2015 ANNUAL OPERATING AND FINANCIAL PLAN

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1 2015 ANNUAL OPERATING AND FINANCIAL PLAN

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3 TABLE OF CONTENTS 2015 ANNUAL OPERATING AND FINANCIAL PLAN Executive Summary... 3 Summary... 7 Revenue and Expenditure Overview Enterprise Financial Plan Enterprise Financial Plan OPERATING AND FINANCIAL PLANS BY SERVICE Electric Natural Gas Water Wastewater Enterprise Wide Capital Projects Enterprise Wide Administrative and General Division s Corporate/Chief Executive Officer Energy Services Water Services Customer and Corporate Services Environment, Health and Safety Planning and Finance Strategy and External Affairs Glossary of Terms Appendix Map of four-service territory Annual Ordinance Source Funds Ordinance Annual Operating and Financial Plan 1

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5 EXECUTIVE SUMMARY ABOUT THE ANNUAL OPERATING AND FINANCIAL PLAN The 2015 was developed to achieve the outcomes most important to customers and the Utilities Board: competitive utility rates; safe, reliable service and excellent customer service. Further, the supports the financial metrics necessary to maintain a healthy AA credit rating that helps keep customer rates competitive long term. Colorado Springs Utilities comprehensive planning and budgeting process begins with the Utilities Board Strategic Plan to achieve their strategic outcomes of rates, reliability and relationships. Within the five year plan, key themes, strategic objectives and strategic initiatives identify important areas of resource focus. The Annual Operating and Financial Plan is year one of a five-year plan. The plan is a comprehensive look at the financial resources required to meet operational needs. Colorado Springs Utilities goal is to make these operational and financial documents useful for multiple audiences; so the information is detailed in two views: 1. Service Overview: This view illustrates the expenses going into each service (electric, natural gas, water and wastewater) to determine rates. Financial statements can be linked to the total appropriation with the exception of the other category, which includes classified expense in various financial categories. All divisions contribute expense to each of the four services. 2. Division Overview: In this view, budgets are categorized by how the organization is functionally structured. Divisions include: Energy Services, Water Services, Customer and Corporate Services, Environment, Health and Safety, Planning and Finance, and Strategy and External Affairs. Financials presented include only operating expenses for the division. Note that financial data in the division view is a restatement of operating expenses in the service view. So, adding Electric budget service to Energy Division budget figures, for example, will result in counting line items twice Annual Operating and Financial Plan 3 INTRODUCTION The utility industry is changing rapidly. For Colorado Springs Utilities to continue providing safe, reliable, competitively-priced services, we need to further align the organization with increasing demands and evolving operational practices. Colorado Springs Utilities is no different than many other energy and water utilities across the nation that are experiencing relatively flat sales, additional regulatory requirements and increasing capital and infrastructure needs. To successfully meet customer expectations, now and in the future, Colorado Springs Utilities will need to continue to innovate the delivery of utility services. In 2014, Colorado Springs Utilities reduced nonlabor expenses due to reduced sales in water and electric services and significantly reduced the proposed 2015 in both Operations and Maintenance and Capital expenses. This approved 2015 reflects those reductions. All areas of the organization have contributed to the savings, which have been accomplished by evaluating service levels and prioritizing programs and projects.

6 Through the Utilities Board-directed 5-year business service plan strategic initiative, Colorado Springs Utilities is using benchmarking, best practices and other internal and external input to further optimize our organization. In the initial five year financial analysis, leadership identified that approximately $35 million in sustainable operating cost reductions are needed by 2016 to keep customer rates competitive. This will be accomplished by eliminating 100 positions over the next two years and continuing to reduce Operations and Maintenance and Capital expenses. Additional reductions are a tremendous challenge because of changes already made in how we operate in the midst of a weak economy and an essential, large capital program. However, we have a track record of finding new ways to work and do business in a thoughtful and proactive manner. Already, innovative solutions have been realized to deliver valued service at a reduced cost. KEY FINANCIAL PLANNING FACTORS Integrated strategic and financial planning are critical elements of Colorado Springs Utilities business planning process. The Kaplan-Norton Balanced Scorecard model is used as the foundation for strategic business planning. The model translates strategies into operational objectives, initiatives and performance targets to achieve desired outcomes that are measured and regularly monitored. Multiyear planning occurs in all aspects of Colorado Springs Utilities strategic plan, long-range resource plans, infrastructure plans and Operations and Maintenance plans. This planning is reflected in financial forecasts and the Annual Operating and Financial Plan. Financial key planning factors in the 2015 Annual : Relatively flat energy and water demand due to low customer growth and flat or decreasing percustomer usage is expected compared to Large capital investment is required to comply with power plant emissions regulations and natural gas safety rules. Capital expenditures for the Southern Delivery System; electric, gas and water distribution systems and wastewater collection are required to maintain reliable service. Watershed management and water asset management. Nonfuel Operations and Maintenance costs for power plant maintenance. Fuel and purchased power costs and wholesale natural gas prices for distribution to customers. TOTAL APPROPRIATIONS The 2015 is $1,082.7 million, a decrease of $70.7 million, or 6.1 percent, from City Council s Approved This decrease is primarily the result of lower capital expenditures largely driven by lower construction costs of the Southern Delivery System (SDS) water project. All increases and decreases are described in the detail that follows, and are in comparison to the 2014 Approved. Capital Improvements Total capital costs for 2015 are $329.7 million and represent approximately 30 percent of the Capital costs are the primary drivers of the 2015 electric base rate increase. Capital improvements are required to maintain and rehabilitate aging infrastructure in order to provide safe and reliable services to existing customers, to prepare for future demand, and to meet environmental and regulatory requirements Annual Operating and Financial Plan 4

