Who Must Be Reported as Beneficial Owners of a Reporting Company?
The article was orginially posted on November 28, 2023 and has been updated to reflect changes that took effect in 2024.
During 2024 the Corporate Transparency Act (CTA) and related CTA Rule will require an estimated 32.6 million “Reporting Companies” to register with FinCEN, a bureau of U.S. Treasury. Registration occurs through online filings of Beneficial Ownership Information (BOI) reports. A Reporting Company’s BOI report provides basic name and address information about the entity, but also must identify all individuals deemed to be its “Beneficial Owners” and provide specified PII (personally identifying information) about each of them. Except for entities that are exempt or excluded from the Reporting Company definition under the Act, BOI reporting requirements extend to all corporations, LLCs, or other legal entities that are formed in the U.S. and all foreign entities that register to do business in the U.S.
Under the CTA , an individual is deemed a Beneficial Owner if she either exercises substantial control over the Reporting Company or owns or controls at least 25% of the ownership interests of the Reporting Company. This article discusses the elements that give rise to Beneficial Owner status and various complex issues that can arise in connection with that determination.
What is at Stake?
If identified as a Beneficial Owner of a Reporting Company, an individual must furnish five pieces of PII: (1) full legal name (including middle name and suffix, where applicable), (2) date of birth, (3) street address of principal residence, (4) unique identifying number from a current State driver’s license or other approved governmentally issued ID documents, and (5) an image of that driver’s license or other ID document. Foreseeably, some people will be reluctant to disclose and entrust that information to the Reporting Company. In the case of Beneficial Owners who are Reporting Company employees (including senior officers, as discussed below), the Reporting Company will generally have leverage to encourage this disclosure. But the Reporting Company may have less leverage over investors and individuals associated with those investors.
The CTA does offer a route by which a covered individual can provide this same personal information directly to FinCEN, by applying for a FinCEN Identifier number. If a Beneficial Owner has a FinCEN ID, the Reporting Company can provide the identifier number in lieu of collecting and reporting the required personal data.
A Reporting Company that fails to provide (or reference) the requisite PII for a Beneficial Owner is exposed to potential civil or criminal penalties under the CTA. A recalcitrant owner or manager too, however, is potentially exposed to penalties for failing to furnish the requisite PII (or a FinCEN ID) to the Reporting Company when needed.
Definition of Beneficial Owner: Difficult Questions
Under the CTA, a “Beneficial Owner” of a Reporting Company is defined to mean “any individual who, directly or indirectly, either exercises substantial control over such reporting company or owns or controls at least 25 percent of the ownership interests of such reporting company.” Applying these concepts can involve difficult questions.
25+% of Equity or Voting Power
In companies with a single class of equity securities, determining 25+% ownership or control will often be straightforward. Arrangements that shift voting power (such as a voting trust) or that create contingent equity interests (such as stock options or convertible notes) will complicate the picture. And in companies with multiple classes of equity securities where one class is entitled to a preferential return over another (such as upon liquidation), 25+% ownership can shift over time in unexpected ways. The following examples illustrate these points:
- For entities that issue capital and profit interests (such as LLCs taxed as partnerships), the individual’s total capital and profit interests are compared to the total outstanding capital and profit interests of the Reporting Company.
- For corporations, entities taxed as corporations, and other entities that issue shares, the individual’s percentage of ownership interests is the greater of: (1) the total combined voting power of all classes of ownership interests of the individual as a percentage of total outstanding voting power of all classes of ownership interests entitled to vote, or (2) the total combined value of the ownership interests of the individual as a percentage of the total outstanding value of all classes of ownership interests. For these entities, either 25% of the voting power or 25% of the equity will suffice.
- If a class or series of shares has supervoting rights, that will affect the distribution of voting power. By such means, a holder of, say, 10% of the equity might have authority to cast 30% of the votes on matters submitted to shareholders, and thus be a Beneficial Owner even if not otherwise involved in management.
- Measurement of the equity gets complicated where there is more than one class of interests. For example, in an early-stage startup company, assume that the preferred shares constitute just 24% of the fully-diluted equity but are entitled to the first $6 million of proceeds on liquidation. If the business runs into trouble and is thought to have a value not exceeding $8 million, then the preferred stock could constitute 75% or more of the equity, and each investor that owns at least at least one-third of the preferred shares will own 25+% of the equity.
