Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 78 THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT OTHER INFORMATION (UNAUDITED) - 78 - OTHER INFORMATION (UNAUDITED) DEBT SERVICE COVERAGE Following is a table that provides information for the Department’s debt service coverage for years 2016, 2015, and 2014. The target level for debt service coverage was 1.8x on all bonds for 2016, 2015, and 2014 in accordance with current financial policies (which include a Rate Stabilization Account that will result in greater compliance of actual debt service coverage with the policy-specified level). ($ in millions) Debt Service Coverage 2016 2015 2014 OPERATING REVENUES: Retail power revenues 788.0 $ 736.6 $ 720.8 $ Short-term wholesale power revenues 62.9 61.2 96.8 Other power-related revenues (a)(b)(c) 32.6 36.8 50.8 Transfers from/(to) rate stabilization account (d) (0.1) 23.4 (4.4) Other operating revenues 19.8 24.9 22.4 Total operating revenues 903.2 $ 882.9 $ 886.4 $ OPERATING EXPENSES: Long-term purchased power—Bonneville and other (b) 219.8 $ 213.6 $ 214.3 $ Short-term wholesale power purchases 15.1 26.8 14.9 Other power expenses (b) 60.1 59.6 65.9 Transmission (e) 53.5 54.3 52.8 Distribution 63.5 65.1 59.7 Customer service 42.6 38.3 37.6 Conservation 30.2 29.1 27.3 Administrative and general 105.0 92.1 75.8 Taxes 85.2 81.1 80.0 Depreciation and amortization 120.8 112.0 105.8 Total operating expenses 795.8 $ 772.0 $ 734.1 $ NET OPERATING REVENUE (f) 107.4 $ 110.9 $ 152.3 $ Adjustments to Net Operating Revenue (g) City Taxes (h) 48.4 $ 45.5 $ 44.6 $ Depreciation and amortization 120.8 112.0 105.8 Depreciation & amortization included in operating & maintenance expenses (i) 29.9 27.1 24.8 Pension expense (j) 40.8 27.9 - Pension contributions (j) (25.3) (24.9) - Valuation on exchange power, net (b)(c) 0.0 0.6 0.3 BPA Conservation Augmentation/Agreement revenue (k) (1.2) (0.9) (0.7) Investment income (l) 7.3 6.7 5.4 Non-cash expenses (m) 1.8 (0.3) 1.9 Other (n) 2.0 2.0 7.0 Total adjustments 224.5 $ 195.7 $ 189.1 $ Net Revenue Available for Debt Service 331.9 $ 306.6 $ 341.4 $ Total Debt Service (o) 196.5 $ 189.6 $ 184.8 $ Ratio of Available Net Revenue to Debt Service 1.69x 1.62x 1.85x December 31