Quarteriy Analysis ef Financial Performance December 2019 Management’s Discussion and Analysis of Financial Performance for the Quarter Ended December 31, 2019 JEA is a municipal utility operating in Jacksonville, Florida (Duval County) and parts of three adjacent counties. The operation is comprised of three enterprise funds: the Electric Enterprise Fund (Electric Enterprise), the Water and Sewer Enterprise Fund (W&S), and the District Energy System (DES). Electric Enterprise is comprised of the JEA Electric System, Bulk Power Supply System (Scherer) and St. Johns River Power Park System (SJRPP). Electric Enterprise, W&S, and DES are presented on a combined basis in the statements of net position, statements of revenue, expenses and changes in net position, and statements of cash flows. Quarter Operating Results Electric Enterprise Operating Revenues Total operating revenues increased approximately $4 million (1.1 percent) and total MWh sales decreased 86,104 megawatt hours (MWh) (3.0 percent) over the prior year comparable quarter. Revenues from territorial sales decreased $5 million and territorial MWh sales were down 44,141 MWh (1.5 percent). The territorial sales decrease resulted from a 3.4 percent decrease in average MWhs per customer, which was driven by weather, and was partially offset by a 1.9 percent increase in customers. Off system revenues decreased by approximately $2 million and MWhs decreased by 41,963 driven by lower sales to The Energy Authority. Stabilization fund revenues increased $12 million, which is made up of $30 million increase in debt management stabilization withdrawals, a $23 million increase in fuel contributions, a $3 million increase in environmental withdrawals, and a $2 million increase in non-fuel purchased power withdrawals. Other operating revenue decreased $1 million due to lower transmission revenues. Operating Expenses Total operating expenses decreased approximately $22 million (8.6 percent) over the prior year comparable quarter. Fuel and purchased power expense decreased $26 million (22.5 percent), primarily driven by: • a $19 million decrease in generation costs primarily driven by lower natural gas prices; and • a $5 million decrease resulting from lower MWh generated and purchased of 121,472 (4.0 percent) to 2,909,026; • a $2 million decrease in purchased power cost. As commodity prices fluctuate, the mix between generation and purchased power shifts, with JEA taking advantage of the most economical source of power. JEA’s power supply mix is detailed below. Natural gas Purchased power Coal Petroleum coke Total Quarter Ended December 31 2019 2018 56% 54% 21% 23% 14% 16% 9% 7% 100% 100% Page 2 Operating expenses, other than fuel and purchased power, increased $4 million over the prior year comparable quarter, primarily due to: • a $6 million increase in maintenance and other operating expenses driven by higher compensation and benefits; • a $4 million decrease in depreciation largely as a result of the retention of technology-related assets that became fully depreciated in the prior year; • a $3 million increase in recognition of deferred costs and revenues, net, due to environmental expenditures; and • a $1 million decrease in state utility and franchise taxes as a result of a decrease in tax-based revenues. Water & Sewer Enterprise Operating Revenues Total operating revenues increased approximately $18 million (16.7 percent) over the prior year comparable quarter. Water consumption increased 310,992 thousands of gallons (kgals) (3.5 percent) to 9,177,802 kgals. Water revenues increased $1 million driven by the increase in consumption and a 2.1 percent increase in water accounts. Sewer sales increased 123,355 kgals (1.9 percent) to 6,766,833 kgals. Sewer revenues increased $1 million driven by the increase in consumption and a 2.5 percent increase in sewer accounts. Reuse sales increased 151,431 kgals (17.5 percent) to 1,017,324 kgals. Reuse revenues increased $1 million due to the increase in consumption and a 21.5 percent increase in reuse accounts. Stabilization fund revenues increased $14 million due to debt management stabilization withdrawals. There was also an increase of $1 million in miscellaneous operating revenue. Operating Expenses Operating expenses increased $3 million (4.1 percent) over the prior year comparable quarter, primarily driven by a $3 million increase in depreciation expense due to a higher depreciable base. District Energy System Operating revenues and expenses remained flat when compared to the prior period at $2 million, respectively. Nonoperating Revenues (Expenses) Total nonoperating expenses, net increased $6 million (28.9 percent) over the prior year comparable quarter, respectively. The drivers of the changes are detailed below. (Dollars in millions) Changes in nonoperating expenses, net Quarter Decrease in investment fair market value $ Decrease in realized investment income (2) Increase in allowance for funds used during construction 2 Increase in interest on debt (1) Decrease in customer deposit interest Total change in nonoperating expenses, net (6) 1 $ (6) Debt Administration Debt outstanding at December 31, 2019 was $3,335 million, a decrease of approximately $286 million from the prior fiscal year end. This decrease was due to regular principal payments of $193 million and defeasance of principal of $93 million. Page 3 JEA’s debt ratings and outlooks on its long-term debt per Standard & Poor’s and Fitch remained unchanged during the quarter ended December 