METROPOLITAN UTILITIES DISTRICT Inter-Department Communication. August20,2013

Transcription

1 METROPOLITAN UTILITIES DISTRICT Inter-Department Communication August20,2013 Subject: REPORT ON INCOME AND FINANCE FOR JUNE 2013 To: From: Committee on Accounts, Expenditures, Finance and Rates cc: All Board Members; Messrs. Clark, Bucher, Doyle and Keep, Ms. Schneider; KPMG and all Vice Presidents Joseph J. Schaffart, Vice President, Accounting Statements: Board Schedules- Water and Gas, A-12, A-20, W-1, W-2, G-1 and G-2 for the month of June 2013 are transmitted herewith. Water Department June water sales revenues of $9.1 million were $.7 million, or 6.8 /o unfavorable to budget and $1.0 million, or 9.9 /o unfavorable to prior year. Water volumes were 19.5%> unfavorable to budget and 25. 7o/o unfavorable to prior year. The fairly sizable unfavorable volume variance vs. prior year was partially mitigated by the 5o/o rate increase to two components of the water rates, namely "Commodity Charges" and "Service Charges" that was effectuated in January The relationship between volumes and revenue is further impacted by the "fixed" components of revenue, namely "Service Charge" and "Infrastructure Charge" revenue. To clarify, the "Service Charge" and "Infrastructure Charge" components of a customer's monthly water invoice are the same, regardless of usage levels. This billing methodology has the impact of "smoothing" revenue, making the overall revenue variances less pronounced than the volume variances would seem to indicate. June expenses were favorable to budget by $.5 million, or 6.7%>, due primarily to: Millions Reduced depreciation and amortization expense (plant additions $0.2 and replacements below budget by $10.7 million through June) Decreased primary pumping expense, primarily Platte West All other, net $0.1 $0.2 June expenses were unfavorable to last year by $0.1 million, or 1.9 /o due primarily to: Millions Increased interest expense associated with 2012 bonds ($0.1) Increased Customer Accounts expense due in part to CRB related overtime Decreased WIR water service reconnects ($0.1) $0.1

2 The activity discussed above resulted in June net income for the Water Department of $2.1 million, which is unfavorable to budget by $.2 million, and unfavorable to prior year by $1.1 million. The Water Department fund position at June 30, 2013 is $23.7 million, which is $14.0 million favorable to budget, due primarily to: Millions Decreased Revenue ($0.3) Decreased Operating Expenses $3.1 Reduced Depreciation and Amortization Expense ($1.2) CIR Retro Payment (nearly all of payment charged to Gas Dept.) $0.6 Reduced/Delayed Capital Expenditures $11.8 Contributions in Aid of Construction ($2.1) Increased Unbilled Revenue ($0.8) Other Changes...$Q2 Operational Funds- Variance to Budget $11.8 Proceeds from NDEQ- Contact Basin Loan $0.5 Pay down in Loan from Gas Dept. (paid back less than budgeted) _111. Total Fund Position- Variance to Budget $14.0 At June 30, 2013, the Water Department owed the Gas Department $1.5 million, which is the balance of the loan; it is anticipated that this loan will be paid off in Additionally, there was an Interdepartmental payable of $1.2 million due to the Gas Department related to the monthly settlement between the two departments. The Water Department's June year-to-date capital expenditures were $11.8 million less than budget (as noted above). This variance is primarily timing related, as amounts are expected to be spent later in the year. Significant items budgeted, but not "closed" and/or expended through June 2013 include: Millions Platte South - SCADA Replacement Platte South - Zweibel Creek Waste Elimination Platte South - Phase 2 HVAC Platte South -Replace Wellfield Communication (L T3-l) Platte South- Replace Upflow Basin Valve Actuators Platte South - All Other Florence -Improvements (numerous projects) Pumping & Purification Florence Phase 2 THM Reduction Pumping & Purification Replace Nordberg Engines Platte South Pumping & Purification-All Other Construction Machines WIR Projects Mains-Other All Other Net -2- Over (Under) Budget ($1.5) ($1.4) ($0.6) ($0.4) ($0.2) ($0.6) ($3.2) ($0.7) ($0.5) ($0.4) ($0.4) ($1.1) ($0.3) ($0.5) ($11.8)

3 Gas Department June Gas net revenues of $5.7 million were favorable to budget by $.8 million, or 15.4%>, while volumes were up by 1.3 /o. June net revenues were favorable to last year by $1.0 million, or 21.2 /o, while volumes decreased by 4.5 /o. The disparity between the revenue and volume variance as compared to budget and prior year is due primarily to the fact there are fixed components to the revenue stream, namely Service Charge and Infrastructure Charge revenue; consequently, a 1.3 /o favorable volume variance to budget does not result in a like favorable percentage increase in net revenue. The revenue variance to prior year is also favorably impacted by the impact of a 13o/o increase to the base commodity charge that was effectuated January 1, 2013 (this increase results in a 2.6o/o annual increase to the average residential customer). June expenses were unfavorable to budget by $0.3 million, or 7.3%, due primarily to: Millions Increased Customer Accounts expense due in part to ($0.3) CRB related overtime Increased Depreciation expense Increased General & Administrative expense due to Reduced amounts charged to construction projects Decreased gas production operating and maintenance Decreased gas distribution operating and maintenance ($0.2) ($0.1) $0.2 $0.1 June expenses were unfavorable to last year by $0.3 million, or 5.5 /o, due primarily to: Millions Increased Administrative and General expense due to increased salary expense coupled with lower amounts transferred to construction Increased Depreciation expense Increased Customer Accounts expense due in part to CRB related overtime Decreased Production and Distribution expense partially offset by $.3MM impact of retroactive CIR payment All other net ($0.1) ($0.1) ($0.1) $0.2 ($0.2) The activity discussed above resulted in June net income for the Gas Department of $.9 million, which is favorable to budget by $.4 million and favorable to last year by $.7 million. -3-

