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.

Plus: TBO Correction

$2,148

Note 1, Line 18

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 25

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

(31,871)

Appendix I, Line 15 (See Note 3)

7.

Less: Reduction to PBOP Reg. Asset for VEBA 3 Contributions Included in 1993 TBO Write-Off

($38,264)

Appendix I, Line 25 (See Note 3)

8.

Subtotal

$252,751

Line 5 + Line 6 + Line 7

9.

Tax Factor

0.59254

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

10.

Normalized After-Tax Regulatory Asset Write-Off

$149,765

Line 8 x Line 9

Note 1

11.

CPUC - TBO Adjustment

($12,708)

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

12.

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

13.

Corrected CPUC - TBO Adjustment

($10,221)

Line 11 x Line 12

14.

Difference

$2,487

Line 11 - Line 13

15.

Regulated Factor

0.9409

Exhibit 2A: 404, Attachment 7 - 7

16.

Regulated Amount

$2,340

Line 14 x Line 15

17.

Expense Factor

0.9180

Exhibit 2A: 404, Attachment 7-7

18.

Amount to Correct TBO

$2,148

Line 16 x Line 17

Note 2

19.

Pacific Bell Tax-Deductible Contribution - 1998

$236,788

Exhibit 2A: 404, Attachment 7-7

20.

VEBA 3 to VEBA 5 Transfer - 1998

$79,300

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

21.

Total Contribution Claimed by Pacific Bell

$316,088

Line 19 + Line 20

22.

Intrastate Factor

0.8043

Exhibit Phase 2A: 404, Attachment 7-7

23.

Intrastate Amount

$254,230

Line 21 x Line 22

24.

Regulated Factor

0.9409

Exhibit Phase 2A: 404, Attachment 7-7

25.

Intrastate Regulated Amount

$239,205

Line 23 x Line 24

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 effect of the VEBA 3 contributions (made in 1989 and 1990) on the TBO amortization expense, the TBO write-off in 1993, and the PBOP reg. asset write-off in 1998. In Appendix D, the effects of the VEBA 3 transfer and VEBA 3 contributions on Pacific's NOI are listed separately from the write-off of the PBOP reg. 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.	Plus: TBO Correction	$2,148	Note 1, Line 18

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 25

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	(31,871)	Appendix I, Line 15 (See Note 3)

7.	Less: Reduction to PBOP Reg. Asset for VEBA 3 Contributions Included in 1993 TBO Write-Off	($38,264)	Appendix I, Line 25 (See Note 3)

8.	Subtotal	$252,751	Line 5 + Line 6 + Line 7

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

10.	Normalized After-Tax Regulatory Asset Write-Off	$149,765	Line 8 x Line 9


	Note 1

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

12.	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

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

14.	Difference	$2,487	Line 11 - Line 13

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

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

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

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

	Note 2

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

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

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

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

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

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

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

	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 effect of the VEBA 3 contributions (made in 1989 and 1990) on the TBO amortization expense, the TBO write-off in 1993, and the PBOP reg. asset write-off in 1998. In Appendix D, the effects of the VEBA 3 transfer and VEBA 3 contributions on Pacific's NOI are listed separately from the write-off of the PBOP reg. asset.