31, 2019. All ratings and outlooks as of December 31, 2019 are detailed below. Standard & Poor's Moody's Rating Outlook Rating Outlook Fitch Rating Outlook stable stable stable stable JEA Electric System Senior A2 negative A+ negative AA Subordinated A3 negative A negative AA SJRPP A2 negative A+ negative AA Scherer A2 negative A+ negative AA W&S Senior A2 negative AAA stable AA Subordinated A2 negative AA+ stable AA A3 negative AA+ stable AA DES stable stable stable As of December 31, 2019, there was $5 million in outstanding bank draws under the revolving lines of credit, which was equal to the outstanding draws from the prior fiscal year end. Debt service coverage ratios for JEA Electric System and W&S bonds are as follows: Quarter Ended December 31 2019 2018 JEA Electric System Senior 11.02 x 5.75 x 5.00 x 2.47 x Senior 6.49 x 3.37 x Senior and subordinated 5.73 x 2.83 x Senior and subordinated W&S The increase in the JEA Electric System and W&S debt service coverage ratios for the quarter was due to higher net revenues and lower debt service requirements. Capital Assets JEA’s total investment in capital assets and capital expenditures for the quarter ended December 31, 2019 are detailed below. The cost of ongoing capital improvement programs is planned to be provided from revenues generated from operations and existing fund balances. Total Investment (Dollars in millions) Electric Enterprise Water and Sewer Enterprise District Energy System Total December 31, 2019 $ 2,692 2,742 33 $ 5,467 Expenditures Quarter Ended December 31, 2019 $ 79 57 $ 136 JEA Page 4 Statements of Net Position (in thousands) December 2019 (unaudited) September 2019 Assets Current assets: Cash and cash equivalents Investments Customer accounts receivable, net of allowance ($914 and $1,341, respectively) Inventories: Materials and supplies Fuel Other current assets Total current assets $ 249,234 124,423 185,948 $ 414,438 2,399 227,331 61,514 37,425 15,383 673,927 58,962 30,898 19,109 753,137 114,416 250,314 1,081 365,811 265,784 380,250 1,071 647,105 Costs to be recovered from future revenues Other assets Total noncurrent assets 841,969 21,223 1,229,003 851,046 19,016 1,517,167 Net capital assets 5,466,871 5,465,444 Total assets 7,369,801 7,735,748 Deferred outflows of resources Unrealized pension contributions and losses Unamortized deferred losses on refundings Accumulated decrease in fair value of hedging derivatives Unrealized asset retirement obligation Unrealized OPEB contributions and losses Total deferred outflows of resources Total assets and deferred outflows of resources 131,554 103,622 148,141 48,134 9,100 440,551 7,810,352 $ 131,554 108,875 161,485 50,329 9,100 461,343 8,197,091 Noncurrent assets: Restricted assets: Cash and cash equivalents Investments Accounts and interest receivable Total restricted assets $ JEA Page 5 Statements of Net Position (in thousands) December 2019 (unaudited) September 2019 Liabilities Current liabilities: Accounts and accrued expenses payable Customer deposits and prepayments Billings on behalf of state and local governments Current portion of asset retirement obligations Compensation and benefits payable City of Jacksonville payable Total current liabilities $ 38,043 72,475 20,923 16,725 10,489 10,175 168,830 $ 53,827 73,974 26,292 18,884 17,228 10,269 200,474 Current liabilities payable from restricted assets: Debt due within one year Interest payable Renewal and replacement reserve Construction contracts and accounts payable Total current liabilities payable from restricted assets 102,700 30,260 45,378 16,336 194,674 192,555 64,775 46,955 66,775 371,060 Noncurrent liabilities: Net pension liability Asset retirement obligation Net OPEB liability Other liabilities Total noncurrent liabilities 566,372 31,409 18,256 61,872 677,909 566,372 31,445 18,256 59,840 675,913 3,231,885 107,191 131,970 3,471,046 4,512,459 3,428,080 118,125 149,887 3,696,092 4,943,539 198,346 50,880 11,249 322 260,797 238,690 50,880 11,249 300,819 2,578,850 2,248,863 99,329 24,962 40,393 293,562 3,037,096 7,810,352 $ 165,186 193,063 42,005 303,616 2,952,733 8,197,091 Long-term debt: Debt payable, less current portion Unamortized premium, net Fair value of debt management strategy instruments Total long-term debt Total liabilities Deferred inflows of resources Revenues to be used for future costs Unrealized pension gains Unrealized OPEB gains Accumulated increase in fair value of hedging derivatives Total deferred inflows of resources Net position Net investment in capital assets Restricted for: Capital projects Debt service Other purposes Unrestricted Total net position Total liabilities, deferred inflows of resources, and net position $ JEA Page 6 Statements of Revenues, Expenses and Changes in Net Position (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Operating revenues Electric Water and sewer District energy system Other Total operating revenues $ 305,205 125,366 2,012 8,614 441,197 $ 300,907 107,504 2,058 8,620 419,089 Operating expenses Operations and maintenance: Fuel Purchased power Maintenance and other operating expenses Depreciation State utility and franchise taxes Recognition of deferred costs and revenues, net Total operating expenses Operating income 65,780 25,629 101,672 89,992 17,383 6,772 307,228 133,969 85,930 31,957 94,735 90,908 17,754 4,195 325,479 93,610 Nonoperating revenues (expenses) Interest on debt Investment income, net Allowance for funds used during construction Other nonoperating income, net Earnings from The Energy