WCU Board of Directors Meeting - Agenda

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Tuesday, November 24, 2015 at 9:00 a.m.

Boardroom, 787 Ouellette Avenue, Windsor, Ontario

WCU Directors

D. Dilkens, Chair

M. Komsa, Vice-Chair

G. Fenn

F. Francis

J. Elliott

J. Gignac

1.

Call to Order & Declarations of Conflicts of Interest

2.

Summary of Business

3.

Meeting Minutes

3.1

WCU Board Meeting Minutes of October 22, 2015

4.

Executive Reports

4.1 President & CEO

4.1.1

CEO Report – November 2015

4.2 Vice President Finance & CFO

4.2.1

2015 Q3 Financial Statements

4.2.2

Dividend Payable Q3

4.2.3

Financial Reporting for Q3, 2015

4.2.4

Windsor Canada Utilities Ltd. 2016-2021 Draft Business Plan and

Operating and Capital Budgets

4.3 Vice President Asset Management

4.4 Vice President Operations

5.

In Camera Session

(Materials enclosed under separate cover)

6.

Other Business

7.

Administrative Business

7.1

Draft 2016 Meeting Schedule

8.

Conclude Meeting

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SUMMARY OF BUSINESS

WINDSOR CANADA UTILITIES LTD.

BOARD OF DIRECTORS MEETING

TUESDAY, NOVEMBER 24, 2015

PUBLIC SESSION

Item

Pg #

Recommendation

1.

N/A

Call to Order and Declarations of Conflicts of Interest

3.1

3-4

That the WCU Board of Director Meeting Minutes of October 22, 2015 be

approved.

4.1.1

5-14

That the CEO Report – November 2015 be received.

4.2.1

15-25

That the WCU 2015 Q3 Financial Statements be approved as recommended

by the WCU Audit & Finance Committee.

4.2.2

26-29

That a $1,000,000 dividend by declared to the City of Windsor based on the

2015 Q3 financial results as recommended by the WCU Audit & Finance

Committee.

And that a $1,000,000 dividend be declared to the City of Windsor based on

the 2015 Q4 projected financial results as recommended by the WCU Audit &

Finance Committee.

4.2.3

30-31

That the WCU Financial Reporting for Q3 2015 be received.

4.2.4

32

That the Windsor Canada Utilities Ltd. 2016 – 2021 Business Plan and

Operating and Capital Budgets be deferred to the WCU Audit & Finance

Committee for further discussion, review and approval.

5.

N/A

That the Board move in camera.

That the in camera session be concluded.

7.1

33-35

That the Draft 2016 Meeting Schedule be received;

And that the 2016 Draft Meeting Schedule for this board and its committee(s)

be approved.

8.

N/A

That the meeting be terminated.

WCU Board of Directors Meeting - Summary of Business

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WINDSOR CANADA UTILITIES LTD.

BOARD OF DIRECTORS MEETING

PUBLIC MEETING MINUTES

THURSDAY, OCTOBER 22, 2015

A public meeting of the Windsor Canada Utilities Ltd. Board of Directors was held on

Thursday, October 22, 2015 in the Boardroom at 787 Ouellette Ave., Windsor,

Ontario.

ATTENDANCE

Directors:

Drew Dilkens (chair), Marty Komsa, Jo-Anne Gignac, Fred Francis

and John Elliott

Regrets:

Garnet Fenn

Management:

Interim President & CFO Victoria Zuber, VP Asset Management

John Wladarski, Director Finance & Board Secretary Laura

Rauch, Director of Regulatory Affairs Paul Gleason, Executive

Assistant Chantelle Menard and Assistant to the President and

Recording Secretary Debbie Ens

CALL TO ORDER & DECLARATION OF CONFLICTS OF INTEREST

The Chair noting quorum called the meeting to order at 10:31 a.m.

No conflicts of interest were declared.

MEETING MINUTES

Moved by J. Elliott and seconded by F. Francis

That the Windsor Canada Utilities Ltd. Public Board Meeting Minutes of August 20,

2015 be approved.

-CARRIED

PRESIDENT & CEO

The Board was informed that EnWin has submitted to the Ontario Energy Board

(OEB) its 2016 IRM Distribution Rate Application for rates effective May 1, 2016.

