2007 PILS / CORPORATE TAX FILING

Transcription

1 Page 1 of PILS / CORPORATE TAX FILING Sheet Index: Title Page Input Information Summary Tax Rates & Exemptions 26 Adjusted Taxable Income 26 Taxable Income Additions 26 Taxable Income Deductions Test Year Sch 8 and 1 UCC&CEC Test Year UCC and CEC Additions & Disposals Test Year Schedule 8 CCA Test Year CEC Test Year Sch 13 Tax Reserves Test Year Sch 7-1 Loss Cfwd Test Year Sch 7-3 Interest Test Year Taxable Income Test Year Taxable Income Additions Test Year Taxable Income Deductions Test Year Financing Fees Test Year OCT Test Year Loans and Advances Test Year Tax Deductions > Book Test Year PILs,Tax Provision Test Year PILs Variance 21 Schedule 7-2 FMV FMV Bump Supplementry Notes

2 Page 2 of 44 PILS / CORPORATE TAX FILING Name of Utility: License Number: File Number: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX

3 Page 3 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Ratebase 1,846,774, DATA for PILS MODEL E 19 Net Income Before Taxes 58,173, DATA for PILS MODEL F 23 Calculation of Deemed Interest Debt Ratio 65.% 4-1 DATA for PILS MODEL E 2 Debt Rate % (as calculated) 5.51% 4-1 DATA for PILS MODEL E 21 Deemed Interest to be recovered 66,14,955 Questions that must be answered Yes or No 1. Did the applicant elect to apply the FMV Bump-up of assets of October 1, 21 in their annual tax filings? Yes If No, please explain your reasons in the manager's summary.

4 Page 4 of 44 Has the applicant included in their reported UCC/ECE the FMV Bump-up of assets in this application? If No, please explain your reasons in the manager's summary. Yes 2. Does the applicant have any Investment Tax Credits (ITC)? Yes 3. Does the applicant have any Scientific Research and Experimental Development Expenditures? Yes 4. Does the applicant have any Capital Gains or Losses for tax purposes? Yes 5. Does the applicant have any Capital Leases? Yes 6. Does the applicant have any Loss Carry-Forwards (non-capital or net capital)? No 7. Has the applicant deducted regulatory assets for tax purposes in 28 and/or prior years? Yes If Yes, please explain your reasons in the manager's summary. 8. Since 1999, has the applicant acquired another regulated applicant's assets? No 9. Did the applicant pay dividends in 28 and/or prior years? Yes If Yes, please describe what was the tax treatment in the manager's summary. 1 Did the applicant elect to capitalize interest incurred on CWIP for tax purposes for 28 and/or prior years? No 11. Did the applicant make the adjustment for Provincial Capital Tax as required on Page 13 of EDR instructions? Yes

5 Page 5 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Applicant Toronto Hydro-Electric System Limited Regulated Affiliates (if applicable) Total Rate Base 1,846,774,689 1,846,774,689 OCT Exemption 12,5, 12,5, 12,5, Corporate Tax Rates for Test Year Income Range 3, 4, to to to >1,128,519 3, 4, 1,128,519 Federal 13.12% 22.12% 22.12% 22.12% Ontario 5.5% 5.5% 5.5% 14.% Income Tax Rates used to gross up the true up variance Ontario SBD Clawback 18.62% 27.62% 27.62% 4.67% 36.12% Capital Tax Rate.285% Surtax.%

6 Page 6 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2S1 line # Total for Legal Entity Non-Distribution Eliminations 26 Wires Only Income before PILs/Taxes A 121,986, ,986,847 Additions: Interest and penalties on taxes 13 Amortization of tangible assets ,56, ,56,191 Amortization of intangible assets 16 Recapture of capital cost allowance from 17 Schedule 8 Gain on sale of eligible capital property from 18 Income or loss for tax purposes- joint ventures 19 or partnerships Loss in equity of subsidiaries and affiliates 11 Loss on disposal of assets 111 Charitable donations 112 Taxable Capital Gains , ,769 Political Donations 114 Deferred and prepaid expenses 116 Scientific research expenditures deducted on 118 financial statements Capitalized interest 119 Non-deductible club dues and fees ,8 142,8 Non-deductible meals and entertainment 175, ,1 expense Non-deductible automobile expenses ,71 19,71 Non-deductible life insurance premiums 123 Non-deductible company pension plans 124 Tax reserves deducted in prior year 125 Reserves from financial statements- balance at 135,67, ,67,264 end of year Soft costs on construction and renovation of 127 buildings

7 Page 7 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2S1 line # Total for Legal Entity Non-Distribution Eliminations 26 Wires Only Book loss on joint ventures or partnerships 25 Capital items expensed 26 Debt issue expense 28 Development expenses claimed in current year 212 Financing fees deducted in books 216 Gain on settlement of debt 22 Non-deductible advertising 226 Non-deductible interest 227 Non-deductible legal and accounting fees 228 Recapture of SR&ED expenditures 231 Share issue expense 235 Write down of capital property 236 Amounts received in respect of qualifying environment trust per paragraphs 12(1)(z.1) and 12(1)(z.2) 237 Other Additions Interest Expensed on Capital Leases 29 Realized Income from Deferred Credit Accounts 291 Pensions 292 Non-deductible penalties 293 Debt Financing Expenses for Book Purposes ,55 455,55 See Attached ,39,788 56,39,788 Total Additions 317,915, ,915,714

