Exhibit PSE-501 Period II John Story. Statement AA - Period II Puget Sound Energy Balance Sheets

Transcription

1 Statement AA - Period II Balance Sheets Page 1 of 4 FERC 2010 Change 2011 Line No. Account Description Amount Amount Utility Plant Plant in Service $9,793,926,043 $478,686,201 $10,272,612, Property Under Capital Leases Plant Held for Future Use $54,097,762 $54,097, Completed Construction Not Classified $58,822,155 $58,822, Construction Work in Progress $628,385,943 $532,742,706 $1,161,128, Accumulated Provision for Depreciation ($3,524,842,318) ($269,242,297) ($3,794,084,615) Accumulated Provision for Amortization ($118,077,126) ($118,077,126) Electric Plant Acquisition Adjustments $251,782,251 $251,782, Accumulated Provision for Amort. of Acquisition Adjustments ($60,122,543) ($60,122,543) Gas Stored Undergroound - Noncurrent $8,057,045 $8,057, Other Utility Plant 12. Total Utility Plant $7,092,029,212 $742,186,610 $7,834,215,822 Other Property and Investments Nonutility Property $4,213,318 $4,213, Accumulated Provision for Depr. & Amort. Of Nonutility Property ($863,648) ($863,648) Investment in Subsidiary Companies $49,380,155 $49,380, Other Investments $68,718,285 $68,718, Other Special Funds $ Derivative Instrument Assets $8,232,813 $8,232, Derivative Instrument Assets - Hedges $0 20. Total Other Property and Investments $129,680,923 $0 $129,680,923

2 Statement AA - Period II Balance Sheets Page 2 of 4 FERC 2010 Change 2011 Line No. Account Description Amount Amount Current and Accrued Assets Cash $13,672,281 ($746,447) $12,925, Other Special Deposits $4,736,379 ($258,586) $4,477, Working Funds $2,820,588 ($153,992) $2,666, Temporary Cash Investments $15,000,000 ($818,934) $14,181, Notes Receivable $3,461,113 $3,461, Customer Accounts Receivable $265,108,807 $50,893,438 $316,002, Other Accounts Receivable $69,895,436 $12,155,571 $82,051, Accumulated Provision for Uncollectable Accounts ($9,783,914) ($500,564) ($10,284,478) Accounts Receivable form Associated Companies $101,702 $101, Fuel $16,316,797 $16,316, Plant Materials and Operating Supplies $79,805,285 $2,394,159 $82,199, Stores Expense $4,416,676 $132,500 $4,549, Gas Stored Underground - Current $75,272,703 ($10,995,535) $64,277, Liquefied Natural Gas $632,728 $632, Prepayments $22,239,821 $406,011 $22,645, Interest and Dividends Receivable $0 $ Accrued Utility Revenues $194,088,080 ($6,328,140) $187,759, Misc. Current and Accrued Assets $5,924 $5, Derivative Instrument Assets $7,499,503 $7,499, Derivative Instrument Assets - Hedges 21. Total Current and Accrued Assets $765,289,909 $46,179,481 $811,469,390 Deferred Debits Unamortized Debt Expenses $43,900,305 ($2,038,270) $41,862, Extraordinary Property Losses $103,629,756 ($16,351,881) $87,277, Unrecovered Plant and Regulatory Study Costs $7,393,833 $7,393, Other Regulatory Assets $484,399,175 ($1,284,969) $483,114, Preliminary Survey and Investigation Charges $2,195,883 $2,195, $ $ Clearing Accounts $ Temporary Facilities $19,699 $19, Misc. Deferred Debits $364,954,870 ($1,979,469) $362,975, Deferred Losses from Disposition of Utility Plant $539,448 $539, Research, Development and Demonstration Expend. $ Unamortized Loss on Reacquired Debt $18,304,231 $18,304, Accumulated Deferred Income Taxes $549,148,984 $36,646,136 $585,795, Unrecovered Purchase Gas Costs $5,991,769 ($5,890,448) $101, Total Deferred Debits $1,580,477,953 $9,101,099 $1,589,579, Total Assets $9,567,477,997 $797,467,190 $10,364,945,187

3 Statement AA - Period II Balance Sheets Page 3 of 4 FERC 2010 Change 2011 Line No. Account Description Amount Amount Proprietary Capital Common Stock Issued $859,038 $859, Preferred Stock Issued $ Premium on Capital Stock $478,145,250 $478,145, Gain on Resale of Reacquired Capital Stock $ Misc. Paid in Capital $2,488,196,691 $293,000,000 $2,781,196, Capital Stock Expense ($7,133,879) ($7,133,879) Appropriated Retained Earnings $167,604,344 $7,432,406 $175,036, Unappropriated Retained Earnings $4,882,711 $4,882, Accumulated Other Comprehensive Income ($157,646,287) $22,115,530 ($135,530,757) 10. Total Proprietary Capital $2,974,907,868 $322,547,936 $3,297,455,804 Long Term Debt Bonds $3,463,860,000 $240,000,000 $3,703,860, Other Long Term Debt 13. Total Long Term Debt $3,463,860,000 $240,000,000 $3,703,860,000 Other Noncurrent Liabilities Obligations Under Capital Leases - Noncurrent Accum. Provision for Injuries and Damages $300,000 $300, Accum. Provision for Pensions and Benefits $58,748,833 $942,037 $59,690, Accum. Misc. Operating Provisions $75,678,611 ($5,201,089) $70,477, Long Term Portion of Derivative Instrument Liabilities $155,178,787 ($9,098,359) $146,080, Asset Retirement Obligations $25,416,838 $1,342,848 $26,759, Total Other Noncurrent Liabilities $315,323,069 ($12,014,563) $303,308,506 Current and Accrued Liabilities Notes Payable $247,000,000 ($9,224,479) $237,775, Accounts Payable $323,008,525 ($2,156,157) $320,852, Notes Payable to Associated Companies $22,597,785 $22,597, Accounts Payable to Associated Companies $616,351 $616, Customer Deposits $30,153,837 $30,153, Taxes Accrued $19,834,149 $110,655,178 $130,489, Interest Accrued $54,723,144 $5,183,254 $59,906, Tax Collections Payable $2,264,845 $2,264, Misc. Current and Accrued Liabilities $17,573,377 ($2,285,000) $15,288, Obligations Under Capital Leases - Current $0 $ Derivative Instrument Liabilities $243,053,430 ($82,130,851) $160,922, Derivative Instrument Liabilities - Hedges 33. Total Current and Accrued Liabilities $960,825,443 $20,041,945 $980,867,388

