3 January 2018 HY Corporate Credit HY Multi Sector.Media. Cable & Satellite • Corporate Tax. Both the Senate and the House bills call for a reduction in the corporate tax rate to 20% (effective in 2018 in the Senate Bill and in 2019 in the House Bill). • Aftemative Minimum Tscic (AMT). The House Bill repeals the corporate AMT, while the Senate Bill makes no change to it. • Deduction for dividends. Both the Senate and the House bills reduce the corporate deduction for dividends received from less-than-80%-owned subsidiaries to reflect the lower corporate income tax rate. Deductibility of interest expense. Interest deductions would be capped at interest income earned plus 30% of annual adjusted taxable income (proxy for EBITDA for House Bill and EBIT for the Senate Bill). For businesses organized as partnerships, this limitation would be determined at the partnership level. Of note, interest deductions disallowed due to this limitation would be carried forward (indefinitely under the Senate Bill and for up to 5 years under the House Bill) but would remain subject to the overall calculation of the limitation on deductibility. • NOLs. Under both bills companies lose the ability to carry back NOLs but would be allowed to carry forward NOLs indefinitely. Of importance, the House Bill increases the value of any unused NOLs by an interest factor to preserve their value. Further, both bills limit the ability of an NOL to reduce taxable income to 90% of taxable income. However, under the Senate Bill, this limit would be reduced to 80% beginning in 2023. • immediate Expensing. Both bills allow immediate expensing of 100% of the cost of qualified property (certain used property is included under the House Bill) placed in service before 2023 (2024 for property with a longer production period). Under the Senate Bill expensing is phased out 20% per year beginning with property placed in service in 2024 (2025 for property with a longer production