App A-p.3

		APPENDIX A
		Page 3 of 3
	San Gabriel Valley Water Company
	Fontana Water Company Division
	Income Tax Calculation
	(Dollars in Thousands)
		TY 2006-2007		Adjusted
Operating Revenue		$41,938.8		$41,639.9
Purchased Power		$8,625.1		$8,625.1
Purchased Water		$4,795.5		$4,795.5
Chemicals		$637.4		$637.4
Payroll		$4,628.1		$4,628.1
Materials & Supplies		$465.5		$465.5
Transportation		$619.3		$619.3
Pensions & Benefits		$1,650.3		$1,650.3
Uncollectibles		$81.8		$81.2
Franchise Fees		$339.3		$336.9
Outside Services		$452.6		$452.6
Insurance		$591.2		$591.2
Other O&M Expense		$163.5		$163.5
Other A&G Expense		($34.6)		($34.6)
Bank Charges		$62.0		$62.0
Allocated Common		$2,987.8		$2,987.8
Ad Valorem Taxes		$849.2		$839.7
Payroll Taxes		$444.1		$444.1
	Subtotal	$27,358.2		$27,345.7
Interest		$2,895.5		$2,895.5
	Total Deductions	$30,253.7		$30,241.2
Taxable Income		$11,685.2		$11,398.8
State Tax Depreciation		$8,578.1		$8,578.1		0.045726808	8524.3
Net Taxable Income		$3,107.1		$2,820.7			186798.4
	State Corp. Franch.Tax @ 8.84%	$274.7		$249.4			0.045633689
	Amortization of CIAC Tax	$2.0		$2.0
	Total State Income Tax Expense	$276.7		$251.4
Federal Tax Depreciation		$3,701.3		$3,701.3		0.019730317
State Franchise Tax - Prior Year		$666.1		$666.1
Federal Taxable Income		$7,317.8		$7,031.4
	Fed. Income Tax @ 34.18%	$2,501.2		$2,403.3
	Amortization of CIAC Tax	$7.3		$7.3
	Total Federal Income Tax Expense	$2,508.5		$2,410.6
Total Taxes		$2,785.2		$2,662.0
	(end of Appendix A)