{"data":{"id":"us-va/20vac5-403-70-1","jurisdiction":"us-va","citation":"20VAC5-403-70:1","heading":"APPENDIX A","body":"APPENDIX A\n\nSchedule 1\n\nCapital Structure and Cost of Capital Statement\n\nInstructions: 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.\n\nThe 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.\n\nSchedule 1\n\nCapital Structure and Cost of Capital Statement Test Period\n\nA. Capital Structure Per Balance Sheet ($)\n\nShort-Term Debt\n\nCustomer Deposits\n\nOther Current Liabilities\n\nLong-Term Debt\n\nCommon Equity\n\nInvestment Tax Credits\n\nOther Tax Deferrals\n\nOther Liabilities\n\nTotal Capitalization\n\nB. Capital Structure Approved for Ratemaking Purposes ($)\n\nShort-Term Debt\n\nLong-Term Debt\n\nJob Development Credits\n\nCost-Free Capital\n\nCommon Equity\n\nTotal Capitalization\n\nC. Capital Structure Weights for Ratemaking Purposes (%)\n\nShort-Term Debt\n\nLong-Term Debt\n\nJob Development Credits\n\nCost-Free Capital\n\nCommon Equity\n\nTotal Capitalization (100%)\n\nD. Component Capital Cost Rates (%)\n\nShort-Term Debt\n\nLong-Term Debt\n\nJob Development Credits\n\nCost-Free Capital\n\nCommon Equity (Authorized)\n\nE. Component Weighted Cost Rates (%)\n\nShort-Term Debt\n\nLong-Term Debt\n\nJob Development Credits\n\nCost-Free Capital\n\nCommon Equity (Authorized)\n\nWeighted Cost of Capital\n\nSchedule 2\n\nSchedule of Bonds, Mortgages, Other Long-Term Debt, and Cost-Free Capital\n\nInstructions: 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.\n\nSchedule 3\n\nSchedule of All Short-Term Debt, Revolving Credit Agreements, and Similar Arrangements\n\nInstructions: 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.\n\nSchedule 4\n\nStockholders' Annual Report\n\nInstructions: Provide a copy of the most recent stockholders' annual report and SEC Form 10K (if SEC Form 10K is available).\n\nSchedule 5\n\nCompany Profitability and Capital Markets Data\n\nInstructions: 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).\n\nDefinitions\n\nReturn on Year-End Equity* =\n\nEarnings Available for Common Stockholders\n\nYear-End Common Equity\n\nReturn on Average Equity* =\n\nEarnings Available for Common Stockholders\n\nThe Average of Year-End Equity for the Current \u0026 Previous   Year\n\nEarnings Per Share (EPS) =\n\nEarnings Available for Common Shareholders\n\nAverage No. Common Shares Outstanding\n\nDividends Per Share (DPS) = Common Dividends Paid Per Share During the Year\n\nPayout Ratio = DPS/EPS\n\nAverage Market Price** = (Yearly High + Yearly Low Price)/2 (if known)\n\n*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.\n\n**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.\n\nSchedule 5\n\nCompany Profitability and Capital Market Data Test Period\n\nA. Ratios\n\nReturn on Year-End Equity\n\nReturn on Average Equity\n\nEarnings Per Share\n\nDividends Per Share\n\nPayout Ratio\n\nMarket Price of Common Stock:\n\nYear's High\n\nYear's Low\n\nAverage Price\n\nB. External Funds Raised\n\nExternal Funds Raised -- All Sources (itemized)\n\nDollar Amount Raised\n\nCoupon Rate (if applicable)\n\nRating Service (if applicable)\n\nAverage Offering Price (for Stock)\n\nSchedule 6\n\nCoverage Ratios and Cash Flow Profile Data\n\nInstructions: 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.\n\n- 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.\n\n- Income taxes (line 2) shall include federal and state income taxes (in Virginia gross receipts tax should be considered State income tax).\n\n- Earnings before interest and taxes (line 6) equals net income plus income taxes plus total interest = (line 1) + (line 2) + (line 5).\n\n- IDC (line 8), where applicable, is total IDC - allowance for borrowed and other funds.\n\n- Cash flow generated (line 14) = (line 1) + (line 9) + (line 10) + (line 11) + (line 12) - (line 8) - (line 13).\n\n- Construction expenditures (line 15) is net of IDC.\n\nCoverage definitions for Schedule 6\n\nPre-Tax Interest Coverage =\n\nEarnings before Interest \u0026 Taxes\n\n=\n\nline 6\n\nInterest\n\nline 5\n\nCommon Dividend Coverage =\n\nCash Flow Generated\n\n=\n\nline 14\n\nCommon Dividends\n\nline 16\n\nCash Coverage of Construction Expenditures =\n\nCash Flow Generated\n\n=\n\nline 14\n\nConstruction\n\nline 15\n\nSchedule 6\n\nCoverage Ratios and Cash Flow Data Test Period\n\nInterest Coverage Ratios\n\na. Pre-Tax Method\n\nCash Flow Coverage Ratios\n\na. Common Dividend Coverage\n\nb. Cash Flow Coverage of Construction Expenditures\n\nData for Interest Coverage\n\nLine 1. Net Income\n\nLine 2. Income Taxes\n\nLine 3. Interest on Mortgages\n\nLine 4. Other Interest\n\nLine 5. Total Interest\n\nLine 6. Earnings Before Interest and Taxes\n\nLine 7. Estimated Rental Interest Factor (SEC)\n\nData for Cash Flow Coverage\n\nLine 1. Net Income\n\nLine 8. Interest During Construction (IDC)\n\nLine 9. Amortization\n\nLine 10. Depreciation\n\nLine 11. Change in Deferred Taxes\n\nLine 12. Change in Investment Tax Credits\n\nLine 13. Preferred Dividends Paid\n\nLine 14. Cash Flow Generated\n\nLine 15. Construction Expenditures\n\nLine 16. Common Dividends Paid\n\nSchedule 7\n\nComparative Balance Sheets\n\nInstructions: Provide a comparative balance sheet for the test period and the corresponding 12-month period immediately preceding the test period.