Kennedy Alt R0109001 revis agenda dec NRF 092304

1997 Adjustments

Summary of Adopted Errors to Net Operating Income and Rate Base

Pacific Bell Intrastate Regulated Operations

Phase 2B

1997

Joint Exhibit

Line

Pacific Bell

Non-Reg (Below the

Interstate

Intrastate Reg Before

Income

Intrastate Regulated

Index

Number

Adopted Adjustments to Net Operating Income

Total Co.

Line )

Separations

Tax

Tax

After Tax

Phase 2B Net Operating Income

39

1.

SBC Ops FAS 106 Merger Conforming Expense

-

-

-

-

40

2.

AMDOC Awards SBC Operations

-

-

-

-

41

3.

Excess Executive Compensation SBC Operations

-

-

-

-

42

4.

SBC Ops Sec. Alloc of Parent Mgt Fees

-

-

-

-

43

5.

SBC Ops Call Ctr Depreciation, Merger Implementation Exp.

-

-

-

-

44

6.

SBC Svcs "Excess" Executive Comp Expense

-

-

-

-

45

7.

SBC Svcs, CFL, TRI Sec. Alloc. of Parent Mgt Fees

-

-

-

-

46

8.

Parent "Excess" Executive Compensation Expense

3,146,751

17,745

643,633

2,485,373

(1,012,690)

1,472,683

47

9.

Parent Political and Legislative Influence Expense

18,219,042

-

3,747,639

14,471,403

(5,896,518)

8,574,885

48

10.

Parent Legal Expense

-

-

-

-

49

11.

Parent Public Relations & Corporate Sponsorship Expense

3,667,301

94,355

702,983

2,869,963

(1,169,395)

1,700,568

50

12.

Parent Corporate Development Expense

-

-

-

-

51

13.

Parent Strategic Planning Expense

3,630,668

70,541

732,315

2,827,812

(1,152,220)

1,675,592

52

14.

Parent Contributions, Memberships, Foundation Expense

342,104

-

70,370

271,734

(110,721)

161,013

53

15.

Parent Out of Period Expense

(7,415,911)

(100,845)

(1,504,702)

(5,810,364)

2,367,491

(3,442,873)

54

16.

Parent Merger Conforming Expense

-

-

-

-

55

17.

Parent Impact of Adjustments on Billings to PBD

1,301,134

-

-

1,301,134

(530,160)

770,974

56

18.

MSI USA "Excess" Executive Compensation Billed Directly

-

-

-

-

57

19.

Parent PB Employee Transfer Fees Billed Back to Pac Bell

1,350,777

19,407

273,862

1,057,508

(430,892)

626,616

59

20.

Nevada Bell Net Directory Revenue

-

-

-

-

62

24.

Customer Service Non-Productive Salary Allocations

(2,285,929)

(532,304)

(1,753,625)

714,532

(1,039,093)

64

26.

Non-regulated Tracking Code Direct Assignment Errors

15,926

3,441

12,485

(5,087)

7,398

65

27.

National-Local Strategy Implementation

-

-

-

-

66

28.

1997 Corporate Sponsorship Costs

2,083,333

371,135

1,712,198

(697,652)

1,014,546

67

29.

Customer Premise Equipment Costs

-

-

-

-

1

30.

Unsupported Contingent Liabilities - Revenues

40,463,493

-

-

40,463,493

(16,487,255)

23,976,238

2

31.

Bellcore Dividends

6,554,000

-

-

6,554,000

(2,670,493)

3,883,507

3

32.

Uncollectible Revenues - RCRMS (PacBell reports flows thru)

-

-

-

4

33.

Gain on Sale of Bellcore

19,642,499

4,246,767

15,395,732

(6,273,145)

9,122,587

5

34.

Local Number Portability Costs

109,203,787

869,074

21,734,713

86,600,000

(35,286,036)

51,313,964

7

36.

Merger Savings

-

-

-

-

-

-

8

37.

Advanced Communications Network

38,880,766

739,068

8,023,530

30,118,168

(12,271,949)

17,846,219

10

39.

