This excerpt taken from the HRZ 10-K filed Mar 2, 2007.
Procedure for adjusting CPI according to New TP1 agreement
All slot rates, excluding Puerto Rico and Alaska, as outlined on First Revised Appendix 1-A, are subject to CPI adjustments.
The slot rates will be adjusted initially on 3/18/2007 and then annually on 12/10/2007, 12/10/2008 and 12/10/2009 based on the average preceding 12 month change in the publicly available Consumer Price Urban Index, subject to a maximum adjustment cap of *** per annum allowed. This index will be used as sole adjustment factor for CPI increases to the rates as outlined on First Revised Appendix 1-A.
Only the Operating Cost percentage of the slot costs will be adjusted. Once rates have been adjusted, new base rate and operations percentage will be calculated for purpose of the next adjustment due 12 months later (see examples below and on Appendix 4 Worksheets A-D). The permitted increases of ***/ffe in the Asia/USWC/Hawaii/Guam slot rates will be applied exclusively to the Owner/Operation portion before the annual adjustment takes place and split according to the then-current percentages in effect (these increases will not be subject to fuel adjustment).
For the purpose of these examples, Fuel adjustment is not included (fuel is kept fixed in the examples at a ***/ton level, but in reality, fuel will be adjusted monthly based on the average actual fuel price and may represent a higher percentage of the base rate than shown below at time of first CPI adjustment).
Example: Trade lane Asia/USWC, Slot adjustment on 12/10/2007:
These Percentages will vary depending on CPI development