8 Page 8 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2S1 line # Total for Legal Entity Non-Distribution Eliminations 26 Wires Only Deductions: Gain on disposal of assets per financial 2,74, ,74,548 statements Dividends not taxable under section Capital cost allowance from Schedule ,962, ,962,821 Terminal loss from Schedule 8 44 Cumulative eligible capital deduction from 1,146, ,146,387 Allowable business investment loss 46 Deferred and prepaid expenses 49 Scientific research expenses claimed in year 411 Tax reserves claimed in current year 413 Reserves from financial statements - balance at 125,567, ,567,928 beginning of year Contributions to deferred income plans 416 Book income of joint venture or partnership 35 Equity in income from subsidiary or affiliates 36 Other deductions: (Please explain in detail the nature of the item) Interest capitalized for accounting deducted for 39 tax Capital Lease Payments ,45 48,45 Financing Fees for Tax Under S.2(1)(e) 393 1,121,325 1,121,325 See Attached ,4,4 41,4,4 Total Deductions 293,925, ,925,454 Net Income for Tax Purposes 145,977,17 145,977,17

9 Page 9 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2S1 line # Total for Legal Entity Non-Distribution Eliminations 26 Wires Only Charitable donations from Schedule Taxable dividends deductible under section or 113, from Schedule 3 (item 82) Non-capital losses of preceding taxation years 331 from Schedule 4 Net-capital losses of preceding taxation years 332 from Schedule 4 Limited partnership losses of preceding taxation 335 years from Schedule 4 TAXABLE INCOME 145,977,17 145,977,17

10 Attachment to 26 Adjusted Taxable Income Toronto Hydro Electric System Limited License Number: File Number: Toronto Hydro-Electric System Limited Page 1 of 44 ED RP-XXXX-XXXX, Other Additions Amount ARO Accretion Expenses 359,952 Transition cost recovery 1,947,761 Transition cost interest recovery 1,675,8 Smart meter Reg Asset allocated to OPEX 2,61 Smart meter income from rates 2,966,383 Small tools expensed for accounting; capitalized for tax 694,17 Portion of gain re: Belfield recorded in retained earnings 1,476,456 Deferred revenue - 12(1)(a) add back 4,697,526 Dividend income (SunLife shares) not recorded in THESL 15,558 Ontario specified tax credits 174,41 Capital tax per books 5,524,435 Capital Contributions Under S.12(1)x) 27,775,951 56,39,788

11 Attachment to 26 Adjusted Taxable Income Toronto Hydro Electric System Limited License Number: ED File Number: RP-XXXX-XXXX, Other Deductions Amount ARO Payments - Deductible for Tax 55,832 S.13(7.4) Election 27,775,951 Non-CDM revenue related to Summer Challenge Program 74,318 Smart meter interest/carrying costs not legally entitled to 421,589 Smart meter OPEX recorded as Reg Asset 525,959 Deferred revenue - 2(1)(m) deduction 4,697,526 Ontario capital tax per return 6,22,677 ITC taxed in 25 but recapture recorded in 26 income 269,188 41,4,4 Toronto Hydro-Electric System Limited Page 11 of 44

12 Page 12 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, Methodology: This schedule starts with 26 Schedules 8 and 1, as filed in the actual 26 corporate tax returns; then the non-distribution assets are eliminated. The closing balances in this schedule are the starting point for the 27 Schedules. Class Class Description UCC End of Year Dec 31/6 per tax returns Less: Non- Distribution Portion Less: Disallowed FMV Increment UCC 27 Opening Balance Distribution System - post 1987 and pre-feb. 22, 25 1,33,55,148 1,33,55,148 Distribution System - pre ,64, ,64,232 General Office/Stores Equip 37,498,82 37,498,82 Computer Hardware/ Vehicles 15,98,964 15,98, Certain Automobiles 38,556 38, Computer Software 8,75,712 8,75, Lease # 1 1,91,36 1,91, Lease # Lease # Lease # 4 14 Franchise 17 New Electrical Generating Equipment Acq'd after Feb 27/ Other Than Bldgs 7,21,455 7,21, Fibre Optic Cable 43.1 Certain Energy-Efficient Electrical Generating Equipment 45 Computers & Systems Software acq'd post Mar 22/4 2,712,645 2,712, Data Network Infrastructure Equipment (acq'd post Mar 22/4)

13 Page 13 of Distribution Equipment (acq'd post Feb 22/5) 29,174,397 29,174, WIP 67,54,773 67,54,773 SUB-TOTAL - UCC 2,157,216, 2,157,216, CEC Goodwill CEC Land Rights CEC FMV Bump-up CEC Total 15,23,568 15,23,568 SUB-TOTAL - CEC 15,23,568 15,23,568