7 Total 2015 capital expenditures before accounting for Allowance for Funds Utilized During Construction (AFUDC) and capitalized interest will decrease by $88.2 million, or 22.6 percent from the 2014 Approved. Water capital will decrease by $94.5 million. Phase I of the SDS project continues to represent a major portion of the water system capital investment during this planning period with the continued construction of the water treatment plant and pump stations and completion of construction of pipelines through 2016 when the pipeline is scheduled to be operational. Non- SDS capital expenditures will be limited to existing critical infrastructure needs for water mains, storage facilities, treatment plants, vehicle and equipment replacements, and Waldo Canyon fire-related restoration and recovery. Electric capital will increase by $9.7 million, primarily for funding emissions controls projects of $19.4 million, partially offset by decreased funding for plant, transmission, and distribution infrastructure, and vehicle and equipment replacements. Natural gas capital will decrease by $2.9 million, primarily due to fewer vehicle and equipment replacements compared to the 2014 Approved, completion in 2014 of gas system upgrades for U.S. Air Force Academy privatized housing (100 percent reimbursed by USAFA), and compressed natural gas infrastructure. Wastewater capital increased $3.2 million, primarily to fund the Advanced Wastewater Treat project at the Las Vegas Water Resource Recovery Facility (a $1.0 million State grant for construction is expected to partially reimburse costs for this project) and replace old and high mileage vehicles and equipment. Also included is the continued rehabilitation of local collection system and creek crossings. Common capital to support all the services decreased by $3.8 million, primarily due to fewer vehicle and equipment replacements. The majority of the remaining decrease is associated with the completion of relocating the secondary data center and back-up Supervisory Control and Data Acquisition (SCADA) control center to the East Service Center in Nonfuel Operations and Maintenance Total Nonfuel Operations and Maintenance expenditures will decrease by $4.3 million, or 1.5 percent, from the 2014 Approved primarily due to reduced maintenance for power plants. To maintain competitive compensation and attract and retain a quality workforce the labor and benefit package increased overall by $9.3 million, or 5 percent from the 2014 Approved. The overall increase in base pay is estimated at 6 percent, with approximately 3 percent allocated for merit increases based on individual performance plans, 2 percent increase in workforce needed for the Southern Delivery System, and 1 percent for normal operational base pay adjustments. Employee benefits will increase almost 4 percent from the 2014 Approved. Maintenance for major power plants will decrease by $6.0 million as planned outages on Martin Drake Units 5 and 6 and Ray Nixon Unit 1 were completed in Annual Operating and Financial Plan 5

8 Purchased water will decrease by $2.5 million from the 2014 Approved due to 2,000 acre feet delivery through the Fountain Valley Authority System compared to 10,000 acre feet in the 2014 Approved. Fuel and Purchased Power Fuel and purchased power will increase by $7.8 million, or 2.8 percent more than Natural gas for distribution will increase by $10 million over 2014 due to a strengthening natural gas market. In 2015 approximately 12 percent less MWh will be purchased off the market than in Natural gas generation at the Front Range Power Plant is available for a lower price than we can purchase from the market in Debt Service Total debt service is planned to remain relatively flat with a decrease of $0.2 million or 0.2 percent from the 2014 Approved primarily due to higher principal and interest payments associated with Water s SDS capital project, offset by higher AFUDC and Capitalized Interest overheads applied to the project. Transfers Surplus Funds to the City Total transfers surplus funds to the City are planned to increase slightly by $0.8 million or 2.5 percent from the 2014 Approved approved budget due to slightly higher electric and gas sales inside City limits. Transfers - Surplus Funds to City are in accordance with approved Resolution No dated August 10, 2010 at an electric surplus rate of $ per Kwh and a gas surplus rate per Mcf delivered at psi of $ OPERATIONAL RISKS OF BUDGET DEFERRALS AND DECREASES The 2015 is a responsible balance between investing in infrastructure to maintain safe, reliable service and keeping rates as low as possible. After an extensive prioritization process, some maintenance and rehabilitation projects have been decreased in scope or postponed to future years. Electric Service's power plant maintenance has been moved from a two- to three-year schedule. Water Services is managing risk by using cathodic protection to extend the life of the water mains. Water main replacement budgets have been reduced to moderate rate pressure while SDS is being constructed. Once the SDS project is completed, Utilities will be able to re-focus on water distribution replacements Annual Operating and Financial Plan 6

9 BUDGET SUMMARY The Colorado Springs Utilities funds the priorities outlined in the Strategic Plan. A summary of the approved uses of funds for 2015 follows: 2015 BUDGET SUMMARY COMPARED TO 2014 APPROVED BUDGET (in thousands of dollars) 2015 Approved 2014 Approved Increase / (Decrease) % Change Capitalized Projects & Interest $ 329,723 $ 410,049 $ (80,326) -19.6% Fuel Operations & Maintenance 286, ,204 7, % Non-Fuel Operations & Maintenance 283, ,112 (4,271) -1.5% Debt Service 143, ,273 (219) -0.2% Transfers - Surplus Funds to City 1 32,479 31, % Other 2 6,600 1,063 5, % TOTAL $ 1,082,682 $ 1,153,382 $ (70,699) -6.1% Note: Totals may vary due to rounding. 1 Transfers - Surplus Funds to City are in accordance with approved Resolution No dated August 10, 2010 at an electric surplus rate of $ per Kwh and a gas surplus rate per Mcf delivered at psi of $ Other includes Customer Rebates, Franchise Fees and Net Changes In Assets and Liabilities - Uses. The resulting of $1,082.7 million is needed to meet the mission of Colorado Springs Utilities to provide safe, reliable, competitively-priced electric, natural gas, water and wastewater services to its citizen owners and customers. Delivering on this mission will require a focus on meeting environmental and regulatory requirements, while maintaining critical infrastructure in Additionally, to maintain financial stability, Colorado Springs Utilities must generate sufficient revenue to meet the financial metrics of a AA credit rated utility Annual Operating and Financial Plan 7

10 2015 BUDGET SUMMARY (in thousands of dollars) 2015 Total Appropriations $1,082,682 Fuel Operations & Maintenance $286,985 27% Capitalized Projects & Interest $329,723 30% Non-Fuel Operations & Maintenance $283,841 26% Debt Service $143,054 13% Other 2 $6,600 1% Transfers -Surplus Funds to City 1 $32,479 3% 1 Transfers - Surplus Funds to City are in accordance with approved Resolution No dated August 10, 2010 at an electric surplus rate of $ per Kwh and a gas surplus rate per Mcf delivered at psi of $ Other includes Customer Rebates, Franchise Fees and Net Changes In Assets and Liabilities - Uses Annual Operating and Financial Plan 8

11 2015 Approved Electric 122,675 CAPITALIZED PROJECTS AND INTEREST (in thousands of dollars) 2014 Approved Increase / (Decrease) % Change $ $ 9, % $ 112,971 Natural Gas 14,254 17,133 (2,879) -16.8% Water 138, ,168 (94,546) -40.5% Wastewater 14,743 11,586 3, % Streetlighting 1, % Common 11,383 15,206 (3,823) -25.1% TOTAL (before AFUDC & Capitalized Interest) $ 302,788 $ 390,991 $ (88,204) -22.6% AFUDC & Capitalized Interest 26,936 19,058 7, % TOTAL $ 329,723 $ 410,049 $ (80,326) -19.6% Note: Totals may vary due to rounding. Capital improvements are required to maintain and rehabilitate aging infrastructure in order to provide safe and reliable services to present customers, to prepare for future demand, and to meet environmental and regulatory requirements. Capital expenditures are driven by $97.6 million in the Water Service for construction of the Southern Delivery System (SDS) Phase I, advancing engineering and geotechnical work for SDS Phase II, and $71.0 million in the Electric Service to install sulfur dioxide gas scrubbers at the Martin Drake and Ray Nixon power plants Annual Operating and Financial Plan 9