Authority Other interest, net Total nonoperating expenses, net Income before contributions and special item (40,330) 3,676 5,559 1,970 673 224 (28,228) 105,741 (38,538) 11,503 3,433 1,762 527 (588) (21,901) 71,709 Contributions (to) from General Fund, City of Jacksonville, Florida Developers and other Reduction of plant cost through contributions Total contributions (29,706) 24,654 (16,326) (21,378) (29,412) 19,012 (11,859) (22,259) Change in net position Net position, beginning of year Net position, end of period $ 84,363 2,952,733 3,037,096 $ 49,450 2,755,309 2,804,759 JEA Page 7 Statements of Cash Flows (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Operating activities Receipts from customers Payments to suppliers Payments for salaries and benefits Other operating activities Net cash provided by operating activities $ Noncapital and related financing activities Contribution to General Fund, City of Jacksonville, Florida Net cash used in noncapital and related financing activities Capital and related financing activities Defeasance of debt Proceeds from issuance of debt Acquisition and construction of capital assets Repayment of debt principal Interest paid on debt Capital contributions Other capital financing activities Net cash used in capital and related financing activities Investing activities Purchase of investments Proceeds from sale and maturity of investments Investment income Distributions from The Energy Authority Net cash provided by (used in) investing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of period $ 434,265 $ (177,602) (75,807) 14,368 195,224 (29,614) (29,614) (29,313) (29,313) (93,495) (135,850) (192,555) (70,386) 8,328 (9,237) (493,195) 2,000 (130,285) (185,790) (79,696) 7,153 276 (386,342) (56,285) 63,785 3,466 47 11,013 (154,540) 178,924 4,743 447 29,574 (316,572) 680,222 363,650 $ Reconciliation of operating income to net cash provided by operating activities Operating income $ 133,969 $ Adjustments: Depreciation and amortization 90,294 Recognition of deferred costs and revenues, net 6,772 Other nonoperating income, net 270 Changes in noncash assets and noncash liabilities: Accounts receivable 46,231 Inventories (9,080) Other assets (1,804) Accounts and accrued expenses payable (26,533) Current liabilities payable from restricted assets (1,311) Other noncurrent liabilities and deferred inflows (43,584) Net cash provided by operating activities $ 195,224 $ Noncash activity Contribution of capital assets from developers Unrealized investment fair market value changes, net $ $ 441,595 (210,897) (68,478) 7,723 169,943 16,326 $ (410) $ (216,138) 555,782 339,644 93,610 91,224 4,195 53 44,186 (7,358) 1,582 (39,951) (1,262) (16,336) 169,943 11,859 5,259 JEA Page 8 Combining Statement of Net Position (in thousands - unaudited) December 2019 Electric System and Bulk Power Supply System Assets Current assets: Cash and cash equivalents Investments Customer accounts receivable, net of allowance ($914) Inventories: Materials and supplies Fuel Other current assets Total current assets $ 171,096 88,330 133,808 SJRPP System $ 59,951 2,979 - 2,287 37,425 14,632 447,578 96 9,868 72,894 Noncurrent assets: Restricted assets: Cash and cash equivalents Investments Accounts and interest receivable Total restricted assets 137,983 1,053 139,036 80,610 10,226 21 90,857 Costs to be recovered from future revenues Other assets Total noncurrent assets 340,842 18,200 498,078 Net capital assets Total assets Deferred outflows of resources Unrealized pension contributions and losses Unamortized deferred losses on refundings Accumulated decrease in fair value of hedging derivatives Unrealized asset retirement obligation Unrealized OPEB contributions and losses Total deferred outflows of resources Total assets and deferred outflows of resources Total Elimination Electric of intercompany Enterprise transactions Fund Water and Sewer Enterprise Fund $ $ - 231,047 91,309 133,808 16,871 33,114 51,818 $ 1,316 322 Total JEA $ 249,234 124,423 185,948 2,383 37,425 11,007 506,979 59,131 4,376 165,310 1,638 61,514 37,425 15,383 673,927 - 80,610 148,209 1,074 229,893 28,716 102,105 7 130,828 5,090 5,090 114,416 250,314 1,081 365,811 250,833 341,690 - 591,675 18,200 839,768 250,260 2,998 384,086 34 25 5,149 841,969 21,223 1,229,003 2,682,396 9,632 - 2,692,028 2,741,695 33,148 5,466,871 3,628,052 424,216 4,038,775 3,291,091 39,935 7,369,801 78,089 58,931 121,054 32,514 5,551 296,139 $ 3,924,191 3,539 3,451 15,620 81,628 62,382 121,054 48,134 5,551 318,749 (13,493) $ 4,357,524 49,926 41,061 27,087 3,549 121,623 $ 3,412,714 179 179 40,114 131,554 103,622 148,141 48,134 9,100 440,551 $ 7,810,352 $ 22,610 446,826 (13,493) (13,493) $ District Energy System Fund (13,493) $ $ JEA Page 9 Combining Statement of Net Position (in thousands - unaudited) December 2019 Electric System and Bulk Power Supply System Liabilities Current liabilities: Accounts and accrued expenses payable Customer deposits and prepayments Billings on behalf of state and local governments Current portion of asset retirement obligation Compensation and benefits payable City of Jacksonville payable Total current liabilities Current liabilities payable from restricted assets: Debt due within one year Interest payable Renewal and replacement reserve Construction contracts and accounts payable Total current liabilities payable from restricted assets Noncurrent liabilities: Net pension liability Asset retirement obligations Net OPEB liability Other liabilities Total noncurrent liabilities Long-term