There was a discussion concerning upcoming changes that will be implemented by

the OEB. All questions were answered to the Board’s satisfaction.

Moved by J. Gignac and seconded by M. Komsa

That the verbal President & CEO update be received for information.

-CARRIED

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Windsor Canada Utilities Ltd. Board of Directors Public Meeting

Thursday, October 22, 2015 – Page 2

2016 – 2021 WCU BUSINESS PLAN, OPERATING & CAPITAL BUDGETS

Moved by J. Gignac and seconded by M. Komsa

That the 2016 – 2021 Windsor Canada Utilities Business Plan and Operating and

Capital Budgets be deferred until the EnWin Utilities Business Plan and Operating and

Capital Budgets has been approved.

-CARRIED

IN CAMERA SESSION

Moved by F. Francis and seconded by M. Komsa

That the Board move to In Camera session.

-CARRIED

The In Camera session commenced at 10:44 a.m.

The In Camera session concluded at 10:55 a.m.

OTHER BUSINESS

CEO RECRUITMENT

D. Dilkens advised the Board of the current status of the CEO Recruitment. It was

recommended that a Selection Committee be established.

Moved by J. Gignac and seconded by M. Komsa

That the Selection Committee consists of Drew Dilkens, Vic Neufeld, Abe Taqtaq and

John Elliot;

And that the Committee review the applications and report back to the Board.

-CARRIED

2015 MEETING SCHEDULE

Moved by M. Komsa and seconded by F. Francis

That the 2015 Meeting Schedule be received, noting changes.

-CARRIED

TERMINATION

Moved by F. Frances and seconded by M. Komsa

That the meeting be terminated.

-CARRIED

The meeting terminated at 11:02 a.m.

__________________________

Recording Secretary

WCU Board of Directors Meeting - Meeting Minutes

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AGENDA SUBMISSION

To:

EWU Audit & Finance Committee and Board of Directors

WCU Audit & Finance Committee and Board of Directors

November 5, 2015

From:

Victoria Zuber

Re:

CEO Report - November 2015

There are a number of government initiatives keeping us busy this fall. I want to give a brief

update on a few of the more significant items:

Bill 112

There has been put forward Bill 112 – Strengthening Consumer Protection and Electricity

System Oversight Act. It is currently before the Standing Committee for review.

A portion of the bill addresses practices of electricity retailers. It also addresses some

concerns for protection for consumers stemming from criticisms around the Hydro One IPO.

It expands the mandate and the powers of the OEB to ensure consumers are being

protected. It also eliminates a number of the restrictions around the scope of business the

LDC’s may engage in. Subject, however, to OEB approval.

One concern for us will be how existing distributors with an expanded scope are treated.

We are hoping there will be a grandfathering aspect and EnWin will not require additional

approvals.

This proposed bill greatly expands the power of the OEB, going so far as to give them the

power to appoint a supervisor to oversee management of a distributor, and may act without

notice or without a hearing.

I have enclosed the EDA’s Submission to the Standing Committee (Appendix A). The full act

is available on line.

Cap and Trade System

The provincial government in April committed to a cap and trade system in conjunction with

the existing programs in California and Quebec. When the EDA’s VP, Policy and

Government affairs stopped into visit, she indicated we may be impacted due to our

ownership of several large transformer stations. I am attending a course on Greenhouse

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EWU A&F Committee and Board of Directors

November 5, 2015

WCU A&F Committee and Board of Directors

2

Gas Essentials for LDC’s later this month and will update the Board on the impacts to

EnWin and its customers.

PWC Audit

PWC, as part of their internal audit plan for the City of Windsor is scheduled to begin their

field work for EnWin and WUC beginning November 9. Their review is focused primarily

around work management as it applies to asset management. The final report will be issued

in January 2016.

Upcoming Bill Changes for January 2016

I am attaching the EDA’s backgrounder (Appendix B) on the changes affecting the bill

effective January 2016.

Recommendation

That the CEO Report be received.

Interim CEO

Vice President and CFO

Encls.