12 FUEL OPERATIONS AND MAINTENANCE COSTS (in thousands of dollars) 2015 Approved Purchased Power 18, Approved Increase / (Decrease) % Change $ $ (6,351) -25.2% $ 25,191 Total Fuel for Territorial Generation 116, ,335 7, % Total Natural Gas 130, ,738 9, % Wholesale Electric 10,128 10, % Natural Gas 15,415 15, % Total Wholesale 25,543 25, % Inter-Service Eliminations 1 (4,619) (1,549) (3,070) 198.2% TOTAL $ 286,985 $ 279,204 $ 7, % Note: Totals may vary due to rounding. 1 Inter-Service Eliminations are made to eliminate double counting of revenues and expenses provided from one utility service to another. Such revenues and expenses are eliminated on a consolidated enterprise basis. The fuel used to generate electricity for customers and the natural gas provided to customers represents a significant portion of the. As commodity prices change an electric and gas cost adjustment is used to pass these costs or savings through to customers Annual Operating and Financial Plan 10

13 NONFUEL OPERATIONS AND MAINTENANCE COSTS BY SERVICE (in thousands of dollars) 2015 Approved 2014 Approved Increase / (Decrease) % Change Electric Labor & Benefits $ 75,797 $ 72,826 $ 2, % Non-Labor 49,804 58,973 (9,169) -15.5% Total 125, ,799 (6,198) -4.7% Natural Gas Labor & Benefits 25,127 24, % Non-Labor 13,132 14,199 (1,067) -7.5% Total 38,259 38,681 (423) -1.1% Water Labor & Benefits 46,083 42,122 3, % Non-Labor 48,597 54,028 (5,430) -10.1% Total 94,680 96,150 (1,470) -1.5% Wastewater Labor & Benefits 22,019 21, % Non-Labor 13,796 14,687 (891) -6.1% Total 35,815 36,449 (634) -1.7% Streetlighting Labor & Benefits 973 1,098 (124) -11.3% Non-Labor 2,213 2,401 (187) -7.8% Total 3,187 3,498 (312) -8.9% Inter-Service Eliminations 1 (13,701) (18,465) 4, % TOTAL $ 283,841 $ 288,112 $ (4,271) -1.5% Note: Totals may vary due to rounding. 1 Inter-Service Eliminations are made to eliminate double counting of revenues and expenses provided from one utility service to another. Such revenues and expenses are eliminated on a consolidated enterprise basis. Colorado Springs Utilities has prioritized and streamlined operating processes that enable the safe and efficient delivery of utility services while complying with all regulations. This effort has allowed us to accommodate increased costs for plant maintenance, post-fire flood mitigation, employee benefits, and other critical operating and maintenance activities with a minimal year over year increase in expenses Annual Operating and Financial Plan 11

14 REGULAR, CAPITAL AND OTHER LABOR COSTS (in thousands of dollars) 2015 Approved 2014 Approved Increase / (Decrease) % Change Operations & Maintenance $ 172,539 $ 164,900 $ 7, % Capital 25,452 23,771 1, % Other 1,363 1,374 (11) -0.8% TOTAL $ 199,354 $ 190,045 $ 9, % LABOR COSTS BY CATEGORY (in thousands of dollars) 2015 Approved 2014 Approved Increase / (Decrease) % Change Regular Base Pay $ 148,220 $ 139,760 $ 8, % Overtime 6,194 6,913 (719) -10.4% Standby/Shift 1,396 1, % Other Compensation (35) -5.6% Total Labor 156, ,651 7, % Employee Benefits 41,646 40,069 1, % Post-Retirement Expenses 1,306 1,325 (19) -1.4% Total Benefits & Other 42,953 41,394 1, % TOTAL LABOR & BENEFITS $ 199,354 $ 190,045 $9, % Note: Totals may vary due to rounding Annual Operating and Financial Plan 12

15 2015 Approved DEBT SERVICE (in thousands of dollars) 2014 Approved Increase / (Decrease) % Change Electric Interest Payments¹ $ 42,760 $ 43,571 $ (810) -1.9% Principal Repayments 27,766 26,280 1, % AFUDC & Capitalized Interest (1,443) (639) (804) 125.8% Total 69,083 69,211 (128) -0.2% Natural Gas Interest Payments¹ 6,902 6, % Principal Repayments 4,727 4, % AFUDC & Capitalized Interest (493) (87) (406) 464.3% Total 11,135 11,154 (19) -0.2% Water Interest Payments¹ 43,939 40,231 3, % Principal Repayments 18,344 15,207 3, % AFUDC & Capitalized Interest (24,999) (18,254) (6,745) 37.0% Total 37,283 37, % Wastewater Interest Payments¹ 13,705 14,162 (457) -3.2% Principal Repayments 11,095 10, % AFUDC & Capitalized Interest - (72) % Total 24,800 24,979 (179) -0.7% Streetlighting Interest Payments¹ (14) -3.1% Principal Repayments % AFUDC & Capitalized Interest - (5) % Total % Total Interest Payments¹ 107, ,259 2, % Principal Repayments 62,257 57,073 5, % AFUDC & Capitalized Interest (26,936) (19,058) (7,878) 41.3% TOTAL $ 143,054 $ 143,273 $ (219) -0.2% Note: Totals may vary due to rounding. Bonds are typically issued for the general system and not specific to service. For forecasting purposes bonds and debt service are allocated based on capital budgets and then recorded to actuals as the expense is incurred. 1 Interest payments are net of subsidies received for Build America Bonds issued for the Southern Delivery System and Front Range Power Annual Operating and Financial Plan 13

16 Revenue 2015 Approved Electric Service 11,082 INTER-SERVICE ELIMINATIONS (in thousands of dollars) 2014 Approved Increase / (Decrease) % Change $ $ (1,296) -10.5% $ 12,378 Natural Gas Service 2,087 2, % Water Service 4,639 4,935 (296) -6.0% Wastewater Service (104) -16.9% TOTAL $ 18,320 $ 20,014 $ (1,694) -9.2% Operations & Maintenance Expense 2015 Approved Fuel 4, Approved Increase / (Decrease) % Change $ $ 3, % $ 1,549 Non-Fuel 13,701 18,465 (4,764) -25.8% TOTAL $ 18,320 $ 20,014 $ (1,694) -9.2% Note: Totals may vary due to rounding. Inter-Service Eliminations are made to eliminate double counting of revenues and expenses provided from one utility service to another. Such revenues and expenses are eliminated on a consolidated enterprise basis Annual Operating and Financial Plan 14

