Seattle City Light 2016 ANNUAL REPORT | Audited Financial Statements 5 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 - 5 - ASSETS Utility Plant—Net 2016 Compared to 2015 Utility plant assets net of accumulated depreciation and amortization increased $253.2 million to $3,214.7 million in 2016. Utility plant assets were comprised of hydroelectric production plant $847.0 million which increased $25.9 million, transmission plant, $242.2 million, which increased $11.3 million, distribution plant, $2,408.9 million, which increased $113.3 million, general plant, $368.4 million, which increased $29.9 million, and intangible assets, $543.8 million which increased $61.7 million. The net increase in utility plant assets were partially offset by a $63.5 million increase in Accumulated depreciation and amortization to $1,735.3 million. The $113.2 million increase in distribution plant is primarily due to $31.0 million for Underground, $22.0 million for Network, $14.1 million for Services, $12.2 million for Poles, $5.4 million for Station Equipment, $5.2 million for Street Lights. The $27.3 million increase in Hydro Assets is primarily due to: $12.5 million for Ancillary Electric Equipment, $5.4 million for Miscellaneous Hydro Equipment, $5.2 million for Hydro Structures. The $11.4 million increase in Transmission is primarily due to: $6.4 million for Transmission Station Equipment, $2.2 million for Transmission Overhead Lines. The $29.9 million increase in General plant is primarily due to: $18.4 million for General Structure improvements, $5.7 million for Communication Equipment, $4.5 million for vehicles. The $61.7 million increase in Intangible assets is primarily due to: $38.8 million for net Software additions (New Customer Information System and Emergency Management System) and $22.8 million for High Ross and Relicensing at Boundary and Skagit. Other components of utility plant include Construction work-in-progress $392.5 million which increased $72.7 million, driven mainly by an increase of $95.2 in Underground Distribution projects and a decrease in General Plant of $27.5. Nonoperating property has a balance of $12.7 million which increased $0.9 million, Assets held for future use $59.5 million which decreased $1.3 million, and Land and land rights $75 million, which increased $2.3 million. See Note 3 Utility Plant of the accompanying financial statements. 2015 Compared to 2014 Utility plant assets net of accumulated depreciation and amortization increased $233.2 million to $2,961.5 million in 2015. Utility plant assets were comprised of hydroelectric production plant $821.1 million which increased $57.5 million, transmission plant $230.9 million which increased $23.1 million, distribution plant $2,295.6 million which increased $101.4 million, general plant $338.5 million which increased $24.6 million, and intangible assets $482.1 million which increased $25.6 million. The net increase in utility plant $847.0  $242.2  $2,408.9  $368.4  $543.8  2016 $821.1  $230.9  $2,295.6  $338.5  $482.1  2015 $763.6  $207.8  $2,194.2  $313.9  $456.5  2014 Hydroelectric Transmission Distribution General Intangible (in millions) (in millions) (in millions)