4 The Gas Department fund position at June 30, 2013 is $26.7 million, which is $14.5 million favorable to budget, due primarily to: Millions Increased Net Revenue $ 7.3 Decreased Operating Expenses $ 0.4 Increased Depreciation and Amortization Expense $ 0.7 Reduced/Delayed Capital Expenditures (timing) $10.8 Change in Unbilled Revenue ($ 0.7) Natural Gas Inventory Change ($ 2.0) C I R Retroactive Payment ($ 0.5) Other Changes ~ Operational Funds -Variance to Budget $16.2 Pay down in Loan to Water Dept. (less than budgeted) ($1.7) Total Fund Position -Variance to Budget $14.5 The Gas Department's June year-to-date capital expenditures were $10.8 million less than budget (as noted above). This variance is primarily timing related, as amounts are expected to be spent later in the year. Significant items budgeted, but not "closed" and/or expended through June 2013 include: Information Technology- CRB Project GIR Projects- Mains and Other Distribution Information Technology-Mobility Initiative Furniture, Equipment and Misc. Information Technology-SAN Storage Replacements/ Additions Information Technology-HR Initiatives Data Center Equipment Replacements/Additions Information Technology Infrastructure Virtualization Information Technology-"Rugged" computers CNG Station-West Omaha Refurbish Delaval Compressor Spare Rotor All Other, Net Vehicle Purchases-CNG (timing) SCADA-Master Plan 2012 (timing) Statement A-12, Payroll, Employee Count and Overtime by Area Payroll and Employee Count Millions Over (Under) Budget ($2.1) ($2.0) ($1.5) ($0.9) ($0.7) ($0.5) ($0.5) ($0.4) ($0.4) ($0.4) ($0.3) ($2.2) $0.8 ~ ($10.8) The active payroll for June was $4.5 million, compared with $4.6 million in budget and $4.5 million for prior year. At June 30th, there were 803 regular full-time employees, compared with 849 in budget and 827 in prior year. Part-time, Summer and Temp. employees numbered 56 at June 30th, as compared with 66 in budget and 61 in prior year. -4-

5 Overtime Hours Overtime hours for the month totaled 9,370.5 as compared with 7,041.0 in budget and 6,855.5 in prior year. The unfavorable overtime hours variance versus budget (2,329.5 hours, or 33.1 /o) primarily occurred in Customer Services (2,611 hours over budget due primarily to the CRB project), Marketing and Corporate Communications (151.5 hours over budget-primarily Builder Services) and Information Technology (114.5 hours over budget due primarily to the CRB project), partially offset by reduced overtime in Construction (312 hours under budget), Field Services and Measurement (280.5 hours under budget) and Water Operations (71 hours under budget). Statement A-20, Restricted and Unrestricted Funds On June 30, 2013, the Water Department cash and restricted funds totaled $23.0 million. Of this amount, $14.3 million was in the 2012 Bond Project Fund, $6.7 million was in the Bond Sinking/Reserve Fund and $0.2 million was in the Platte West Environmental Fund. On June 30, 2013, there were no Gas Department investments; however, there was $47.4 million in cash on hand. The cash on hand is primarily made up of: 1) customer deposits and credit balances $10.1 million, 2) GIR funds collected but not expended, $10.9 million, and 3) payback of the Water Loan through June 2013, $21.3 million. The funds are generating earnings credits, which serve to reduce our monthly bank charges. The earnings credits currently exceed the returns offered by short-term investment options. Approved: 0~0 CJJAud Debra A. Schneider Senior Vice President, Chief Financial Officer Dou as R. Clark President Enclosures -5-

6 METROPOLITAN UTILITIES DISTRICT OF OMAHA WATER DEPARTMENT FINANCIAL VARIANCE REPORT FOR THE MONTH AND SIX MONTHS ENDING JUNE 30, 2013 AND 2012 Over Over Over Over June2013 (Under) Six Months 2013 (Under) June (Under) Six Months (Under) Actual Budget Bud let Actual Budget Budget 2013ACTUAL 2012ACTUAL Prior Year 2013ACTUAL 2012ACTUAL Prior Year Revenues Water sales $ 7,679,772 $ 8,388,273 (8.45)% $ 35,378,261 $ 35,739,061 (1.01)% $ 7,679,772 $ 8,756,129 (12.29)% $ 35,378,261 $ 35,068,473.88% Infrastructure Charge 1,336,260 1,159, % 7,094,173 7,007, % 1,336,260 1,164, % 7,094,173 6,961, % Other ,000 (54.59)% 1,519,257 1,498, % ,762 (47.43)% 1,519,257 1,510,667.57% Total revenues 9,126,831 9, (6.79)% 43,991,691 44,244,725 (.57)% 9,126,831 10,131,710 (9.92)% 43,991,691 43,540, % Revenue Deductions Operating & Maintenance 5,346,832 5,457,700 (2.03)% 31,850,310 33,640,112 (5.32)% 5,346,832 5,105, % 31,850,310 30,899, % WIR Water Service Reconr 11,897 74,448 (84.02)% 456, , % 11, ,295 (89.21)% 456, , % Other 1,699,149 2,033,592 (16.45)% 10,654,378 12,013,750 (11.32)% 1,699,150 1,713,335 (.83)% 10,654,378 10,082, % Total expenses 7,057,879 7,565,740 (6.71)% 42,961, (6.81)% 7,057,879 6,928, % 42, , % Interest Income $ (9,551) $ (57,032) 2 2,600 $ (2,598) $ (5,104) Net Income (Loss) $ 2,068,954 $ 2,235,216 $ (166,262) $ 1,030,481 ~ (1,798,507} $ 2,828,988 $ 2,068,954 $ 3,205,319 $ (1,136,365) $ 1,030,481 $ 2,140,008 $ (1,1 09,528) Thousands of gallons sold 2,585,404 3,212,220 (19.51)% 12,216,841 12,588,482 (2.95)% 2,585,404 3,478,916 (25.68)% 12,216,841 12,685,180 (3.69)% Number of customers N/A 202,146 N/A Plant Additions & Replacements $ 2,773,779 $ 5,580,281 $ (2,806,502) $ 14,810,465 $ 26,637,634 $ (11,827,169) $ 2,773,779 $ 4,949,400 $ (2,175,621) $ 14,810,465 $ 18,647,413 $ (3,836,949) Ending Funds Position $ 23,725,784 $ 5,779,626 $ 17,946,158 Water Construction/Environmental Fund $ 171,620 $ 171,589 $ 31 Note: Subsequent to the closing of our June "financials", it was discovered that the "Number of Customers" (which represents total "active customers), is not available as an unintended consequence of the CRB conversion. Efforts are underway to derive this Information; this has no impact on the integrity of our billing or on the "Number of Customers Billed" as reported on other statements.