17 REVENUE AND EXPENDITURE OVERVIEW OPERATING REVENUES BY SERVICE (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual Electric $ 458,401 $ 435,685 $ 417,778 $ 22, % $ 40, % Natural Gas 221, , ,170 9, % 13, % Water 195, , ,378 (4,257) -2.1% 51, % Wastewater 66,967 70,647 65,431 (3,680) -5.2% 1, % Streetlighting 4,139 4,135 4, % (112) -2.6% Subtotal $ 946,347 $ 922,114 $ 839,008 $ 24, % $ 107, % Inter-Service Eliminations (18,320) (20,014) (15,248) 1, % (3,072) -20.1% TOTAL $ 928,027 $ 902,099 $ 823,760 $ 25, % $ 104, % Note: Totals may vary due to rounding Operating Revenues by Service Streetlighting $4,139 0% Electric $458,401 49% Wastewater $66,967 7% Water $195,165 21% Natural Gas $221,675 23% 2015 Annual Operating and Financial Plan 15

18 OPERATING REVENUE BY SERVICE AND SOURCE (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 TOTAL Actual Actual Residential $ 444,577 $ 441,396 $ 396,456 $ 3, % $ 48, % Commercial 304, , ,096 15, % 50, % Industrial 74,681 85,735 66,975 (11,054) -12.9% 7, % Military 49,860 34,596 36,243 15, % 13, % Transmission Sales 2,564 3,674 4,733 (1,110) -30.2% (2,169) -45.8% Wholesale & Other 44,606 41,458 58,999 3, % (14,393) -24.4% Irrigation 3,300 2,492 2, % 1, % Streetlighting 4,139 4,135 4, % (112) -2.6% Inter-Service Revenues¹ 18,320 20,014 15,248 (1,694) -8.5% 3, % TOTAL $ 946,347 $ 922,114 $ 839,008 $ 24, % $ 107, % ELECTRIC Residential $ 178,275 $ 171,811 $ 162,930 $ 6, % $ 15, % Commercial 152, , ,256 10, % 24, % Industrial 68,962 68,622 63, % 5, % Military 23,404 24,615 20,013 (1,211) -4.9% 3, % Transmission Sales 776 1,039 2,485 (263) -25.3% (1,708) -68.8% Wholesale & Other 23,817 15,959 32,646 7, % (8,829) -27.0% Inter-Service Revenues¹ 11,082 12,378 9,046 (1,296) -10.5% 2, % TOTAL $ 458,401 $ 435,685 $ 417,778 $ 22, % $ 40, % NATURAL GAS Residential $ 120,426 $ 120,134 $ 114,266 $ % $ 6, % Commercial 57,318 51,542 56,112 5, % 1, % Industrial 5,719 17,113 3,571 (11,395) -66.6% 2, % Military 18,146 1,702 10,237 16, % 7, % Transmission Sales 1,788 2,635 2,249 (847) -32.1% (461) -20.5% Wholesale & Other 16,192 17,014 20,143 (822) -4.8% (3,951) -19.6% Inter-Service Revenues¹ 2,087 2,085 1, % % TOTAL $ 221,675 $ 212,225 $ 208,170 $ 9, % $ 13, % WATER Residential $ 95,949 $ 96,389 $ 71,425 $ (440) -0.5% $ 24, % Commercial 79,487 80,057 55,515 (571) -0.7% 23, % Military 8,310 8,279 5, % 2, % Wholesale & Other 3,481 7,270 4,368 (3,789) -52.1% (887) -20.3% Irrigation 3,300 2,492 2, % 1, % Inter-Service Revenues¹ 4,639 4,935 4,070 (296) -6.0% % TOTAL $ 195,165 $ 199,422 $ 143,378 $ (4,257) -2.1% $ 51, % WASTEWATER Residential $ 49,927 $ 53,062 $ 47,836 $ (3,134) -5.9% $ 2, % Commercial 15,411 15,755 15,212 (343) -2.2% % Wholesale & Other 1,116 1,214 1,841 (98) -8.1% (725) -39.4% Inter-Service Revenues¹ (104) -16.9% (29) -5.4% TOTAL $ 66,967 $ 70,647 $ 65,431 $ (3,680) -5.2% $ 1, % STREETLIGHTING $ 4,139 $ 4,135 $ 4,251 $ 4 0.1% $ (112) -2.6% Note: Totals may vary due to rounding. 1 Inter-Service Eliminations are made to eliminate double counting of revenues and expenses provided from one utility service to another. Such revenues and expenses are eliminated on a consolidated enterprise basis Annual Operating and Financial Plan 16

19 OPERATING REVENUES BY SERVICE AND SOURCE (in thousands of dollars) 2015 Operating Revenues by Source Inter-Service Revenues 18,320 2% Streetlighting $4,139 1% Irrigation $3,300 0% Wholesale & Other $44,606 5% Transmission Sales $2,564 0% Military $49,860 5% Industrial $74,681 8% Residential $444,577 47% Commercial $304,301 32% $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 $946, Approved Comparative Totals $922, Approved $839, Actual Note: Totals may vary due to rounding Annual Operating and Financial Plan 17

20 OPERATING REVENUES BY SERVICE AND SOURCE (in thousands of dollars) ELECTRIC Residential Commercial Industrial Military Transmission Sales Wholesale & Other Inter-Service Revenues¹ Total $ $ 2015 Approved 178, ,085 68,962 23, ,817 11, ,401 Sales Sales in MWH 1,440,353 1,537,169 1,007, ,707 22,242 3, ,822 4,510,884 Total Number of Customers 187,545 31, ,044 NATURAL GAS Residential Commercial Industrial Military Transmission Sales Wholesale & Other Inter-Service Revenues¹ Total $ $ 120,426 57,318 5,719 18,146 1,788 16,192 2, ,675 Sales in mcf at psia 14,988,048 8,446, ,709 2,277,830 1,899, ,862 28,714, ,839 19, ,896 WATER Residential Commercial Military Wholesale & Other Irrigation Inter-Service Revenues¹ Total Sales in cf $ 95,949 1,464,033, ,506 79,487 1,381,858,800 13,467 8, ,762, ,481 19,492, , ,979,566-4, ,260, $ 195,165 3,533,387, ,219 WASTEWATER Residential Commercial Wholesale & Other Inter-Service Revenues¹ Total $ $ 49,927 15,411 1, ,967 Sales in cf 1,051,923, ,402,294 42,071,066 19,010,499 1,599,407, ,205 7, ,508 STREETLIGHTING $ 4,139 N/A 163 Note: Totals may vary due to rounding. 1 Inter-Service Eliminations are made to eliminate double counting of revenues and expenses provided from one utility service to another. Such revenues and expenses are eliminated on a consolidated enterprise basis Annual Operating and Financial Plan 18