WCU Board of Directors Meeting - Executive Reports

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Appendix A

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WCU Board of Directors Meeting - Executive Reports

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Appendix B

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WCU Board of Directors Meeting - Executive Reports

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AGENDA SUBMISSION

To:

WCU Audit & Finance Committee and Board of Directors

November 4, 2015

From:

Victoria Zuber

Re:

WCU 2015 Q3 Financial Statements

Enclosed are the WCU Q3 financial statements for the period ended September 30, 2015.

Included in the financial package are highlights of the significant cost drivers along with

financial variance analysis of operational results.

RECOMMENDATION

:

WCU Audit & Finance Committee

That the WCU 2015 Q3 Financial Statements report be received;

And that the WCU 2015 Q3 Financial Statements be recommended to the WCU Board of

Directors for approval.

WCU Board of Directors

That the WCU 2015 Q3 Financial Statements be approved, as recommended by the WCU

Audit & Finance Committee.

Interim CEO

Vice President Finance and CFO

Encls

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Page 1 of 10

Windsor Canada Utilities Ltd.

Consolidated Balance Sheet

(In thousands of Canadian dollars)

IFRS IFRS IFRS

September September December

2015 2014 2014

ASSETS Current Assets

Cash and Bank $ 6,979 $ 6,872 $ 5,893 Accounts Receivable 20,645 22,061 19,033 Accounts Receivable - Unbilled Revenue 24,384 25,510 27,738 Payments in Lieu of Income Tax Receivable 316 (286) 1,348 Due from Related Parties 3,142 1,052 2,365 Inventories 4,040 3,858 3,575 Prepaid Expenses 797 626 948 Total Current Assets 60,303 59,693 60,900 Property, Plant and Equipment

Property, Plant and Equipment 273,038 250,645 262,758 Accumulated Depreciation (48,878) (37,166) (40,134) Customer Contributions (8,255) (8,502) (8,440) Assets under Construction 11,777 13,688 7,428 Total Property, Plant and Equipment 227,682 218,665 221,612 Other Assets

Investments 3,149 2,500 2,510 Work in Progress 1,046 559 392 Receivable from WUC - debenture 52,000 52,000 52,000 Receivable from WUC - defined benefit obligation 5,342 6,164 5,342 Future Payments in Lieu of Tax 8,980 7,899 8,980 Total Other Assets 70,517 69,122 69,224 TOTAL ASSETS $ 358,502 $ 347,480 $ 351,736

LIABILITIES Current Liabilities

Accounts Payable and Accrued Liabilities $ 30,798 $ 24,851 $ 28,470 Due to Related Parties 4,755 4,350 5,295 Customer Deposits, current portion 1,163 1,052 1,004 Deferred Revenue 794 909 402 Total Current Liabilities 37,510 31,162 35,171 Long-Term Liabilities

Customer Deposits, long-term portion 6,146 9,275 7,576 Long-Term Debt 102,430 102,419 102,422 Vested Sick Leave - 1 1 Deferred Revenue - Customer Contributions 8,373 3,771 5,222 Employee Future Benefits 53,348 43,730 51,101 Total Long-Term Liabilities 170,297 159,196 166,322

SHAREHOLDER'S EQUITY Equity Common Shares 81,842 81,842 81,842 Contributed Capital 517 517 517 Retained Earnings 68,336 74,763 67,884 Total Equity 150,695 157,122 150,243 TOTAL LIABILITIES AND EQUITY $ 358,502 $ 347,480 $ 351,736

September 30, 2015

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Page 2 of 10

Windsor Canada Utilities Ltd.