7 METROPOLITAN UTILITIES DISTRICT OF OMAHA GAS DEPARTMENT FINANCIAL VARIANCE REPORT FOR THE MONTH AND SIX MONTHS ENDING JUNE 30, 2013 AND 2012 Over Over Over Over June 2013 (Under) Six Months 2013 (Under) June (Under) Six Months (Under) Actual Budget Budget Actual Budget Budget 2013ACTUAL 2012ACTUAL PriorY ear 2013ACTUAL 2012ACTUAL PriorY ear Revenues Gas sales $ 9,710,991 $ 7,827, % $ 119,856,429 $ 103,452, % $ 9,710,991 $ 6,983, % $ 119,856,429 $ 85,862, % (Over)/under gas recovery (823,952) -.00% 421, % (823,952) (68,604).00% 421,920 3,077,912 Infrastructure Charge 1,217,737 1,044, % 6,396,553 6,312, % 1,217,737 1,037, % 6,396,553 6,275,378 Other 250, ,500 (14.78)% 2,117,152 1,930, % 250, ,150 (12.28)% 2,117,152 2,192,622 (3.44)% Total revenues, net 10,354,909 9,166, % 128,792, ,696, % 10,354,909 8,238, % 128,792, , % Less: Natural gas purchased 4,651,128 4,225, % 79,863,517 70,047, % 4,651,128 3,533, % 79,863,517 57,163, o/o Operating revenues, net of gas cost A.940,7~ % 48, ,648, % 5,703,781 4,705, % , % Revenue Deductions Operating & Maintenance 3,912,292 3,747, % 22,803,473 24,201,789 (5.78)% 3,912,292 3,826, % 22,803,473 22,165, % Other % 9, , % 869, % 9,824,354 7,917, % Total expenses 4, , % 32, (1.24)% 4,781, o/o 32,627,826 30,082, o/o Interest Income I Extraordinary items $ 2, $ 9, $ (42,061) ,169 $.(149,112) Net Income {loss) $ 928,912 $ 486,489 $ 442,423 $ 16,361,768 _$_~ $ 7,700,057 _L~ $ $ 705,740 $ 16,361,768 $ 10,372,121 $ 5,989,647 Total Sales Adjusted for Unbllied Sales 1,114,051 1,099, % 19,550,007 18,103, % 1,114,051 1,166,902 (4.53)% 19,550,007 14,740, % Heating degree days (5.88)% 3,864 3, o/o % 3,864 2, % Number of customers N/A 216,309 N/A Plant Additions & Replacements $ 2,944,064 $ 5,540,168 $ (2,596,104) $ 20,329,738 $ 31,085,210 $ {10,755,472) $ 2,944,064 $ 3,090,715 $ (146,651) $ 20,329,738 $ 18,431,196 $ 1,898,542 Ending F.unds Position $ 26,666,194 $ (14,321,907) $ 40,988,101 Note: Subsequent to the closing of our June "financlals", it was discovered that the "Number of Customers" {which represents total "active" customers), is not available as an unintended consequence of the CRB conversion. Efforts are underway to derive this Information; this has no impact on the integrity of our billing or on the "Number of Customers Bflled" as reported on other statements.

8 METROPOLITAN. UTILITIES DISTRICT A-12a PAYROLL BY DEPARTMENTS AND DIVISIONS JUNE 2013 FOR THE MONTH AND SIX MONTHS ENDING JUNE 30, 2013 AND 2012 Month of June Six Months Ending June Actual Budget Actual Actual Budget Actual Executive and General Staff President's Office $ 108,458 $ 127,170 $ 125,745 $ 678,810 $ 764,726 $ 785,286 Law 52,297 38,345 47, , , ,481 Human Resources 58,513 76,650 50, , , ,382 Safety and Security 49,810 48,171 48, , , ,432 Purchasing 20,284 28,513 28, , , ,318 Information Technology 392, , ,656 2,308,131 2,528,280 2,135,633 Gas Operations Gas Operations 37,104 36,366 38, , , ,615 Gas Production 118, , , , , ,610 Gas Systems Control 36,751 36,999 35, , , ,409 Gas Distribution 79,217 75,970 86, , , ,116 Department Total ,730 1, , ,598,750 Field Services and Measurement Field Service Administration 127, , , , , ,462 Field Services and Measurement 424, , ,265 2,760,372 2,787,986 2,724,977 Measurement ,099 79! ,775 Department Total 622,452 _694.~84_ 6_4{,112 4,150,978 4,067,174. _3,~49,214 Water Operations Water Operations 20,622 20,824 20, , , ,895 Water Pumping - Florence 180, , ,077 1,123,073 1,132,493 1,039,218 Maintenance 216, , ,778 1,544,248 1,335,835 1,322,816 Water Distribution 176, , ,314 1,142,149 1,088,175 1,075,481 Platte South 71,117 74,711 67, , , ,575 Platte West 82,831 87,908 94, , , ,140 Water Quality ,082 49, , ,802 Department Total 797, , !818,927 Marketing and Corporate Communications 79,087 83,173 74, , , ,976 Customer Services Customer Service Administration 37,041 46,928 46, , , ,488 Meter Reading 202, , ,965 1,308,788 1,354,669 1,314,562 Customer Service 193, , ,462 1,110,174 1,162, ,496 Customer Accounting 145, , , , , ,019 Cashiers 29,056 35,505 30, , , ,642 Credit Services 75!233 60!160 86, , ,718 Department Total , ,768 4,152,820 4,118,884 3,958,925 Accounting 117,018 95,540 96, , , ,807 Stores 46,408 46,870 47, , , ,274 Engineering & Construction Engineering & Construction 49,691 54,721 47, , , ,610 Plant Engineering 194, , ,419 1,134,659 1,189,331 1,049,685 Engineering Design 190, , ,458 1,230,304 1,157,857 1,137,142 Construction 633, , ,237 4,413,058 4,362,886 4,311,143 Transportation 88,116 92,332 94, , , ,933 Transportation Office 46,674 47,358 47, , , ,844 Department Total 1, , ,014,902 7,880,754 7,669,357 Total Payroll _! 4,591,840_ $ -~.646,750 $ 4,527,058 $ 28,888,515 $ 28,46~,703 $ 27,339,762 A-12a