21 OPERATING EXPENSES BY SERVICE (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual Electric $ 345,295 $ 347,612 $ 335,042 $ (2,317) -0.7% $ 10, % Natural Gas 191, , ,002 9, % 15, % Water 144, , ,338 12, % 25, % Wastewater 51,890 52,826 48,623 (936) -1.8% 3, % Streetlighting 4,571 4,849 4,511 (279) -5.8% % Subtotal $ 737,965 $ 720,101 $ 682,516 $ 17, % $ 55, % Inter-Service Eliminations (18,320) (20,014) (15,248) 1, % (3,072) -20.1% TOTAL $ 719,645 $ 700,087 $ 667,268 $ 19, % $ 52, % Note: Totals may vary due to rounding Operating Expenses by Service Streetlighting $4,571 1% Electric $345,295 47% Wastewater $51,890 7% Water $144,227 19% Natural Gas $191,982 26% Excludes Inter-Service Eliminations 2015 Annual Operating and Financial Plan 19

22 OPERATING EXPENSES BY USE AND SERVICE (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual FUEL Electric $ 145,479 $ 144,599 $ 149,880 $ % $ (4,400) -2.9% Natural Gas 146, , ,123 9, % 12, % Inter-Service Eliminations (4,619) (1,549) (4,535) (3,070) 198.2% (85) 1.9% Subtotal $ 286,985 $ 279,204 $ 279,468 $ 7, % $ 7, % NON-FUEL Electric $ 125,601 $ 131,799 $ 120,363 $ (6,198) -4.7% $ 5, % Natural Gas 38,259 38,681 34,845 (423) -1.1% 3, % Water 94,680 96,150 88,359 (1,470) -1.5% 6, % Wastewater 35,815 36,449 33,024 (634) -1.7% 2, % Streetlighting 3,187 3,498 3,204 (312) -8.9% (17) -0.5% Inter-Service Eliminations (13,701) (18,465) (10,714) 4, % (2,987) 27.9% Subtotal $ 283,841 $ 288,112 $ 269,081 $ (4,271) -1.5% $ 14, % DEPRECIATION Electric $ 73,906 $ 70,935 $ 64,510 $ 2, % $ 9, % Natural Gas 7,599 7,759 7,035 (160) -2.1% % Water 49,547 36,069 29,979 13, % 19, % Wastewater 16,075 16,377 15,599 (302) -1.8% % Streetlighting 1,384 1,351 1, % % Subtotal $ 148,511 $ 132,492 $ 118,430 $ 16, % $ 30, % OTHER Electric % % Subtotal $ 309 $ 279 $ 289 $ % $ % TOTAL $ 719,645 $ 700,087 $ 667,268 $ 19, % $ 52, % Note: Totals may vary due to rounding Non-Fuel Operating & Maintenance Expenses 2015 Fuel Operating & Maintenance Expenses Streetlighting $3,187 1% Electric $125,601 42% Wastewater $35,815 12% Water $94,680 32% Natural Gas $38,259 13% Electric $145,479 50% Natural Gas $146,125 50% Excludes Inter-Sevice Eliminations Excludes Inter-Sevice Eliminations 2015 Annual Operating and Financial Plan 20

23 2015 ENTERPRISE FINANCIAL PLAN CONDENSED FINANCIAL STATEMENTS (in thousands of dollars) 2015 Approved 2014 Approved 2013 Actual 2015 Approved Increase/(Decrease) from: STATEMENT OF NET ASSETS Actual Assets Current $ 400,359 $ 390,796 $ 427,939 $ 9,563 $ (27,580) Noncurrent - Other 294, , ,855 (271,932) (83,756) Capital Assets, Net 3,868,293 3,678,106 3,388, , ,092 Total Assets $ 4,562,751 $ 4,634,933 $ 4,193,995 $ (72,182) $ 368,756 Liabilities Current $ 182,767 $ 164,267 $ 182,657 $ 18,500 $ 110 Noncurrent 2,612,736 2,739,017 2,525,341 (126,281) 87,395 Total Liabilities $ 2,795,503 $ 2,903,283 $ 2,707,997 $ (107,780) $ 87,506 Net Assets $ 1,767,248 $ 1,731,650 $ 1,485,998 $ 35,598 $ 281,250 Total Liabilities & Net Assets $ 4,562,751 $ 4,634,933 $ 4,193,995 $ (72,182) $ 368,756 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS Operating Revenues $ 928,027 $ 902,099 $ 823,760 $ 25,927 $ 104,267 Operating Expenses (719,645) (700,087) (667,268) 19,559 52,377 Operating Income $ 208,382 $ 202,013 $ 156,492 $ 6,369 $ 51,890 Non-Operating Revenues/(Expenses) - Net (70,106) (71,337) (135,679) (1,231) (65,573) Income/(Loss) Before Contributions & Transfers $ 138,276 $ 130,676 $ 20,813 $ 7,600 $ 117,463 Contributions in Aid of Construction $ 35,881 $ 37,171 $ 44,490 $ (1,290) $ (8,609) Transfers - Surplus Funds to City (32,479) (31,680) (31,844) Transfers - Other - (716) (816) (716) (816) Change in Net Assets $ 141,678 $ 135,451 $ 32,642 $ 6,227 $ 109,035 Net Assets - Beginning of year $ 1,625,570 $ 1,596,199 $ 1,454,174 $ 29,371 $ 171,396 Net Assets - End of Year $ 1,767,248 1,731,650 $ 1,485,998 35, ,250 STATEMENT OF CASH FLOWS Net Cash Provided By/(Used In): Operating Activities $ 350,602 $ 333,738 $ 252,262 $ 16,864 $ 98,340 Non-Capital Financing Activities (32,479) (31,680) (31,584) Capital & Related Financing Activities (337,792) (357,009) (211,162) (19,216) 126,630 Investing Activities 692 3,012 (46,281) (2,321) 46,973 Net Increase/(Decrease) $ (18,978) $ (51,938) $ (36,765) $ 32,961 $ 17,787 Cash and Cash Equivalents and Investments Cash & Investments, Beginning of Year $ 340,707 $ 425,848 $ 428,629 $ (85,142) $ (87,923) Cash & Investments, End of Year 321, , ,413 (52,163) (118,684) Note: Totals may vary due to rounding Annual Operating and Financial Plan 21