4 Statement AA - Period II Balance Sheets Page 4 of 4 FERC 2010 Change 2011 Line No. Account Description Amount Amount Deferred Credits Customer Advances for Construction $94,479,314 $94,479, Other Deferred Credits $150,729,165 $78,686,774 $229,415, Other Regulatory Liabilities $98,077,992 ($6,029,046) $92,048, Accumulated Deferred Investment Tax Credits $115,553 $165,131 $280, Deferred Gains from Disposition of Utility Plant $5,030,945 ($2,212,500) $2,818, Unamortized Gain of Reacquired Debt $10,083 $10, Accum. Deferred Income Taxes - Accel. Amort. $ Accum. Deferred Income Taxes - Other Property $1,202,674,847 $150,279,817 $1,352,954, Accum. Deferred Income Taxes - Other $301,443,718 $6,001,696 $307,445, Total Deferred Credits $1,852,561,617 $226,891,872 $2,079,453, Total Liabilities $9,567,477,997 $797,467,190 $10,364,945,187 Check $0 $0 $0

5 Statement AB - Period II Income Statement Page 1 of 2 FERC Line No. Account Description Amount Utility Operating Income Sales Of Electricity Residential $1,113,312, Commercial & Industrial $1,002,371, Street Lighting $17,347, Sales for Resale $18,562, Total Sales Of Electricity $2,151,594,041 Other Operating Revenues Other Electric Revenues $129,932, Revenues from Transmission of Electricity of Others $24,940, Total Other Operating Revenues $154,872,788 Operating Expenses Operation Expense $1,327,839, Maintenance Expense $100,523, Depreciation Expense $204,563, Depreciation Expense for Asset Retirement Amortization of Limited Term Electric Plant Amortization of Other Electric Plant $13,858, Amortization of Electric Plant Acquisition Adjustments Regulatory Debits $152,349, Regulatory Credits Taxes other than Income Taxes $215,904, Income Taxes $591, Provision for Deferred Income Taxes $117,172, Provision for Deferred Income Taxes - Credit ($20,848,777) Investment Tax Credit Adjustments Gains from Disposition of Utility Property Losses from Disposition of Utility Property Gains from Disposition of Allowances Losses from Disposition of Allowances Accretion Expense $1,114, Total Utility Operating Expenses $2,113,068, Net Utility Operating Income $193,398,072

6 Statement AB - Period II Income Statement Page 2 of 2 FERC Line No. Account Description Amount Other Income Revenues for Merchandizing, Jobbing and Contract Work Costs & Expenses of Merchandizing, Job. & Contract Work Revenues from Nonutility Operations Expenses of Nonutility Operations Nonoperating Rental Income Equity in Earnings of Subsidiary Companies Interest & Dividend Income $10,466, Allowance for Other Funds Used Durring Construction $40,300, Miscellaneous Nonoperating Income $57,692, Gain on Disposition of Property 11. Total Other Income $108,459, Donations Life Insurance ($2,066,466) Penalities Exp. For Civic, Political & Related Activities Other Deductions $8,992, Total Other Deductions $6,926,351 Taxes on Other Income and Deductions Taxes Other than Income Taxes Income Taxes $515, Provision for Deffered Income Taxes Provision for Deffered Income Taxes - Credit 22. Total Taxes on Other Income and Deductions $515,658 Interest Charges Interest on Long Term Debt $132,600, Amort. of Debt Discount & Expense $4,543, Amort. of Loss on Reaquired Debt $799, Amort. of Gain on Reaquired Debt - Credit Interest on Debt to Assoc. Companies Other Interest Expense $17,404, Allowance for Borrowed Funds Used Durring Construction ($31,423,561) 30. Net Interest Charges $123,924, Net Income $170,490,863

7 Statement AC - Period II Retained Earnings Page 1 of 1 (1) (2) Line No. Description Amount 1. Balance-Beginning Of Year $167,604, License Hydro Project Excess Earnings $0 3. Balance Transferred From Income $226,923, Dividends Declared Common Stock $219,490, Transfers from Unappropriated Undistributed Subsidiary Earnings $0 6. Balance End Of the Period $175,036, Total Appropriated Retained earnings -Amortization Reserve Account $8,376, Total Retained Earnings $183,413,211

8 Statement AD - Period II Cost Of Plant Account 101, 102, 106 Page 1 of 3 (1) (2) Line No. Functional Classification Average Balance 1. Production $2,590,701, Transmission $478,449, Distribution $3,612,724, General & Intangible $213,804, Sub Total $6,895,680, Common $265,463, Total Plant $7,161,144,098

9 Statement AD - Period II Cost Of Plant Account 101, 102, 106 Page 2 of 3 (1) (2) (3) (4) (5) (6) Derviation of Production Construction Completed Total Line No. Steam Hydro Other Production Not Classified Production 1. December 2010 $1,139,427,258 $292,346,983 $1,147,323,098 $301,816 $2,579,399, January 2011 $1,138,989,108 $292,521,333 $1,148,096,125 $0 $2,579,606, February 2011 $1,138,691,324 $292,393,868 $1,148,822,239 $0 $2,579,907, March 2011 $1,138,635,370 $292,266,402 $1,149,520,489 $0 $2,580,422, April 2011 $1,138,975,387 $292,138,937 $1,150,195,217 $0 $2,581,309, May 2011 $1,139,972,565 $292,011,471 $1,150,841,636 $0 $2,582,825, June 2011 $1,141,690,244 $291,884,006 $1,151,728,565 $0 $2,585,302, July 2011 $1,144,005,923 $291,756,540 $1,152,414,033 $0 $2,588,176, August 2011 $1,146,492,962 $291,629,074 $1,153,085,305 $0 $2,591,207, September 2011 $1,148,828,213 $291,501,609 $1,153,789,896 $0 $2,594,119, October 2011 $1,150,812,546 $291,374,143 $1,154,387,477 $0 $2,596,574, November 2011 $1,152,591,969 $291,246,678 $1,154,979,185 $0 $2,598,817, December 2011 $1,168,010,804 $314,664,185 $1,158,769,738 $0 $2,641,444, Total $14,887,123,673 $3,817,735,229 $14,973,953,004 $301,816 $33,679,113, Month Average $1,145,163,359 $293,671,941 $1,151,842,539 $23,217 $2,590,701,055 Derviation of Transmission Construction Completed Total Transmission Not Classified Transmission 8. December 2010 $463,546,132 $9,470,735 $473,016, January 2011 $474,409,053 $0 $474,409, February 2011 $475,609,721 $0 $475,609, March 2011 $476,646,626 $0 $476,646, April 2011 $477,561,425 $0 $477,561, May 2011 $478,361,263 $0 $478,361, June 2011 $479,097,013 $0 $479,097, July 2011 $479,728,547 $0 $479,728, August 2011 $480,273,699 $0 $480,273, September 2011 $480,746,444 $0 $480,746, October 2011 $481,143,533 $0 $481,143, November 2011 $481,482,583 $0 $481,482, December 2011 $481,771,483 $0 $481,771, Total $6,210,377,522 $9,470,735 $6,219,848, Month Average $477,721,348 $728,518 $478,449,866