9 Executive and General Staff METROPOLITAN UTILITIES DISTRICT A-12b EMPLOYEES BY DEPARTMENTS AND DIVISIONS JUNE 2013 FOR THE MONTH AND SIX MONTHS ENDING JUNE 30, 2013 AND 2012 Current Year Actual Current Year Budget Prior Year Actual Full Part Summer/ Full Part Summer/ Full Part Summer/ Time Time Temp. Time Time Temp. Time Time Temp. President's Office Law Human Resources Safety and Security Purchasing Information Technology Gas Operations Gas Operations Gas Production Gas Systems Control Gas Distribution 14_ R - 5 1L - Department Total ~ Field Services and Measurement Field Service Administration Field Services and Measurement Measurement 17_ _ _ - 1_ Department Total! Q 2 9 1gj _ Water Operations Water Operations Water Pumping - Florence Maintenance Water Distribution Platte South Platte West Water Quality 9_ - - 9_ - 1 9_ - 1 _ Department Total 11I 1 21 :!..& 2 1.L 11 1 _ Government Affairs and Marketing 14_ _ - 2_ Customer Services Customer Service Administration Meter Reading Customer Service Customer Accounting Cashiers Credit Services _ _ - Department Total _11Q 8 3_ ~ 14 3 '! 11 2_ 3 _ 4_ Accounting Stores Engineering & Construction Engineering & Construction Plant Engineering Engineering Design Construction Transportation Transportation Office a_ - - 9_ - 9_ Department Total ~ - 3_ ~ - 3_ ~ - 3_ Total Employees ~ ~ ~ ~ ~ A-12b

10 METROPOLITAN UTILITIES DISTRICT A-12c OVERTIME HOURS BY DEPARTMENTS AND DIVISIONS JUNE 2013 FOR THE MONTH AND SIX MONTHS ENDING JUNE 30,2013 AND 2012 Month of June Six Months Ending June Actual Budget Actual Actual Budget Actual Executive and General Staff President's Office Law Human Resources Safety and Security Purchasing Information Technology , , ,042.9 Gas Operations Gas Operations Gas Production , , Gas Systems Control Gas Distribution , ,108.5 Department Total , , ,838.5 Field Services and Measurement Field Service Administration , , Field Services and Measurement , , , ,336.5 Measurement , Department Total _ ,25)5.0 1, , , ,692.0 Water Operations Water Operations Water Pumping - Florence , , Maintenance Water Distribution , , ,728.5 Platte South Platte West Water Quality Department Total , , !668.5 Marketing and Corporate Communications Customer Services Customer Service Administration Meter Reading , , Customer Service 1, , , ,485.5 Customer Accounting , Cashiers Credit Services , ,241.0 Department Total 3, , , , , ,398.0 Accounting Stores Engineering & Construction Engineering & Construction Plant Engineering , , ,346.5 Engineering Design Construction 1, , , , , ,342.0 Transportation Transportation Office Department Total ~.05~.5 3, , , , ,348.0 Total Overtime Hours 9, , , , ,1_56.0_ 32,300.4 A-12c

11 Metropolitan Utilities District of Omaha Water and Gas Departments Restricted and Unrestricted Investment Funds As of June 30, 2013 A-20 Page 1 of 2 Description: Maturity Date Stated Int. Rate Effective Int. Rate Water Cost Including Unamortized Premium or Discount Gas Total Revenue Fund Currently No Investments for Water Or Gas $ $ $

12 Metropolitan Utilities District of Omaha Water and Gas Departments Restricted and Unrestricted Investment Funds As of June 30, 2013 A-20 Page 2 of 2 Description: Maturity Date Stated Int. Rate Effective Int. Rate Water Cost Including Unamortized Premium or Discount Gas Total 2006 Bond Sinking Funds 2012 Bond Sinking Funds 2012 Bond Fund Currently No Investments (2006) Cash (2012) Cash (2012) Bond Reserve 2,952, ,260 2,954,531 2,952, ,260 2,954,531 $ 6,716,469 $ - $ 6,716,469 T & E Species Agreement TRSRA Agreement 39, ,119 39, ,119 $ 171,620 $.. $ 171,620 $ 6,888,090 $ - $ 6,888,090

13 METROPOLITAN UTILITIES DISTRICT OF OMAHA W-1 WATER DEPARTMENT JUNE 2013 BALANCE SHEETS Page 1 AS OF JUNE 30, 2013 AND MAY 31, 2013 June 30 May31 January 1 Increase (Decrease) ASSETS One Month Six Months UTILITY PLANT -At Cost Plant in service $ 935,110,904 $ 935,005,506 $ 928,196,903 $ 105,398 $ 6,914,001 Less - Accumulated depreciation 163,377, ,343, ,905,420 1,034,139 5,472,088 Net utility plant in service 771,733, ,662, ,291,483 (928,741) 1,441,913 Construction in progress 31,894,375 29,157,575 25,072,259 2,736,800 6,822,116 Construction materials at average cost 1,009,631 1,093, ,329 (83,965) 155,302 Net utility plant 804,637, ,913, ,218,071 1,724,094 8,419,331 NONCURRENT ASSETS Construction/Environmental fund 171, , , Total noncurrent assets 171, , , CURRENT ASSETS Cash in treasurer's accounts 1,814, , ,640 1,640,636 1,548,967 Bond sinking fund - restricted 6,716,469 12,580,413 5,948,475 (5,863,944) 767,994 Working funds 8,400 8,400 8,400 U.S. Government securities Bond 2012 Project Fund 14,299,400 15,342,908 21,306,740 (1,043,508) (7,007,340) Accounts receivable - other 629,592 1,734,519 2,062,117 ( ,927) (1,432,525) Accounts receivable - utility service 16,071,839 12,780,107 16,784,980 3,291,732 (713,141) Allowance for uncollectible accounts (1,017,523) (984,307) (797,200) (33,216) (220,323) Interdepartmental Receivable from Gas Department - 5,002,002 1,654,199 (5,002,002) (1,654,199) Loan receivable from Gas Department Interest receivable Accrued unbilled revenues 2,852,805 1,749,615 1,627,064 1,103,190 1,225,741 Fire protection taxes 2,208 2,208 3,483 - (1,275) Materials and supplies - at average cost 2,618,456 2,427,262 2,359, , ,662 Prepayments 1,634,191 1,669,146 1,811,186 (34,956) (176,996) Total current assets 45,630,443 52,486,244 53,034,878 (6,855,800) (7,404,435) DEFERRED CHARGES 967, ,421 1,053, (86,112) Total Assets $ 851,406,565 $ 856,537,591 $ 850,477,766 $ (5,131,026) $ 928,799 W-1

