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Home My WebLink About20040510Application.pdfTax Department 1801 California Street, 25th Floor Denver, Coiorado 80202 Qwest, if) WIf--0 ~~o Carol Phillips Director - Tax Research & Planning 1801 California # 2539 Denver, Colorado 80202 Mr. Doug Cooley Telecommunications Analyst Idaho Public Utilities Commission 472 W. Washington Boise, ill 83720 Idaho P~bllf? LJt~li,i~s Cc Office ot tile S(~C RECEI~i::D MAY 1 U 2004 Boise. Idaho RE: 2002 Application for Broadband Equipment Credit Dear Mr. Cooley, Enclosed is Qwest's documentation in support of the Idaho Broadband Credit for 2002. Pursuant to our earlier discussion, I am submitting the following: 1) 2002 qualified investment, reported by general broadband, dedicated line, and inter-office facilities - (Tab A) 2) 2002 retirements of 2001 investment, along with an explanation of how the retirements were calculated - (Tab B) 3) Explanation of how we differentiate 2002 from 2001 investment and insure that . no equipment is reported more than once - (Tab C) 4) Statement concerning changes in capitalization policy and processes - (Tab D) 5) Certification Statement - (Tab E) Total investment for 2002, net of retirements , is shown below. General Broadband Services: Dedicated Line Services Inter-Office Facilities Total 2002 investment Retirements of 2001 investment 2002 Net Investment $ 3 809 761 856 502 1,382,893 $ 8 049,156 37.363 011,793 I am enclosing 4 copies, 2 in binders and the other 2 un-bound. I am not able to put the investment data on 81/2 x 11 paper, but I have copied it to a disc. Hopefully this will help you. Please contact me on 303-308-5638 with any questions on this submission. Sincerely, Carol Phillips Copy to: John Souba, Qwest Corporation General Broadband Services OVERSIZED CHARTS SEE CASE FILE Dedicated Line Services OVERSIZED CHARTS SEE CASE FILE Inter Office Facilities (IOF) OVERSIZED CHARTS SEE CASE FILE Retirements related to broadband investment made in 2001 were determined by means of retirement ratios. Because investment data is provided at a summary level rather than an individual asset basis, it would be extremely time-consuming to attempt to identify retirements of individual assets. For certain types of plant accounts , it would be impossible, because tables are used in order to develop retirements. Retirement ratios were developed taking total retirements by year and plant account as a percentage of total investment for that year and plant account. These ratios were then applied to ID broadband investment by year and plant account. The total retirements of vintage 2001 investment using this approach are $ 37,363. Retirements of investment made in the immediately preceding year are generally less than one percent. The method of calculating retirements described above meets the applicable provisions of the IRS code, and has been accepted by the Internal Revenue Service. See the chart on the following page for a summary of total retirements and detail by plant account. Owest Corporation - Idaho Central Broadband Retirement Ratios - Vintage 2001 Tax Year 2002 Retiremen Curr Yr FRC Investment Ratio Retires 217 0000 534,483 0000 816 0000 45C 735,167 0010 730 85C 371 026 0000 157C 125 0000 257C 533,436 0032 502 357C 965,516 0010 131 377C 211 274 0000 845C 208,470 0000 852C 60,400 0000 862C 373 0000 Total 20,798 303 363 Source:2002 Acufile Book Basis Report for Idaho Central for Vintage 2001. Note:(1) Retirement Ratio calculated at Vintage Plant Account Level (2) Calculation = Total Book Basis of Retirements for Vintage Plant Account divided by Total Book Basis of Investment for Vintage Plant Account. When a job is first set up or opened, the planner establishes a targeted date on the CPD (Common Planning Document) for the job to be in-service and submits it to the budget tracking system (JETS). Material/equipment purchases with a FRC ending in a 7 or 9 code for the job are processed through a system called BV APP (Billing Verification Accounts Payable Processing). If work is being performed at multiple locations (address IDs), a unique BV APP number is assigned to each location. The date associated with the job (not the BV APP number) is the date used for tracking purposes in JETS. Outside plant FRC codes are processed through the NECT AS system. A job remains open until all BV APPs are complete. The completion date for the last BV APP then becomes the Actual in Service date for the job in JETS. When a BV APP is complete, the address/FRC associated with that BV APP is turned up in service individually, even though the entire job is not complete. For purposes of Idaho Broadband reporting, we include all FRCs/locations in the year that they are turned up in service. Therefore, you will see some jobs that are reported in multiple years. However, when we pull the data for each year we will by-pass or filter out any address that was previously reported for a job. This insures that we do not duplicate any addresses that have been previously reported for a job. There have been no changes to the Field Reporting Manual or Capitalization Policy since the time that these documents were submitted for the 2001 filing. In addition, the descriptions of the billing and costing processes that were included in Tab E of the 2001 filing are still accurate. Certification Statement Qwest Corporation , Carol Phillips, have read the applicable statutes for broadband investment income tax credit and I believe that the subject broadband equipment qualifies for the tax credit under Idaho Code Sec. 63-3029. Date: April 30, 2004 Signature: Title: Dir. Tax Research & Planning