Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 79 THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT OTHER INFORMATION (UNAUDITED) - 79 - Notes (a) Includes conservation and renewable credits under the power sales contract with BPA, the recognition of payments from BPA for the purchase of conservation savings, revenue from deliveries of power to Pend Oreille PUD pursuant to the Boundary Project's FERC license, and other energy credits. (b) Effective January 1, 2016, the Department adopted GASB Statement No. 72, Fair Value Measurement and Application. Non-monetary transactions are measured at fair value and are valued at market. Disclosures required by GASB Statement No. 72 are available in Note 2 Fair Value Measurement. (c) Includes significant activity for the valuation of energy delivered under seasonal exchanges, basis sales, and other power exchange contracts. Energy exchanges have both revenue and expense components; therefore, a net revenue or expense adjustment is made for a given year. (d) Transfers from/(to) the RSA in accordance with Ordinance No. 123260, primarily to address fluctuations in surplus power sales. (e) Includes revenue from the short-term sale of excess transmission capacity. (f) Operating Income per audited financial statements. (g) Significant non-cash transactions are adjusted from Net Operating Revenue to calculate Revenue Available for debt Service. Furthermore, some types of revenue in addition to Operating Revenue are included to calculate Revenue Available for Debt Service. These adjustments are listed in the remaining lines within the table. (h) City taxes are excluded because the lien on such taxes is junior to debt service in accordance with the Bond Legislation. (i) The majority of the depreciation and amortization (non-cash) expenses included in Operating and Maintenance Expense are for amortization of conservation expenses that are recognized over a 20-year period. (j) Pension expense is the amount recorded for compliance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, implemented in 2015, a non-cash item. Pension contributions are the Department cash contributions to the Seattle City Employee’s Retirement System. (k) Payments received for conservation measures are initially recorded as unearned revenue. The adjustment represents the amount of revenue amortized and recognized over future periods for financial reporting, a non-cash transaction. (l) Investment income is not included in Total Revenue in this table; therefore, an adjustment is made to Net Operating Revenue, consisting primarily of interest earnings from City's cash pool and interest receipts from suburban underground charges. This amount excludes unrealized gains and losses, which are non-cash adjustments. (m) Primarily claim expenses and capital project expenditures from prior year which were determined not to be capital expenditures. (n) Includes proceeds from sale of properties, principal receipts from suburban underground charges from local jurisdictions, and miscellaneous items. (o) Net of federal bond subsidies. DEBT SERVICE COVERAGE: ALL BONDS Year Ending Revenue Available Debt Service Debt Service December 31 for Debt Service Requirements Coverage ($ in millions) 2016 331.9 $ 196.5 $ 1.69 2015 306.6 189.6 1.62 2014 341.4 184.8 1.85 2013 319.6 172.8 1.85 2012 306.1 169.1 1.81