Consolidated Income Statement

(In thousands of Canadian dollars)

MIFRS MIFRS

IFRS Annual Latest Current

Actuals Budget Variance Actuals Actuals Variance Budget Estimate REVENUE FROM SALE OF ELECTRICAL ENERGY

Sale of Electricity $ 191,004 $ 202,949 $ (11,945) $ 186,087 $ 179,848 $ 11,156 $ 265,330 $ 253,385 Residential Distribution 17,948 18,160 (212) 17,625 17,986 (38) 23,457 23,245 General Service - Small Distribution 14,590 14,911 (321) 14,298 14,600 (10) 19,437 19,116 General Service - Large Distribution 3,329 3,469 (140) 3,274 3,436 (107) 4,585 4,445 Street Lighting - Distribution 1,231 1,225 6 1,215 1,226 5 1,631 1,637

TOTAL REVENUE FROM SALE OF ELECTRICAL ENERGY 228,102 240,714 (12,612) 222,499 217,096 11,006 314,440 301,828

COST OF ELECTRICAL ENERGY 191,004 202,949 11,945 191,004 179,848 (11,156) 265,330 253,385

GROSS INCOME 37,098 37,765 (667) 31,495 37,248 (150) 49,110 48,443

MISCELLANEOUS REVENUES

Services Provided to WUC 15,623 16,174 (551) 15,623 15,407 216 21,566 21,015 Services Provided to City 2,344 2,643 (299) 2,344 2,444 (100) 3,524 3,225 Change of Occupancy 269 273 (4) 269 207 62 363 357 Late Payment and Collection Charges 298 328 (30) 298 471 (173) 438 408 Pole Rental 471 473 (2) 471 404 67 631 629

Sale of Scrap 146 57 89 146 137 9 77 166

Sentinel Light Rental 85 87 (2) 85 88 (3) 116 114 Other Operating Revenue 2,647 1,644 1,003 2,831 1,932 715 2,194 3,223

TOTAL MISCELLANEOUS REVENUES 21,883 21,679 204 22,067 21,090 793 28,909 29,137

OPERATING EXPENSES

Community Relations 114 117 3 114 127 13 175 172 Customer Billing and Collection 1,935 1,691 (244) 1,935 1,794 (141) 2,254 2,498 Administration and General 3,508 4,383 875 3,612 2,853 (655) 5,820 5,195 Vehicles Operations and Maintenance 611 771 160 611 732 121 1,047 887 Property and Tools Maintenance 1,777 1,710 (67) 1,777 1,776 (1) 2,279 2,346 Salaries and Benefits 20,049 20,802 753 20,061 20,339 290 27,736 27,602 Regulatory 275 276 1 275 261 (14) 368 367 Employee Future Benefits 3,346 3,345 (1) 3,346 3,227 (119) 4,462 4,463 System Operation and Maintenance 3,964 3,625 (339) 3,977 3,972 8 4,890 5,247

TOTAL OPERATING EXPENSES 35,579 36,720 1,141 35,708 35,081 (498) 49,031 48,777

OPERATING INCOME/EBITDA 23,402 22,724 678 17,854 23,257 145 28,988 28,803

OTHER EXPENSES

Depreciation 8,616 8,714 98 8,706 7,981 (635) 11,619 11,521 Interest Expense 1,616 1,789 173 1,616 1,596 (20) 2,384 2,211 Loss (Gain) on Sale of Property, Plant & Equipment (95) - 95 (65) 68 163 - (95) Settlement of Regulatory Assets/Liabilities 36 - (36) 1,639 (1,199) (1,235) - 36

TOTAL OTHER EXPENSES 10,173 10,503 330 11,896 8,446 (1,727) 14,003 13,673

NET INCOME (LOSS) BEFORE TAXES 13,229 12,221 1,008 5,958 14,811 (1,582) 14,985 15,130 Current Income Taxes 3,506 3,239 (267) 3,506 3,925 419 3,971 4,009

NET INCOME (LOSS) - MIFRS $ 9,723 $ 8,982 $ 741 $ 2,452 10,886 $ (1,163) $ 11,014 $ 11,120 Regulatory Adjustment - IFRS (7,271) - (7,271) - (364) (6,907) -

-NET INCOME (LOSS) - IFRS $ 2,452 $ 8,982 $ (6,530) $ 2,452 $ 10,522 $ (8,070) $ 11,014 $ 11,120

Year to Date - September 2015 Year to Date - September 2014 September 30, 2015

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Page 3 of 10

Windsor Canada Utilities Ltd.