24 STATEMENT OF REVENUES, EXPENSES AND CHANGE IN NET ASSETS (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual OPERATING REVENUES $ 928,027 $ 902,099 $ 823,760 $ 25, % $ 104, % OPERATING EXPENSES Production & Treatment $ 160,075 $ 155,029 $ 154,221 $ 5, % $ 5, % Purchased Power, Gas & Water 173, , , % 6, % Transmission & Distribution 40,915 37,658 39,343 3, % 1, % Maintenance 56,068 61,187 63,023 (5,119) -8.4% (6,955) -11.0% Administration & General 107, ,999 93, % 14, % Customer Accounting & Collection 20,128 21,161 20,362 (1,033) -4.9% (234) -1.2% Customer Service & Information 12,802 12,548 11, % 1, % Products & Services (3) -16.0% % Franchise Fees % % Depreciation & Amortization 148, , ,430 16, % 30, % Total Operating Expenses $ 719,645 $ 700,087 $ 667,269 $ 19, % $ 52, % OPERATING INCOME $ 208,382 $ 202,013 $ 156,491 $ 6, % $ 51, % NON-OPERATING REVENUES/(EXPENSES) Investment Income $ 692 $ 3,012 $ 2,323 $ (2,321) -77.0% $ (1,631) -70.2% Other Revenue 9,320 11,040 16,680 (1,720) -15.6% (7,360) -44.1% Other Expense (1,074) (642) (73,212) (432) 67.4% 72, % Interest Expense, net of AFUDC & Bond Amortization (79,043) (84,747) (81,469) 5, % 2, % Total Non-Operating Revenues/(Expenses) $ (70,106) $ (71,337) $ (135,679) $ 1, % $ 65, % INCOME/(LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS $ 138,276 $ 130,676 $ 20,812 $ 7, % $ 117, % Contributions in Aid of Construction $ 35,881 $ 37,171 $ 44,490 $ (1,290) -3.5% $ (8,609) -19.4% Transfers - Surplus Funds to City (32,479) (31,680) (31,844) (799) 2.5% (635) 2.0% Transfers - Other - (716) (816) INCREASE/(DECREASE) IN NET ASSETS $ 141,678 $ 135,451 $ 32,642 $ 6, % $ 109, % Note: Totals may vary due to rounding Annual Operating and Financial Plan 22

25 NON-OPERATING REVENUES/(EXPENSES) AND CONTRIBUTIONS IN AID (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 NON-OPERATING Actual Actual REVENUES/(EXPENSES) Investment Income Equity in Earnings - Young Gas $ 189 $ 100 $ 116 $ % $ % Interest Earnings 503 2,912 2,207 (2,410) -82.7% (1,704) -77.2% Subtotal $ 692 $ 3,012 $ 2,323 $ (2,321) -77.0% $ (1,631) -70.2% Other Non-Operating Revenues Other Miscellaneous Revenue $ 9,320 $ 11,040 $ 16,680 $ (1,720) -15.6% $ (7,360) -44.1% Non-Operating Expenses Interest on Long-Term Debt $ (87,551) $ (87,799) $ (102,284) $ % $ 14, % AFUDC & Capitalized Interest 6, ,402 5, % (11,143) -64.0% Bond Amortization Expense 2,250 2,068 3, % (1,164) -34.1% Other Miscellaneous Expense (1,074) (642) (73,212) (432) 67.4% 72, % Subtotal $ (80,117) $ (85,389) $ (154,681) $ 5, % $ 74, % Total Non-Operating Revenues/(Expenses) $ (70,106) $ (71,337) $ (135,679) $ 1, % $ 65, % CONTRIBUTIONS IN AID OF CONSTRUCTION Cash $ 7,250 $ 12,286 $ 12,356 $ (5,036) -41.0% $ (5,106) -41.3% Developer Fees 19,213 17,343 18,411 1, % % Assets 9,418 7,542 13,723 1, % (4,305) -31.4% Total Contributions in Aid of $ 35,881 $ 37,171 $ 44,490 $ (1,290) -3.5% $ (8,609) -19.4% Construction Note: Totals may vary due to rounding Annual Operating and Financial Plan 23

26 CASH BALANCE (in thousands of dollars) 2015 Approved 2014 Approved 2013 Actual 2015 Approved Increase/(Decrease) from: Actual Unrestricted Cash Balance $ 196,189 $ 171,441 $ 225,819 $ 24, % $ (29,629) -13.1% Restricted Cash Balance 125, , ,594 (76,911) -38.0% (89,054) -41.5% TOTAL $ 321,729 $ 373,892 $ 440,413 $ (52,163) -14.0% $ (118,684) -26.9% Note: Totals may vary due to rounding. Restricted Cash Balance represents cash on which constraints have been placed, principally by creditors, through bond covenants/provisions. Unrestricted Cash Balance includes all other cash. $500,000 Cash Balance $400,000 $214,594 $300,000 $125,540 $202,451 $200,000 $100,000 $196,189 $171,441 $225,819 $ Approved Restricted Cash Balance 2014 Approved 2013 Actual Unrestricted Cash Balance 2015 Annual Operating and Financial Plan 24

27 DEBT (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual Current Maturities of Revenue Bonds $ 70,742 $ 60,678 $ 55,764 $ 10, % $ 14, % Current Notes & Loans Payable 1,498 1,526 1,531 (28) -1.9% (33) -2.1% Subtotal $ 72,240 $ 62,204 $ 57,295 $ 10, % $ 14, % Revenue Bonds, Net $ 2,408,158 $ 2,410,763 $ 2,345,644 $ (2,606) -0.1% $ 62, % Notes & Loans Payable 15,321 16,818 16,636 (1,498) -8.9% (1,315) -7.9% Subtotal $ 2,423,478 $ 2,427,582 $ 2,362,280 $ (4,103) -0.2% $ 61, % Net Gain/(Loss) on Refundings $ (27,701) $ - $ (28,423) $ - $ % TOTAL $ 2,468,017 $ 2,489,786 $ 2,391,152 $ (21,769) -0.9% $ 76, % Note: Totals may vary due to rounding. $3,000,000 Debt $2,500,000 $2,468,017 $2,489,786 $2,391,152 $2,000,000 $1,500,000 $1,000,000 $500,000 $ Approved 2014 Approved 2013 Actual 2015 Annual Operating and Financial Plan 25

28 BOND ISSUES (in thousands of dollars) 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual Electric $ 28,256 $ 54,685 $ 32,606 $ (26,429) -48.3% $ (4,351) -13.3% Natural Gas 8,208 8,824 6,803 (616) -7.0% 1, % Water 68, ,669 88,075 (33,353) -32.8% (19,760) -22.4% Wastewater (76) - TOTAL $ 104,779 $ 165,178 $ 127,560 $ (60,399) -36.6% $ (22,781) -17.9% Note: Totals may vary due to rounding. Bonds are typically issued for the general system (with the exception of SDS) and not specific to service. For forecasting purposes bonds and debt service are allocated based on capital budgets and then recorded to actuals as the expense is incurred. $120,000 $100,000 Bond Issues $101,669 $88,075 $80,000 $68,315 $60,000 $54,685 $40,000 $20,000 $28,256 $32,606 $8,208 $8,824 $6,803 $ Approved 2014 Approved 2013 Actual Electric Natural Gas Water Wastewater 2015 Annual Operating and Financial Plan 26