10 Statement AD - Period II Cost Of Plant Account 101, 102, 106 Page 3 of 3 (1) (2) (3) (4) Derviation of Distribution Construction Completed Total Line No. Distribution Not Classified Distribution 1. December 2010 $3,488,607,370 $19,906,526 $3,508,513, December 2011 $3,716,935,352 $0 $3,716,935, Total $7,205,542,722 $19,906,526 $7,225,449, Simple Average $3,602,771,361 $9,953,263 $3,612,724,624 Derviation of General & Intangible General & Construction Completed Total Intangible Not Classified General & Intangible 5. December 2010 $213,043,174 $1,603,014 $214,646, December 2011 $212,963,354 $0 $212,963, Total $426,006,527 $1,603,014 $427,609, Simple Average $213,003,264 $801,507 $213,804,771 Derviation of Common Construction Completed Total Common Not Classified Common 5. December 2010 $245,071,499 $5,384,730 $250,456, December 2011 $280,471,333 $0 $280,471, Total $525,542,832 $5,384,730 $530,927, Simple Average $262,771,416 $2,692,365 $265,463,781

11 Statement AE - Period II Accumulated Depreciation and Amortization Account 108, 111 (1) (2) Line No. Functional Classification Average Balance 1. Production $1,219,749, Transmission $160,662, Distribution $1,263,005, General & Intangible $51,559, Sub Total $2,694,977, Common $92,639, Total Plant $2,787,617,041

12 Statement AE - Period II Accumulated Depreciation and Amortization Account 108, 111 (1) (2) (3) (4) (5) (6) Derviation of Production and Transmission Total Total Line No. Steam Hydro Other Production Production Transmission 1. December 2010 $668,582,183 $140,738,620 $380,448,731 $1,189,769,534 $156,218, January 2011 $669,846,464 $141,111,283 $383,793,046 $1,194,750,793 $156,956, February 2011 $671,110,266 $141,483,645 $387,138,453 $1,199,732,364 $157,695, March 2011 $672,373,791 $141,855,708 $390,485,019 $1,204,714,518 $158,435, April 2011 $673,637,423 $142,227,471 $393,832,832 $1,209,697,726 $159,175, May 2011 $674,901,901 $142,598,934 $397,181,993 $1,214,682,828 $159,916, June 2011 $676,168,249 $142,970,098 $400,533,495 $1,219,671,842 $160,658, July 2011 $677,437,668 $143,340,961 $403,886,938 $1,224,665,567 $161,401, August 2011 $678,711,161 $143,711,524 $407,242,641 $1,229,665,326 $162,143, September 2011 $679,989,591 $144,081,787 $410,601,239 $1,234,672,617 $162,887, October 2011 $681,273,865 $144,451,751 $413,963,214 $1,239,688,830 $163,630, November 2011 $682,566,381 $144,821,414 $417,330,221 $1,244,718,016 $164,374, December 2011 $683,956,859 $145,640,443 $420,711,413 $1,250,308,715 $165,118, Total $8,790,555,802 $1,859,033,639 $5,207,149,235 $15,856,738,676 $2,088,613, Month Average $676,196,600 $143,002,588 $400,549,941 $1,219,749,129 $160,662,551

13 Statement AE - Period II Accumulated Depreciation and Amortization Account 108, 111 (1) (2) Derviation of Distribution Line No. Distribution 1. December 2010 $1,228,598, December 2011 $1,297,413, Total $2,526,011, Simple Average $1,263,005,859 Derviation of General & Intangible General & Intangible 5. December 2010 $47,558, December 2011 $55,561, Total $103,119, Simple Average $51,559,937 Derviation of Common Common 5. December 2010 $91,367, December 2011 $93,911, Total $185,279, Simple Average $92,639,564

14 Steam Production Capital Leases Account 108 Total December 2010 $0 $668,582,183 $668,582,183 January 2011 $0 $669,846,464 $669,846,464 February 2011 $0 $671,110,266 $671,110,266 March 2011 $0 $672,373,791 $672,373,791 April 2011 $0 $673,637,423 $673,637,423 May 2011 $0 $674,901,901 $674,901,901 June 2011 $0 $676,168,249 $676,168,249 July 2011 $0 $677,437,668 $677,437,668 August 2011 $0 $678,711,161 $678,711,161 September 2011 $0 $679,989,591 $679,989,591 October 2011 $0 $681,273,865 $681,273,865 November 2011 $0 $682,566,381 $682,566,381 December 2011 $0 $683,956,859 $683,956,859 Hydro Production Account 108 Account 111 Total December 2010 $140,738,620 $0 $140,738,620 January 2011 $141,111,283 $141,111,283 February 2011 $141,483,645 $141,483,645 March 2011 $141,855,708 $141,855,708 April 2011 $142,227,471 $142,227,471 May 2011 $142,598,934 $142,598,934 June 2011 $142,970,098 $142,970,098 July 2011 $143,340,961 $143,340,961 August 2011 $143,711,524 $143,711,524 September 2011 $144,081,787 $144,081,787 October 2011 $144,451,751 $144,451,751 November 2011 $144,821,414 $144,821,414 December 2011 $145,640,443 $145,640,443 Other Production Account 108 Account 111 Total December 2010 $380,364,820 $83,911 $380,448,731 January 2011 $383,793,046 $383,793,046 February 2011 $387,138,453 $387,138,453 March 2011 $390,485,019 $390,485,019 April 2011 $393,832,832 $393,832,832 May 2011 $397,181,993 $397,181,993 June 2011 $400,533,495 $400,533,495 July 2011 $403,886,938 $403,886,938 August 2011 $407,242,641 $407,242,641 September 2011 $410,601,239 $410,601,239 October 2011 $413,963,214 $413,963,214 November 2011 $417,330,221 $417,330,221 December 2011 $420,711,413 $420,711,413 Source : Financail Model