Consolidated Statement of Changes in Financial Position

(In thousands of Canadian dollars)

September September December

2015 2014 2014

OPERATING ACTIVITIES

Net Income - MIFRS $ 9,723 10,886 $ 12,586 Add (Deduct) Items not Affecting Cash

Depreciation 8,706 8,138 11,072

Deferred revenue depreciation (153) (63) (96)

Remeasurement of post employment benefits (OCI), net - - (4,888) Change in post employment retirement benefits 2,247 2,334 9,705 Receivable from WUC - 822 822

Cost of issuing long-term indebtedness 8 8 11

Loss (gain) on sale of capital assets (65) 69 108

Deferred revenue (gain)/loss (31) -

-Change in future payment in lieu of taxes - - (1,080) Change in vested sick leave (1) (9) (9)

Change in deposits (1,270) 388 (1,359) Deferred revenue - CDM 392 402 (105)

Change in work in process (654) (126) 41

Change in regulatory adjustment - IFRS (7,271) (364) (1,058) Change in non-cash working capital components 3,470 (13,304) (10,105) TOTAL CASH PROVIDED (USED) FROM OPERATIONS 15,101 9,181 15,645 FINANCING ACTIVITIES Dividends paid to City (2,000) (3,000) (6,000) TOTAL CASH PROVIDED (USED) FROM FINANCING (2,000) (3,000) (6,000) INVESTING ACTIVITIES Acquisition of capital assets (11,710) (12,765) (17,358) Acquisition of investments (600) (2,500) (2,500) (Gain)/loss on Investment (40) - (10)

Decrease (increase) in net investment in lease 2 2 3

Proceeds on sale of capital assets 333 170 327

TOTAL CASH PROVIDED (USED) FROM INVESTING (12,015) (15,093) (19,538) Net Increase (Decrease) in Cash for the Period 1,086 (8,912) (10) Cash, Beginning of Period 5,893 15,784 15,784 Cash, End of Period $ 6,979 $ 6,872 $ 5,893

September 30, 2015

WCU Board of Directors Meeting - Executive Reports

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Page 4 of 10

Windsor Canada Utilities Ltd.

Financial Highlights and Variances

September 30, 2015

(In thousands of Canadian dollars)

REVENUES Actual Budget

Fav / (Unfav)

Variance % Variance Reasons for Variance

Gross Income from distribution of electrical energy 37,098 37,765 (667) (2)%Consumption is unfavourable to budget by 4.5%

Miscellaneous Revenues 21,883 21,679 204 1%Revenue from street light maintenance is higher than planned due to delays in the LED street light conversion project. This is partly offset by lower revenues from shared services provided to WUC and the City due to lower shared operating expenses, as well as less shared asset charges.

EXPENSES

Community Relations 114 117 3 3%Consistent with budget.

Customer Billing and Collection 1,935 1,691 (244) (14)%Uncollectible and aging hydro account balances as well as mail volumes that are higher than budget have resulted in this unfavourable variance.

Admin and General 3,508 4,383 875 20%Favourable cost to date incurred to support labour negotiations as well as the timing of training expenses and IT support costs support this favourable variance.

Vehicles Operations and Maintenance 611 771 160 21%Favourability is due to delays in vehicle leasing, lower fuel prices and lower fuel consumption. This variance is permanent for 2015. Property and Tools Maintenance 1,777 1,710 (67) (4)%Due to inclement weather earlier in the year, crews time was allocated to

this category. Through Q3, an initiative to reduce tool failure rate has resulted in material costs for tool calibration and tool replacement costs which have exceeded budget.

Salaries and Benefits 20,049 20,802 753 4%Favourability is mainly due to FTE head count lower than budget and reduced overtime compared to budget.

Regulatory 275 276 1 0%Consistent with budget.

Employee Future Benefits 3,346 3,345 (1) 0%Variance is consistent with budget. Post retirement expenses with updated actuarial assumptions will be adjusted for year end. System Operation and Maintenance 3,964 3,625 (339) (9)%Consistent with Q2, unfavourable variance is a result of the increased

street light maintenance activity over forecasted levels due to the delay in the LED street light conversion project. This is partly offset by reduced costs for overhead hydro distribution.

Total Operating Expenses 35,579 36,720 1,141 3%

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Page 5 of 10

Windsor Canada Utilities Ltd.