14 Page 14 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, Total Capital Assets for PILs Model CCA Class 27 Projected Capital Transactions 27 Projected Capital Transactions Additions Disposals Additions Disposals 162 Buildings and Fixtures Boiler Plant Equipment Reservoirs, Dams and Waterways Roads, Railroads and Bridges Buildings and Fixtures Roads and Trails Buildings and Fixtures Buildings and Fixtures 1 5,8,967 1,16,996 5,8,967 1,16, Electric Plant Purchased or Sold 1 22 Experimental Electric Plant Unclassified 1 23 Electric Plant and Equipment Leased to 1 Others 24 Electric Plant Held for Future Use 1 25 Completed Construction Not Classified-- 1 Electric 27 Other Utility Plant 1 SUBTOTAL - CLASS 1 5,8,967 1,16,996 5,8,967 1,16, Buildings and Fixtures Boiler Plant Equipment Reservoirs, Dams and Waterways Roads, Railroads and Bridges Buildings and Fixtures Station Equipment Towers and Fixtures Poles and Fixtures Overhead Conductors and Devices Underground Conduit Underground Conductors and Devices Roads and Trails Buildings and Fixtures Transformer Station Equipment - Normally Primary above 5 kv Distribution Station Equipment - Normally Primary below 5 kv Storage Battery Equipment Poles, Towers and Fixtures Overhead Conductors and Devices Underground Conduit Underground Conductors and Devices Line Transformers Services Meters 2

15 Page 15 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, Total Capital Assets for PILs Model CCA Class 27 Projected Capital Transactions 27 Projected Capital Transactions Additions Disposals Additions Disposals 1865 Other Installations on Customer's Premises Leased Property on Customer Premises Buildings and Fixtures Contributions and Grants - Credit 2 21 Electric Plant Purchased or Sold 2 22 Experimental Electric Plant Unclassified 2 23 Electric Plant and Equipment Leased to Others 2 24 Electric Plant Held for Future Use 2 25 Completed Construction Not Classified-- Electric 2 27 Other Utility Plant 2 xxx1 Fixed Assets for Conservation and Demand Management 2 xxx2 Smart Meters 2 SUBTOTAL - CLASS Street Lighting and Signal Systems Office Furniture and Equipment 8 599, , Stores Equipment Tools, Shop and Garage Equipment 8 1,42,945 1,42, Measurement and Testing Equipment Power Operated Equipment Communication Equipment 8 2,172,639 2,172, Miscellaneous Equipment Water Heater Rental Units Load Management Controls - Customer 8 Premises 3,591,36 3,591, Load Management Controls - Utility Premises System Supervisory Equipment 8 4,627,914 4,627, Sentinel Lighting Rental Units Other Tangible Property 8 SUBTOTAL - CLASS 8 12,34,6 12,34,6 Fibre Optic Cable 42 9,173 9,173 SUBTOTAL - CLASS 42 9,173 9, Computer Equipment - Hardware 45 4,935,141 4,935,141 SUBTOTAL - CLASS 45 4,935,141 4,935, Transportation Equipment 1 9,169,615 9,169,615 SUBTOTAL - CLASS 1 9,169,615 9,169, Computer Software - CL ,1,9 24,1,9

16 Page 16 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, Total Capital Assets for PILs Model CCA Class 27 Projected Capital Transactions 27 Projected Capital Transactions Additions Disposals Additions Disposals SUBTOTAL - CLASS 12 24,1,9 24,1,9 163 Leasehold Improvements , , Leasehold Improvements Leasehold Improvements Leasehold Improvements 13 4 SUBTOTAL - CLASS 13 New Electrical Generating Equipment Acq'd after Feb 27/ Other Than Bldgs , ,222 35,99 35,99 35,99 SUBTOTAL - CLASS Engines and Engine-Driven Generators Turbogenerator Units Water Wheels, Turbines and Generators Fuel Holders, Producers and Accessories Prime Movers Generators Accessory Electric Equipment Miscellaneous Power Plant Equipment 43.1 SUBTOTAL - Generating Equipment Station Equipment 47 Towers and Fixtures 47 Poles and Fixtures 47 Overhead Conductors and Devices 47 8,1,155 8,1,155 Underground Conduit 47 Underground Conductors and Devices 47 Transformer Station Equipment - Normally 47 Primary above 5 kv Distribution Station Equipment - Normally 47 Primary below 5 kv 11,234,683 11,234,683 Storage Battery Equipment 47 Poles, Towers and Fixtures 47 14,734,224 14,734,224 Overhead Conductors and Devices 47 Underground Conduit 47 49,591,81 49,591,81 Underground Conductors and Devices 47 38,287,391 38,287,391 Line Transformers 47 44,244,412 44,244,412 Services 47 7,935,137 7,935,137 Meters 47 7,63,27 7,63,27 Other Installations on Customer's Premises 47 Leased Property on Customer Premises 47

17 Page 17 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, Total Capital Assets for PILs Model CCA Class 27 Projected Capital Transactions 27 Projected Capital Transactions Additions Disposals Additions Disposals Fixed Assets for Conservation and Demand Management 47 Smart Meters 47 4,799,35 4,799, Contributions and Grants - Credit 47-33,553,495-33,553,495 SUBTOTAL - CLASS ,886, ,886, Property Under Capital Leases CL 275 Non-Utility Property Owned or Under Capital CL Leases SUBTOTAL - Capital Leases 166 Organization ECP 161 Miscellaneous Intangible Plant ECP 1616 Land Rights ECP 13,65 13, Land Rights ECP 186 Land Rights ECP 196 Land Rights ECP 26 Electric Plant Acquisition Adjustment ECP 265 Other Electric Plant Adjustment ECP 168 Franchises and Consents 14 SUBTOTAL - Eligible Capital Property 13,65 13, Land LAND 6,, 1,768,75 6,, 1,768, Land LAND 185 Land LAND 195 Land LAND SUBTOTAL - Land 6,, 1,768,75 6,, 1,768, Construction Work in Progress--Electric WIP Total Tier 1 and Tier 2 Adjustments 251,341,18 3,279, ,341,18 3,279,845

