20 Va. Admin. Code § 5-403-70:1
Instructions: This schedule shall state the amount of each capital component per balance sheet, the amount for ratemaking purposes, the percentage weight in the capital structure, the component cost, and the weighted capital cost, using the format of the attached schedule. This information shall be provided for the test period. In Part A, the test period information should be compatible with the State Corporation Commission Annual Operating Report. The methodology used in constructing the capital structure should be consistent with that approved in the applicant's last rate case. If the applicant wishes to use a different methodology (including a change in cost of equity) in constructing its capital structure in a rate application, it may prepare an additional schedule labeled as Schedule 1(a) explaining the methodology used and justifying any departure from applicant's last rate case.
The amounts and costs for short-term debt, revolving credit agreements, and similar arrangements shall be based on a 13-month average over the test year, or, preferably, a daily average during the test year, if available. All other test period amounts are end-of-year. The component weighted cost rates equal the product of each component's capital structure weight for ratemaking purposes times its cost rate. The weighted cost of capital is equal to the sum of the component weighted cost rates.
Schedule 1
Capital Structure and Cost of Capital Statement Test Period
Short-Term Debt
Customer Deposits
Other Current Liabilities
Long-Term Debt
Common Equity
Investment Tax Credits
Other Tax Deferrals
Other Liabilities
Total Capitalization
Short-Term Debt
Long-Term Debt
Job Development Credits
Cost-Free Capital
Common Equity
Total Capitalization
Short-Term Debt
Long-Term Debt
Job Development Credits
Cost-Free Capital
Common Equity
Total Capitalization (100%)
Short-Term Debt
Long-Term Debt
Job Development Credits
Cost-Free Capital
Common Equity (Authorized)
Short-Term Debt
Long-Term Debt
Job Development Credits
Cost-Free Capital
Common Equity (Authorized)
Weighted Cost of Capital
Schedule 2
Schedule of Bonds, Mortgages, Other Long-Term Debt, and Cost-Free Capital
Instructions: Provide a description of each issue, amount outstanding, percentage of total capitalization, and annualized cost based on the embedded cost rate. These data shall support the debt cost contained in Schedule 1. Provide a detailed breakdown of all cost-free capital items contained in Schedule 1.
Schedule 3
Schedule of All Short-Term Debt, Revolving Credit Agreements, and Similar Arrangements
Instructions: Provide data and explain the methodology used to calculate the cost and balance contained in Schedule l for short-term debt, revolving credit agreements, and similar arrangements.
Schedule 4
Stockholders' Annual Report
Instructions: Provide a copy of the most recent stockholders' annual report and SEC Form 10K (if SEC Form 10K is available).
Schedule 5
Company Profitability and Capital Markets Data
Instructions: This schedule shall be prepared by companies having more than $3 million in gross annual operating revenue which are not a subsidiary of a telecommunications company, using the definitions provided below and the format of the attached schedule. These companies shall provide data for the two most recent calendar years plus the test period. This information shall be compatible with the latest Stockholders' Annual Reports (including any restatements).
Definitions
| Return on Year-End Equity* = | Earnings Available for Common Stockholders |
| Year-End Common Equity |
| Return on Average Equity* = | Earnings Available for Common Stockholders |
| The Average of Year-End Equity for the Current & Previous Year |
| Earnings Per Share (EPS) = | Earnings Available for Common Shareholders |
| Average No. Common Shares Outstanding |
Dividends Per Share (DPS) = Common Dividends Paid Per Share During the Year
Payout Ratio = DPS/EPS
Average Market Price** = (Yearly High + Yearly Low Price)/2 (if known)
*Job Development Credits shall not be included as part of equity capital nor shall a deduction be made from earnings for a capital charge on these Job Development Credits.
**An average based on monthly highs and lows is also acceptable. If this alternative is chosen, provide monthly market prices and sufficient data to show how the calculation was made.
Schedule 5
Company Profitability and Capital Market Data Test Period
Return on Year-End Equity
Return on Average Equity
Earnings Per Share
Dividends Per Share
Payout Ratio
Market Price of Common Stock:
Year's High
Year's Low
Average Price
External Funds Raised -- All Sources (itemized)
Dollar Amount Raised
Coupon Rate (if applicable)
Rating Service (if applicable)
Average Offering Price (for Stock)
Schedule 6
Coverage Ratios and Cash Flow Profile Data
Instructions: This schedule shall be prepared using the definitions and instructions given below and using the format of the attached schedule for the past two calendar years plus the test period.