- The CTA Rule defines ownership interests very broadly to include not only (A) a profits interest or (B) shares; but also (C) any securities or instrument convertible into a profits interest or shares, and (D) any put, call, straddle, or other option or privilege of buying or selling any of the items described in (A), (B), or (C) above; and also (E) “Any other instrument, contract, arrangement, understanding, relationship, or mechanism used to establish ownership” in the Reporting Company.
- As the classes or types of equity interests become more numerous, as the split of the equity gets more complex, or as the value of the Reporting Company becomes more uncertain, it may be debatable who should be considered to own at least 25% of the equity. The CTA Rule provides certainty through an overinclusive catch-all rule:
“If the facts and circumstances do not permit the [25% calculations] to be performed with reasonable certainty, any individual who owns or controls 25 percent or more of any class or type of ownership interest of a reporting company shall be deemed to own or control 25 percent or more of the ownership interests of the reporting company.”
- The presence of contingent interests brings additional complexity. In calculating whether an individual’s ownership interest reaches 25%, the CTA Rule provides that “Ownership interests of the individual shall be calculated at the present time, and any options or similar interests of the individual shall be treated as exercised.”
- Note that the Rule language says that the individual’s options (or similar interests) shall be treated as exercised.
- In the CTA Rule release, FinCEN indicates that an option (or similar interest) being “out of the money” does not prevent it from being given full effect in calculating the equity percentage.
- Other guidance from FinCEN seems to say that all options and contingent interests of all parties are deemed exercised. This contradicts the Rule and also opens an avenue to use worthless, out-of-the money options in an abusive manner to dilute an individual’s ownership below 25%.
- The calculations are to be made “at the present time,” but it is unclear whether then-nonexercisable options or warrants held by an individual are to be counted.
- To be safe, it seems advisable that the ownership percentage calculation should count all options or warrants of the individual as if exercised, but should not count any unexercised options or warrants of any other persons, in each case without regard to whether the options or warrants are then exercisable by their terms.
- Note that the Rule language says that the individual’s options (or similar interests) shall be treated as exercised.
In making these determinations, the Reporting Company will generally have a good sense of which of its investors are 25+% owners. It should be kept in mind, however, that the BOI report generally focuses on individuals. Thus, the Reporting Company generally needs to look through its investor entities and determine (A) what individuals sufficiently control the investor entity to be considered to control the investor entity’s entire stake and (B) whether there are any individuals who are passive owners of the investor entity but hold a large enough stake in the investor entity to translate to a 25+% proportional stake in the Reporting Company. From examples provided by FinCEN, we know that an individual who holds 40% of an investor entity that itself holds a 30% interest in the Reporting Company will fall short of 25% ownership (40% x 30% = 12%) unless that individual controls the investor entity, in which case she will be considered to control all 30% owned by the entity investor. If the investor entity instead holds a 65% interest in the Reporting Company, then even an individual who passively owns a 40% stake (such as a large outside limited partner of a private equity fund) will constitute a Beneficial Owner of the Reporting Company (40% x 65% = 26%).
In those (rare) cases in which a Reporting Company concludes that an individual would qualify as a 25+% Beneficial Owner exclusively by being a passive owner of one or more investor entities that are themselves exempt entities, then the Reporting Company may elect in its BOI report to name the investor entity or entities and not identify the individual or provide the otherwise requisite PII about that individual. (See discussion below.)
“Substantial control” is the other basis for treating an individual as a Beneficial Owner of the Reporting Company. Any of the following will be deemed to have substantial control:
- Each of the Reporting Company’s “senior officers” – defined as (i) an individual who holds the position or exercises the authority of a president, chief financial officer, general counsel, chief executive officer, chief operating officer, or (ii) any other officer, regardless of official title, who performs a similar function;
- Each other individual who has authority over the appointment or removal of any senior officer or of a majority of the board of directors (or similar body);
- Each other individual who directs, determines, or has “substantial influence” over important decisions made by the reporting company. FinCEN provides the following as an illustrative, but not exclusive, list of important decisions:
- The nature, scope, and attributes of the business of the Reporting Company, including the sale, lease, mortgage, or other transfer of any principal assets of the Reporting Company;
- The reorganization, dissolution, or merger of the Reporting Company;
- Major expenditures or investments, issuances of any equity, incurrence of any significant debt, or approval of the operating budget of the Reporting Company;
- The selection or termination of business lines or ventures, or geographic focus, of the Reporting Company;
- Compensation schemes and incentive programs for senior officers;
- The entry into or termination, or the fulfillment or non-fulfillment, of significant contracts; or
- Amendments of any substantial governance documents of the Reporting Company, including the articles of incorporation or similar formation documents, bylaws, and significant policies or procedures;
- As a catch-all, any other individual who has any other form of “substantial control” over the Reporting Company.