debt: Debt payable, less current portion Unamortized premium, net Fair value of debt management strategy instruments Total long-term debt Total liabilities Deferred inflows of resources Revenues to be used for future costs Unrealized pension gains Unrealized OPEB gains Accumulated increase in fair value of hedging derivatives Total deferred inflows of resources Net position Net investment in capital assets Restricted for: Capital projects Debt service Other purposes Unrestricted Total net position Total liabilities, deferred inflows of resources, and net position $ 29,265 55,078 17,199 1,105 7,560 8,076 118,283 SJRPP System Total Electric Enterprise Fund District Energy System Fund Water and Sewer Enterprise Fund (5,396) $ (5,396) 29,674 55,078 17,198 16,725 7,560 8,076 134,311 67,765 14,947 3,780 86,492 13,340 2,611 45,378 4,124 65,453 (3,597) (3,597) 81,105 17,558 45,378 4,307 148,348 19,870 12,378 11,600 43,848 1,725 324 429 2,478 102,700 30,260 45,378 16,336 194,674 343,046 31,409 11,136 54,075 439,666 4,001 4,500 8,501 (4,500) (4,500) 347,047 31,409 11,136 54,075 443,667 219,325 7,120 7,746 234,191 51 51 566,372 31,409 18,256 61,872 677,909 1,681,045 49,987 104,883 1,835,915 2,480,356 251,765 1,271 253,036 348,414 (13,493) 1,932,810 51,258 104,883 2,088,951 2,815,277 1,267,665 55,960 27,087 1,350,712 1,663,230 180,245 27,276 6,862 322 214,705 6,166 6,166 - 180,245 33,442 6,862 322 220,871 18,101 17,438 4,387 39,926 969,834 (2,154) - 967,680 1,611,380 45,069 19,716 3,597 35,912 (3,597) 252,999 1,321,376 (13,493) $ 4,357,524 49,925 4,815 4,481 38,957 1,709,558 $ 3,412,714 $ 3,672 28,139 62,589 92,246 446,826 $ $ 8,350 17,397 3,725 2,908 2,099 34,479 $ Total JEA 5,805 $ (1) 15,620 21,424 45,069 16,044 4,176 194,007 1,229,130 $ 3,924,191 $ Elimination of intercompany transactions 19 21 40 31,410 (27) 31,383 33,952 - (210) $ 4,335 431 1,606 6,162 40,114 $ 38,043 72,475 20,923 16,725 10,489 10,175 168,830 3,231,885 107,191 131,970 3,471,046 4,512,459 198,346 50,880 11,249 322 260,797 2,578,850 99,329 24,962 40,393 293,562 3,037,096 $ 7,810,352 JEA Page 10 Combining Statement of Net Position (in thousands) September 2019 Electric System and Bulk Power Supply System Assets Current assets: Cash and cash equivalents Investments Customer accounts receivable, net of allowance ($1,341) Inventories: Materials and supplies Fuel Other current assets Total current assets $ 282,069 172,163 SJRPP System $ 66,734 2,399 - 2,219 30,898 18,049 505,398 106 9,790 79,029 74,586 230,849 1,053 306,488 94,858 10,891 11 105,760 343,247 16,285 666,020 Net capital assets Total assets Noncurrent assets: Restricted assets: Cash and cash equivalents Investments Accounts and interest receivable Total restricted assets Cost to be recovered from future revenues Other assets Total noncurrent assets Deferred outflows of resources Unrealized pension contributions and losses Unamortized deferred losses on refundings Accumulated decrease in fair value of hedging derivatives Unamortized asset retirement obligation Unrealized OPEB contributions and losses Total deferred outflows of resources Total assets and deferred outflows of resources Total Elimination Electric of intercompany Enterprise transactions Fund Water and Sewer Enterprise Fund $ $ - 348,803 2,399 172,163 64,146 54,930 $ Total JEA 1,489 238 414,438 2,399 227,331 56,637 4,408 180,121 1,727 58,962 30,898 19,109 753,137 - 169,444 241,740 1,064 412,248 89,586 138,510 7 228,103 6,754 6,754 265,784 380,250 1,071 647,105 253,706 359,466 - 596,953 16,285 1,025,486 254,059 2,731 484,893 34 6,788 851,046 19,016 1,517,167 2,674,310 9,734 - 2,684,044 2,748,123 33,277 5,465,444 3,845,728 448,229 (13,138) 4,280,819 3,413,137 41,792 7,735,748 78,089 61,773 130,219 32,282 5,551 307,914 $ 4,153,642 3,539 3,502 18,047 25,088 473,317 81,628 65,275 130,219 50,329 5,551 333,002 (13,138) $ 4,613,821 49,926 43,418 31,266 3,549 128,159 $ 3,541,296 182 182 41,974 131,554 108,875 161,485 50,329 9,100 461,343 $ 8,197,091 $ - $ 2,325 30,898 14,701 571,289 $ (13,138) (13,138) $ District Energy System Fund $ JEA Page 11 Combining Statement of Net Position (in thousands) September 2019 Electric System and Bulk Power Supply System Liabilities Current liabilities: Accounts and accrued expenses payable Customer deposits and prepayments Billings on behalf of state and local governments Current portion of asset retirement obligation Compensation and benefits payable City of Jacksonville payable Total current liabilities $ 42,875 56,714 22,406 837 12,236 8,186 143,254 SJRPP System $ Total Elimination Electric of intercompany Enterprise transactions Fund 4,255 $ (1) 18,047 22,301 (3,600) $ (3,600) 43,530 56,714 22,405 18,884 12,236 8,186 161,955 District Energy System Fund Water and Sewer Enterprise Fund $ 10,156 17,260 3,887 4,944 2,083 38,330 $ Total JEA 141 48 189 $ 53,827 73,974 26,292 18,884 17,228 10,269 200,474 Current liabilities payable from restricted assets: Debt due within one year Interest payable Renewal and replacement reserve Construction contracts and accounts payable Total current liabilities payable from restricted assets 122,380 32,109 24,589 179,078 13,780 5,564 46,955 3,859 70,158 (3,315) (3,315) 136,160 37,673 46,955 25,133 245,921 54,705 26,436 41,481 122,622 1,690 666 161 2,517 192,555 64,775 46,955 66,775 371,060 Noncurrent liabilities: Net pension liability Net OPEB liability Asset retirement obligation Other liabilities Total noncurrent liabilities 343,046 11,136 31,445 51,373 437,000 4,001 6,223 10,224 (6,223) (6,223) 347,047 