18 Page 18 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, For Leasehold Improvements, insert the number of lease years (cells I18 - I2) Class 1 Class Description UCC 27 Opening Balance 27 Projected Additions 27 Projected Dispositions UCC Before 1/2 Yr Adjustment 1/2 Year Rule {1/2 Additions Less Disposals} Reduced UCC Rate % 27 CCA UCC End of 27 Distribution System not in Cl post ,33,55,148 5,8,967 1,16,996 1,335,145,119 2,319,985 1,332,825,133 4% 53,313,5 1,281,832,114 2 Distribution System - pre ,64, ,64, ,64,232 6% 28,656, ,947,978 8 General Office/Stores Equip 37,498,82 12,34,6 49,532,142 6,17,3 43,515,112 2% 8,73,22 4,829,12 1 Computer Hardware/ Vehicles 15,98,964 9,169,615 24,268,579 4,584,87 19,683,771 3% 5,95,131 18,363, Certain Automobiles 38,556 38,556 38,556 3% 11,567 26, Computer Software 8,75,712 24,1,9 32,85,82 12,5,45 2,8,757 1% 2,8,757 12,5, Leasehold Improvement # 1 1,91,36 392,222 1,483, ,111 1,287,147 SL 279,646 1,23, Leasehold Improvement # Leasehold Improvement # Leasehold Improvement # 4 14 Franchise 17 New Electrical Generating Equipment Acq'd after Feb 27/ Other Than Bldgs 7,21,455 35,99 6,851,356 6,851,356 8% 548,18 6,33, Fibre Optic Cable 9,173 9,173 4,587 4,587 12% 55 8,623 Certain Energy-Efficient Electrical 43.1 Generating Equipment 3%

19 Page 19 of Computers & Systems Software acq'd post Mar 22/4 2,712,645 4,935,141 7,647,786 2,467,57 5,18,215 45% 2,331,97 5,316, Data Network Infrastructure Equipment (acq'd post Mar 22/4) 3% Distribution Equipment (acq'd post Feb 22/5) 29,174, ,886, ,6,542 94,443,72 33,617,469 8% 24,289, ,771, WIP 67,54,773 67,54,773 67,54,773 67,54,773 TOTAL 2,157,216, 245,327,413 1,511,95 2,41,32, ,83,29 2,278,949,11 144,838,536 2,256,193,782

20 Page 2 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Additions Cumulative Eligible Capital Cost of Eligible Capital Property Acquired during 27 13,65 15,23,568 Other Adjustments Subtotal 13,65 x 3/4 = 1,24 Non-taxable portion of a non-arm's length transferor's gain realized on the transfer of an ECP to the Corporation after Friday, December 2, 22 x 1/2 = 1,24 1,24 Amount transferred on amalgamation or wind-up of subsidiary Subtotal 15,24,772 Deductions Projected proceeds of sale (less outlays and expenses not otherwise deductible) from the disposition of all ECP during 27

21 Page 21 of 44 Other Adjustments Subtotal x 3/4 = Cumulative Eligible Capital Balance 15,24,772 Taxation Year 27 Deduction 15,24,772 x 7% = 1,66,854 Cumulative Eligible Capital - 27 Closing Balance 14,173,918

22 Page 22 of 44 Name of Utility: License Number: File Numbers: ED-XXXX-XXXX RP-XXXX-XXXX, EB-XXXX-XXXX CONTINUITY OF RESERVES Test Year Adjustments Description Projected Balance at December 31, 26 Non-Distribution Eliminations Sign Convention: Increase (+) Decrease (-) 26 Utility Only Eliminate Amounts Not Relevant for Test Year Sign Convention: Increase (+) Decrease (-) 26 Adjusted Utility Balance (C/F Tab "26 Adjusted Taxable Income) Add (+) Deduct (-) Balance for Test Year (C/F to Tab "Test Year Taxable Income") Change During the Year Disallowed Expenses Capital Gains Reserves ss.4(1) Tax Reserves Not Deducted for accounting purposes Reserve for doubtful accounts ss. 2(1)(l) Reserve for goods and services not delivered ss. 2(1)(m) Reserve for unpaid amounts ss. 2(1)(n) Debt & Share Issue Expenses ss. 2(1)(e) Other tax reserves Total

23 Page 23 of 44 Name of Utility: License Number: File Numbers: ED-XXXX-XXXX RP-XXXX-XXXX, EB-XXXX-XXXX CONTINUITY OF RESERVES Test Year Adjustments Description Projected Balance at December 31, 26 Non-Distribution Eliminations Sign Convention: Increase (+) Decrease (-) 26 Utility Only Eliminate Amounts Not Relevant for Test Year Sign Convention: Increase (+) Decrease (-) 26 Adjusted Utility Balance (C/F Tab "26 Adjusted Taxable Income) Add (+) Deduct (-) Balance for Test Year (C/F to Tab "Test Year Taxable Income") Change During the Year Disallowed Expenses Financial Statement Reserves (not deductible for Tax Purposes) General Reserve for Inventory Obsolescence (non-specific) 727, , , ,113 1,, 272,113 General reserve for bad debts 11,31,387 11,31,387 11,31, ,613 12,, 689,613 Accrued Employee Future Benefits: 122,343, ,343, ,343,778 14,683, ,27, 14,683,222 - Medical and Life Insurance -Short & Long-term Disability -Accmulated Sick Leave - Termination Cost 1,156,64 1,156,64 1,156,64-1,156,64-1,156,64 - Other Post- Employment Benefits Provision for Environmental Costs Restructuring Costs Accrued Contingent Litigation Costs Accrued Self-Insurance Costs Other Contingent Liabilities