15 Statement AF - Period II Specified Deferred Credits (Includes 254, 255, 281, 282 and 283) Page 1 of 1 (1) (2) Line No. 254 Other Regulatory Liabilities Total 1. December 2010 $86,597, December 2011 $81,117, Average Balance $83,857, Accumulated Deferred Income Taxes 4. December 2010 $863,499, December 2011 $979,639, Average Balance $921,569, Accumulated Deferred Income Taxes 7. December 2010 $216,956, December 2011 $222,274, Average Balance $219,615,975

16 Statement AG - Period II Specified Plant Accounts and Deferred Debits (Includes 105, 114, 115, 182.1, 182.2, and 190) (1) (2) Line No. 105 Plant Held For Future Use Total 1. December 2010 $29,445, December 2011 $29,445, Average Balance $29,445, Electric Plant Acquistion Adjustment 4. Milwaukee $946, Dupont $302, Encogen $76,622, Mint Farm $156,960, Whitehorn $16,950, Total Average Balance $251,782, Accumulated Provision for Amortization for Electric Plant Acquistion Adjustment 10. Milwaukee $757, Dupont $298, Encogen $46,556, Mint Farm $11,792, Whitehorn $5,511, Total Average Balance $64,916, Extraordinary Property Losses 16. December 2010 $103,629, December 2011 $87,277, Average Balance $95,453, Unrecovered Plant and Regulatory Costs 19. December 2010 $7,393, December 2010 $7,393, Average Balance $7,393, Other Regulatory Assets 22. December 2010 $440,176, December 2011 $438,513, Average Balance $439,345, Accumulated Deferred Income Taxes 25. December 2010 $420,254, December 2011 $449,078, Average Balance $434,666,373

17 Breakdown of Account 114 Dec-10 Dec-11 Average Milwaukee $946,172 $946,172 $946,172 Dupont $302,358 $302,358 $302,358 Encogen $76,622,597 $76,622,597 $76,622,597 Mint Farm $156,960,791 $156,960,791 $156,960,791 Whitehorn $16,950,333 $16,950,333 $16,950,333 Total 114 $251,782,251 $251,782,251 $251,782,251 Breakdown of Account 115 Dec-10 Dec-11 Average Change Milwaukee $744,789 $770,589 $757,689 $25,800 Dupont $293,999 $302,358 $298,178 $8,359 Encogen $45,229,939 $47,882,839 $46,556,389 $2,652,900 Mint Farm $9,484,643 $14,101,142 $11,792,893 $4,616,499 Whitehorn $4,369,173 $6,654,078 $5,511,626 $2,284,905 Total 115 $60,122,543 $69,711,006 $64,916,775 $9,588,463 Certain Account Detail Dec-10 Dec-11 Average Mint Farm Deferral $41,988,654 $39,110,708 $40,549,681 Goldendale Deferred Costs $3,882,142 $413,682 $2,147,912 Sumas Deferral $640,861 $640,861 $640,861 Chelan PUD Contract Initiation $133,888,235 $132,706,885 $133,297,560 Chelan PUD Security Deposit $0 $18,500,000 $9,250,000 Total of Selected $180,399,892 $191,372,136 $185,886,014

18 Page 1 of 8 Statement AH - Period II Electric Operating and Maintenance Expenses (1) (2) Line No. Description Amount 2010 Amount 1. Steam Power Generation $139,745,822 $104,503, Hydraulic Power Production $15,997,694 $18,049, Other Power Generation $297,921,311 $246,653, Other Power Supply Expenses $551,278,469 $758,952, Total Production $1,004,943,296 $1,128,158, Transmission Expenses $90,095,652 $90,430, Distribution Expenses $82,873,044 $82,924, Customer Service and Informational Sales $151,464,231 $138,944, Administrative and General $98,986,822 $93,517, Total $1,428,363,045 $1,533,975, Total Operation Expenses $1,327,839,873 $1,411,705, Total Mainteanance Expenses $100,523,172 $122,269, Total $1,428,363,045 $1,533,975,208

19 Statement AH - Period II Electric Operating and Maintenance Expenses Page 2 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Steam Power Generation Operation Operation Supervision and Engineering $669,053 $544, Fuel $90,062,807 $67,538, Steam Expenses $14,138,094 $7,964, Steam From Other Sources Steam Transferred -Credit Electric Expenses $2,847,263 $2,449, Miscellaneous Steam Power Expenses $8,165,585 $4,672, Rents $70,072 $41, Operation Supplies and Expenses Allowances 11. Total Operation $115,952,874 $83,210,520 Maintenance Maintenance Supervision and Engineering $2,051,433 $1,742, Maintenance of Structures $2,980,777 $2,244, Maintenance of Boiler Plant $12,945,730 $11,587, Maintenance of Electric Plant $2,863,152 $3,281, Maintenance of Miscellaneous Steam Plant $2,951,856 $2,436, Total Maintenance $23,792,948 $21,292, Total Steam Power Generation $139,745,822 $104,503,465

20 Period II Witness Statement AH - Period II Electric Operating and Maintenance Expenses Page 3 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Hydraulic Power Generation Operation Operation Supervision and Engineering $2,934,790 $3,875, Water for Power Hydraulic Expenses $4,072,831 $4,084, Electric Expenses $238,731 $347, Miscellaneous Hydraulic Power Generation Expenses $2,444,195 $3,778, Rents Operation Supplies and Expenses 8. Total Operation $9,690,547 $12,086,327 Maintenance Maintenance Supervision and Engineering $4,857 $2, Maintenance of Structures $787,919 $468, Mainteanance of Reservoirs, Dams and Waterways $775,419 $511, Maintenance of Electric Plant $1,054,855 $609, Maintenance of Miscellaneous Hydraulic Plant $3,684,097 $4,371, Maintenance of Hydraulic Production Plant 15. Total Maintenance $6,307,147 $5,963, Total Hydraulic Power Generation $15,997,694 $18,049,509