11,136 31,445 51,373 441,001 219,325 7,120 8,438 234,883 29 29 566,372 18,256 31,445 59,840 675,913 1,796,880 56,775 118,621 1,972,276 2,731,608 265,105 1,433 266,538 369,221 (13,138) 2,061,985 58,208 118,621 2,238,814 3,087,691 1,332,960 59,946 31,266 1,424,172 1,820,007 208,794 27,276 6,862 242,932 6,166 6,166 - 208,794 33,442 6,862 249,098 29,896 17,438 4,387 51,721 (12,879) - 760,240 1,490,121 83,017 135,612 3,315 35,889 (3,315) 262,274 1,277,032 (13,138) $ 4,613,821 77,771 55,761 6,116 39,799 1,669,568 $ 3,541,296 Long-term debt: Debt payable, less current portion Unamortized premium (discount), net Fair value of debt management strategy instruments Total long-term debt Total liabilities Deferred inflows of resources Revenues to be used for future costs Unrealized pension gains Unrealized OPEB gains Total deferred inflows of resources Net position 773,119 Net investment in capital assets Restricted for: 83,017 Capital projects 121,541 Debt service 4,388 Other purposes 197,037 Unrestricted 1,179,102 Total net position Total liabilities, deferred inflows of resources, and net position $ 4,153,642 $ 14,071 28,186 68,552 97,930 473,317 $ 33,135 (29) 33,106 35,841 - (1,498) $ 4,398 1,690 1,543 6,133 41,974 3,428,080 118,125 149,887 3,696,092 4,943,539 238,690 50,880 11,249 300,819 2,248,863 165,186 193,063 42,005 303,616 2,952,733 $ 8,197,091 JEA Page 12 Combining Statement of Revenue, Expenses and Changes in Net Position (in thousands - unaudited) for the quarter and year-to-date ended December 2019 Electric System and Bulk Power Supply System Operating revenues Electric Water and sewer District energy system Other Total operating revenues $ 309,235 $ 5,700 314,935 Total Elimination Electric of intercompany Enterprise Fund transactions SJRPP System 6,102 $ 57 6,159 Operating expenses Operations and maintenance: Fuel Purchased power Maintenance and other operating expenses Depreciation State utility and franchise taxes Recognition of deferred costs and revenues, net Total operating expenses Operating income 65,780 31,732 60,400 49,678 14,691 2,831 225,112 89,823 7,183 102 2,838 10,123 (3,964) Nonoperating revenues (expenses) Interest on debt Investment income, net Allowance for funds used during construction Other nonoperating income, net Earnings from The Energy Authority Other interest, net Total nonoperating expenses, net Income before contributions (22,489) 2,124 2,238 1,040 673 87 (16,327) 73,496 (2,534) 735 79 (1,720) (5,684) Contributions (to) from General Fund, City of Jacksonville, Florida Developers and other Reduction of plant cost through contributions Total contributions (23,468) 223 (223) (23,468) Change in net position Net position, beginning of year Net position, end of period 50,028 1,179,102 $ 1,229,130 $ (5,684) 97,930 92,246 $ Water and Sewer Enterprise Fund (6,103) $ (6,103) 309,234 $ 5,757 314,991 (6,103) (6,103) - 65,780 25,629 67,583 49,780 14,691 5,669 229,132 85,859 37,897 39,595 2,692 1,103 81,287 47,795 - (25,023) 2,859 2,238 1,119 673 87 (18,047) 67,812 (14,979) 784 3,312 851 137 (9,895) 37,900 - (23,468) 223 (223) (23,468) (6,238) 24,431 (16,103) 2,090 - - $ 125,430 3,652 129,082 44,344 39,990 1,277,032 1,669,568 $ 1,321,376 $ 1,709,558 $ District Energy System Fund Elimination of intercompany transactions Total JEA - $ 2,100 (1) 2,099 (4,029) $ (64) (88) (794) (4,975) 305,205 125,366 2,012 8,614 441,197 1,167 617 1,784 315 (4,975) (4,975) - 65,780 25,629 101,672 89,992 17,383 6,772 307,228 133,969 (328) 33 9 (286) 29 - (40,330) 3,676 5,559 1,970 673 224 (28,228) 105,741 - - (29,706) 24,654 (16,326) (21,378) 29 6,133 6,162 - $ 84,363 2,952,733 $ 3,037,096 JEA Page 13 Combining Statement of Revenue, Expenses and Changes in Net Position (in thousands - unaudited) for the quarter and year-to-date ended December 2018 Electric System and Bulk Power Supply System Operating revenues Electric Water and sewer District energy system Other Total operating revenues $ 304,091 6,209 310,300 Elimination of intercompany transactions SJRPP System $ 7,991 314 8,305 Operating expenses Operations and maintenance: Fuel Purchased power Maintenance and other operating expenses Depreciation State utility and franchise taxes Recognition of deferred costs and revenues, net Total operating expenses Operating income 83,160 39,136 59,841 53,272 15,125 (503) 250,031 60,269 2,770 1,427 102 3,515 7,814 491 Nonoperating revenues (expenses) Interest on debt Investment income, net Allowance for funds used during construction Other nonoperating income, net Earnings from The Energy Authority Other interest, net Total nonoperating expenses, net Income before contributions and special item (21,489) 6,366 1,143 1,056 527 (528) (12,925) 47,344 (2,610) 1,042 86 (1,482) (991) Contributions (to) from General Fund, City of Jacksonville, Florida Developers and other Reduction of plant cost through contributions Total contributions (23,238) 1,162 (1,162) (23,238) Change in net position Net position, beginning of year Net position, end of period 24,106 1,066,817 $ 1,090,923 $ - $ (991) 97,633 96,642 $ Total Electric Enterprise Fund $ (7,179) $ (7,179) 304,903 6,523 311,426 (7,179) (7,179) - 85,930 31,957 61,268 53,374 15,125 3,012 250,666 60,760 37,358 36,924 2,629 1,183 78,094 32,505 - (24,099) 7,408 1,143 1,142 527 (528) (14,407) 46,353 (14,102) 4,059 2,279 620 (60) (7,204) 25,301 - (23,238) 1,162 (1,162) (23,238) (6,174) 17,850 (10,697) 979 - 23,115 1,164,450 $ 1,187,565 District Energy System Fund Water and Sewer Enterprise Fund 107,667 2,932 110,599 26,280 