Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90Seattle City Light 2015 Annual Report - 6 - THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2015 and 2014 million. The $86.9 million increase in Construction work-in-progress is primarily due to $13.1 million for the new customer billing system, $12.7 million for Boundary generation, $11.8 million for Denny Substation, and $49.3 million increases in various other projects, predominantly in distribution. Restricted Assets 2015 Compared to 2014 Restricted assets consisting primarily of restricted cash decreased by $33.3 million to $265.1 million. Construction funds decreased by $35.1 million to $88.7 million, and represent the balance of unspent proceeds from the variable rate 2015B bonds issued in July. Proceeds from the 2014 bonds and from the 2015A bonds issued in May 2015 were fully spent during the year funding a significant portion of the ongoing capital improvement program. Bond reserve account deposits increased by $25.8 million to $73.7 million from operating cash, bond proceeds, and interest earnings. Funding from operating cash of $20.0 million continued accumulation of the reserve account ahead of the existing surety bond 2029 expiration. The Rate Stabilization Account (RSA) decreased by a net $23.4 million to $91.0 million as funds were transferred to operating cash during the year because net wholesale revenues were less than budgeted. See Note 3 Rate Stabilization Account of the accompanying financial statements. Other restricted assets declined by $0.6M to $11.7 million. 2014 Compared to 2013 Restricted assets consisting primarily of restricted cash increased by $71.4 million to $298.4 million. Construction funds increased by $65.3 million to $123.8 million, due to unspent proceeds from the 2014 bonds issued in early November designated to fund a portion of the ongoing capital improvement program. The Rate Stabilization Account (RSA) increased by a net $4.4 million to a balance of $114.4 million as a result of operating cash transferred to the RSA during the year because net wholesale revenues were greater than budgeted. See Note 3 Rate Stabilization Account in the accompanying financial statements. Bond reserve account deposits increased $1.1 million to $47.9 million from bond proceeds and interest earnings, and other restricted assets increased by $0.6 million to $12.3 million. 6