24 Page 24 of 44 Name of Utility: License Number: File Numbers: ED-XXXX-XXXX RP-XXXX-XXXX, EB-XXXX-XXXX CONTINUITY OF RESERVES Test Year Adjustments Description Bonuses Accrued and Not Paid Within 18 Days of Year-End ss. 78(4) Projected Balance at December 31, 26 Non-Distribution Eliminations Sign Convention: Increase (+) Decrease (-) 26 Utility Only Eliminate Amounts Not Relevant for Test Year Sign Convention: Increase (+) Decrease (-) 26 Adjusted Utility Balance (C/F Tab "26 Adjusted Taxable Income) Add (+) Deduct (-) Balance for Test Year (C/F to Tab "Test Year Taxable Income") Change During the Year Disallowed Expenses Unpaid Amounts to Related Person and Not Paid Within 3 Taxation Years ss. 78(1) Other Total 135,538, ,538, ,538,656 15,644,948-1,156,64 15,27, 14,488,344

25 Page 25 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Calculated Deemed 26 Interest Expense in 27 EDR model 27 Actual Interest Expense 27 Capitalized Interest (USoA 64) 27Capitalized Interest (USoA 642) 27 Actual Interest 66,14,955 64,537, UNADJUSTED ACCOUNTING DATA L ,537, UNADJUSTED ACCOUNTING DATA L UNADJUSTED ACCOUNTING DATA L 432 Interest Forecast for Tier 1 or 2 Adjustments Total Interest 64,537,426 Excess Interest Expense for 27 PILs Note: The applicant must indicate whether it made an election to capitalize interest incurred on CWIP for tax purposes for 26 and prior years.

26 Page 26 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2 S1 line # Test Year Taxable Income 26 Adjusted Taxable Income Variance Explanation for Variance Net Income Before Taxes 58,173,43 121,986,847-63,813,444 Additions: Interest and penalties on taxes 13 Amortization of tangible assets 2-4 ADJUSTED ACCOUNTING DATA P489 Amortization of intangible assets 2-4 ADJUSTED ACCOUNTING DATA P49 Recapture of capital cost allowance from Schedule 8 Gain on sale of eligible capital property from Income or loss for tax purposes- joint ventures or partnerships ,414, ,56,191 7,854, Loss in equity of subsidiaries and affiliates 11 Loss on disposal of assets 111 Charitable donations 112 Taxable Capital Gains 113 4,287, ,769 3,73,852 Political Donations 114 Deferred and prepaid expenses 116 Scientific research expenditures deducted on financial statements 118 Capitalized interest 119 Non-deductible club dues and fees ,8-142,8 Capital additions projected for 27 Non-deductible meals and entertainment expense ,1-175,1 Non-deductible automobile expenses ,71-19,71 Non-deductible life insurance premiums 123 Non-deductible company pension plans 124 Tax reserves beginning of year 125 Reserves from financial statements- balance at end of year Soft costs on construction and renovation of buildings ,27, 135,67,264 14,356, Book loss on joint ventures or partnerships 25 Capital items expensed 26 Debt issue expense 28 Development expenses claimed in current year 212 Financing fees deducted in books 216 Gain on settlement of debt 22 Non-deductible advertising 226 Non-deductible interest 227 Non-deductible legal and accounting fees 228

27 Page 27 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2 S1 line # Test Year Taxable Income 26 Adjusted Taxable Income Variance Explanation for Variance Recapture of SR&ED expenditures 231 Share issue expense 235 Write down of capital property 236 Amounts received in respect of qualifying environment trust per paragraphs 12(1)(z.1) and (1)(z.2) Other Additions: (please explain in detail the nature of the item) Interest Expensed on Capital Leases 29 Realized Income from Deferred Credit Accounts 291 Pensions 292 Non-deductible penalties 293 Debt Financing Expenses for Book Purposes ,55 455,55 See Attached ,376,264 56,39,788-9,933, Total Additions 333,561, ,915,714 15,645,454 See Test Year Financing Fees schdeule This is substantially all contributions for capital additions which has an equal deduction below. See " Taxable Income Additions" tab. Deductions: Gain on disposal of assets per financial statements 41 11,756,59 2,74,548 9,681,961 Dividends not taxable under section Capital cost allowance from Schedule ,838, ,962,821 21,875,715 Terminal loss from Schedule 8 44 Cumulative eligible capital deduction from Schedule 1 CEC 45 1,66,854 1,146,387-79,533 Allowable business investment loss 46 Deferred and prepaid expenses 49 Scientific research expenses claimed in year 411 Tax reserves end of year 413 Reserves from financial statements - balance at beginning of year ,538, ,567,928 9,97,728 Contributions to deferred income plans 416 Book income of joint venture or partnership 35 Equity in income from subsidiary or affiliates 36 Other deductions: (Please explain in detail the nature of the item) capital asset additions projected for 27 based on 27 projected balances

