F - PBOP Write Off

Appendix F

CALCULATION OF THE 1998 WRITE-OFF OF THE PBOP REGULATORY ASSET

Amounts in

$000's

Reference

1.

Total Intrastate Regulated PBOP Cost Claimed by Pacific Bell in 1998 (Including the Write Off of the PBOP Regulatory Asset)

$559,942

Exhibit 2A: 404, Volume 2, Page 7-27, Table 7-8

2.

TBO Correction

$2,148

Note 1, Line 17

3.

Corrected PBOP Costs Claimed by Pacific Bell

$562,090

Line 1 + Line 2

4.

PBOP Tax-Deductible Contribution Claimed by Pacific Bell in 1998 (Including VEBA 3 Transfer)

(239,205)

Note 2, Line 24

5.

Regulated Asset Write-Off

$322,885

Line 3 + Line 4

6.

Less: TBO Adjustment for Expensing of VEBA 3 Contributions in 1989 and 1990

(43,350)

Appendix I, Line 14 (See Note 3)

7.

Subtotal

$279,536

Line 5 + Line 6

8.

Tax Factor

0.59254

(1 - .40746 (Combined Fed. and State Tax))

9.

Normalized After-Tax Regulatory Asset Write-Off

$165,636

Line 7 x Line 8

Note 1

10.

CPUC - TBO Adjustment

($12,708)

Exhibit 2A: 404, Volume 2, Attachment 7 - 7

11.

Intrastate Correction Per Pacific Bell

0.8043

Exhibit. Phase 2A: 307, p. 25, Lines 1 - 15; and Exhibit Phase 2A: 404, Vol. 2, Attach. 7-7

12.

Corrected CPUC - TBO Adjustment

($10,221)

Line 10 x Line 11

13.

Difference

$2,487

Line 10 - Line 12

14.

Regulated Factor

0.9409

Exhibit 2A: 404, Attachment 7 - 7

15.

Regulated Amount

$2,340

Line 13 x Line 14

16.

Expense Factor

0.9180

Exhibit 2A: 404, Attachment 7-7

17.

Amount to Correct TBO

$2,148

Line 15 x Line 16

Note 2

18.

Pacific Bell Tax-Deductible Contribution - 1998

$236,788

Exhibit 2A: 404, Attachment 7-7

19.

VEBA 3 to VEBA 5 Transfer - 1998

$79,300

Exhibit Phase 2A: 307, p. 30, Line 1. See Note 3.

20.

Total Contribution Claimed by Pacific Bell

$316,088

Line 18 + Line 19

21.

Intrastate Factor

0.8043

Exhibit Phase 2A: 404, Attachment 7-7

22.

Intrastate Amount

$254,230

Line 20 x Line 21

23.

Regulated Factor

0.9409

Exhibit Phase 2A: 404, Attachment 7-7

24.

Intrastate Regulated Amount

$239,205

Line 22 x Line 23

Note 3

To avoid double counting, the write-off of the PBOP regulatory asset is reduced by (i) the VEBA 3 transfer in 1998, and (ii) the adjustment to Pacific's TBO caused by expensing the VEBA 3 contributions in 1989 and 1990. In Appendix D, the effects of the VEBA 3 transfer and TBO adjustment on Pacific's NOI are listed separately from the write-off of the PBOP regulatory asset.


	Appendix F

CALCULATION OF THE 1998 WRITE-OFF OF THE PBOP REGULATORY ASSET


		Amounts in
		$000's	Reference

1.	Total Intrastate Regulated PBOP Cost Claimed by Pacific Bell in 1998 (Including the Write Off of the PBOP Regulatory Asset)	$559,942	Exhibit 2A: 404, Volume 2, Page 7-27, Table 7-8

2.	TBO Correction	$2,148	Note 1, Line 17

3.	Corrected PBOP Costs Claimed by Pacific Bell	$562,090	Line 1 + Line 2

4.	PBOP Tax-Deductible Contribution Claimed by Pacific Bell in 1998 (Including VEBA 3 Transfer)	(239,205)	Note 2, Line 24

5.	Regulated Asset Write-Off	$322,885	Line 3 + Line 4

6.	Less: TBO Adjustment for Expensing of VEBA 3 Contributions in 1989 and 1990	(43,350)	Appendix I, Line 14 (See Note 3)

7.	Subtotal	$279,536	Line 5 + Line 6

8.	Tax Factor	0.59254	(1 - .40746 (Combined Fed. and State Tax))

9.	Normalized After-Tax Regulatory Asset Write-Off	$165,636	Line 7 x Line 8



	Note 1

10.	CPUC - TBO Adjustment	($12,708)	Exhibit 2A: 404, Volume 2, Attachment 7 - 7

11.	Intrastate Correction Per Pacific Bell	0.8043	Exhibit. Phase 2A: 307, p. 25, Lines 1 - 15; and Exhibit Phase 2A: 404, Vol. 2, Attach. 7-7

12.	Corrected CPUC - TBO Adjustment	($10,221)	Line 10 x Line 11

13.	Difference	$2,487	Line 10 - Line 12

14.	Regulated Factor	0.9409	Exhibit 2A: 404, Attachment 7 - 7

15.	Regulated Amount	$2,340	Line 13 x Line 14

16.	Expense Factor	0.9180	Exhibit 2A: 404, Attachment 7-7

17.	Amount to Correct TBO	$2,148	Line 15 x Line 16

	Note 2

18.	Pacific Bell Tax-Deductible Contribution - 1998	$236,788	Exhibit 2A: 404, Attachment 7-7

19.	VEBA 3 to VEBA 5 Transfer - 1998	$79,300	Exhibit Phase 2A: 307, p. 30, Line 1. See Note 3.

20.	Total Contribution Claimed by Pacific Bell	$316,088	Line 18 + Line 19

21.	Intrastate Factor	0.8043	Exhibit Phase 2A: 404, Attachment 7-7

22.	Intrastate Amount	$254,230	Line 20 x Line 21

23.	Regulated Factor	0.9409	Exhibit Phase 2A: 404, Attachment 7-7

24.	Intrastate Regulated Amount	$239,205	Line 22 x Line 23

	Note 3

	To avoid double counting, the write-off of the PBOP regulatory asset is reduced by (i) the VEBA 3 transfer in 1998, and (ii) the adjustment to Pacific's TBO caused by expensing the VEBA 3 contributions in 1989 and 1990. In Appendix D, the effects of the VEBA 3 transfer and TBO adjustment on Pacific's NOI are listed separately from the write-off of the PBOP regulatory asset.