21 Statement AH - Period II Electric Operating and Maintenance Expenses Page 4 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Other Power Generation Operation Operation Supervision and Engineering $3,418,211 $3,533, Fuel $254,597,552 $200,608, Generation Expenses $8,462,774 $7,651, Miscellaneous Other Power Generation Expenses $3,699,636 $4,765, Rents $4,810,870 $4,384, Total Operation $274,989,043 $220,943,639 Maintenance Maintenance Supervision and Engineering $970,283 $664, Maintenance of Structures $585,212 $958, Maintenance of Generating and Electric Plant $19,979,178 $23,176, Maintenance of Miscellaneous Other Power Generation Plant $1,397,595 $910, Total Maintenance $22,932,268 $25,709, Total Other Power Generation $297,921,311 $246,653,151 Other Power Supply Expenses Purchased Power $538,232,078 $754,334, System Control and Load Dispatching $2,047,479 $1,350, Other Expenses $10,998,912 $3,267, Total Other Power Supply Expenses $551,278,469 $758,952,084

22 Statement AH - Period II Electric Operating and Maintenance Expenses Page 5 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Transmission Expenses Operation Operation Supervision and Engineering $1,562,016 $1,989, Load Dispatching $2,012,867 $1,515, Load Dispatch -Reliability Load Dispatch - Monitor and Operate Transmission System Load Dispatch - Transmission Service and Scheduling Scheduling, System Control and Dispatch Services Reliability Planning and Standards Development Transmission Service Studies Generation Interconnection Studies Reliability Planning and Standards Development Services Station Expenses $119,789 $112, Overhead Line Expense $427,178 $406, Underground Line Expenses Transmission of Electricity by Others $79,472,619 $78,564, Miscellaneous Transmission Expenses $3,966,319 $3,248, Rents $220,764 $295,946 Total Operation $87,781,552 $86,132,818 Maintenance Maintenance Supervision and Engineering $148, Maintenance of Structures $265, Maintenance of Computer Hardware Maintenance of Computer Software Maintenance of Communication Equipment Maintenance of Miscellaneous Regional Transmission Plant Maintenance of Station Equipment $344,785 $506, Maintenance of Overhead Lines $1,969,315 $3,376, Maintenance of Underground Lines Maintenance of Miscellaneous Transmission Plant Maintenance of Transmission Plant 29. Total Maintenance $2,314,100 $4,297,296 Total Transmission Expenses $90,095,652 $90,430,114

23 Statement AH - Period II Electric Operating and Maintenance Expenses Page 6 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Distribution Expenses Operation Operation Supervision and Engineering $2,654,682 $2,367, Load Dispatching $1,272,395 $2,501, Station Expenses $1,879,810 $1,809, Overhead Line Expenses $22,753,792 $3,597, Underground Line Expenses $3,459,158 $2,338, Street Lighting and Signal System Expenses $1,243,073 $1,286, Meter Expenses $1,539,799 $1,640, Customer Installations Expenses $4,277,854 $3,833, Miscellaneous Distribution Expenses $2,000,862 $2,690, Rents $681,012 $847, Total Operation $41,762,437 $22,912,209 Maintenance Maintenance Supervision and Engineering $ Maintenance of Structures $ Maintenance of Station Equipment $4,282,360 $4,454, Maintenance of Overhead Lines $21,423,574 $40,720, Maintenance of Underground Lines $13,196,479 $12,149, Maintenance of Line Transformers $367,506 $246, Maintenance of Street Lighting and Signal Systems $1,353,653 $1,939, Maintenance of Meters $487,035 $501, Maintenance of Miscellaneous Distribution Plant 24. Total Maintenance $41,110,607 $60,012, Total Distribution Expenses $82,873,044 $82,924,735

24 Statement AH - Period II Electric Operating and Maintenance Expenses Page 7 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Customer Accounts Expenses Operation Supervision $271,672 $241, Meter Reading Expenses $16,656,639 $17,332, Customer Records and Collection Expenses $20,751,194 $21,077, Uncollectible Accounts $11,255,066 $11,596, Miscellaneous Customer Accounts Expenses ($83,330) ($72,315) 6. Total Customer Accounts Expenses $48,851,241 $50,175,907 Customer Service - Informational Expenses Operation Supervision $0 $ Customer Assistance Expenses $101,369,549 $87,151, Informational and Instructional Advertising Expenses $755,747 $1,431, Miscellaneous Customer Service and Informational Expenses $28,033 $41, Total Customer Service -Informational Expenses $102,153,329 $88,624,648 Sales Expenses Operation Supervision $5,304 $3, Demonstrating and Selling Expenses $345,089 $110, Advertising Expenses $198 $ Miscellaneous Sales Expenses $109,070 $29, Total Sales Expenses $459,661 $144, Total Customer Service and Informational Expenses $151,464,231 $138,944,684

25 Statement AH - Period II Electric Operating and Maintenance Expenses Page 8 of 8 (1) (2) (3) Line No. FERC Account Description Amount 2010 Amount Administrative and General Expenses Operation Administrative and General salaries $25,929,717 $24,283, Office Supplies and Expenses $7,024,293 $5,002, Administrative Expenses -Transferred-Credit ($152,704) ($164,288) Outside Service Employed $13,265,164 $12,275, Property Insurance $3,184,255 $4,972, Injuries and Damages $2,963,773 $3,587, Employee Pensions and Benefits $25,124,469 $25,153, Franchise Requirements $ Regulatory Commission Expenses $9,932,769 $5,508, Duplicate Charges - Credit $ General Advertising Expenses $279,881 $264, Miscellaneous General Expenses $1,600,035 $2,747, Rents $5,769,068 $4,890, Total Operation $94,920,720 $88,523,082 Maintenance Maintenance of General Plant $4,066,102 $4,994, Total Maintenance $4,066,102 $4,994, Total Administrative and General Expenses $98,986,822 $93,517,466