28 Page 28 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, T2 S1 line # Test Year Taxable Income 26 Adjusted Taxable Income Variance Explanation for Variance Interest capitalized for accounting deducted for tax 39 Capital Lease Payments ,45-48,45 Financing Fees for Tax Under S.2(1)(e) 393 1,587,75 1,121, ,75 See Attached ,827,957 41,4,4-5,176,83 Excess Interest (from Tab "Schedule 7-3") 395 Applicable to Test Year only Total Deductions 33,615, ,925,454 36,69,134 This is substantially all contributions for capital additions which has an equal addition above. See "Test Year Taxable Income Deductions" tab. NET INCOME FOR TAX PURPOSES 61,118, ,977,17-84,858,124 Charitable donations 311 Taxable dividends received under section 112 or Non-capital losses of preceding taxation years from Schedule Net-capital loss carried back from ,84 867,84 Limited partnership losses of preceding taxation years from Schedule LCB from 28 TAXABLE INCOME (C/F to tab "Tax Provision) 6,251, ,977,17-85,725,28

29 Page 29 of 44 Attachment to Test Year Adjusted Taxable Income Toronto Hydro Electric System Limited License Number: File Number: ED RP-XXXX-XXXX, Other Additions 26 Amount 27 Amount Variance ARO Accretion Expenses 359,952 - (359,952) Transition cost recovery 1,947,761 1,947,761 - Transition cost interest recovery 1,675,8 1,675,8 - ITC claimed in prior year - 2, 2, Capital Contributions Under S.12(1)(x) 27,775,951 33,553,495 5,777,544 4,758,672 46,376,264 5,617,592

30 Attachment to Test Year Adjusted Taxable Income Toronto Hydro Electric System Limited License Number: ED File Number: RP-XXXX-XXXX, Toronto Hydro-Electric System Limited Page 3 of 44 Other Deductions 26 Amount 27 Amount Variance ARO Payments - Deductible for Tax 55,832 - (55,832) S.13(7.4) Election 27,775,951 33,553,495 5,777,544 AFUDC included in accounting income - 2,274,462 2,274,462 28,326,783 35,827,957 7,51,174

31 Page 31 of 44 Attachment to Test Year Taxable Income Toronto Hydro Electric System Limited License Number: ED File Number: RP-XXXX-XXXX, Financing Fees Continuity TAX TREATMENT Year of ITA Amortization Original Cost Expenditure Reference Ending NBV 22 LOC 671,25 22 S. 2(1)(e) 134,25 134,25 134,25 134,25 134,25 - THC $5M LOC 811, S. 2(1)(e) 162, , , , ,398 - THC $5M LOC Setup 243,6 24 S. 2(1)(e.1) 243,6 - Debt Issue Costs 2,988, S. 2(1)(e) 597, , , , ,767 - LC and Standby Charge 664, S. 2(1)(e) 132,91 132,91 132,91 132,91 132,91 - THC $5M LLC 47, 25 S. 2(1)(e) 94, 94, 94, 94, 94, - $245MM City Note Repayment 3,, 27 S. 2(1)(e) 6, 6, 6, 6, 6, LOC Setup Fee 47, 28 S. 2(1)(e) 94, 94, 94, 188, $245MM City Note Repayment 3,, 29 S. 2(1)(e) 6, 6, 1,8, CAPEX Program 2,, 29 S. 2(1)(e) 4, 4, 1,2, Total S. 2(1)(e) 134,25 1,27,325 1,27,325 1,121,325 1,121,325 1,587,75 788, 1,788, 1,694, 3,788, Total S. 2(1)(e.1) , ACCOUNTING TREATMENT Original Cost Year of Expenditure Amortization Ending NBV 22 LOC 671, , ,562 - THC $5M LOC 811, ,328 27,664 - THC $5M LOC Setup 243, ,4 81,2 - Debt Issue Costs 2,988, , , , , , , , ,883 72,218 LC and Standby Charge 664, ,551 - THC $5M LLC 47, 25 14, , ,667 52,222 - $245MM City Note Repayment 3,, 27 1, 166, ,667 2,566,666 LOC Setup Fee 47, 28 14, , ,667 52,221 $245MM City Note Repayment 3,, 29 18, 2,82, CAPEX Program 2,, 29 12, 1,88, Total 534,688 1,536, , , ,55 455,55 555,55 622, ,217 8,21,15

32 Page 32 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, If Rate Base is proxy for paid-up capital, use Section A If using actual paid-up capital, use Section B Section A Wires Only ONTARIO CAPITAL TAX Rate Base 1,846,774,689 Less: Exemption 12,5, Deemed Taxable Capital 1,834,274,689 Rate in % Net Amount (Taxable Capital x Rate) 5,227,683

33 Page 33 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Section B Detailed Calculation of the Ontario Capital Tax ONTARIO CAPITAL TAX PAID-UP CAPITAL From 27 Trial Non-Distribution Balance Elimination Wires Only Paid-up capital stock 527,816, ,816,668 Retained earnings (if deficit, use negative sign) 19,44,71 19,44,71 Capital and other surplus excluding appraisal surplus 12,757,392 12,757,392 Loans and advances 1,198,54, 1,198,54, Bank loans Bankers acceptances Bonds and debentures payable Mortgages payable Lien notes payable Deferred credits 21,445, 21,445, Contingent, investment, inventory and similar reserves 13,516,93 13,516,93 Other reserves not allowed as deductions 15,27, 15,27, Share of partnership(s), joint venture(s) paid-up capital Sub-total 2,114,543,61 2,114,543,61