Unsupported Contingent Liabilities - Operating Expense

91,639,150

2,472,834

89,166,316

(36,331,707)

52,834,609

12

41.

ISP-Bound Traffic Separations

(19,299,000)

(179,010)

-

(19,119,990)

7,790,631

(11,329,359)

13

42.

Uncollectible Settlements - RCRMS

-

-

-

-

16

43.

SFAS 112

-

-

-

18

45.

SAVR Delayed Retirements

-

-

-

-

20

47.

Equal Access IEMR Ratemaking Adjustment

-

-

-

-

22

48.

Ameritech Income Tax Misclass

-

-

-

-

23

49.

Income Tax Normalization - Phase 2B Issues

(37,018,000)

-

-

(37,018,000)

-

(37,018,000)

24

50.

Excess Deferred Income Tax

-

-

-

-

25

51.

Sales and Use Tax Accrual

-

-

-

26

52.

Employment Tax Error

-

-

-

-

68

53.

PIU Accrual

(14,673,001)

(14,673,001)

5,978,661

(8,694,340)

69

54.

USOAR Turnaround Accrual

(23,123,001)

(23,123,001)

9,421,698

(13,701,303)

70b

55.

LNP Depreciation

1,159,999

1,159,999

(472,653)

687,346

57.

Total Phase 2B Net Operating Income

237,485,888

4,003,169

38,513,382

194,969,337

(94,525,560)

100,443,777

Phase 2B Rate Base

29

58.

SFAS 112 Liability

30

59.

Vacation Liability

31

60.

SFAS 106 Accrued Liability

32

61.

Accrued Contingent Liability

27

62.

Cash Working Capital

(142,169,000)

28

63.

Prepaid Directory Expense

-

35

64.

Restructure Reserve

(29,070,727)

36

65.

Accumulated Reserve for Depreciation

3,239,878

37

66.

Accumulated Deferred Income Tax

(57,788,323)

38

67.

Excess Deferred Income Tax

-

70a

68.

LNP Plant

(14,315,457)

72

69.

PBOP Pre-Funding Plant Adj.

70.

Total Phase 2B Rate Base

(240,103,629)


	Summary of Adopted Errors to Net Operating Income and Rate Base
	Pacific Bell Intrastate Regulated Operations
	Phase 2B
	1997
Joint Exhibit	Line		Pacific Bell	Non-Reg (Below the	Interstate	Intrastate Reg Before	Income	Intrastate Regulated
Index	Number	Adopted Adjustments to Net Operating Income	Total Co.	Line )	Separations	Tax	Tax	After Tax

