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 7 - 7 - 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 Current Assets 2015 Compared to 2014 Current assets increased by $40.8 million to $339.6 million at the end of 2015. Operating cash increased by $24.2 million to $152.5 million at the end of the year. Increased inflows to cash derived from a 4.2% system average rate increase effective in January, Bonneville Power Administration (Bonneville) 0.9% pass-through rate adjustment effective in October, transfers from the RSA, and reimbursement from the Construction account for capital expenditures. Cash inflows were offset by payments for higher debt service payments, capital construction projects, and ongoing operations. Accounts receivable, net, increased by $7.6 million to $82.2 million. A total of $12.6 million net increase in receivables were for retail electric due to rate increases, large service connections in progress, a grant from the Model Toxics Control Act, damage billings, and other. These were offset by a net decrease in short-term wholesale power sales of $5.0 million because of lower surplus sales compared to December 2014. Unbilled revenues increased by $5.9 million to $70.5 million mainly because of the rate increases and higher customer loads during the 4th quarter compared to same comparable period of 2014. Other current assets increased by $3.1 million to $34.4 million. Materials and supplies inventory was higher by $2.0 million due to the purchase of additional spare parts for generating facilities and an increase in the unallocated material handling costs that will be charged out in the following year. 2014 Compared to 2013 Current assets decreased by $70.3 million to $298.8 million at the end of 2014. Operating cash decreased by $65.5 million to $128.3 million at the end of the year. Increased inflows to cash resulted from a 5.6% system average rate increase effective at the beginning of the year, Bonneville Power Administration (Bonneville) 1.2% pass-through rate adjustment, higher net wholesale energy sales, and reimbursement from the Construction account for certain capital expenditures. The higher cash inflows were offset by greater debt service payments, capital construction projects, ongoing operations, and transfers to the RSA. Accounts receivable, net, increased by $10.6 million to $74.6 million. Wholesale power receivables increased by $5.9 million as a result of higher surplus sales during December. Other net receivables increased by $4.7 million including the recovery of costs expended on distribution system assets subject to co-ownership. The ongoing trend of improved collection efforts and revised allowance methodology for large service connection billings led to a lower allowance for bad debt for both retail and sundry sales receivables. Unbilled revenues decreased by $14.2 million to $64.6 million due to lower retail customer loads during the 4th quarter compared to same comparable period of 2013. Materials and supplies inventory increased $1.2 million to $30.8 million for ongoing operations.