- The CTA and CTA Rule also provides some special exceptions to Beneficial Owner status.
A close examination of these categories illustrates the vague and expansive nature of “control” for purposes of identifying covered individuals under the CTA.
A. Senior Officers: For most Reporting Companies, identifying the five enumerated senior officers will be relatively straightforward. The following examples illustrate some complexities, however:
- In a Reporting Company that uses nontraditional officer titles or that does not designate any officers per se, the “senior officers” will be those individuals, irrespective of title, who perform roles functionally equivalent to the five enumerated roles.
- The senior officer test does not hinge on employment status. Thus, a company with a “rent-a-CFO” arrangement would need to identify as a senior officer (and thus a Beneficial Owner) the individual who most clearly fulfills the CFO function, even if employed by an outside consulting firm. Similarly, if a VC firm employee steps in (even on a part-time, uncompensated basis) as an interim replacement for a portfolio company CEO who has stepped down, the portfolio company (if a Reporting Company) likely needs to treat that interim replacement as a senior officer.
- In contrast, FinCEN guidance suggests that an outside lawyer is typically not treated as the “general counsel” in the senior officers list. In FAQ D.6, FinCEN states that “ordinary, arms-length advisory or other third-party professional services to a reporting company are not considered to be ‘substantial control.’”
- The test is factual, however, and an individual “who holds the position of general counsel in a reporting company is a ‘senior officer’ of that company.”
- That same lawyer would be reportable also as a Company Applicant for an entity formed on or after January 1, 2024, if she was primarily responsible for directing the entity formation filing.
- Although in the absence of corresponding titles the test is a functional one, a person who does carry an enumerated title (such as President) – even if on a wholly honorific basis, without real authority – meets the definition of a “senior officer,” Under the CTA Rule, “holding the position or exercising the authority” will suffice.
- If a person does hold a title on a completely honorific basis and is not otherwise a covered individual, she or the Reporting Company should consider whether to change the title of that position or drop altogether the practice of designating purely honorific titles. (Of course, if that same person has at least a 25% ownership stake, then she is a Beneficial Owner regardless.)
- In its CTA Rule release, FinCEN said it agreed with commenters that the roles of corporate secretary and treasurer tend to entail ministerial functions with little control of the company. FinCEN therefore omitted those roles from the definition of ‘‘senior officer.’’ A treasurer who actually does have authority to manage financial or accounting matters, however, might well be the entity’s chief financial officer and thus includable as a “senior officer” on that basis.
- If the Reporting Company organizes its operations into separately managed divisions, it will need to determine if one such manager (aside from the president or CEO) has authority over the other managers such that she should be considered the chief operating officer. In some cases, a Reporting Company might conclude that it has multiple chief operating officers of equal rank, in which case it may be appropriate to include all of them (or, if sufficiently eclipsed by the president or CEO as to the business as a whole, none of them) as “senior officers.”
- In Reporting Companies where the identities of the senior officers are not otherwise obvious, it may be advisable for the board of directors to make a determination of who is, and is not, a senior officer within the meaning of the CTA. A good faith determination by the board should be entitled to significant weight.
B. Appointment or Removal Powers. This category is relatively narrow. If a person holds (directly or indirectly) the power to remove a majority the board (or equivalent body), then that person’s control over the Reporting Company is obvious. If that “person” is an investor entity, then it might not be obvious which individual(s) associated with that entity have control of that decision.
Particularly in VC-funded or angel-funded startup companies, the major investors might each have a contractual right to block the appointment of a CEO candidate; even if no one investor can force the appointment of a particular CEO, the power to block a candidate should probably suffice for these purposes. If no one investor can block an appointment without support from other investors, consideration should be given to whether that investor has (as a practical matter) sufficient sway to assure that no candidate will be appointed as CEO without that investor’s approval. Again, however, the Reporting Company will need to determine which underlying individual(s) have control over the investor’s decision.