26 Allocation of Common Costs Electric Allocation Electric Common Allocation Total Supervision $0 $460, % $271,672 $271,672 Meter Reading Expenses $16,285,946 $585, % $370,693 $16,656,639 Customer Records and Collection Expenses $3,557,831 $29,161, % $17,193,363 $20,751,194 Uncollectible Accounts $11,255,066 $0 0.00% $0 $11,255,066 Miscellaneous Customer Accounts Expenses $0 ($141,333) 58.96% ($83,330) ($83,330) Customer Service and Informational Expenses $0 $ % $0 $0 Supervision $0 $ % $0 $0 Customer Assistance Expenses $14,557,089 $1,238, % $729,925 $15,287,014 Informational and Instructional Advertising Expenses $0 $1,281, % $755,747 $755,747 Miscellaneous Customer Service and Informational Expenses $0 $47, % $28,033 $28,033 Supervision $5,304 $ % $0 $5,304 Demonstrating and Selling Expenses $345,089 $ % $0 $345,089 Advertising Expenses $0 $ % $198 $198 Miscellaneous sales Expenses $109,070 $0 0.00% $0 $109,070 Sales Expenses $0 $0 0.00% $0 $0 Administrative and General salaries $8,163,928 $26,711, % $17,765,789 $25,929,717 Office Supplies and Expenses $1,366,322 $8,506, % $5,657,971 $7,024,293 Administrative Expenses -Transferred-Credit $0 ($229,596) 66.51% ($152,704) ($152,704) Outside Service Employed $3,856,764 $14,145, % $9,408,400 $13,265,164 Property Insurance $655,517 $4,152, % $2,528,738 $3,184,255 Injuries and Damages $262,748 $4,581, % $2,701,025 $2,963,773 Employee Pensions and Benefits $25,124,469 $ % $0 $25,124,469 Franchise Requirements $0 $0 0.00% $0 $0 Regulatory Commission Expenses $7,293,910 $3,967, % $2,638,859 $9,932,769 Duplicate Charges - Credit $0 $0 0.00% $0 $0 General Advertising Expenses $0 $420, % $279,881 $279,881 Miscellaneous General Expenses $240,264 $2,044, % $1,359,771 $1,600,035 Rents $274,894 $8,260, % $5,494,174 $5,769,068 Maintenance of General Plant $0 $ % $0 $0 Maintenance of General Plant $739,944 $5,000, % $3,326,158 $4,066,102

27 Allocation of Common Costs Electric Common Electric Common Gas Supervision 0 460, ,773 Meter Reading Expenses 16,285, ,150 16,285, ,150 11,625,800 Customer Records and Collection Expenses 3,557,831 29,161,064 3,557,831 29,161,064 3,034,659 Uncollectible Accounts 11,255, ,255,066 5,530,369 Miscellaneous Customer Accounts Expenses 0 (141,333) (141,333) Customer Service and Informational Expenses 0 0 Supervision 0 0 Customer Assistance Expenses 14,557,089 1,238,001 14,557,089 1,238,001 4,695,823 Informational and Instructional Advertising Expenses 0 1,281,796 1,281,796 Miscellaneous Customer Service and Informational Expenses 0 47,545 47,545 Supervision 5, ,304 Demonstrating and Selling Expenses 345, , ,760 Advertising Expenses Miscellaneous sales Expenses 109, ,070 Sales Expenses 0 0 Administrative and General salaries 8,163,928 26,711,456 8,163,928 26,711,456 1,382,221 Office Supplies and Expenses 1,366,322 8,506,948 1,366,322 8,506, ,753 Administrative Expenses -Transferred-Credit 0 (229,596) (229,596) Outside Service Employed 3,856,764 14,145,842 3,856,764 14,145, ,780 Property Insurance 655,517 4,152, ,517 4,152, ,931 Injuries and Damages 262,748 4,581, ,748 4,581, ,589 Employee Pensions and Benefits 25,124,469 25,124,469 12,005,932 Franchise Requirements 0 0 Regulatory Commission Expenses 7,293,910 3,967,613 7,293,910 3,967,613 2,389,252 Duplicate Charges - Credit 0 0 General Advertising Expenses 0 420, ,810 Miscellaneous General Expenses 240,264 2,044, ,264 2,044,461 Rents 274,894 8,260, ,894 8,260,674 Maintenance of General Plant 0 0 1,838,690 Maintenance of General Plant 739,944 5,000, ,944 5,000,989 94,094, ,196,604 44,657,559

28 Page 1 of 8 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries (1) (2) Line No. Description Amount 2010 Amount 1. Steam Power Generation $1,156, Hydraulic Power Production $8,417, Other Power Generation $11,337, Other Power Supply Expenses $5,367, Total Production $26,278,627 22,674, Transmission Expenses $3,598,461 3,047, Distribution Expenses $25,702,185 21,906, Customer Service and Informational Sales $14,526,154 14,317, Administrative and General $28,032,003 24,490, Total $98,137,430 $86,436, Total Operation Expenses $81,414, Total Mainteanance Expenses $16,722, Total $98,137,430

29 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 2 of 8 (1) (2) (3) Line No. FERC Account Description Amount Steam Power Generation Operation Operation Supervision and Engineering $123, Fuel $ Steam Expenses $1, Steam From Other Sources $ Steam Transferred -Credit $ Electric Expenses $ Miscellaneous Steam Power Expenses $ Rents $ Operation Supplies and Expenses $ Allowances $0 11. Total Operation $124,956 Maintenance Maintenance Supervision and Engineering $ Maintenance of Structures $395, Maintenance of Boiler Plant $253, Maintenance of Electric Plant $299, Maintenance of Miscellaneous Steam Plant $83, Maintenance of Steam Production $0 18. Total Maintenance $1,031, Total Steam Power Generation $1,156,775

30 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 3 of 8 (1) (2) (3) Line No. FERC Account Description Amount Hydraulic Power Generation Operation Operation Supervision and Engineering $1,917, Water for Power $ Hydraulic Expenses $2,031, Electric Expenses $227, Miscellaneous Hydraulic Power Generation Expenses $1,320, Rents $ Operation Supplies and Expenses $0 8. Total Operation $5,497,674 Maintenance Maintenance Supervision and Engineering $1, Maintenance of Structures $238, Mainteanance of Reservoirs, Dams and Waterways $451, Maintenance of Electric Plant $630, Maintenance of Miscellaneous Hydraulic Plant $1,596, Mainteanance of Hydraulic Production Plant $0 15. Total Maintenance $2,919, Total Hydraulic Power Generation $8,417,416