29 DEBT SERVICE (in thousands of dollars) Approved Approved Approved 2013 Increase/(Decrease) from: Actual Actual ELECTRIC Interest Payments¹ $ 42,760 $ 43,571 $ 42,935 $ (810) -1.9% $ (175) -0.4% Principal Repayments 27,766 26,280 25,397 1, % 2, % AFUDC & Capitalized Interest (1,443) (639) (4,164) (804) 125.8% 2, % TOTAL $ 69,083 $ 69,211 $ 64,168 $ (128) -0.2% $ 4, % NATURAL GAS Interest Payments¹ $ 6,902 $ 6,854 $ 6,612 $ % $ % Principal Repayments 4,727 4,388 3, % 1, % AFUDC & Capitalized Interest (493) (87) (206) (406) 464.3% (288) 139.9% TOTAL $ 11,135 $ 11,154 $ 10,114 $ (19) -0.2% $ 1, % WATER Interest Payments¹ $ 43,939 $ 40,231 $ 37,098 $ 3, % $ 6, % Principal Repayments 18,344 15,207 13,501 3, % 4, % AFUDC & Capitalized Interest (24,999) (18,254) (12,713) (6,745) 37.0% (12,287) 96.6% TOTAL $ 37,283 $ 37,184 $ 37,886 $ % $ (603) -1.6% WASTEWATER Interest Payments¹ $ 13,705 $ 14,162 $ 14,792 $ (457) -3.2% $ (1,087) -7.4% Principal Repayments 11,095 10,890 9, % 1, % AFUDC & Capitalized Interest - (72) (285) % % TOTAL $ 24,800 $ 24,979 $ 23,944 $ (179) -0.7% $ % STREETLIGHTING Interest Payments¹ $ 427 $ 441 $ 470 $ (14) -3.1% $ (43) -9.1% Principal Repayments % % AFUDC & Capitalized Interest - (5) (35) % % TOTAL $ 753 $ 744 $ 680 $ 9 1.2% $ % TOTAL Interest Payments¹ $ 107,734 $ 105,259 $ 101,908 $ 2, % $ 5, % Principal Repayments 62,257 57,073 52,285 5, % 9, % AFUDC & Capitalized Interest (26,936) (19,058) (17,402) (7,878) 41.3% (9,534) 54.8% TOTAL $ 143,054 $ 143,273 $ 136,791 $ (219) -0.2% $ 6, % Note: Totals may vary due to rounding. Bonds are typically issued for the general system (with the exception of SDS) and not specific to service. For forecasting purposes bonds and debt service are allocated based on capital budgets and then recorded to actuals as the expense is incurred. 1 Interest payments are net of subsidies received for Build America Bonds issued for Southern Delivery System and Front Range Power. $150,000 Debt Service $140,000 $130,000 $143,054 $143,273 $136,791 $120,000 $110,000 $100, Approved 2014 Approved 2013 Actual 2015 Annual Operating and Financial Plan 27

30 SOURCES AND USES OF FUNDS (in thousands of dollars) SOURCES OF FUNDS Operating Revenues: 2015 Approved 2014 Approved 2013 Actual 2015 Approved Increase/(Decrease) from: Actual Electric $ 458,401 $ 435,685 $ 417,778 $ 22, % $ 40, % Natural Gas 221, , ,170 9, % 13, % Water 195, , ,378 (4,257) -2.1% 51, % Wastewater 66,967 70,647 65,431 (3,680) -5.2% 1, % Streetlighting 4,139 4,135 4, % (112) -2.6% Inter-Service Eliminations 1 (18,320) (20,014) (15,248) 1, % (3,072) 20.1% Subtotal $ 928,027 $ 902,099 $ 823,760 $ 25, % $ 104, % Investment Income 692 3,012 2,323 (2,321) -77.0% (1,631) -70.2% Build America Bonds Subsidy 7,935 8,115 7,871 (180) -2.2% % Contributions in Aid of Construction (Cash and Developer Fees) 26,463 29,629 30,767 (3,166) -10.7% (4,304) -14.0% Bond Proceeds 100, , ,560 (57,983) -36.6% (26,972) -21.1% Net Changes In Assets & ,107 - (19,107) % Liabilities - Sources Change In Cash On Hand 18,978 52,699 14,028 (33,721) -64.0% 4, % TOTAL SOURCES 2 $ 1,082,682 $ 1,154,125 $ 1,025,414 $ (71,443) -6.2% $ 57, % USES OF FUNDS Operating Expenses - Fuel 286, , ,468 7, % 7, % Operating Expenses - Non-Fuel 283, , ,081 (4,271) -1.5% 14, % Transfers - Surplus Funds to City & 32,788 31,959 32, % % Franchise Fees Debt Service Payments 2 : Interest Payments $ 80,798 $ 86,201 $ 84,506 $ (5,403) -6.3% $ (3,708) -4.4% Principal Repayments 62,257 57,073 52,285 5, % 9, % Total Debt Service $ 143,054 $ 143,273 $ 136,791 $ (219) -0.2% $ 6, % Capital Expenditures: Cash Funded $ 217,695 $ 251,431 $ 169,359 $ (33,735) -13.4% $ 48, % Bond Funded 112, , ,580 (46,591) -29.4% (26,552) -19.2% Total Capital $ 329,723 $ 410,049 $ 307,940 $ (80,326) -19.6% $ 21, % Net Changes In Assets & 6, , % 6,291 Liabilities - Uses Change In Cash On Hand TOTAL USES 3 $ 1,082,682 $ 1,153,382 $ 1,025,414 $ (70,699) -6.1% $ 57, % Note: Totals may vary due to rounding. Major non-cash (expense) and revenue items not reflected above that are included on the income statement: Depreciation & Amortization $ (148,511) $ (132,492) $ (118,430) $ 16, % $ (30,081) 25.4% 1 Inter-Service Eliminations are made to eliminate double counting of revenues and expenses provided from one utility service to another. Such revenues and expenses are eliminated on a consolidated enterprise basis. 2 Includes AFUDC and Capitalized Interest. 3 Total Sources approved at $1,154,125; Total Uses approved at $1,153, Annual Operating and Financial Plan 28