C. Substantial Influence. The Beneficial Owner category that poses the greatest uncertainties is the class of individuals who, directly or indirectly, exercise or have “substantial influence” over “important decisions made by the reporting company.”
- “Substantial influence” certainly includes the concept of indirect control, whether exercised through express instructions or through loyal agents who know full well their boss’s desires. In its CTA Rule release, FinCEN states: “For example, a sanctioned individual may direct an advisor to form a company to engage in business activities, with instructions to omit the sanctioned individual from any corporate-formation documents. The sanctioned individual, through the adviser, may continue to have substantial influence over important decisions of the reporting company, even if the individual does not direct or determine those decisions.”
- “Substantial influence” also includes the concept of divided or shared control. FinCEN states: “A reporting company may also be structured such that multiple individuals exercise essentially equal authority over the entity’s decisions—in which case each individual would likely be considered to have substantial influence over the decisions even though no single individual directs or determines them.”
- Because FinCEN’s examples of “important decisions” are so broad, and because coalitions of directors may control important decisions that no one of them could make on her own, it likely is prudent to include all members of the board (or equivalent body) as Beneficial Owners unless:
- It is obvious that only certain directors control the decision-making and that the other directors have little influence over important decisions, in which case the fringe directors have insufficient power to be considered actual control persons; or
- The board is completely eclipsed by a domineering president or CEO, rarely meets, and does what it is told to do, in which case the board members are mere agents of the domineering president or CEO. Even so, the Reporting Company may wish to identify all of its directors as Beneficial Owners, and being somewhat overinclusive may be the more prudent course of action.
D. Substantial Control. The Beneficial Owner definition also includes a catch-all category, for any individual who has “any other form of substantial control over the reporting company.” In the CTA Rule release, FinCEN explains:
This provision recognizes that control exercised in novel and less conventional ways can still be substantial. It also could apply to the existence or emergence of varying and flexible governance structures, such as series limited liability companies and decentralized autonomous organizations, for which different indicators of control may be more relevant. As noted by commenters, [it] also operates to address any efforts to evade or circumvent FinCEN’s requirements and is intended to prevent sophisticated bad actors from structuring their relationships to exercise substantial control of reporting companies without the formalities typically associated with such control in ordinary companies.”
Failing to disclose the “Oz behind the curtain” could subject the Reporting Company’s senior officers to penalties under the CTA.
E. Exceptions. The CTA Rule includes the following exceptions from treatment as a Beneficial Owner:
- Parent/Guardian in Lieu of Child. A minor child (as defined by applicable State or tribal law) if the reporting company reports the required information of a parent or legal guardian of the minor child is identified and disclosed as a Beneficial Owner. Once the child reaches the age of majority, the Reporting Company must update its BOI report to include that individual and delete (unless otherwise a Beneficial Owner) the previously-identified parent or legal guardian.
- Mere Agent. An individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual.
- Lower-Level Employee. A Reporting Company employee whose substantial influence over important decisions derives solely from her employment status with the company, but only if (i) the employee’s economic benefits from the Reporting Company likewise derive solely from that employment status and (ii) the employee is not a senior officer of the company. An employee who holds any equity interest in the company (other than through exercise of an employee share option or other benefit) or who serves on the company’s board (or equivalent body) likely does not qualify for this narrow exception. An independent contractor would not qualify, given the definition of the term “employee.”
- Future Heir. An individual “whose only interest” in the Reporting Company is through a right of inheritance. Once the individual gains ownership or control over the shares, this exception lapses as to those shares.
- Creditor. The holder of a bona fide debt of the Reporting Company for a predetermined sum will not be considered a Beneficial Ownership solely by reason of loan covenant restrictions that, although regulating the company’s affairs in certain respects, are “intended to secure the right to receive payment or enhance the likelihood of repayment” and would not commonly be considered to give the creditor control of the Reporting Company. A right to convert to equity or otherwise share in company profits would not qualify for this exception. And once a creditor does exercise some degree of control over a defaulting borrower, then the normal tests for Beneficial Owner would apply. In the CTA Rule release, FinCEN expressed sensitivity over not wanting to disrupt normal commercial lending practices. But where debt is a disguised vehicle for control of a company, this exception will not apply.