1,585,326 $ 1,611,606 $ Elimination of intercompany transactions 2,157 2 2,159 $ 1,204 610 1,814 345 (337) 36 11 (290) 55 $ Total JEA (3,996) $ (163) (99) (837) (5,095) 300,907 107,504 2,058 8,620 419,089 (5,095) (5,095) - 85,930 31,957 94,735 90,908 17,754 4,195 325,479 93,610 - (38,538) 11,503 3,433 1,762 527 (588) (21,901) 71,709 - - (29,412) 19,012 (11,859) (22,259) 55 5,533 5,588 - $ 49,450 2,755,309 $ 2,804,759 JEA Page 14 Combining Statement of Cash Flows (in thousands - unaudited) for the quarter and year-to-date ended December 2019 Electric System and Bulk Power Supply System Operating activities Receipts from customers Payments to suppliers Payments for salaries and benefits Other operating activities Net cash provided by operating activities $ Noncapital and related financing activities Contribution to General Fund, City of Jacksonville, Florida Net cash used in noncapital and related financing activities (23,391) (23,391) Capital and related financing activities Defeasance of debt Acquisition and construction of capital assets Repayment of debt principal Interest paid on debt Capital contributions Other capital financing activities Net cash used in capital and related financing activities Investing activities Purchase of investments Proceeds from sale and maturity of investments Investment income Distributions from The Energy Authority Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of period 319,990 $ (156,292) (50,812) 10,205 123,091 6,101 $ (3,607) (5,046) 57 (2,495) - District Energy System Fund Water and Sewer Enterprise Fund (6,464) $ 319,627 $ 6,464 (153,435) (55,858) 10,262 120,596 116,803 $ (28,008) (19,764) 4,901 73,932 - (23,391) (23,391) (6,223) (6,223) - (48,070) (78,344) (136,160) (41,942) (6,606) (311,122) (45,425) (57,295) (54,705) (27,779) 8,328 (2,631) (179,507) (41,715) 46,038 2,149 47 6,519 (11,845) 11,922 731 808 - (53,560) 57,960 2,880 47 7,327 (2,725) 5,825 553 3,653 (21,031) 161,592 140,561 $ - (206,590) (108,145) 518,247 153,732 $ 311,657 $ 45,587 $ (3,964) - $ 102 2,838 - - 223 $ (212) $ 3 10 1,550 (1,311) (1,723) (2,495) $ - - $ (8) $ - 85,859 $ 49,780 5,669 33 47,795 Elimination of intercompany transactions 2,016 $ (1,134) (185) (1) 696 - (13,780) (5,564) (19,344) (185,559) 356,655 $ 171,096 $ $ $ SJRPP System Total Electric Enterprise Fund (48,070) (78,344) (122,380) (36,378) (6,606) (291,778) Reconciliation of operating income to net cash provided by operating activities Operating income $ 89,823 $ Adjustments: Depreciation and amortization 49,678 Recognition of deferred costs and revenues, net 2,831 Other nonoperating income, net 33 Changes in noncash assets and noncash liabilities: Accounts receivable 42,190 Inventories (6,596) Other assets (1,267) Accounts and accrued expenses payable (24,204) Current liabilities payable from restricted assets Other noncurrent liabilities and deferred inflows (29,397) Net cash provided by operating activities $ 123,091 $ Non-cash activity Contribution of capital assets from developers Unrealized investment fair market value changes, net Elimination of intercompany transactions 39,897 1,103 237 (4,181) $ 434,265 4,975 (177,602) (75,807) (794) 14,368 195,224 - (29,614) (29,614) - (93,495) (135,850) (192,555) (70,386) 8,328 (9,237) (493,195) 33 33 - (56,285) 63,785 3,466 47 11,013 (1,837) 8,243 6,406 $ - (316,572) 680,222 $ 363,650 315 - $ (211) (1,690) (665) (2,566) $ Total JEA $ 617 - 133,969 - 90,294 6,772 270 $ 42,193 (6,586) (1,267) (22,654) (1,311) (31,120) 120,596 $ 4,122 (2,494) (512) (3,730) (12,486) 73,932 $ (84) (25) (149) 22 696 $ - $ 46,231 (9,080) (1,804) (26,533) (1,311) (43,584) 195,224 $ $ 223 $ (220) $ 16,103 $ (190) $ - - $ $ 16,326 (410) $ $ JEA Page 15 Combining Statement of Cash Flows (in thousands - unaudited) for the quarter and year-to-date ended December 2018 Electric System and Bulk Power Supply System Operating activities Receipts from customers Payments to suppliers Payments for salaries and benefits Other operating activities Net cash provided by operating activities $ Noncapital and related financing activities Contribution to General Fund, City of Jacksonville, Florida Net cash used in noncapital and related financing activities Investing activities Purchase of investments Proceeds from sale and maturity of investments Investment income Distributions from The Energy Authority Net cash provided by (used in) investing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of period SJRPP System 330,803 $ (190,157) (49,362) 5,284 96,568 (23,115) (23,115) Capital and related financing activities Proceeds from issuance of debt Acquisition and construction of capital assets Repayment of debt principal Interest paid on debt Capital contributions Other capital financing activities Net cash used in capital and related financing activities Total Electric Enterprise Fund (8,064) $ 331,205 $ 8,064 (186,368) (49,372) 5,598 101,063 112,149 $ (28,490) (18,941) 2,960 67,678 - (23,115) (23,115) (6,198) (6,198) (1,720) (5,603) (7,323) - (83,231) (132,410) (47,720) 265 (263,096) 2,000 (46,774) (51,720) (31,296) 7,153 11 (120,626) (90,486) 64,999 2,286 447 (22,754) (38,495) 46,118 994 8,617 - (128,981) 111,117 3,280 447 (14,137) (25,559) 67,807 1,427 43,675 5,789 139,953 145,742 $ - (199,285) 425,767 $ 226,482 $ 491 $ - $ 1,162 3,208 $ $ 102 3,515 - - 60,760 $ 53,374 3,012 53 - $ 41,639 (4,684) 2,049 (35,722) (1,262) (18,156) 101,063 $ 11 - $ $ 1,162 3,219 $ $ $ $ $ Total JEA (4,258) $ 441,595 5,095 (210,897) (68,478) (837) 7,723 169,943 - (29,313) (29,313) - 