Financial Highlights and Variances

September 30, 2015

(In thousands of Canadian dollars)

Depreciation 8,616 8,714 98 1%Consistent with budget.

Interest Expense 1,616 1,789 173 10%Favourable due to higher than budgeted cash balances and higher than planned interest earned on the sinking fund.

Loss (Gain) on Sale of Property, Plant & Equipment (95) - 95 100%Net gain mainly related to disposal of obsolete substation property. Settlement of Regulatory Assets/Liabilities 36 - (36) Permanent difference related to settlement of regulatory assets. Current Income Taxes 3,506 3,239 (267) (8)%26.5% on current year's MIFRS net income.

Net Income (Loss) - MIFRS 9,723 8,982 741 8%

Regulatory Adjustment - IFRS (7,271) - (7,271) - Current years difference between IFRS and MIFRS is presented here. This captures the impact of not recognizing regulatory assets/liabilities under IFRS.

Net Income (Loss) - IFRS 2,452 8,982 (6,530) (73)%

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Page 6 of 10

Windsor Canada Utilities Ltd.

Key Operational Metrics Summary

September 30, 2015

(In thousands of Canadian dollars)

Cost Driver

Operational Areas Impacted

2015

YTD

Actual

2015

YTD

Budget

2014

YTD

Actual

- capital reinvestment

- shareholder return

- long term debt repayment

- capital reinvestment

- long term debt requirements

- dividend payments

Capital Expenditures, net

- operations and maintenance

11,712

14,346

12,765

- depreciation expense

- customer service

Capex % of Total Capital Assets

- asset management plan

5.34%

6.38%

5.94%

Dividends - Declared

- shareholder return

2,000

2,000

3,000

Debt/Equity

- financial covenants

- interest expense

ROE

- shareholder return

6.45%

5.53%

6.93%

Legend

Negative variance to budget

R

Positive variance to budget

G

Neutral impact to budget

Y

25.29%

23.89%

24.50%

Net Income - MIFRS

Cash Flow

9,723

8,982

10,886

4,053

750

(279)

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Page 7 of 10

WINDSOR CANADA UTILITIES LTD

Segmented Information

September 30, 2015

(In thousands of Canadian dollars)

Income Statement

Utilities

Energy

Total

Revenue

$

228,102

$

-

$

228,102

Other income

20,573

1,310

21,883

248,675

1,310

249,985

Operating Expenses

225,560

1,023

226,583

Income before undernoted

23,115

287

23,402

Depreciation & Amort

8,616

-

8,616

Interest

1,933

(317)

1,616

Loss (Gain) on Fixed Assets

(95)

-

(95)

Settlement of Assets

36

-

36

10,490

(317)

10,173

Income before taxes

12,625

604

13,229

Current Income Taxes

3,346

160

3,506

Net Income - MIFRS

9,279

444

9,723

Regulatory Adjustment - IFR

(7,271)

-

(7,271)

NET INCOME - IFRS

$

2,008

$

444

$

2,452

Balance Sheet

Utilities

Energy

Total

Current Assets

$

44,358

$

15,945

$

60,303

Capital assets

227,682

-

227,682

Other Assets

70,512

5

70,517

Total Assets

342,552

$

15,950

$

358,502

Current Liabilities

37,295

215

37,510

Long-term Liabilities

160,987

9,310

170,297

Total Liabilities

198,282

9,525

207,807

Shareholder Equity

144,270

6,425

150,695

Total Liabilities and Equity

$

342,552

$

15,950

$

358,502

WCU Board of Directors Meeting - Executive Reports

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Page 8 of 10

($'s are in 000's)

September

December

2015

2014

WCU - Consolidated

Covenant #1: Aggregate principal amount of Consolidated Funded

Obligations do not exceed 75% of Total Consolidated Capitalization.

Non-Current Liabilities (Excluding Long Term Borrowings)

$

67,867

$

63,900

Long Term Borrowings

103,000

103,000

Total Consolidated Funded Obligations

$

170,867

$

166,900

Total Consolidated Capitalization

$

321,562

$

317,143

Actual Ratio

53.1%

52.6%

Covenant Level

75.0%

75.0%

Variance

21.9%

22.4%

WCU - Consolidated

Covenant #2: Indebtedness of all designated subsidiaries, in the

aggregate, does not exceed 5% of Consolidated Net Worth.