Identifying Beneficial Owners Associated with Investor Entities:
In many cases, it will be obvious which investors have sufficient involvement to be considered to have control (or shared control) over the Reporting Company. If such an investor is an entity, however, this is not the end of the inquiry. The BOI report seeks the identity of individuals and not entities, and so the Reporting Company is obligated to look through that investor entity and determine who there actually pulls the strings.
It is foreseeable that a significant investor entity may resist a detailed inquiry by Reporting Company management (or counsel) into control of the investor. Any exempt or excluded entity that owns interests in one or more Reporting Companies should be prepared to identify its appropriate control persons, and to do so in a manner that inspires confidence in the accuracy of that determination.
Where the investor entity has board representation rights, its designated director will almost always be deemed a Beneficial Owner of the portfolio company. In many cases, that designee might indeed be the sole individual with control over decisions relating to the particular Reporting Company. Whether this is the case, however, comes down to a question of clout within the investor entity. Particularly where the board designee is a more junior member of the investor’s management team, there may be a boss or other “behind the scenes” person she needs to consult with in order to authorize fundamental decisions about that portfolio company. If so, this other person generally should be considered a Beneficial Owner in addition to the board designee. In an investor organization run by a dominant or domineering founder or manager, that person too is a candidate for inclusion as a Beneficial Owner of any portfolio companies that are Reporting Companies under the CTA.
Special Reporting Exceptions
If a Reporting Company is itself controlled by another Reporting Company, the subsidiary’s BOI report can sometimes simply disclose the parent company’s FinCEN ID in lieu of naming any individual Beneficial Owners. This is allowed only where the parent company (i) has already filed a BOI report, (ii) in so doing elected to obtain a FinCEN ID, and (iii) has reported as its Beneficial Owners only individuals who also constitute all of the Beneficial Owners of the subsidiary.
This special rule is of limited utility. In cases of complete overlap of Beneficial Owners, the subsidiary could easily add to its BOI report the same names and identifying information as the parent disclosed in its own BOI report. Updating may be easier, in that a change or correction in BOI data at the parent level will not spark an update requirement at the subsidiary if the two sets of Beneficial Owners remain identical. If the two sets of Beneficial Owners ever stop being identical (such as a new senior officer hired at the subsidiary who is not also a Beneficial Owner of the parent), this special exception drops away and the subsidiary must promptly update its BOI report to identify all of its Beneficial Owners.
Passive Owners of Exempt Companies:
As noted above, if an individual is a 25+% Beneficial Owner of a Reporting Company solely because she is a passive owner of an intermediate exempt entity, then the individual need not be identified in a BOI report and the Reporting Company can instead simply identify the exempt entity through which that the individual’s interests are owned. This special exception has its limitations:
- The most common example of this is where a private equity fund, venture capital fund, or other pooled investment vehicle has a large but passive limited partner. Note, however, that this only works for exempt entities.
- Not every PE or VC fund is an exempt entity. To qualify, the firm typically must be operated or advised by an SEC-registered investment adviser, a bank, or certain other exempt entity institutions.
- If the investor entity is an excluded entity (such as a trust), this exception does not apply.
- If the underlying individual directly or indirectly partakes in management of the fund with regard to the Reporting Company, then the individual must be named in the BOI report if she has the capacity to exert “substantial influence” over important decisions by the Reporting Company.
- If the underlying individual is indeed passive but owns at least some of her stake in the Reporting Company other than through exempt entities – such as by owning some shares directly in the Reporting Company or through a trust or other excluded entity – then she must be named as a Beneficial Owner if she owns or controls at least a 25% stake in the Reporting Company.
Foreign Pooled Investment Vehicle:
If a pooled investment vehicle is formed under the laws of a foreign country, it cannot qualify as an exempt entity even if advised, for example, by an SEC-registered investment adviser. If the foreign fund has registered with any State (or Indian tribe) to do business, it is deemed a Reporting Company but is allowed in its BOI report to identify just one Beneficial Owner – namely, the individual “who has the greatest authority over the strategic management of the entity.”