2,000 (130,285) (185,790) (79,696) 7,153 276 (386,342) 36 36 - (154,540) 178,924 4,743 447 29,574 (1,382) 6,954 5,572 $ - (216,138) 555,782 $ 339,644 345 - $ $ 610 - 2,205 (2,674) (437) (4,179) 1,835 67,678 $ 10,697 2,040 2,499 $ (1,134) (165) 2 1,202 (280) (1,660) (680) (2,620) (15,471) 123,061 107,590 $ 32,505 Elimination of intercompany transactions - 37,240 1,183 - 475 1,217 (43) (1,262) 4,495 $ $ $ District Energy System Fund Water and Sewer Enterprise Fund (83,231) (130,690) (42,117) 265 (255,773) (205,074) 285,814 $ 80,740 $ $ $ 8,466 $ (4,275) (10) 314 4,495 - Reconciliation of operating income to net cash provided by operating activities Operating income $ 60,269 $ Adjustments: Depreciation and amortization 53,272 Recognition of deferred costs and revenues, net (503) Other nonoperating income, net 53 Changes in noncash assets and noncash liabilities: Accounts receivable 41,164 Inventories (5,901) Other assets 2,049 Accounts and accrued expenses payable (35,679) Current liabilities payable from restricted assets Other noncurrent liabilities and deferred inflows (18,156) Net cash provided by operating activities $ 96,568 $ Non-cash activity Contribution of capital assets from developers Unrealized investment fair market value changes, net Elimination of intercompany transactions 342 (30) (50) (15) 1,202 $ - $ $ 93,610 - 91,224 4,195 53 - $ 44,186 (7,358) 1,582 (39,951) (1,262) (16,336) 169,943 - $ $ 11,859 5,259 JEA Page 16 Electric System Schedules of Debt Service Coverage (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Revenues Electric Investment income (1) Earnings from The Energy Authority Other, net (2) Plus: amount paid from the rate stabilization fund into the revenue fund Less: amount paid from the revenue fund into the rate stabilization fund Total revenues $ Operating expenses (3) Fuel Purchased power (4) Other operations and maintenance State utility and franchise taxes Total operating expenses $ Aggregate debt service Less: investment income on sinking fund Less: Build America Bonds subsidy Debt service requirement $ $ Senior debt service coverage (5) Debt service requirement (from above) Plus: aggregate subordinated debt service on outstanding subordinated bonds Less: Build America Bonds subsidy Total debt service requirement and aggregate subordinated debt service Senior and subordinated debt service coverage (6) $ 58,027 49,162 53,248 14,691 175,128 Net revenues Net revenues (from above) 282,250 1,835 673 5,722 39,187 (12,202) 317,465 142,337 13,801 (501) (383) 12,917 288,742 2,616 527 6,227 17,860 (2,511) 313,461 73,528 57,792 53,189 15,125 199,634 $ 113,827 $ 20,726 (541) (382) 19,803 $ 11.02 x $ 142,337 5.75 x $ 113,827 12,917 16,042 (486) 28,473 5.00 x 19,803 26,691 (501) 45,993 2.47 x (1) Excludes investment income on sinking funds. Excludes the Build America Bonds subsidy. (3) Excludes depreciation and recognition of deferred costs and revenues, net. (2) (4) In accordance with the requirements of the Electric System Resolution, all the contract debt payments from the Electric System to the SJRPP and Bulk Power Supply System with respect to the use by the Electric System of the capacity and output of the SJRPP and Bulk Power Systems are reflected as a purchased power expense on these schedules. These schedules do not include revenues of the SJRPP and Bulk Power Supply System, except that the purchased power expense is net of interest income on funds maintained under the SJRPP and Bulk Power Supply System (5) (6) Net revenues divided by debt service requirement. Minimum annual coverage is 1.20x. Net revenues divided by total debt service requirement and aggregate subordinated debt service. Minimum annual coverage is 1.15x. JEA Page 17 Bulk Power Supply System Schedules of Debt Service Coverage (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Revenues: JEA Investment Income Total revenues $ 17,430 87 17,517 Operating expenses (1) Fuel Other operations and maintenance Total operating expenses $ 7,753 3,368 11,121 18,656 24 18,680 9,632 3,269 12,901 Net revenues $ 6,396 $ 5,779 Aggregate debt service Less: Build America Bonds subsidy Aggregate debt service $ 2,673 (148) 2,525 $ 2,527 (156) 2,371 $ Debt service coverage (2) $ 2.53 x 2.44 x (1) Excludes all current expenses paid or accrued to the extent that such expenses are to be paid from revenues. (2) Net revenues divided by aggregate debt service. Minimum annual coverage is 1.15x. St. Johns River Power Park System Schedules of Debt Service Coverage - 2nd Resolution (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Revenues JEA Investment income Total revenues $ Operating expenses 6,160 744 6,904 $ - 8,988 1,031 10,019 2,770 Net revenues $ 6,904 $ 7,249 Aggregate debt service Less: Build America Bonds subsidy Aggregate debt service $ 5,946 (79) 5,867 $ 6,227 (86) 6,141 $ Debt service coverage (1) (1) Net revenues divided by aggregate debt service. Semiannual minimum coverage is 1.15x. 1.18 x $ 1.18 x JEA Page 18 Water and Sewer System Schedules of Debt Service Coverage (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Revenues Water Water capacity fees Sewer Sewer capacity fees Investment income Other (1) Plus: amounts paid from the rate stabilization fund into the revenue fund Less: amounts paid from the revenue fund into the rate stabilization fund Total revenues $ 44,732 2,944 68,902 5,384 975 3,888 17,947 (6,151) 138,621 $ 43,277 2,407 66,693 4,736 2,019 2,932 3,634 (5,937) 119,761 Operating expenses Operations and maintenance (2) State utility