34 Page 34 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Subtract: Amounts deducted for income tax purposes in excess of amounts booked 69,852,471 69,852,471 Deductible R&D expenditures and ONTTI costs deferred for income tax Total (Net) Paid-up Capital 2,44,69,59 2,44,69,59 ELIGIBLE INVESTMENTS Bonds, lien notes, interest coupons Mortgages due from other corporations Shares in other corporations Loans and advances to unrelated corporations Eligible loans and advances to related corporations 795, 795, Share of partnership(s) or joint venture(s) eligible investments Total Eligible Investments 795, 795,

35 Page 35 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, TOTAL ASSETS From 27 Trial Balance Non-Distribution Elimination Wires Only Total assets per balance sheet 2,313,52,76 2,313,52,76 Mortgages or other liabilities deducted from assets Share of partnership(s)/ joint venture(s) total assets Deduct Investment in partnership(s)/joint venture(s) Total assets as adjusted 2,313,52,76 2,313,52,76 Add: (if deducted from assets) Contingent, investment, inventory and similar reserves Other reserves not allowed as deductions 15,27, 15,27, Deduct Amounts deducted for income tax purposes in excess of amounts booked 69,852,471 Deductible R&D expenditures and ONTTI costs deferred for income tax 69,852,471 Deduct Appraisal surplus if booked

36 Page 36 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Other adjustments (if deducting, use negative sign) Total Assets 2,393,676,65 2,393,676,65 Investment Allowance 679,93 679,93 Taxable Capital Net paid-up capital 2,44,69,59 2,44,69,59 Investment Allowance 679,93 679,93 Taxable Capital 2,44,11,497 2,44,11,497 Capital Tax Calculation Deduction from taxable capital up to $15,, 12,5, 12,5, Net Taxable Capital 2,31,511,497 Rate.285% Ontario Capital Tax (Deductible, not grossed-up) 5,789,88

37 Page 37 of 44 Attachment to Test Year OCT Toronto Hydro Electric System Limited License Number: ED File Number: RP-XXXX-XXXX, Loans and Advances Advances from Associated Companies 18,, current prtion of LT liabilities 16,6, LT Customer deposits 2,74, Notes Payable to Associated Companies 98,231, Obligations under capital leases - current 458, Obligations under capital leases - non current 511, Total 1,198,54,

38 Page 38 of 44 Attachment to Test Year OCT Toronto Hydro Electric System Limited License Number: ED File Number: RP-XXXX-XXXX, Amounts Deducted for Income Tax > of Amounts Booked 12/31/26 Per Income Tax Return 52,44,726 ADD: 27 CCA 144,838, CEC Amount 1,66,854 LESS: 27 Amortization Expense (132,414,733) ADD: 27 AFUDC 2,274,462 ADD: 27 S. 2(1)(e) amounts 1,587,75 LESS: 27 Accounting amort. of finance fees 455,55 69,852,471

39 Page 39 of 44 Name of Utility: Toronto Hydro-Electric System Limited License Number: ED File Numbers: RP-XXXX-XXXX, Wires Only Regulatory Taxable Income - From 'Test Year Taxable Income' 6,251,899 Corporate Income Tax Rate 36.12% Total Income Taxes 21,762, Actual Variance Explanation of Variance Investment Tax Credits 2, 2, Miscellaneous Tax Credits Total Tax Credits 2, 2, Corporate PILs/Income Tax Provision for Test Year 21,562,986 Ontario Capital Tax 5,789,88 INCLUSION IN RATES Income Tax (grossed-up) 33,755,457 Ontario Capital Tax (not grossed-up) 5,789,88 Tax Provision for 27 EDR Model Rate Recovery (EDR Model Tab "4-2 OUTPUT from PILS MODEL" cell E15) 39,545,265

40 Page 4 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, CCA Class October 1, 21 FMV Bump FMV Bump Non- Distribution Utility FMV Bump 162 Buildings and Fixtures 1 2,61,316 2,61, Boiler Plant Equipment Reservoirs, Dams and Waterways Roads, Railroads and Bridges Buildings and Fixtures Station Equipment 1 17,23,3 17,23,3 172 Towers and Fixtures Poles and Fixtures Overhead Conductors and Devices 1 79,23,615 79,23, Underground Conduit Underground Conductors and Devices 1 176,82,14 176,82, Roads and Trails Buildings and Fixtures Transformer Station Equipment - Normally Primary above 5 kv Distribution Station Equipment - Normally Primary below 5 kv Storage Battery Equipment Poles, Towers and Fixtures Overhead Conductors and Devices Underground Conduit Underground Conductors and Devices Line Transformers 1 5,725,985 5,725, Services Meters 1 13,381,544 13,381, Other Installations on Customer's Premises Leased Property on Customer Premises Buildings and Fixtures Contributions and Grants - Credit 1 21 Electric Plant Purchased or Sold 1 22 Experimental Electric Plant Unclassified 1 23 Electric Plant and Equipment Leased to Others 1 24 Electric Plant Held for Future Use 1 25 Completed Construction Not Classified--Electric 1 27 Other Utility Plant 1 xxx1 Fixed Assets for Conservation and Demand Management 1