		Phase 2B Net Operating Income

39	1.	SBC Ops FAS 106 Merger Conforming Expense	-			-	-	-
40	2.	AMDOC Awards SBC Operations	-			-	-	-
41	3.	Excess Executive Compensation SBC Operations	-			-	-	-
42	4.	SBC Ops Sec. Alloc of Parent Mgt Fees	-			-	-	-
43	5.	SBC Ops Call Ctr Depreciation, Merger Implementation Exp.	-			-	-	-
44	6.	SBC Svcs "Excess" Executive Comp Expense	-			-	-	-
45	7.	SBC Svcs, CFL, TRI Sec. Alloc. of Parent Mgt Fees	-			-	-	-
46	8.	Parent "Excess" Executive Compensation Expense	3,146,751	17,745	643,633	2,485,373	(1,012,690)	1,472,683
47	9.	Parent Political and Legislative Influence Expense	18,219,042	-	3,747,639	14,471,403	(5,896,518)	8,574,885
48	10.	Parent Legal Expense	-			-	-	-
49	11.	Parent Public Relations & Corporate Sponsorship Expense	3,667,301	94,355	702,983	2,869,963	(1,169,395)	1,700,568
50	12.	Parent Corporate Development Expense	-			-	-	-
51	13.	Parent Strategic Planning Expense	3,630,668	70,541	732,315	2,827,812	(1,152,220)	1,675,592
52	14.	Parent Contributions, Memberships, Foundation Expense	342,104	-	70,370	271,734	(110,721)	161,013
53	15.	Parent Out of Period Expense	(7,415,911)	(100,845)	(1,504,702)	(5,810,364)	2,367,491	(3,442,873)
54	16.	Parent Merger Conforming Expense	-			-	-	-
55	17.	Parent Impact of Adjustments on Billings to PBD	1,301,134	-	-	1,301,134	(530,160)	770,974
56	18.	MSI USA "Excess" Executive Compensation Billed Directly	-			-	-	-
57	19.	Parent PB Employee Transfer Fees Billed Back to Pac Bell	1,350,777	19,407	273,862	1,057,508	(430,892)	626,616
59	20.	Nevada Bell Net Directory Revenue	-			-	-	-
62	24.	Customer Service Non-Productive Salary Allocations	(2,285,929)		(532,304)	(1,753,625)	714,532	(1,039,093)
64	26.	Non-regulated Tracking Code Direct Assignment Errors	15,926		3,441	12,485	(5,087)	7,398
65	27.	National-Local Strategy Implementation	-			-	-	-
66	28.	1997 Corporate Sponsorship Costs	2,083,333		371,135	1,712,198	(697,652)	1,014,546
67	29.	Customer Premise Equipment Costs	-			-	-	-
1	30.	Unsupported Contingent Liabilities - Revenues	40,463,493	-	-	40,463,493	(16,487,255)	23,976,238
2	31.	Bellcore Dividends	6,554,000	-	-	6,554,000	(2,670,493)	3,883,507
3	32.	Uncollectible Revenues - RCRMS (PacBell reports flows thru)				-	-	-
4	33.	Gain on Sale of Bellcore	19,642,499		4,246,767	15,395,732	(6,273,145)	9,122,587
5	34.	Local Number Portability Costs	109,203,787	869,074	21,734,713	86,600,000	(35,286,036)	51,313,964
7	36.	Merger Savings	-	-	-	-	-	-
8	37.	Advanced Communications Network	38,880,766	739,068	8,023,530	30,118,168	(12,271,949)	17,846,219
10	39.	Unsupported Contingent Liabilities - Operating Expense	91,639,150	2,472,834		89,166,316	(36,331,707)	52,834,609
12	41.	ISP-Bound Traffic Separations	(19,299,000)	(179,010)	-	(19,119,990)	7,790,631	(11,329,359)
13	42.	Uncollectible Settlements - RCRMS		-		-	-	-
16	43.	SFAS 112				-	-	-
18	45.	SAVR Delayed Retirements			-	-	-	-
20	47.	Equal Access IEMR Ratemaking Adjustment	-			-	-	-
22	48.	Ameritech Income Tax Misclass	-			-	-	-
23	49.	Income Tax Normalization - Phase 2B Issues	(37,018,000)	-	-	(37,018,000)	-	(37,018,000)
24	50.	Excess Deferred Income Tax	-			-	-	-
25	51.	Sales and Use Tax Accrual				-	-	-
26	52.	Employment Tax Error	-			-	-	-
68	53.	PIU Accrual	(14,673,001)			(14,673,001)	5,978,661	(8,694,340)
69	54.	USOAR Turnaround Accrual	(23,123,001)			(23,123,001)	9,421,698	(13,701,303)
70b	55.	LNP Depreciation	1,159,999			1,159,999	(472,653)	687,346

	57.	Total Phase 2B Net Operating Income	237,485,888	4,003,169	38,513,382	194,969,337	(94,525,560)	100,443,777

		Phase 2B Rate Base

29	58.	SFAS 112 Liability
30	59.	Vacation Liability
31	60.	SFAS 106 Accrued Liability
32	61.	Accrued Contingent Liability
27	62.	Cash Working Capital						(142,169,000)
28	63.	Prepaid Directory Expense						-
35	64.	Restructure Reserve						(29,070,727)
36	65.	Accumulated Reserve for Depreciation						3,239,878
37	66.	Accumulated Deferred Income Tax						(57,788,323)
38	67.	Excess Deferred Income Tax						-
70a	68.	LNP Plant						(14,315,457)
72	69.	PBOP Pre-Funding Plant Adj.

	70.	Total Phase 2B Rate Base						(240,103,629)