Robert Filip Kathleen King
Managing Director, Managing Director, Managing Director,
Transfer Pricing Federal Tax Research Credits and Incentives
ldicker@alvarezandmarsal.com rfilip@alvarezandmarsal.com kking@alvarezandmarsal.com
Carolyn Shantz Kent Wisner
Managing Director, Managing Director,
Sales and Use Tax International Tax
cshantz@alvarezandmarsal.com kwisner@alvarezandmarsal.com
For complete survey results, please contact us to arrange a private consultation.

12. About Alvarez & Marsal Taxand
Alvarez & Marsal Taxand, LLC, an affiliate of Alvarez & Marsal (A&M), a leading global
professional services firm, is an independent tax group made up of experienced tax
professionals dedicated to providing customized tax advice to clients and investors
across a broad range of industries. Its professionals extend A&M’s commitment
to offering clients a choice in advisors who are free from audit-based conflicts of
interest, and bring an unyielding commitment to delivering responsive client service.
A&M Taxand has offices in major metropolitan markets throughout the U.S., and
serves the U.K. from its base in London.
Alvarez & Marsal Taxand is a founder of Taxand, the world’s largest independent tax
organization, which provides high quality, integrated tax advice worldwide. Taxand
professionals, including almost 400 partners and more than 2,000 advisors in 50
countries, grasp both the fine points of tax and the broader strategic implications,
helping you mitigate risk, manage your tax burden and drive the performance of
your business.
To learn more, visit www.alvarezandmarsal.com or www.taxand.com.
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and A&M® are registered trademarks of Alvarez & Marsal Holdings, LLC. © Copyright 2012 Alvarez & Marsal Holdings, LLC. All Rights Reserved.
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