Consolidated Indebtedness (excluding debenture)

-

-Consolidated Shareholders Equity

$

150,695

$

150,243

Actual Ratio

0.0%

0.0%

Covenant Level

5.0%

5.0%

Variance

5.0%

5.0%

Indebtedness Availability

$

7,535

$

7,512

WINDSOR CANADA UTILITIES LTD.

Covenant Calculations

September 30, 2015

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Page 9 of 10

($'s are in 000's)

September

December

2015

2014

WCU - Consolidated

Covenant: Debt to Total Capitalization

Interest Bearing Debt

$

103,000

$

103,000

Total Capitalization

$

253,695

$

253,243

Actual Ratio

40.6%

40.7%

Covenant Level

60.0%

60.0%

Variance

19.4%

19.3%

Note:

1) WCU covenant pledged to credit facility at RBC.

WINDSOR CANADA UTILITIES LTD.

Covenant Calculations

September 30, 2015

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Page 10 of 10

($'s are in 000's)

September

December

2015

2014

WUC - Consolidated

Covenant #1: Aggregate principal amount of Consolidated Funded

Obligations do not exceed 75% of Total Consolidated Capitalization.

Non-Current Liabilities (Excluding Long Term Borrowings)

8,369

8,447

Long Term Borrowings

52,000

52,000

Total Consolidated Funded Obligations

$

60,369

$

60,447

Total Consolidated Capitalization

$

263,557

$

253,751

Actual Ratio

22.9%

23.8%

Covenant Level

75.0%

75.0%

Variance

52.1%

51.2%

WUC - Consolidated

Covenant #2: Indebtedness of all designated subsidiaries, in the

aggregate, does not exceed 5% of Consolidated Net Worth.

Consolidated Indebtedness (excluding debenture)

-

-Total Equity

203,188

193,304

Actual Ratio

0.0%

0.0%

Covenant Level

5.0%

5.0%

Variance

5.0%

5.0%

Indebtedness Availability

10,159

9,665

WINDSOR UTILITIES COMMISSION

Covenant Calculations- Revolving Credit Agreement

September 30, 2015

(26)

AGENDA SUBMISSION

To:

WCU Audit & Finance Committee and Board of Directors

November 5, 2015

From:

Victoria Zuber

Re:

Dividend Payable

The 2015 Budget package included $5,000,000 in dividends to be declared in 2015.

Dividends will be declared quarterly subject to financial performance.

Based on the results for the third quarter in 2015, Management recommends a dividend be

declared payable to City of Windsor in the amount of $1,000,000.

The 2015 Q4 Forecast anticipates the year end operating results to be consistent with plan.

As a result, Management recommends a dividend be declared payable to the City of

Windsor in the amount of $1,000,000.

The dividend policy states that the target dividend to the shareholder is between 25% and

55% of MIFRS net income. This recommendation is 30.85% of the target value for Q3 and

35.97% for the Q4 forecast.

RECOMMENDATION

:

WCU Audit & Finance Committee

That the dividend payable report be received;

And that this Committee recommend to the Board that a $1,000,000 dividend be

declared to the City of Windsor, based on the 2015 Q3 financial results.

And that this Committee recommend to the Board that a $1,000,000 dividend be

declared to the City of Windsor, based on the 2015 Q4 projected financial results.

WCU Board of Directors Meeting - Executive Reports

(27)

EWU A&F Committee & Board of Directors

2

November 5, 2015

WCU Board of Directors

That a $1,000,000 dividend be declared to the City of Windsor, based on the 2015 Q3

financial results, as recommended by WCU Audit & Finance Committee.

And that a $1,000,000 dividend be declared to the City of Windsor, based on the 2015 Q4

projected financial results, as recommended by WCU Audit & Finance Committee.

Interim CEO

Vice President and CFO

Encls

(28)

Windsor Canada Utilities Ltd.