14 METROPOLITAN UTILITIES DISTRICT OF OMAHA W-1 WATER DEPARTMENT JUNE2013 BALANCE SHEETS Page2 AS OF JUNE 30, 2013 AND MAY 31, 2013 June30 May31 January 1 Increase (Decrease) LIABILITIES AND NET WORTH One Month Six Months NONCURRENT LIABILITIES Long Term Debt: Water Revenue Bonds Net of Discount/Premium $ 206,897,291 $ 209,766,128 $ 209,860,945 $ (2,868,838) $ (2,963,654) NDEQ Loan- Bennington 129, , ,856 (30,849) (30,849) NDEQ Loan - Contact Basin 5,191,088 5,191,088 4,672, ,512 Loan from Gas Total long term debt 212,217, ,117, ,693,377 (2,899,687) (2,475,991) Net pension obligation 1,830,997 1,830,997 1,830,997 Other Post Employment Benefits 36,851,708 36,081,323 32,229, ,385 4,622,308 Total Long Term Liabilities 250,900, ,029, ,753,774 (2, 129,302) 2,146,317 CURRENT LIABILITIES Current maturities of revenue bonds 7,130,000 7,030,000 7,030, , ,000 Current maturities of NDEQ Loans 184, , ,311 (121,683) (121,683) Current Maturities of Loan from Gas Department 1,461,503 2,461,503 4,961,503 (1,000,000) {3,500,000) Accounts payable 3,392,796 3,115,567 5,436, ,229 (2,043,276) Interdepartmental Payable to Gas Department 1,153, ,153,228 1,153,228 Water service deposits - 794, ,910 (794,643) (716,910) Customer deposits-pioneer Approach Mains 109, , ,664 (13,995) (79, 124) Customer Credit Balances - 681,701 - (681,701) Statutory payments to municipalities 330, , , ,606 (131,589) Sewer fee collection due municipalities 7,464,504 8,097,346 5,616,060 (632,842) 1,848,444 Interest accrued on water revenue bonds 735,215 4,443, ,554 (3,708, 111) (5,340) Accrued vacation payable 2,806,899 2,806,899 2,898,135 - (91,236) Total current liabilities 24,769,140 30,088,052 28,356,626 (5,318,912) (3,587,486) CUSTOMER ADVANCES FOR CONSTRUCTION 3,773,440 3,942,805 4,325,679 (169,365) (552,239) SELF- INSURED RISKS 1,716,513 1,764,296 1,905,172 (47,783) (188,659) OTHER DEFERRED CREDITS ,907 - (10,907) NET WORTH Contributions in aid of construction 313,023, ,558, ,932, ,381 2,091,292 Accumulated reinvested earnings 257,223, ,154, ,193,454 2,068,954 1,030,481 Total net worth 570,247, ,713, ,125,609 2,534,335 3,121,773 Total Liabilities and Net Worth $ 851,406,565 $ 856,537,591 $ 850,477,766 $ (5,131,026) $ 928,799 'W-1