\n\nSchedule 8\n\nComparative Income Statement\n\nInstructions: Provide a comparative income statement for the test period and the 12-month period immediately preceding the test period.\n\nSchedule 9\n\nRate of Return Statement\n\nInstructions: 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.\n\nSchedule 9\n\nRate of Return Statement Test Period\n\nTotal Company Per Books\n\nVirginia Non-Jurisdic. Amounts\n\nJurisdic. Amounts\n\nAmounts Adjustments\n\nEffect of After Adjustments\n\nAfter Proposed Increase\n\nProposed Increase\n\nCol. (1)\n\nCol. (2)\n\nCol. (3)\n\nCol. (4)\n\nCol. (5)\n\nCol. (6)\n\nCol. (7)\n\nOperating Revenues\n\nLocal Service\n\nToll Service\n\nAccess Charges\n\nMiscellaneous\n\nLess: Uncollectible\n\nTotal Revenues\n\nOperating Expenses\n\nOperating and Maintenance Expense\n\nDepreciation and Amortization\n\nIncome Taxes\n\nTaxes Other than Income Taxes\n\nGain/Loss on Property Disposition\n\nTotal Expenses\n\nOperating Income\n\nLess: Charitable Donations\n\nInterest Expense on Customer Deposits\n\nNet Operating Income -- Adjusted\n\nPlus: Other Income (Expense)\n\nLess: Interest Expense\n\nPreferred Dividend Expense\n\nJDC Capital Expense\n\nIncome Available for Common Equity\n\nAllowance for working capital\n\nNet Utility Plant\n\nTotal Rate Base\n\nTotal Capital for Ratemaking\n\nCommon Equity Capital\n\nRate of Return Earned on Rate Base\n\nRate of Return Earned on Common Equity\n\nSchedule 10\n\nStatement of Net Original Cost of Utility Plant and Allowances for Working Capital for the Test Year\n\nInstructions: 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.\n\nSchedule 10\n\nNet Original Cost of Utility Plant and Allowances\n\nTotal Company Per Books\n\nNon-Jurisdic. Amounts\n\nJurisdic. Amounts\n\nAdjustments\n\nAmounts After Adjustments\n\nCol. (1)\n\nCol. (2)\n\nCol. (3)\n\nCol. (4)\n\nCol. (5)\n\nTelephone Plant in Service\n\nTelephone Plant under construction\n\nProperty held for future use\n\nGross Plant\n\nLess: Reserve for Depreciation\n\nNet Telephone Plant\n\nAllowance for Working Capital\n\nMaterials and supplies (13-month average)\n\nCash (20 days of O\u0026M expenses)\n\nTotal Allowance for Working Capital\n\nOther Rate Base Deductions:\n\nCustomer Deposits\n\nDeferred Federal Income Taxes\n\nCustomer Advances for Construction\n\nOption 1 Investment Tax Credits\n\nTotal Other Rate Base Deductions\n\nRate Base\n\nSchedule 11\n\nExplanation of Adjustments to Book Amounts\n\nInstructions: 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:\n\n1. Adjustments to annualize changes occurring during the test period.\n\n2. Adjustments to reflect known and certain changes in wage agreements and payroll taxes occurring in the test period and proforma period (the 12-month period following the test period).\n\n3. Adjustments to reflect depreciation and property taxes based on end-of-period plant balances.\n\n4. Adjustments relating to other known changes occurring during the test period or proforma period.\n\n5. Amounts relating to known and certain changes in company operations that take place in the proforma period can be adjusted through the end of the rate year. The rate year shall be defined as the 12 months following the effective date of new rates. The proforma period shall be defined as the 12 months immediately following the test year.\n\nSchedule 12\n\nWorking Papers\n\nInstructions: 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.\n\nSchedule 13\n\nRevenue and Expense Schedule\n\nInstructions: The applicant shall provide information about revenues by primary account (consumer classification) and operating and maintenance expenses by primary account during the test period.\n\nThe 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.\n\nSchedule 14\n\nExplanation of Proposed Revenue Requirement Calculation\n\nInstructions: Provide a schedule describing the methodology used to determine the revenue requirement shown on Schedule 9, Column 6.\n\nSchedule 15\n\nAdditional Revenues\n\nInstructions: 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.\n\nSchedule 16\n\nStatement of Compliance\n\nInstructions: Include the following statement signed by the person(s) sponsoring the application:\n\nI, (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.\n\n(Signature of Sponsoring Party)\n\n(Date)","path":["Title 20. Public Utilities And Telecommunications","Agency 5. State Corporation Commission","Chapter 403. Rules Governing Small Investor-Owned Telephone Utilities"],"source_url":"https://law.lis.virginia.gov/admincode/title20/agency5/chapter403/section70:1/","current_through":"2026 Regular Session (effective July 1, 2026)","vintage":"","retrieved_at":"2026-09-14T04:53:30Z","sha256":"90be2be6bde0f8c7d0dc52386372097ea256fc6e7fd09988c7a8fe04e223559e","source_id":"us-va-vac","stale":false,"prev":"us-va/20vac5-403-70","next":"us-va/20vac5-405-10"},"notice":"GroundRules: Original legal text. Not legal advice."}