and franchise taxes Total operating expenses 37,897 2,692 40,589 37,358 2,629 39,987 Net revenues $ 98,032 $ 79,774 Aggregate debt service Less: Build America Bonds subsidy Aggregate debt service $ 15,729 (614) 15,115 $ 24,315 (620) 23,695 Senior debt service coverage $ (3) $ 6.49 x 3.37 x Net revenues (from above) $ 98,032 $ 79,774 Aggregate debt service (from above) Plus: aggregate subordinated debt service on outstanding subordinated debt Total aggregrate and aggregate subordinated debt service $ 15,115 1,982 17,097 $ 23,695 4,496 28,191 Senior and subordinated debt service coverage excluding capacity fees Senior and subordinated debt service coverage including capacity fees (1) (2) (3) $ (4) (4) $ 5.25 x 2.58 x 5.73 x 2.83 x Excludes the Build America Bonds subsidy. Excludes depreciation and recognition of deferred costs and revenues, net. Net revenues divided by aggregate debt service. Minimum annual coverage is 1.25x. (4) Net revenues divided by total aggregate debt service and aggregate subordinated debt service. Minimum annual coverage is either 1.00x aggregate debt service and aggregate subordinated debt service (excluding capacity fees) or the sum of 1.00x aggregate debt service and 1.20x JEA District Energy System Schedule of Debt Service Coverage (in thousands - unaudited) Quarter and Year-to-Date December 2019 2018 Revenues: Service revenues Investment income Total revenues $ Operating expenses: (1) Operations and maintenance Total operating expenses 2,100 33 2,133 $ 2,157 36 2,193 1,167 1,167 1,204 1,204 Net revenues 966 989 Aggregate debt service (2) 755 755 1.28 x 1.31 x Debt service coverage (1) (3) Excludes depreciation. (2) On June 19, 2013, the closing date of the District Energy System Refunding Revenue Bonds, 2013 Series A, the JEA covenanted to deposit into the 2013 Series A Bonds Subaccount from Available Water and Sewer System Revenues an amount equal to the Aggregate DES Debt Service Deficiency that exists with respect to the 2013 Series A Bonds, in the event that the amount on deposit in the Debt Service Account in the Debt Service Fund in accordance with the District Energy System Resolution is less than Accrued Aggregate Debt Service as of the last business day of (3) Net revenues divided by aggregate debt service. Minimum annual coverage is 1.15x. Page 19 JEA Electric Enterprise Fund Operating Statistics (unaudited) Quarter and Year-to-Date December 2019 2018 Electric revenues sales (000s omitted): Residential Commercial Industrial Public street lighting Electric revenues - territorial Saleback to Florida Power & Light Sales for resale - off system Electric revenues Less: rate stabilization and recovery Less: allowance for doubtful accounts Net electric revenues MWh sales Residential Commercial Industrial Public street lighting Total MWh sales - territorial Sales for resale - off system Total MWh sales Number of accounts (1) Residential Commercial Industrial Public street lighting Total average accounts Residential averages Revenue per account - $ kWh per account Revenue per kWh - ¢ Degree days Heating degree days Cooling degree days Total degree days Degree days - 30 year average (1) $ 137,366 $ 92,984 48,110 3,332 281,792 (1) 458 282,249 26,985 309,234 141,127 94,277 48,381 3,249 287,034 812 2,040 289,886 15,349 (332) 304,903 1,190,754 946,968 661,051 13,537 2,812,310 11,971 2,824,281 1,227,312 960,623 654,110 14,406 2,856,451 53,934 2,910,385 423,713 53,313 195 3,917 481,138 415,303 52,740 196 3,821 472,060 324.20 2,810 11.54 339.82 2,955 11.50 339 408 747 396 432 828 775 The quarter column represents a fiscal quarter average and the year-to-date column represents a fiscal year-to-date average. JEA Page 20 Water and Sewer Enterprise Fund Operating Statistics (unaudited) Quarter and Year-to-Date December 2019 2018 Water Revenues (000s omitted): Residential Commercial and industrial Irrigation Total water revenues Rate stabilization Allowance for doubtful accounts Net water revenues $ $ 24,198 $ 11,952 8,637 44,787 4,644 (55) 49,376 $ 23,488 11,835 8,004 43,327 (906) (50) 42,371 Kgal sales (000s omitted) Residential Commercial and industrial Irrigation Total kgals sales 4,314,553 3,425,149 1,438,100 9,177,802 4,161,909 3,420,105 1,284,796 8,866,810 Number of accounts (1) : Residential Commercial and industrial Irrigation Total average accounts 296,873 26,109 37,360 360,342 289,845 25,839 37,118 352,802 81.51 14.53 5.61 81.04 14.36 5.64 Residential averages: Revenue per account - $ Kgals per account Revenue per kgals - $ Sewer Revenues (000s omitted): Residential Commercial and industrial Total sewer revenues Rate stabilization Allowance for doubtful accounts Net sewer revenues $ $ 36,087 $ 28,015 64,102 7,152 (83) 71,171 $ 35,253 27,494 62,747 (1,397) (76) 61,274 Kgal sales (000s omitted) Residential Commercial and industrial Total kgals sales 3,743,001 3,023,832 6,766,833 3,669,483 2,973,995 6,643,478 Number of accounts (1) : Residential Commercial and industrial Total average accounts 263,564 18,599 282,163 256,777 18,423 275,200 Residential averages: Revenue per account - $ kgals per account Revenue per kgals - $ 136.92 14.20 9.64 137.29 14.29 9.61 Reuse Revenues (000s omitted): Reuse revenues Kgal sales (000s omitted) Reuse sales (kgals) Number of accounts Reuse accounts Rainfall Normal Actual Rain Days (1) $ 4,883 $ 4,022 1,017,324 865,893 16,009 13,175 8.84 11.85 29 8.84 11.47 29 : (1) The quarter column represents a fiscal quarter average and the year-to-date column represents a fiscal year-to-date average.