Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 8 THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2016 and 2015 - 8 - 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 allocated in the following year. Other Assets 2016 Compared to 2015 Other assets increased by $56.7 million to $396.2 million. The regulatory asset for environmental cleanup costs increased by $51.9 million, due primarily to the estimated cost to clean up the East Waterway Superfund Site. Environmental cleanup costs are being recovered through rates over a 25-year period. See Note 14 Environmental Liabilities of the accompanying financial statements. Conservation costs, net, increased by $8.6 million. Decreases totaled $3.8 million of which $2.8 million was for over allocation of labor benefits costs from actual retro pay and COLA costs paid. Accordingly, labor benefits costs will be allocated in the following year. The remaining decrease of $1.1 million was for Long term environmental receivables to be paid by other responsible parties for cleanup costs incurred by the Department. See Note 7 Other Assets of the accompanying financial statements. 2015 Compared to 2014 Other assets increased by $19.8 million to $339.5 million. Conservation costs, net, increased by $15.7 million. The regulatory asset for environmental cleanup costs decreased by $3.3 million and are mostly associated with cleanup of the Lower Duwamish Waterway Superfund Site. The balance of Other assets increased by $7.4 million. Long term receivables increased $10.1 million as the result of completion of Shoreline underground electrical infrastructure. This was partly offset by a net $2.1 million decrease in damage repair costs awaiting billing to other parties. Other deferred charges decreased by a net $0.6 million. Deferred Outflows of Resources 2016 Compared to 2015 Deferred outflows of resources increased by $45.1 million to $94.9 million. In 2015, the Department implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27 concerning accounting for pension plans. For 2016, the net increase of $31.2 million was primarily for losses related to differences between projected and actual investment earnings. See Note 12 Seattle City Employees’ Retirement System of the accompanying financial statements. Charges on advance refunding increased a net $13.9 million to $30.3 million. Net activity is the result of additions due to new refunding bond issues and decreases for amortization. 2015 Compared to 2014 Deferred outflows of resources increased by $30.5 million to $49.8 million. The Department deferred 2015 employer pension contributions and losses related to differences between projected and actual investment earnings totaling $33.4 million. Charges on advance refunding decreased a net $2.9 million to $16.4 million.