31 FINANCIAL MEASURES DEBT RATIO (in thousands of dollars) CALCULATION: 2015 Approved Increase/(Decrease) from: Approved Approved 2013 Actual Actual Current Maturities of Revenue Bonds $ 70,742 $ 60,678 $ 55,764 $ 10, % $ 14, % Current Notes & Loans Payable 1,498 1,526 1,531 (28) -1.9% (33) -2.1% Revenue Bonds, Net 2,408,158 2,410,763 2,345,644 (2,606) -0.1% 62, % Notes & Loans Payable 15,321 16,818 16,636 (1,498) -8.9% (1,315) -7.9% Net Gain/(Loss) on Refundings (27,701) - (28,423) (27,701) % Net Funded Debt $ 2,468,017 $ 2,489,786 $ 2,391,152 $ (21,769) -0.9% $ 76, % Current Maturities of Revenue Bonds $ 70,742 $ 60,678 $ 55,764 $ 10, % $ 14, % Current Notes & Loans Payable 1,498 1,526 1,531 (28) -1.9% (33) -2.1% Revenue Bonds, Net 2,408,158 2,410,763 2,345,644 (2,606) -0.1% 62, % Notes & Loans Payable 15,321 16,818 16,636 (1,498) -8.9% (1,315) -7.9% Net Gain/(Loss) on Refundings (27,701) - (28,423) (27,701) % Net Assets 1,767,248 1,731,650 1,485,998 35, % 281, % Total Capitalization $ 4,235,265 $ 4,221,435 $ 3,877,150 $ 13, % $ 358, % Debt Ratio 58.3% 59.0% 61.7% -0.7% -1.2% -3.4% -5.5% Notes: Totals may vary due to rounding. 70.0% Debt Ratio calculation: Net Funded Debt/Total Capitalization Debt Ratio 60.0% 50.0% 40.0% 58.3% 59.0% 61.7% 30.0% 20.0% 10.0% 0.0% 2015 Approved 2014 Approved 2013 Actual 2015 Annual Operating and Financial Plan 29

32 FINANCIAL MEASURES ADJUSTED DEBT SERVICE COVERAGE (in thousands of dollars) 2015 Approved CALCULATION: Increase/(Decrease) from: Approved Approved 2013 Actual Actual Net Revenues: Operating Revenues $ 928,027 $ 902,099 $ 823,760 $ 25, % $ 104, % Contributions in Aid of Construction 26,463 29,629 30,767 (3,166) -10.7% (4,304) -14.0% (Cash and Developer Fees) Interest Earnings w/o Bond Interest 503 2, (2,410) -82.7% (58) -10.4% Build America Bonds Subsidy 7,935 8,115 7,871 (180) -2.2% % Total Revenue $ 962,927 $ 942,755 $ 862,958 $ 20, % $ 99, % Total Operating Expenses (719,645) (700,087) (667,269) (19,559) 2.8% (52,376) 7.8% Depreciation & Amortization 148, , ,430 16, % 30, % Transfers - Surplus Funds to City (32,479) (31,680) (31,844) (799) 2.5% (635) 2.0% Net Revenues $ 359,313 $ 343,480 $ 282,275 $ 15, % $ 77, % Bond Year Debt Service $ 169,990 $ 162,331 $ 154,193 $ 7, % $ 15, % Adjusted Debt Service Coverage Ratio (0.00) -0.1% % Note: Totals may vary due to rounding. Adjusted Debt Service Coverage Ratio calculation: Net Revenues/Bond Year Debt Service Adjusted Debt Service Coverage Approved 2014 Approved 2013 Actual Executive Limitation = 2x Coverage 2015 Annual Operating and Financial Plan 30

33 FINANCIAL MEASURES DAYS OF CASH ON HAND (in thousands of dollars) CALCULATION: 2015 Approved 2014 Approved 2013 Actual 2015 Approved Increase/(Decrease) from: Actual Cash and Cash Equivalents-Unrestricted $ 196,189 $ 171,441 $ 225,819 $ 24, % $ (29,629) -13.1% Cash Expense per Day Total Operating Expenses $ 719,645 $ 700,087 $ 667,269 $ 19, % $ 52, % Less: Depreciation & Amortization 148, , ,430 16, % 30, % Net Cash Expense $ 571,134 $ 567,595 $ 548,839 $ 3, % $ 22, % Number of Days in Period % - 0.0% Net Cash Expense Per Day $ 1,565 $ 1,555 $ 1,504 $ % $ % Days of Cash on Hand % (24.8) -16.5% Note: Totals may vary due to rounding Days of Cash on Hand calculation: Cash and Cash Equivalents-Unrestricted/Net Cash Expense Per Day Days of Cash on Hand Approved 2014 Approved 2013 Actual Executive Limitation = 90 Days 2015 Annual Operating and Financial Plan 31

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35 ENTERPRISE FINANCIAL PLAN 2015 Approved STATEMENT OF NET ASSETS Assets Current 400,359 CONDENSED FINANCIAL STATEMENTS (in thousands of dollars) $ $ 431,707 $ 463,314 $ 521,658 $ 570,835 Noncurrent - Other 294, , , , ,039 Capital Assets, Net 3,868,293 3,992,351 4,097,204 4,146,132 4,178,236 Total Assets $ 4,562,751 $ 4,725,012 $ 4,852,727 $ 4,949,593 $ 5,018,111 Liabilities Current $ 182,767 $ 181,444 $ 188,979 $ 195,186 $ 203,352 Noncurrent 2,612,736 2,618,635 2,606,244 2,568,827 2,500,708 Total Liabilities $ 2,795,503 $ 2,800,079 $ 2,795,223 $ 2,764,013 $ 2,704,060 Net Assets 1,767,248 1,924,932 2,057,504 2,185,579 2,314,051 Total Liabilities & Net Assets $ 4,562,751 $ 4,725,012 $ 4,852,727 $ 4,949,593 $ 5,018,111 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS Operating Revenues $ 928,027 $ 973,852 $ 999,205 $ 1,024,501 $ 1,082,935 Operating Expenses (719,645) (752,534) (785,837) (813,462) (869,153) Operating Income $ 208,382 $ 221,318 $ 213,368 $ 211,039 $ 213,781 Non-Operating Revenues/(Expenses) - Net (70,106) (72,629) (96,729) (97,333) (100,110) Income/(Loss) Before Contributions & Transfers $ 138,276 $ 148,689 $ 116,639 $ 113,705 $ 113,671 Contributions in Aid of Construction $ 35,881 $ 41,823 $ 49,004 $ 47,842 $ 48,626 Transfers - Surplus Funds to City (32,479) (32,827) (33,072) (33,472) (33,825) Transfers - Other Change in Net Assets $ 141,678 $ 157,685 $ 132,571 $ 128,076 $ 128,471 Net Assets - Beginning of year 1,625,570 1,767,248 1,924,932 2,057,504 2,185,579 Net Assets - End of Year 1,767,248 1,924,932 2,057,504 2,185,579 2,314,051 STATEMENT OF CASH FLOWS Net Cash Provided By (Used In): Operating Activities $ 350,602 $ 358,498 $ 362,002 $ 368,581 $ 371,405 Non-Capital Financing Activities (32,479) (32,827) (33,072) (33,472) (33,825) Capital and Related Financing Activities (337,792) (299,279) (317,119) (293,469) (312,538) Investing Activities Net Increase/(Decrease) $ (18,978) $ 27,137 $ 12,576 $ 42,375 $ 25,815 Cash and Cash Equivalents and Investments Cash & Investments, Beginning of Year 340, , , , ,818 Cash & Investments, End of Year 321, , , , ,632 Note: Totals may vary due to rounding Forecast 2017 Forecast 2018 Forecast 2019 Forecast 2015 Annual Operating and Financial Plan 33