- Interest (lines 3, 4, 5) shall include amortization of discount expense and premium on debt without deducting an allowance for borrowed funds used during construction.
- Income taxes (line 2) shall include federal and state income taxes (in Virginia gross receipts tax should be considered State income tax).
- Earnings before interest and taxes (line 6) equals net income plus income taxes plus total interest = (line 1) + (line 2) + (line 5).
- IDC (line 8), where applicable, is total IDC - allowance for borrowed and other funds.
- Cash flow generated (line 14) = (line 1) + (line 9) + (line 10) + (line 11) + (line 12) - (line 8) - (line 13).
- Construction expenditures (line 15) is net of IDC.
Coverage definitions for Schedule 6
| Pre-Tax Interest Coverage = | Earnings before Interest & Taxes | = | line 6 |
| Interest | line 5 |
| Common Dividend Coverage = | Cash Flow Generated | = | line 14 |
| Common Dividends | line 16 |
| Cash Coverage of Construction Expenditures = | Cash Flow Generated | = | line 14 |
| Construction | line 15 |
Schedule 6
Coverage Ratios and Cash Flow Data Test Period
Interest Coverage Ratios
Cash Flow Coverage Ratios
Data for Interest Coverage
Line 1. Net Income
Line 2. Income Taxes
Line 3. Interest on Mortgages
Line 4. Other Interest
Line 5. Total Interest
Line 6. Earnings Before Interest and Taxes
Line 7. Estimated Rental Interest Factor (SEC)
Data for Cash Flow Coverage
Line 1. Net Income
Line 8. Interest During Construction (IDC)
Line 9. Amortization
Line 10. Depreciation
Line 11. Change in Deferred Taxes
Line 12. Change in Investment Tax Credits
Line 13. Preferred Dividends Paid
Line 14. Cash Flow Generated
Line 15. Construction Expenditures
Line 16. Common Dividends Paid
Schedule 7
Comparative Balance Sheets
Instructions: Provide a comparative balance sheet for the test period and the corresponding 12-month period immediately preceding the test period.
Schedule 8
Comparative Income Statement
Instructions: Provide a comparative income statement for the test period and the 12-month period immediately preceding the test period.
Schedule 9
Rate of Return Statement
Instructions: Use the format of the attached schedule. Column 1 should state the Applicant's total Company per books results for the test period. Non-jurisdictional amounts will be shown in Column 2, and Column 3 will reflect Virginia jurisdictional amounts. Adjustments to test period per books results shall be shown in Column 4. These adjustments shall be explained in Schedule 11. If a calendar year test period is used, Column 1 can be prepared from information filed by Applicant in its annual report to the commission. If a calendar year test period is used, operating revenue line items can be found in Schedule 34 at page 58 of the Annual Report. "Depreciation and Amortization" is set forth on Line 23 of Schedule 35 at page 60 of the Annual Report. "Operating and Maintenance Expense" can be derived by subtracting the amount of depreciation and amortization expense from total operating expenses (Schedule 35, line 68). Interest on customer deposits must be calculated from Applicant's books. Column 6 should show the increase requested by Applicant.