15 METROPOLITAN UTILITIES DISTRICT OF OMAHA W-2 WATER DEPARTMENT JUNE 2013 INCOME AND SOURCE AND DISPOSITION OF FUNDS STATEMENTS FOR THE MONTH AND SIX MONTHS ENDING JUNE 30, 2013 AND 2012 June Six June Six Months 2013 Months 2012 Actual Budget Actual Actual Budget Actual OPERATING REVENUES Water sales revenue $ 7,679,772 $ 8,388,273 $ 8,756,129 $ 35,378,261 $ 35,739,061 $ 35,068,473 Infrastructure Charge 1,336,260 1,159,130 1,164,819 7,094,173 7,007,664 6,961,845 Other operating revenues 143, , ,537 1,717,578 1,618,000 1,719,315 Total operating revenues 9,159,069 9,811,403 10,166,485 44,190,012 44,364,725 43,749,633 Less: Bad debt expense (32,238} {20,000} (34,775} {198,321} {120,000} (208,648) Total operating revenues, net 9,126,831 9, ,131,710 43,991,691 44,244,725 43,540,985 REVENUE DEDUCTIONS Operating expense 3,904,830 4,035,092 3,775,500 22,487,715 23,635,706 22,015,574 Maintenance expense 1,442,002 1,422,608 1,329,861 9,362,595 10,004,406 8,884,026 WIR Water Service Reconnects 11,897 74, , , , ,377 Depreciation 1,000,826 1,196, ,182 6,021,806 7,176,749 5,832,646 Statutory payments to municipalities 103, , , , , ,730 Interest expense-revenue bonds 717, , ,340 4,351,944 4,580,403 3,854,008 Interest expense-ndeq loans 17,544 14,083 18,207 83,653 84,498 82,239 Other interest expense-gas loan and other 6,654 7,250 48,368 58,864 43, ,075 Interest charged to construction (cr.) {147,241} {71,667} (91,418} {413,039} {430,000} {448,308) Total revenue deductions 7,057,879 7,565,740 6,928,990 42,961,496 46,100, ,367 Net revenues 2,068,952 2,225,663 3,202,720 1,030,195 (1,855,825) 2,134,618 OTHER INCOME- INTEREST 2 9,553 2, ,318 5,390 FUNDS PROViDED Net income (loss) 2,068,954 2,235,216 3,205,319 1,030,481 (1,798,507) 2,140,008 Depreciation and amortization charges 1,056,460 1,278,008 1,047,597 6,463,795 7,668,045 6,361,744 Net pension obligation OPEB 770, ,235 4,622,308 4,333,410 1,952,001 Loan from NDEQ for Contact Basin - 518,512 - Loan from gas 2,400,000 1,500,000-12,200,000 Long term loan-25 yr - Contribution in aid of construction - Grant ,604 Contribution In aid of construction 93,918 44,900 97,961 31,523 2,687, ,640 Contribution in aid of construction - capital fe 202, , , ,926 1,000,000 1,281,567 Bond Series 2012 Project Fund Total funds provided 4,191,815 4,460,359 7, ,674,148 13,890,898 24,506,961 FUNDS EXPENDED Plant additions and replacements 2,063,645 4,673,116 4,309,147 12,482,339 23,199,469 15,194,529 Plant additions and raplacements-cast Iron 710, , ,253 2,328,126 3,438,165 3,452,884 CIR Retro Pay - Payment - 600,000 NDEQ Loan-Contact Basin - 5, ,000 NDEQ Loan-Bennington 29,944 20,916 29,066 29, ,496 29,066 Bond Retirement 2,750,000 2,075,417 3,250,000 2,750,000 2,750,000 3,250,000 Gas loan retirement 1,000, ,333-5,000,000 5,191, ,000 Total funds expended 6,553,723 8,546,947 8,228,466 22,590,409 35,335, ,479 CHANGE IN UNBILLED REVENUE (1,103,190) (532,528) 3,927 (1,225,741) (433,421) (15,159) CHANGE IN ENVIRONMENTAL FUND (2) ( - (2) (15) - (15) OTHER CHANGES IN FUNDS - NET {3.702,944} - {3,363,682} 304, ,972 NET INCREASE (DECREASE) IN FUNDS $ {1.168,044) $ (4,619,116} $ {4.548,746} (7,837,066) (21,877,651) 2,390,280 FUNDS POSITION - BEGINNING OF PERIOD $ 31,562,850 $ 31,562,850 $ 3,389,346 FUNDS POSITION- END OF PERIOD Cash and temp. investments $ 1,823,007 $ 208,191 Bond Sinking Fund 6,716,469 2,899,295 Bond Series 2006B Project Fund 14,299,400 - Accounts receivable 15,054,316 14,296,549 Interdepartmental balances (1,153,228) 984,647 Interest receivable - - Accounts payable (11,188,127) (10,519,789) Pioneer Approach Main deposits (109,540) (248,911) Level Payment Plan Credit - - Self-Insurance reserve {1,716,513} {1.840,356) Total $ 23,725,784 $ 9,685,199 $ 5,779,626 STATISTICAL DATA Thousands of gallons sold 2,585,404 3,212,220 3,478,916 12,216,841 12,588,482 12,685,180 Number of customers N/A 203, , Total active payroll $ 4,501,840 $ 4,646,750 $ 4,527,058 28,888,515 $ 28,462,703 $ 27,339,762 Number of employees W-2 Note: Subsequent to the closing of our June flnancials, it was discovered that the "Number of Customers" (representing total active customers) Is not available as a consequence of the CRB conversion. Efforts are underway to derive this information.

16 METROPOLITAN UTILITIES DISTRICT OF OMAHA G-1 GAS. DEPARTMENT JUNE 2013 BALANCE SHEETS Page 1 AS OF JUNE 30, 2013 AND MAY 31, 2013 June30 May31 January 1 Increase (Decrease) ASS.ETS One Month Six Months UTILITY PLANT- At Cost Plant in service $ 463,922,487 $ 463,225,895 $ 459,496,760 $ 696,592 $ 4,425,727 Less - Accumulated depreciation 154,438, ,704, ,154, ,026 7,284,570 Net utility plant in service 309,483, ,521, ,342,696 (37,434) (2,858,843) Construction in progress 27,384,527 25,587,001 13,789,941 1,797,526 13,594,586 Construction materials - at average cost 2,722,432 2,612,533 2,772, ,899 (49,987) Net utility plant 339,590, ,720, ,905,056 1,869,991 10,685,756 NONCURRENT ASSETS Long term receivable - Water Dept. loan Early Retiree Drug Subsidy - Restricted Fund 4 300, ,636 (300,654) (300,632) Total noncurrent assets 4 300, ,636 (300,654) (300,632) CURRENT ASSETS Cash in treasurer's accounts 46,126,263 50,889,220 46,681,876 (4,762,957) (555,613) Working funds 1,317,031 1,048,959 1,417, ,072 (100,963) U.S. Government securities and certificates of deposit Accounts receivable - utility service 10,919,078 16,593,473 3,720,692 (5,674,395) 7,198,386 Accounts receivable - other 295,174 1,860,594 2,686,277 (1,565,421) (2,391,1 04) Loan receivable from Water Department 1,461,503 2,461,503 4,961,503 (1,000,000) (3,500,000) Allowance for doubtful accounts {2,355,784) {2,281,434) (1,784,406) (74,350) (571,378) Interdepartmental Receivable from Water Dept 1,153, ,153,228 1,153,228 Accrued unbilled revenues 1,503,473 1,460,000 17,433,105 43,473 (15,929,632) Natural gas in storage 3,308,152 3,357,037 3,199,305 (48,885) 108,847 Natural gas in pipeline storage 2,768, ,001 7,740,639 2,248,476 (4,972,162) Propane in storage 3,196,431 3,196,431 3,203,358 - (6,927) Materials and supplies - at average cost 3,415,135 3,333,843 3,354, ,292 60,846 Prepayments.125, , ,688 (24,273) (73,638) Total current assets 73,233,211 82,588,951 92,813,321 (9,355,740) (19,580,11 0) DEFERRED CHARGES 5,297,516 5,234,082 1,699,617 63,434 3,597,899 Total Assets $ 418,121,543 $ 425,844,512 $ 423,718,630 $ (7,722,969) $ (5,597,087) G-1