Whether or not registered with any State (or Indian tribe), if a foreign fund has large enough holdings in another Reporting Company or is otherwise in a position to exercise “substantial influence” over that Reporting Company, individuals associated with the foreign fund may need to be identified as Beneficial Owners on that other company’s BOI report even if the fund itself would be required to identify only one such individual were it to file a BOI report.
Duty to Update or Correct
Under the CTA Rule, each Reporting Company is subject to ongoing duties to file a new BOI report within 30 days after any change to information included in its most recent BOI report. A new BOI report must also be filed within 30 days after a Reporting Company “becomes aware or has reason to know” that its most recent BOI report contained an inaccuracy when filed. For many Reporting Companies, the duty to update (or correct) will prove more onerous than assembling and filing its BOI report in the first place.
Some changes in Beneficial Owner status will be obvious to the Reporting Company, such as the departure of a chief financial officer and the arrival of a new chief financial officer. Changes in the composition of the board (or equivalent body) of the Reporting Company will also be obvious. These changes trigger an updated BOI report if the previously reported list of Beneficial Owners changes. (For example, if a CFO is elevated to CEO and the prior CEO remains on the board, that prior list might be unchanged and thus not require updating. If a new CFO is later hired, then a new BOI report must be filed to show the updated list of Beneficial Owners.)
Changes in reported PII of Beneficial Owners will often be less obvious. A change in residence address of a director, for example, might go undetected unless the Reporting Company has procedures that remind directors of the need to convey that information to the company. An expired passport that is not renewed by a Beneficial Owner will also trigger the need for an update if the passport was the approved document identified in that individual’s PII on file with FinCEN. Reporting Companies should consider adopting procedures to periodically remind its directors and officers to update the company about changes in PII and to periodically remind major investors to alert the company to relevant changes in control person status within their respective organizations.
If the Reporting Company included a FinCEN ID for a particular Beneficial Owner, that individual (and not the company) has the obligation to file updates for subsequent changes in reported PII. To ease its own monitoring and reporting duties, a Reporting Company might wish to encourage its Beneficial Owners – particularly outside directors and upstream control persons – to file for FinCEN IDs.
 A copy of the Act can be found at https://www.law.cornell.edu/uscode/text/31/5336. A copy of the CTA Rule and FinCEN’s accompanying release can be found at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. As of this writing, FinCEN still has much work to complete before January 1, 2024. Less than six weeks before the January 1 effective date, FinCEN has yet to finalize the online mechanism that is central to the reporting regime. Other FinCEN guidance may be found at https://www.fincen.gov/boi.
 Any domestic Reporting Company already in existence before January 1, 2024 will have until January 1, 2025 to file its initial BOI reports. Any domestic Reporting Company formed during 2024 should file its initial BOI report within 90 days after formation. Any entity formed after 2024 should file its initial BOI report within 30 days after formation. In the case of foreign entities, those deadlines are determined by the date of first registration with any State or tribe for authority to do business, rather than by formation.
 The article assumes that the reader has some basic familiarity with what entities are Reporting Companies and what entities are exempted or excluded from being a Reporting Company. Further details about exempt entity and excluded entity status and other issues under the Act and the CTA Rule can be found in various articles at: https://www.verrill-law.com/gregory-s-fryer/publications-podcasts.
 Unless formed (or, for a foreign entity, first registered) before January 1, 2024, the Reporting Company also must provide similar information for up to two “Company Applicants,” defined as the individual who made the formation (or registration) filing plus the other individual (if any) who had primary responsibility for directing or controlling that filing. If the Company Applicant forms entities in the course of such person’s business, the street address of the business can be provided in lieu of the personal residence address.
 Under the Act, FinCEN is obligated to protect the information disclosed in a BOI report (or FinCEN ID application) but will make the information available to law enforcement and to banks. A Reporting Company that collects personal BOI data should take appropriate steps to protect the confidentiality of that data.
 FinCEN writes: “For example, if the exercise of an option or similar interest at the present time would result in an individual holding 26 percent of the profit interests in an entity, the individual would be deemed to own or control 25 percent or more of the ownership interests in the reporting company even if the value of those profit interests is indeterminate or negligible at the present time.”
 E.g. BOI Small Entity Compliance Guide: “If your company has issued any options, privileges, or convertible instruments . . . [a]ssume they have been exercised or converted in all calculations below.”