Schedule 9
Rate of Return Statement Test Period
| Total Company Per Books | Virginia Non-Jurisdic. Amounts | Jurisdic. Amounts | Amounts Adjustments | Effect of After Adjustments | After Proposed Increase | Proposed Increase | |
| Col. (1) | Col. (2) | Col. (3) | Col. (4) | Col. (5) | Col. (6) | Col. (7) | |
| Operating Revenues | |||||||
| Local Service | |||||||
| Toll Service | |||||||
| Access Charges | |||||||
| Miscellaneous | |||||||
| Less: Uncollectible | |||||||
| Total Revenues | |||||||
| Operating Expenses | |||||||
| Operating and Maintenance Expense | |||||||
| Depreciation and Amortization | |||||||
| Income Taxes | |||||||
| Taxes Other than Income Taxes | |||||||
| Gain/Loss on Property Disposition | |||||||
| Total Expenses | |||||||
| Operating Income | |||||||
| Less: Charitable Donations | |||||||
| Interest Expense on Customer Deposits | |||||||
| Net Operating Income -- Adjusted | |||||||
| Plus: Other Income (Expense) | |||||||
| Less: Interest Expense | |||||||
| Preferred Dividend Expense | |||||||
| JDC Capital Expense | |||||||
| Income Available for Common Equity | |||||||
| Allowance for working capital | |||||||
| Net Utility Plant | |||||||
| Total Rate Base | |||||||
| Total Capital for Ratemaking | |||||||
| Common Equity Capital | |||||||
| Rate of Return Earned on Rate Base | |||||||
| Rate of Return Earned on Common Equity |
Schedule 10
Statement of Net Original Cost of Utility Plant and Allowances for Working Capital for the Test Year
Instructions: This schedule should be constructed using the ratemaking policies, procedures, and guidelines last prescribed for Applicant by the commission. The schedule should indicate all property held for future use by account number and the date of the planned use should be shown. In a footnote, applicant should identify the amount of plant and working capital devoted to non-regulated business activities, if any. Such plant shall not be included in the rate base. Applicants should use the format described below. The unamortized balance of investment tax credits shall be deducted from the rate base if the telephone company is subject to Option 1 treatment under I.R.S. Code § 46(f). Column (4) adjustments should be explained and detailed in Schedule 11. Columns (2) and (3) only apply to companies with over $3,000,000 in gross annual operating revenues which are subsidiaries of telecommunications companies.
Schedule 10
Net Original Cost of Utility Plant and Allowances
| Total Company Per Books | Non-Jurisdic. Amounts | Jurisdic. Amounts | Adjustments | Amounts After Adjustments | |
| Col. (1) | Col. (2) | Col. (3) | Col. (4) | Col. (5) | |
| Telephone Plant in Service | |||||
| Telephone Plant under construction | |||||
| Property held for future use | |||||
| Gross Plant | |||||
| Less: Reserve for Depreciation | |||||
| Net Telephone Plant | |||||
| Allowance for Working Capital | |||||
| Materials and supplies (13-month average) | |||||
| Cash (20 days of O&M expenses) | |||||
| Total Allowance for Working Capital | |||||
| Other Rate Base Deductions: | |||||
| Customer Deposits | |||||
| Deferred Federal Income Taxes | |||||
| Customer Advances for Construction | |||||
| Option 1 Investment Tax Credits | |||||
| Total Other Rate Base Deductions | |||||
| Rate Base |
Schedule 11
Explanation of Adjustments to Book Amounts
Instructions: All ratemaking adjustments to test period operations (test period and proforma) are to be fully explained in a supporting schedule to the applicant's Schedules 9 and 10. Such adjustments shall be numbered sequentially beginning with operating revenues. Supporting data for each adjustment, including the details of its calculation, should be provided. Examples of adjustments include:
Schedule 12
Working Papers
Instructions: Provide detailed work papers and supporting schedules of all proposed adjustments. Two copies of this exhibit shall be filed with the commission's Division of Utility Accounting and Finance. Copies shall be provided to other parties on request. Each schedule shall identify sources of all data. Data shall be clearly identified as actual or estimated.
Schedule 13
Revenue and Expense Schedule
Instructions: The applicant shall provide information about revenues by primary account (consumer classification) and operating and maintenance expenses by primary account during the test period.
The applicant shall also provide a detailed explanation of all revenue and expense item increases and decreases of more than 10% during the test period as compared to the 12-month period immediately preceding the test period. Worksheets used to compute the percentage change should be available for review upon request.
Schedule 14
Explanation of Proposed Revenue Requirement Calculation
Instructions: Provide a schedule describing the methodology used to determine the revenue requirement shown on Schedule 9, Column 6.
Schedule 15
Additional Revenues
Instructions: Show the calculations of the additional gross revenues and percentage increases by customer classes that would be produced by the new rates during the test period.
Schedule 16
Statement of Compliance
Instructions: Include the following statement signed by the person(s) sponsoring the application:
I, (Name of Sponsoring Party), (Title), affirm that this application complies with the commission's rules for small investor-owned telephone utilities' applications for increases in rates, and I further affirm that the schedules filed to support the application comply with the instructions for the schedules set forth in the Appendix to those rules.
| (Signature of Sponsoring Party) | (Date) |
20 Va. Admin. Code § 5-403-70:1
Statutory Authority
§ 12.1-13 of the Code of Virginia.