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  "documentTitle": "PowerSchool Holdings, Inc. (PWSC)",
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      "text": "This liability stood at $418M at the end of Q4'23 and is excluded from most Wall Street EV calculations.",
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      "text": "Tax Receivable Agreement liability: $418M",
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      "text": "We intend to cause Holdings LLC to make (1) pro rata cash distributions to the owners of LLC Units (including us) in amounts sufficient to fund all or part of their tax obligations in respect of taxable income allocated to them (as discussed above) and to fund our obligation to make payments under the Tax Receivable Agreement and (2) non-pro rata reimbursements to us in respect of our expenses. However, Holdings LLC's ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would violate either any contract or agreement to which Holdings LLC or its subsidiaries is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Holdings LLC or its subsidiaries insolvent. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the Tax Receivable Agreement, such payments generally will be deferred and will accrue interest until paid. Nonpayment for a specified period, however, may constitute a breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, unless, generally, such nonpayment is due to a lack of sufficient funds or is prevented by any debt agreement to which Holdings LLC or its subsidiaries is a party.",
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      "text": "PowerSchool conducted an UP-C restructuring simultaneously with its IPO. An UP-C restructuring results in the PubCo having a stepped-up basis in the assets of the operating company, reducing its future tax liability. PowerSchool has agreed to pay 85% of these tax benefits to its Pre-IPO owners Vista Equity and Onex Corp. The tax receivable agreement liability is paid in cash and if the Company is unable to pay for a specified period, then payments will be deferred and will accrue interest until paid. Thus, the tax receivable liability should be treated as debt and added to enterprise value calculations. This liability stood at $418M at the end of Q4'23 and is excluded from most Wall Street EV calculations.",
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      "text": "To the extent that we are unable to make payments under the Tax Receivable Agreement, such payments generally will be deferred and will accrue interest until paid. — PowerSchool 2023 10-K",
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      "text": "Source: PowerSchool FY23 10-K",
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      "text": "Spruce Point Calls Out PowerSchool's ~$420M Liability",
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