31 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 4 of 8 (1) (2) (3) Line No. FERC Account Description Amount Other Power Generation Operation Operation Supervision and Engineering $2,782, Fuel $ Generation Expenses $5,697, Miscellaneous Other Power Generation Expenses $974, Rents $ Operation Supplies and Expenses $0 7. Total Operation $9,455,010 Maintenance Maintenance Supervision and Engineering $457, Maintenance of Structures $212, Maintenance of Generating and Electric Plant $895, Maintenance of Miscellaneous Other Power Generation Plant $315, Maintenance of Other Power Production Plant $0 13. Total Maintenance $1,882, Total Other Power Generation $11,337,067 Other Power Supply Expenses Purchased Power $ System Control and Load Dispatching $1,439, Other Expenses $3,928, Total Other Power Supply Expenses $5,367,369

32 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 5 of 8 (1) (2) (3) Line No. FERC Account Description Amount Transmission Expenses Operation Operation Supervision and Engineering $1,226, Load Dispatch -Reliability $1,505, Load Dispatch - Monitor and Operate Transmission System $ Load Dispatch - Transmission Service and Scheduling $ Scheduling, System Control and Dispatch Services $ Reliability Planning and Standards Development $ Transmission Service Studies $ Generation Interconnection Studies $ Reliability Planning and Standards Development Services $ Station Expenses $59, Overhead Line Expense $105, Underground Line Expenses $ Tranmission of Electricity by Others $ Miscellaneous Transmission Expenses $348, Rents $ Operation Supplies and Expenses $0 17. Total Operation $3,245,117 Maintenance Maintenance Supervision and Engineering $ Maintenance of Structures $ Maintenance of Computer Hardware $ Maintenance of Computer Software $ Maintenance of Communication Equipment $ Maintenance of Miscellaneous Regional Transmission Plant $ Maintenance of Station Equipment $239, Maintenance of Overhead Lines $114, Maintenance of Underground Lines $ Maintenance of Miscellaneous Transmission Plant $ Maintenance of Transmission Plant $0 29. Total Maintenance $353,344 Total Transmission Expenses $3,598,461

33 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 6 of 8 (1) (2) (3) Line No. FERC Account Description Amount Distribution Expenses Operation Operation Supervision and Engineering $1,773, Load Dispatching $1,092, Line and Station Expenses $ Station Expenses $871, Overhead Line Expenses $6,083, Underground Line Expenses $430, Street Lighting and Signal System Expenses $72, Meter Expenses $1,371, Customer Installations Expenses $3,553, Miscellaneous Distribution Expenses $776, Rents $117, Total Operation $16,142,993 Maintenance Maintenance Supervision and Engineering $ Maintenance of Structures $ Maintenance of Station Equipment $2,513, Maintenance of Structures and Equipment $ Maintenance of Overhead Lines $2,828, Maintenance of Underground Lines $3,530, Maintenance of Lines $ Maintenance of Line Transformers $146, Maintenance of Street Lighting and Signal Systems $108, Maintenance of Meters $430, Maintenance of Miscellaneous Distribution Plant $0 24. Total Maintenance $9,559, Total Distribution Expenses $25,702,185

34 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 7 of 8 (1) (2) (3) Line No. FERC Account Description Amount Customer Accounts Expenses Operation Supervision $223, Meter Reading Expenses $235, Customer Records and Collection Expenses $12,379, Uncollectible Accounts $ Miscellaneous Customer Accounts Expenses $0 6. Total Customer Accounts Expenses $12,838,256 Customer Service - Informational Expenses Operation Customer Service and Informational Expenses $ Supervision $ Customer Assistance Expenses $928, Informational and Instructional Advertising Expenses $343, Miscellaneous Customer Service and Informational Expenses $16, Total Customer Service -Informational Expenses $1,287,832 Sales Expenses Operation Supervision $ Demonstrating and Selling Expenses $294, Advertising Expenses $ Miscellaneous Sales Expenses $105, Sales Expenses $0 18. Total Sales Expenses $400, Total Customer Service and Informational Expenses $14,526,154

35 Statement AI - Period II Electric Operating and Maintenance Expenses - Wages and Salaries Page 8 of 8 (1) (2) (3) Line No. FERC Account Description Amount Administrative and General Expenses Operation Administrative and General Salaries $25,708, Office Supplies and Expenses $ Administrative Expenses -Transferred-Credit $ Outside Service Employed $ Property Insurance $560, Injuries and Damages $294, Employee Pensions and Benefits $ Franchise Requirements $ Regulatory Commission Expenses $491, Duplicate Charges - Credit $ General Advertising Expenses $ Miscellaneous General Expenses $1, Rents $0 14. Total Operation $27,055,363 Maintenance Maintenance of General Plant $976, Total Maintenance $976, Total Administrative and General Expenses $28,032,003

36 Page 1 of 2 Statement AJ - Period II Depreciation and Amortization Expenses Account 403, 404, 406, 407, 411 (1) (2) (3) (4) Average Depreciation & Annual Depreciable Amortization Depreciation Line No. Functional Classification Electric Plant Expense Rate Line No. 1. Account 403, Depreciation Expense (101, 101.1) 2. Production $2,567,179,348 $73,116, % 3. Transmission $470,149,070 $8,443, % 4. Distribution $3,561,017,474 $100,319, % 5. General & Intangible $207,888,197 $8,251, % 6. Sub Total $6,806,234,089 $190,131, Common $14,432,008 * 8. Total Depreciation $6,806,234,089 $204,563, Account 404 Amortization Expense (101) Production $48,325,321 $1,271, % General & Intangible $73,064,000 $3,469, % 12. Common $254,889,077 $24,152, % 13. Total Amortization $376,278,398 $28,893, Account 406 Amortization of Electric Acquisition (114,182.3) 15. Production $250,533,721 $14,842, % 16. Transmission $946,172 $25, % 17. Distribution $302,358 $11, % 18. Total Plant $251,782,251 $14,879, Deferred AFUDC $52,292,405 $2,170, % Colstrip Common $7,465,262 $576, % Colstrip Deferred Depreciation $1,802,126 $139, % Total Amortization $313,342,043 $17,766, Account 407 Amortization of Unrecovered Plant (182.1) 25. Storm Damages $95,453,815 $16,351, % White River Plant Costs $36,536,952 $1,537, % PTC Reg Amort and Wind Grant $83,612,517 $107,104, % ** Total Amortization $215,603,284 $124,993, Total Depreciation and Amortization $7,711,457,814 $376,216,194 *Depreciable balance and depreciation rate included in line 12. **PTC balance is increasing, not decreasing

