CALCULATION OF UTILITY INCOME TAXES

Transcription

1 Exhibit C2 Tab 6 Schedule 1 Page 1 of 7 1 CALCULATION OF UTILITY INCOME TAXES Attachment 1: Test Years (2009, 2010) Attachment 2: Calculation of Capital Cost Allowance Test Year (2009, 2010) Attachment 3: Historic Years (2005, 2006, 2007) Attachment 4: Calculation of Capital Cost Allowance Historic (2005, 2006, 2007) & Bridge Year (2008) 9

2 Test Years (2009 and 2010) Attachement 1 Page 1 of 1 No. Particulars (a) (b) Determination of Taxable Income 1 Regulatory Net Income (before tax) $ $ Book to Tax Adjustments: 3 Other Post Employment Benefits expense Other Post Employment Benefits payments (20.0) (21.3) 6 Depreciation and amortization Capital Cost Allowance (392.9) (422.8) 8 Removal costs (0.5) (0.5) 9 Environmental costs (2.1) (1.8) 10 Hedge loss - amortization (0.0) (0.0) 11 Non-deductible meals & entertainment Research & Development ITC Ontario education credits Capitalized overhead costs (26.3) (28.1) 15 Capitalized pension costs (16.7) (17.2) 16 $ (174.0) $ (182.9) 17 Regulatory Taxable Income $ 97.9 $ Corporate Income Tax Rate % % 19 Subtotal $ 32.3 $ Less: R&D ITC / Ontario education credits (0.4) (0.4) 21 Regulatory Income Tax $ 31.9 $ 48.0 Tax Rates 22 Federal Tax % % 23 Provincial Tax % % 24 Total Tax Rate % %

3 Test Years (2009 and 2010) Capital Cost Allowance Attachment 2 Page 1 of Transmission: 1 2,708.9 (0.0) 2,708.9 (0.0) 2, % , % % % % % % % % % % % % , , % , % TX UCC 4, , , , % Total CCA Total Tx CCA Transmission: 1 2, , , % , (0.0) (0.0) % % % % % % % % % % % , , , % , % % TX UCC 5, , , , % Total CCA Less Five Nations 0.3 Total Tx CCA 422.8

4 Historical Years 2005, 2006, 2007 Attachment 3 Page 1 of 2 No. Particulars Notes Calculation of Federal and ON Income Tax 1 Net Income Before Tax (NIBT) per Return (1) 2 3 Required Adjustments to accounting NIBT 4 Recurring items included in Revenue Requirement (RR): 5 Other Post Employment Benefit expense Other Post Employment Benefit payments (14.5) (13.8) (16.2) (2) 7 Depreciation and amortization Capital Cost Allowance (290.8) (293.0) (309.5) 9 Removal costs (7.2) (2.9) (0.1) 10 Environmental costs paid (5.2) (4.1) (3.3) (2) 11 Hedge loss net of amortization (5.4) Non-deductible items (50% Meals & entertainment/interest) Research & Development ITC (3) 14 Capitalized overhead costs deducted (14.1) (16.7) (19.2) (4) 15 Pension cost deductions (12.0) (13.0) (12.2) (2) 16 (73.4) (66.2) (88.4) 17 Deferral accounts not part of RR: 18 Amounts received (paid) re: Earnings Sharing mechanism (7.0) (5) 19 Amounts received re RDDA/OEB decision/tax rate changes Amounts received (paid) re Export Credit (10.5) (5) Reversal of accounting adjustments not part of RR: 23 Building reserve 0.0 (0.6) 0.0 (6) 24 Contingent liability movement (2.3) (5.6) (7.8) (6) 25 Reversal of market ready provision (12.7) (6) 26 Capitalized interest deductible for tax (14.9) (18.6) (19.6) (6) 27 (17.2) (24.8) (40.1) 28 Recurring items not part of RR: 29 Cumulative (6.4) (5.9) (5.5) 30 (6.4) (5.9) (5.5) 31 Immaterial items not in business plan detail: 32 Computer systems software deducted for accounting Computer application software deducted for accounting Amortization of frequency std (1.6) (6) 35 Taxable capital gain Deduction (greater)/ less than expense -underwriting/finance cost (1.4) (1.5) (1.6) 37 WSIB (0.8) (0.8) (0.8) 38 Amortization Capital Contribution (0.1) (0.2) (0.2) 39 Tenant Inducement 0.4 (0.3) (0.3) 40 Capital tax provision vs. return (0.9) 41 Landscaping costs deductible (3.6) (2.0) (2.1) 42 Ivaco receivable (non repetitive) (4.4) (6) 43 Land rights revenue reversal (6) 44 Apprenticeship/Co op Credits Insurance proceeds (4.5) (6) 46 Other (0.1) (0.1) (14.0) (3.9) (3.2) NET Adjustments to Accounting NIBT (97.6) (50.0) (77.0) Taxable Income See Exhibit C1, Tab 7, Schedule 1 for additional Information

5 Historical Years 2005, 2006, 2007 Attachment 3 Page 2 of 2 No. Particulars Corporate Income Tax Rate % 2 3 Subtotal $ 4 Less: Apprencticeship Co op Credits 0.0 (0.3) (1.2) 5 Less: R&D ITC (0.1) (0.1) (0.4) 6 Regulatory Income Tax $ Summary of Utility Income Taxes Income Taxes ( 5) $ 12 Large Corporation Tax (line 26) Total Taxes $ Tax Rates Federal Tax % 18 Federal Surtax % 19 Provincial Tax % 20 Total Tax Rate % Notes: (1) Starting point is tax return NIBT per financial statements (GAAP basis), whereas forecast year starting point is Revenue requirement ('RR'). (2) Deduction on cash basis (3) Deduction of capital R&D net of addback re: prior year's claim (4) Represents portion of capitalized overhead deductible for tax. This amount reduces additions for tax purposes. (5) Not in RR for forecast years (6) No similar item in test year RR No. Particulars Large Corporation Tax LCT Rate % Large Corporation Tax See Exhibit C1, Tab 7, Schedule 1 for additional Information

6 Historical Years (2005 and 2006) Capital Cost Allowance Attachment 4 Page 1 of Transmission: 1 3,194.9 (8.1) 3,186.8 (8.1) 3, % , , , , % % % % % % % % (2.7) (0.6) (0.6) 6.0 (0.1) (0.5) % % % % % % TX UCC 4, , , ,758.5 Eligible Capital continuity % Transmission: Total CCA Net Tx CCA ,059.5 (1.1) 3,058.4 (1.1) 3, % , (0.0) (0.0) % % % (0.0) 0.1 (0.0) % % (0.0) 1.5 (0.0) % % % (0.5) 0.5 (0.0) - (0.0) % % % % % % TX UCC 4, , , ,740.3 Eligible Capital continuity % Total CCA Net Tx CCA 298.5

7 Historical and Bridge Years (2007 and 2008) Capital Cost Allowance Attachment 4 Page 1 of Transmission: 1 2, , , % , % % % % % % % % (0.1) 0.4 (0.0) 0.4 7% % % % % % TX UCC 4, , , , % Total CCA Total Tx CCA Transmission: 1 2, , , % , (0.0) (0.0) % % % % % % % % % % % % % % TX UCC 4, , , , % Total CCA Total Tx CCA 350.3