17 METROPOLITAN UTILITIES DISTRICT OF OMAHA G-1 GAS DEPARTMENT JUNE 2013 BALANCE SHEETS Page 2 AS OF JUNE 30,2013 AND MAY 31,2013 June 30 May31 January 1 Increase (Decrease) LIABILITIES AND NET WORTH One Month Six Months NONCURRENT LIABILITIES Long Term Remediation payable $ - $ - $ - $ - $ Long-Term Debt- CNG Loan 1,491,937 1,509,465 1,596,969 (17,528) (105,032) Net pension obligation 2,320,312 2,320,312 2,320,312 Other Post Employee Benefits 45,849,871 45,015,288 40,842, ,583 5,007,500 Total noncurrent liabilities 49,662,120 48,845,065 44,759, ,055 4,902,468 CURRENT LIABILITIES Accounts payable 15,454,238 16,875,823 31,807,087 (1,421,585) (16,352,849) Remediation payable 2,424,387 2,424,387 2,417,927-6,460 Interdepartmental Payable to Water Dept - 5,002,002 1,654,199 (5,002,002) (1,654,199) Loan Payable to Water Department Line of Credit Funds Current maturities of CNG loan 208, , , ,619 Customer deposits 10,122,146 10,094,481 9,884,824 27, ,322 Customer credit balances - 3,700,752 8,312,302 (3,700,752) (8,31~,302) Statutory payments to municipalities 910, , , , ,801 Accrued vacation payable 2,576,396 2,576,396 2,672,752 - (96,356) Total current liabilities 31,696,426 41,670,860 57,717,930 (9,974,434) (26,021,504) CUSTOMER ADVANCES FOR CONSTRUCTION 79, ,715 61,930 (20,762) 18,023 SELF - INSURED RISKS 1,582,230 1,599,564 1,701,332 (17,334) (119,102) DEFERRED CREDITS 1,991,456 1,474,954 2,841, ,502 (850,289) NET WORTH Contributions in aid of construction 47,948,057 47,920,965 47,836,508 27, ,549 Accumulated reinvested earnings 285,161, ,232, ,799, ,912 16,361,768 Total net worth 333,109, ,153, ,636, ,004 16,473,317 Total Liabilities and Net Worth $ 418,121,543 $ 425,844,512 $ 423,718,630 $ (7,722,969) $ (5,597,087) G-1

18 METROPOLITAN UTILITIES DISTRICT OF OMAHA G-2 GAS DEPARTMENT JUNE2013 INCOME AND SOURCE AND DISPOSITION OF FUNDS STATEMENTS FOR THE MONTH AND SIX MONTHS ENDING JUNE 30, 2013 AND 2012 June Six June Six Months 2013 Months 2012 Actual Budget Actual Actual Budget Actual OPERATING REVENUES Gas sales revenue $ 9,710,991 $ 7,827,893 $ 6,983,794 $ 119,856,429 $ 103,452,872 $ 85,862,092 (Over)/under gas recovery (823,952) - (68,604) 421,920-3,077,912 Infrastructure charge 1,217,737 1,044,666 1,037,798 6,396,553 6,312,654 6,275,378 Other operating revenues , ,530,500 2l13,513 Total operating revenues 10,424,438 9,266,059 8,324, ,267, ,296,026 97,928,895 Less: Bad debt expense {691529} {100,000} (861815} {475,876} { } (520,891) Total operating revenues, net , , , ,696,026 97,408,004 Less: Natural gas purchased for resale ,225,304 3, ,863,517 70,047,222 57,163,314 Operating revenue, net of gas cost 5,703, ,755 4l05,052 48, , , REVENUE DEDUCTIONS Operating expense 2,878,303 2,486,810 2,744,914 17,058,121 17,145,827 16,618,310 Maintenance expense 1,033,989 1,260,823 1,081,140 5,745,352 7,055,962 5,546,818 GIR service reconnections to mains 106, , , ,826 - Depreciation 632, , ,351 7,048,148 6,190,121 6,189,804 Statutory payments & fuel taxes 125, , ,899 2,303,097 1,981,700 1,679,675 Interest expense ,853 8,326 41, Total revenue deductions 41781,558 4, ,530,630 32,627,826 33,038,741 30, Net revenues 922, , ,422 16,300,711 8,610,063 10,161,952 OTHER INCOME- Interest 6, ,750 61, ,169 FUNDS PROVIDED Net income (loss) 928, , ,172 16,361,768 8,661,711 10,372,121 Depreciation and amortization charges 1,077, , ,167 9,719,450 8,992,799 8,681,124 Net Pension Obligation OPES 834, ,733 1,445,917 _5,007,500 5,296,398 6,723,500 Contribution in aid of construction - mains 6,330 80,342 71, ,165 Contribution in aid of construction - grants ,316-38,166 Loan payback from water 1,000, ,358-5,000,000 5,192, ,000 Loan -long term CNG Line of credit funds Total funds provided 3,847, ,721, ,290 28, ,461,076 FUNDS EXPENDED Plant additions and replacements 1,696,039 4,043,721 2,118,339 14,636,145 23,413,128 12,269,388 Plant additions and replacements - Cast Iron 1,248,025 1,496, ,376 5,693,593 7,672,082 6,161,808 CIR Retro Pay- Payment ,090 - Natural gas inventory increase (decrease) 2,199,591 1,707,385 1,157,191 (4,870,242) (6,857,585) (8,363,052) Loan Retirement long-term CNG 17,080 17,166 16, , ,996 99,722 Loan to water 2,400,000 1,500,00_0 12,200,000 Reductions in Line of credit funds Total funds expended 5,160?35 7, ,548 17,061,909 25,230,621 22, CHANGE IN UNBILLED REVENUE {43,473) 153,551 {34,657) 15,929,632 16,650,376 12,467,010 OTHER CHANGES IN FUNDS - NET 11957,695 { } 935,489 (2, } { } (3,971,252} NET INCREASE (DECREASE) IN FUNDS $ $ { } $ (31042,118} 32,869,897 18,362,812 12,588,968 FUNDS POSITION- BEGINNING OF PERIOD $ (61203,703} $ {61203,703) $ (26,910,876) FUNDS POSITION- END OF PERIOD Cash and temp. investments $ 47,443,298 $ 14,695,290 Accounts receivable 8,563,294 2,385,413 Interdepartmental balances 1,153,228 (984,647) Accounts payable (18,789,250) (14,216,159) Customer deposits (10,122,146) (9,452,649) Level Payment Plan Credit - {4,707,966) Self-insurance reserve (1,582,230} (2,041,189} Total $ $ 12,159,109 $ (14,321,907) STATISTICAL DATA Gas Systems Sendout 1,114,051 1,099,400 1,166,902 19,550,007 18,103,100 14,740,661 Heating degree days ,864 3,585 2,636 Number of customers N/A 217, , Total active payroll $ 4,501,840 $ 4,646,750 $ 4,527,058 $ 28,888,515 $ 28,462,703 $ 27,339,762 Number of employees { ) denotes red figure G-2 Note: Subsequent to the closing of our June financials, it was discovered that the "Number of Customers" (representing total active customers) is not available as a consequence of the CRB conversion. Efforts are underway to derive this information.