37 Statement AJ - Period II Depreciation and Amortization Expenses Account 403, 404, 406, 407, 411 (1) (2) (3) (4) Page 2 of 2 Description Certain Account Detail 2011 Amortization Mint Farm Deferral $2,877,946 Goldendale Deferred Costs $3,468,460 Sumas Deferral $0 Chelan PUD Contract Initiation $1,181,350 Chelan PUD Security Deposit $0 Total of Selected $7,527,756 December 2010 December 2011 Average INT Franchises, Baker Project $37,716,588 $37,080,682 $37,398,635 INT Franchises, Snoqualmie $11,244,639 $10,608,733 $10,926,686 HYD, Electron Hatchery $0 $0 $0 Total $48,961,227 $47,689,415 $48,325,321 December 2010 December 2011 Average General & Intangible - Amortized $73,064,000 $73,064,000 $73,064,000 (used 12/2010 as estimate for 12/2011) December 2010 December 2011 Average Deferred AFUDC $53,377,792 $51,207,018 $52,292,405 Colstrip Common $7,753,639 $7,176,885 $7,465,262 Colstrip Deferred Depreciation $1,871,665 $1,732,586 $1,802,126 December 2010 December 2011 Average Storm Damages $103,629,756 $87,277,874 $95,453,815 White River Plant Costs $37,305,563 $35,768,340 $36,536,952 PTC Reg Amort and Wind Grant $27,459,753 $139,765,281 $83,612,517

38 Statement AK - Period II Taxes Other Than Income Taxes Page 1 of 1 (1) (2) Line No. Description Amount 1. State Excise Taxes $85,361, Municipal Taxes $78,368, Property Taxes $41,466, Beneficial Use - Montana $1,775, Payroll Taxes $8,288, Total $215,259,684

39 Statement AL - Period II Working Capital Page 1 of 2 (1) (2) (3) (4) (5) (6) Line No. Description Amount Allocator Production Transmission Distribution 1. Account 151 Fuel Stock $16,020,197 1 $16,020, Account 154 Materials and Supplies $71,994,517 2 $34,039,975 $4,661,260 $33,293, Account 165 Prepayment $18,716,746 2 $8,849,529 $1,211,809 $8,655, Cash Working Capital $58,249,749 $21,106,645 $2,128,988 $35,014, Total Working Capital $164,981,208 $80,016,345 $8,002,057 $76,962,806 Derviation of Cash Working Capital 6. Production Expenses $1,004,943,296 1 $1,004,943, Transmission Expenses $90,095,652 1 $90,095, Distribution Expenses $82,873,044 1 $82,873, Customer Service and Informational Sales $151,464,231 1 $151,464, Administrative and General $98,986,822 2 $46,802,299 $6,408,868 $45,775, Total Operation and Maintenance Expenses $1,428,363,045 $1,051,745,595 $96,504,520 $280,112, Less Purchased Power (555) $538,232,078 1 $538,232, Less Fuel Costs (501, 547) $344,660,359 1 $344,660, Less Transmission of Electricity for Others (565) $79,472,619 1 $79,472, Net Amount $465,997,989 $168,853,158 $17,031,901 $280,112, Cash Working Capital 1/8 $58,249,749 $21,106,645 $2,128,988 $35,014,116 Allocators 17. 1) Direct Assignment 18. 2) Labor Excluding A&G (Statement AI) $55,579,273 $26,278,627 $3,598,461 $25,702, Allocator % % 6.474% %

40 Statement AL - Period I Working Capital Page 2 of 2 (1) (2) (3) (5) Account 151 Account 151 Account 151 Line No. Date Fuel Stock Electric Common 1. December 2010 $16,020, December 2011 $16,020, Total $32,040, Annual Average $16,020,197 Account 154 Account 154 Account 154 Line No. Date Materials and Supplies Electric Common 1. December 2010 $70,906,328 $68,077,414 $4,366, December 2011 $73,082,706 $70,012,635 $4,615, Total $143,989,034 $138,090,050 $8,982, Annual Average $71,994,517 $69,045,025 $4,491,117 Account 165 Account 165 Account 165 Line No. Date Prepayments Electric Common 1. December 2010 $18,487,961 $12,403,275 $9,391, December 2011 $18,945,531 $12,507,431 $9,679, Total $37,433,492 $24,910,706 $19,071, Annual Average $18,716,746 $12,455,353 $9,535,647

41 Statement AM - Period II Construction Work In Progress Page 1 of 1 Line No. 1. None for Production Revenue Requirement. No construction plans for regulation pool.

42 Statement AN - Period II Notes Payable Account 231 and 233 Page 1 of 1 (1) (2) Line No. Date Balance Account 231 Account 233 Total 1. December 2010 $269,597,785 December 2010 $247,000,000 $22,597,785 $269,597, December 2011 $260,373,306 December 2011 $237,775,521 $22,597,785 $260,373, Total $529,971, Average $264,985,546

43 Page 1 of 1 Statement AO - Period II Rate of Allowance for Funds Used During Construction Line No. 1. None for Production Revenue Requirement. No construction plans for regulation pool.

44 Statement AP - Period II Federal Income Tax Deductions - Interest Page 1 of 1 (1) (3) Line No. Description Amount 1. Production-related Rate Base (Schedule BK) $1,703,996, Debt Component of Capital Structure 52.0% 3. Weighted Cost of Debt 6.45% 4. Production-related Interest Deduction $57,152, The interest deduction used in determining the production revenue requirement 6. is calculated by multiplying production-related rate base times the debt 7. component of the capital structure times the weighted cost of debt.