Schedule 6.2 SCHEDULE OF FLOW-THROUGH INCOME TAXES SCHEDULE NO. PARTICULARS AMOUNT REFERENCE (a) (b) (c) 1 Return On Rate Base 822,364 5.2 2 Equity Component: ( 3.14 * 822,364 ) 278,858 9.26 Add: 3 Depreciation 362,243 7.2 4 Large Corporation Tax 19,778 6.2.7 5 Non-allowed Provincial Capital Tax 793 6.2.3 6 Non-allowed Amortization of Debt Discount & Expense 3,451 6.2.2 7 Other Expenses (10,096) 6.2.3 8 Sub-total 376,169 Deduct: 9 Capital Cost Allowance 437,548 6.2.4 10 Benefits Capitalized 617 11 Eligible Capital Expenses 687 6.2.3 12 Interest AFUDC 660 6.2.5 13 Issue Costs 6,162 6.2.3 14 Sub-total 445,674 15 Total Taxable Income 209,353 16 Taxes thereon at 0.38704 / 0.61296 132,191 6.2.1 17 Add: Non-allowed Provincial Capital Tax 793 6.2.3 18 Recovery of Large Corporation Tax 19,778 6.2.7 19 Utility Income Tax Requirement 152,762
CALCULATION OF CURRENT INCOME TAX RATE NO. PARTICULARS 1 Allocation of taxable income to provinces based on composite average of salaries paid within each province and kilometers of pipe located within each province applied to the current provincial statutory income tax rate. COMPOSITE INCOME EFFECTIVE SALARIES KILOMETERS AVERAGE TAX RATE RATE 2 PROVINCE PERCENTAGE OF PIPE PERCENTAGE % % % (a) (b) (c) (d) (e) (f) (g) (h) 3 British Columbia 1,958 0.997 307.00 1.98 1.48 13.500 0.200 4 Alberta 156,721 79.769 11.78 0.08 39.92 13.125 5.240 5 Saskatchewan 6,599 3.359 3,766.13 24.269 13.81 17.000 2.348 6 Manitoba 5,012 2.551 2,805.64 18.08 10.32 16.500 1.703 7 Ontario 23,112 11.764 8,029.42 51.74 31.75 12.500 3.969 8 Quebec 3,067 1.561 598.41 3.86 2.71 9.042 0.245 9 Total 196,469 100 15,518.38 100 100 10 Composite Provincial Tax Rate 13.704 11 Federal Tax Rate 25.000 12 Income Tax Rate for the Forecast Year Ending December 31, 2002 38.704 Schedule 6.2.1
Schedule 6.2.2 CALCULATION OF NON-ALLOWED DEBT DISCOUNT AND EXPENSE NO. PARTICULARS AMOUNT (a) (b) 1 Amortization of Debt, Discount and Expense - Debt Rate of Return Schedule 2.2.2 2,815 2 Amortization of Debt, Discount and Expense - Junior Subordinated Debentures Rate of Return Schedule 3.2.2 636 3 Total 3,451
Schedule 6.2.3 INCOME TAX EXPENSE SCHEDULE NO. PARTICULARS AMOUNT (a) (b) A. CALCULATION OF ELIGIBLE CAPITAL EXPENSES 1 Unamortized Balance at January 1, 2002 9,821 2 Additions - Land Rights (@75%) 0 3 Balance at December 31, 2002 9,821 4 Amount Available for Tax Deduction at 7% of Line 3 687 5 Unamortized Balance at January 1, 2003 9,134 B. CALCULATION OF OTHER EXPENSES 6 50% Meal and Entertainment - Expenses non-deductible 592 7 Non Funded Pension Expense (9,994) 8 Post Employment Benefits (694) 9 Total Non-Allowed Expenses (10,096) C. CALCULATION OF FINANCING COSTS 10 Medium Term Notes 1,718 11 Preferred Securities 4,444 12 Proposed Debt 0 13 Total Financing Costs 6,162 D. CALCULATION OF ALBERTA ADDITIONAL NON-ALLOWED EXPENSES 14 Non-Allowed Provincial Capital Tax 15,127 X.3992 X.13125 793
Schedule 6.2.4 SCHEDULE OF CAPITAL COST ALLOWANCE UNDEPRECIATED BALANCE CAPITAL COST ADDITIONS BEFORE MAXIMUM CLOSING NO. CLASS OPENING BALANCE (NET) CLAIM CLAIM BALANCE (a) (b) (c) (d) (e) (f) 1 Class 1 - Full (4%) 4,339,554 4,339,554 173,582 4,185,326 2 - Half Year 19,749 19,749 395 3 Class 2 - Full (6%) 558,359 558,359 33,502 524,857 4 Class 3 - Full (5%) 28,597 28,597 1,430 27,167 5 Class 8 - Full (20%) 974,073 0 974,073 194,815 819,807 6 - Half Year 45,055 45,055 4,506 7 Class 9 - Full (25%) 0 0 0 0 8 - Half Year 0 0 0 9 Class 10 - Full (30%) 70,218 70,218 21,065 53,830 10 - Half Year 5,502 5,502 825 11 Class 12 - Full (100% 0 0 0 5,590 12 - Half Year 11,181 11,181 5,591 13 Class 13 - Full (S/L) 13,605 13,605 1,822 12,080 14 - Half Year 313 313 16 15 Total 5,984,406 81,799 6,066,205 437,548 5,628,656 CAPITAL COST ALLOWANCE RECONCILIATION NO. PARTICULARS AMOUNT (a) (b) 1 Transfers to GPIS in 2002 53,118 2 Regulated General Plant Additions in 2002 25,442 Adjustments 3 Net Proceeds - Retirements 5,960 4 Benefits Capitalized (617) 5 Materials & Supplies (1,007) 6 Contribution in Aid of Construction (1,097) 7 Total Adjustments 3,239 8 Capital Cost Allowance Additions per Line 15 above 81,799
Schedule 6.2.5 CALCULATION OF INTEREST AFUDC Interest AFUDC = Interest Component of Rate of Return X AFUDC Rate of Return = 6.12 X $999 9.26 = $660
Schedule 6.2.6 CONTINUITY OF UTILITY CAPITAL LOSS CARRY FORWARD AMOUNT NO. PARTICULARS (a) (b) 1 Capital Loss Carried Forward from 2001 81,893 2 Capital Loss for 2002 0 3 Total Capital Loss Carried Forward 81,893
Schedule 6.2.7 CALCULATION OF FEDERAL LARGE CORPORATION TAX NO. PARTICULARS Amount As at December 31 1 Deemed Debt 5,896,003 2 Common Equity 2,904,001 3 Capital Tax Deduction (10,000) 4 Taxable Capital 8,790,004 5 Tax Rate 0.225% 6 Capital Tax Expense 19,778