41 Page 41 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, CCA Class October 1, 21 FMV Bump FMV Bump Non- Distribution Utility FMV Bump xxx2 Smart Meters 1 SUBTOTAL - CLASS 1 339,44, ,44, Buildings and Fixtures Boiler Plant Equipment Reservoirs, Dams and Waterways Roads, Railroads and Bridges Buildings and Fixtures Station Equipment 2 9,166,247 9,166, Towers and Fixtures Poles and Fixtures Overhead Conductors and Devices 2 42,662,639 42,662, Underground Conduit Underground Conductors and Devices 2 95,582,87 95,582, Roads and Trails Buildings and Fixtures Transformer Station Equipment - Normally Primary above 5 kv Distribution Station Equipment - Normally Primary below 5 kv Storage Battery Equipment Poles, Towers and Fixtures Overhead Conductors and Devices Underground Conduit Underground Conductors and Devices Line Transformers 2 27,313,992 27,313, Services Meters 2 7,25,447 7,25, Other Installations on Customer's Premises Leased Property on Customer Premises Buildings and Fixtures Contributions and Grants - Credit 2 21 Electric Plant Purchased or Sold 2 22 Experimental Electric Plant Unclassified 2 23 Electric Plant and Equipment Leased to Others 2 24 Electric Plant Held for Future Use 2 25 Completed Construction Not Classified--Electric 2

42 Page 42 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, CCA Class October 1, 21 FMV Bump FMV Bump Non- Distribution Utility FMV Bump 27 Other Utility Plant 2 xxx1 Fixed Assets for Conservation and Demand Management 2 xxx2 Smart Meters 2 SUBTOTAL - CLASS 2 181,931, ,931, Street Lighting and Signal Systems Office Furniture and Equipment 8 24,914 24, Stores Equipment 8 1,813,98 1,813, Tools, Shop and Garage Equipment Measurement and Testing Equipment Power Operated Equipment Communication Equipment 8 2,62,452 2,62, Miscellaneous Equipment 8 4,228,318 4,228, Water Heater Rental Units Load Management Controls - Customer Premises Load Management Controls - Utility Premises System Supervisory Equipment 8 29,191,326 29,191, Sentinel Lighting Rental Units Other Tangible Property 8 SUBTOTAL - CLASS 8 37,86,99 37,86, Computer Equipment - Hardware 45 5,731,3 5,731,3 SUBTOTAL - CLASS 45 5,731,3 5,731,3 193 Transportation Equipment 1 5,31,287 5,31,287 SUBTOTAL - CLASS 1 5,31,287 5,31, Computer Software - CL ,621,766-36,621,766 SUBTOTAL - CLASS 12-36,621,766-36,621, Leasehold Improvements ,21-268, Leasehold Improvements Leasehold Improvements Leasehold Improvements 13 4 SUBTOTAL - CLASS ,21-268, Engines and Engine-Driven Generators Turbogenerator Units Water Wheels, Turbines and Generators Fuel Holders, Producers and Accessories Prime Movers Generators 43.1

43 Page 43 of 44 Name of Utility: License Number: File Numbers: Toronto Hydro-Electric System Limited ED RP-XXXX-XXXX, CCA Class October 1, 21 FMV Bump FMV Bump Non- Distribution Utility FMV Bump 168 Accessory Electric Equipment Miscellaneous Power Plant Equipment 43.1 SUBTOTAL - Generating Equipment 25 Property Under Capital Leases CL 275 Non-Utility Property Owned or Under Capital Leases CL SUBTOTAL - Capital Leases 166 Organization ECP 11,726,74 11,726, Miscellaneous Intangible Plant ECP 1616 Land Rights ECP 176 Land Rights ECP 186 Land Rights ECP 196 Land Rights ECP 26 Electric Plant Acquisition Adjustment ECP 265 Other Electric Plant Adjustment ECP 168 Franchises and Consents 14 SUBTOTAL - Eligible Capital Property 11,726,74 11,726, Land LAND 175 Land LAND 185 Land LAND 195 Land LAND SUBTOTAL - Land 255 Construction Work in Progress--Electric WIP Yard Improvements 17 5,854, 5,854, Total FMV Bump-up 55,56,31 55,56,31

44 Page 44 of 44 Fair Market Value (FMV) Bump Supplementry Toronto Hydro Electric System Limited License Number: ED File Number: RP-XXXX-XXXX, Class Class Description October 1, 21 FMV Bump Rate % Remaining balance of Bump 24 Remaining balance of Bump 26 Remaining balance of Bump 28 1 Buildings; Electrical generating or distributing equipment and plant (including structures) acquired after ,44,594 4% 287,966,36 265,389, ,583,237 2 Electrical generating or distributing equipment acquired before ,931,132 6% 142,42, ,58,79 11,899,567 8 Office furniture and equipment; Electrical generating equipment acquired after May 25, 1976 that has a max load of not more than 15kws; Portable electrical generating equipment and radio communication equipment acquired after May 25, ,86,99 2% 15,57,862 9,925,31 6,352,2 1 Automotive equipment & vehicle; Computer hardware - computer hardware and system software 11,32,587 3% 2,648,924 1,297, ,7 12 Application software- - subject to half-year rule (36,621,766) 1% Leasehold Improvements - SL w/ estimated 5 year useful (268,21) 2% (53,642) Yard improvements 5,854, 8% 4,193,764 3,549,62 3,4,383 CEC Cumulative Eligible Capital 11,726,74 7% 8,772,184 7,587,62 6,562,5 Total 55,56,31 461,77, ,258, ,37,264