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 9 - 9 - 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 LIABILITIES Long-Term Debt 2015 Compared to 2014 Long-term debt increased a net $165.6 million to $2,090.8 million in 2015. In June, the Department issued $171.9 million of fixed rate revenue bonds and in July, the Department issued $100.0 million of variable rate revenue bonds to fund the ongoing capital improvement program. Debt to capitalization ratio was 64.7% at the end of 2015, an increase from the 59.9% ratio of 2014 because of the additional bonds and the $233.8 million reduction of net position recorded at the beginning of the year due to implementation of GASB Statement No. 68. See Note 11 Seattle City Employees’ Retirement System of the accompanying financial statements. Net revenues available to pay debt service were equal to 1.62 times principal and interest on all bonds for 2015. See Note 7 Long-Term Debt of the accompanying financial statements. 2014 Compared to 2013 Long-term debt increased a net $54.9 million to $1,925.2 million in 2014. In November, the Department issued $265.2 million of revenue and refunding revenue tax-exempt bonds to fund the ongoing capital improvement program and to advance refund $125.4 million of higher interest rate 2004 series bonds. Debt to capitalization ratio was 59.9% at the end of 2014, a decrease from the 61.7% ratio of 2013 and continuing the favorable trend in recent years. Net revenues available to pay debt service were equal to 1.85 times principal and interest on all bonds for 2014. Noncurrent Liabilities 2015 Compared to 2014 Total non-current liabilities increased by $274.2 million to $341.5 million at the end of 2015. The significant area of increase was the result of recording Net Pension Liability totaling $271.8 million due to the implementation of GASB Statement No. 68 concerning pensions. See Note 11 Seattle City Employees’ Retirement System of the accompanying financial statements. Compensated absences increased by $2.7 million to $19.4 million primarily due to additional days off negotiated by union contracts that restore to affected employees the value of unpaid furlough days taken in 2010.