19 GAS PROJECTED Gas Infrastructure Revenue (GIR) - Note 1 $11,390,573 $12,219,200 $12,348,121 $12,463,519 $12,439,611 $12,617,739 $12,599,705 $12,662,703 $12,726,017 $12,789,647 Projected GCI Costs (Budget/Estimated)* $4,834,344 $11,390,789 $10,075,294 $11,434,396 $14,090,311 $15,633,101 $18,713,000 $16,635,000 $17,360,000 $20,152,000 Annual Net - Revenue minus costs $6,556,229 $828,411 $2,272,827 $1,029,124 ($1,650,700) ($3,015,362) ($6,113,295) ($3,972,297) ($4,633,983) ($7,362,353) Total Projected Net $6,556,229 $7,384,640 $9,657,467 $10,686,590 $9,035,890 $6,020,529 ($92,766) ($4,065,063) ($8,699,047) ($16,061,400) GAS ACTUAL (YTD June) Gas Infrastructure Revenue $11,390,573 $12,219,200 $12,348,121 $12,463,519 $12,439,611 $5,348,588 GIR Bad Debt (Note 3) ($52,891) ($56,107) ($48,210) Actual Expenditures GCI Mains per G-21 $1,870,695 $6,030,984 $4,880,328 $6,212,110 $6,837,867 $2,781,053 GIR services per G-21 $257,657 $2,760,211 $4,230,316 $5,417,743 $6,866,790 $2,826,925 GIR service reconnections per G-2 $431,933 Abandonments - approx $412,211 $638,655 $616,006 $990,700 $548,703 $129,225 Regulator Stations per G-21 $0 $245,412 $77,347 $0 $154,580 $53,298 Total Expenditures $2,540,563 $9,675,261 $9,803,997 $12,620,553 $14,407,940 $6,222,435 Annual Net - Revenue minus costs $8,797,118 $2,487,832 $2,495,915 ($157,034) ($1,968,329) ($873,847) Interest 0.25% $10,996 $25,130 $31,423 $34,425 $31,854 $14,191 Total Actual Net $8,808,115 $11,321,077 $13,848,414 $13,725,805 $11,789,330 $10,929,674 **************************************************************************************************************************************************************************************************************** WATER PROJECTED Water Infrastructure Revenue (WIR) - Note 2 $5,924,501 $6,716,778 $10,107,799 $13,521,214 $13,856,957 $14,089,782 $14,057,641 $14,198,217 $14,340,199 $14,483,601 $14,628,437 Projected WCI Costs (Budget/Estimated)* $7,008,368 $6,965,055 $6,981,197 $9,361,541 $10,153,923 $10,494,328 $10,995,128 $13,660,178 $17,003,944 $20,106,632 $21,111,964 Annual Net - Revenue minus costs ($1,083,867) ($248,277) $3,126,602 $4,159,673 $3,703,035 $3,595,454 $3,062,513 $538,039 ($2,663,745) ($5,623,031) ($6,483,526) Total Projected Net ($1,083,867) ($1,332,144) $1,794,459 $5,954,132 $9,657,167 $13,252,620 $16,315,133 $16,853,172 $14,189,428 $8,566,397 $2,082,870 WATER ACTUAL (YTD June) Water Infrastructure Revenue $5,924,501 $6,716,778 $10,107,799 $13,521,214 $13,856,957 $7,120,790 WIR Bad Debt (Note 3) ($20,453) ($22,701) ($27,546) Actual Expenditures WCI Mains per W-2 $3,653,101 $5,289,001 $5,165,884 $8,245,475 $7,782,139 $2,328,126 Abandonments - approx $147,396 $324,132 $248,164 $394,376 $174,698 $40,098 Service Reconnections $143,169 $525,463 $722,597 $1,815,087 $1,297,494 $456,808 Total Expenditures $3,943,666 $6,138,597 $6,136,645 $10,454,938 $9,254,331 $2,825,032 Annual Net - Revenue minus costs $1,960,381 $555,480 $3,943,608 $3,066,276 $4,602,626 $4,295,758 Interest 0.25% $2,450 $5,601 $11,239 $20,030 $29,666 $20,432 Total Actual Net $1,962,832 $2,523,914 $6,478,761 $9,565,067 $14,197,359 $18,513,549 Note 1: GIR rates 2008 through current & beyond: Residential = $3/mo; Commercial = $23/mo; Industrial = $300/mo GIR revenue reflects BILLED revenue and does not include accrued unbilled revenue Note 2: WIR rates 2010: Residential = $3/mo; Commercial = $17/mo; Industrial = $500 WIR rates 2011 & beyond: Residential = $4/mo; Commercial = $22/mo; Industrial = $500/mo WIR revenue reflects BILLED revenue and does not include accrued unbilled revenue Note 3: unpaid GIR & WIR charges from 2008 written off in Dec 2010; amount is not updated to reflect recoveries *Projected costs for reflects estimated costs for jobs budgeted and/or approved in the year Infrastructure Replacement Program - Status Report