Schedule of Available Dividends

Net

Assumed

Dividends

% of Net Income

Income

Dividends

*

Declared **

Dividends

2010

12,227

6,100

4,000

32.71%

2011

10,888

5,400

4,000

36.74%

2012

15,886

7,900

5,000

31.47%

2013

14,943

7,500

5,000

33.46%

2014

12,586

6,300

5,000

39.73%

2015 Q3

9,723

4,900

3,000

30.85%

2015 Q4 Fcst

11,120

5,600

4,000

35.97%

*Assumed dividends are at 50%. The dividend policy states that the target dividend to

the shareholder be between 25% and 55% of net income.

** Dividends declared are shown in the year to which they apply, not necessarily the year

in which it is recorded on the financial statements.

WCU Board of Directors Meeting - Executive Reports

(29)

Windsor Canada Utilities Ltd.

Dividends

Declared

2010 Actual Dividend

2009 - Q4

-2010 - Q1

1,000

2010 - Q2

1,000

2010 - Q3

1,000

2010 - Q4

-Total Dividend - 2010

$

3,000

2011 Actual Dividend

2010 - Q4

1,000

2011 - Q1

1,000

2011 - Q2

1,000

2011 - Q3

1,000

2011 - Q4

1,000

Total Dividend - 2011

$

5,000

2012 Actual Dividend

2012 - Q1

1,000

2012 - Q2

1,000

2012 - Q3

1,000

2012 - Q4

1,000

2012 - Q4 Special

1,000

Total Dividend - 2012

$

5,000

2013 Actual Dividend

2013 - Q1

1,000

2013 - Q2

1,000

2013 - Q3

1,000

2013 - Q4

1,000

Total Dividend - 2013

$

4,000

2014 Actual Dividend

2013 - Q4 Special

1,000

2014 - Q1

1,000

2014 - Q2

1,000

2014 - Q3

1,000

2014 - Q4

1,000

2014 - Q4 Special

1,000

Total Dividend - 2014

$

6,000

2015 Actual Dividend

2014 - Q1

1,000

2015 - Q2

1,000

2015 - Q3

1,000

2015 - Q4

1,000

2015 - Q4 Special (budget)

1,000

Total Dividend - 2015

$

5,000

*Dividends are shown in the year paid and against the Quarter declared.

in 000's

(30)

WCU Board of Directors Meeting - Executive Reports

(31)
(32)

AGENDA SUBMISSION

To:

WCU Board of Directors

November 11, 2015

From:

Victoria Zuber

Re: Windsor Canada Utilities Ltd. 2016 – 2021 Draft Business Plan and

Operating and Capital Budgets

Windsor Canada Utilities Ltd.’s (“WCU”) Audit & Finance Committee approved WCU’s 2016

– 2021 Business Plan and Operating and Capital Budgets on October 13, 2015.

At the WCU Board meeting held on October 22, 2015, the Board requested that further

information related to the business plan and operating expenses be provided at the next

meeting and the motion was deferred. Management recommends that the additional

information be provided for to WCU’s Audit & Finance Committee for review and approval at

its meeting scheduled on January 12, 2016.

RECOMMENDATION

:

WCU Board of Directors

That the Windsor Canada Utilities Ltd. 2016 – 2021 Business Plan and Operating and

Capital Budgets be deferred to the WCU Audit & Finance Committee for further discussion,

review and approval.

Interim CEO

Vice President Finance and CFO

WCU Board of Directors Meeting - Executive Reports

(33)

AGENDA SUBMISSION

To:

EWE Board of Directors

EWU Governance, Audit & Finance Committee and Board of Directors

WCU Audit & Finance Committee and Board of Directors

WUC Governance, Audit & Finance Committee and Board of Commissioners

November 6, 2015

From:

Laura Rauch

Re:

2016 Draft Meeting Schedule

Management has prepared a proposed draft meeting schedule for the 2016 calendar

year for approval.

Recommendation

EWU & WUC Governance, EWU, WCU and WUC Audit & Finance Committees:

That the 2016 Draft Meeting Schedule be received.

EWE, EWU and WCU Board of Directors and WUC Board of Commissioners:

That the 2016 Draft Meeting Schedule be received;

And that the 2016 Draft Meeting Schedule for this board and its committee(s) be

approved.

Director, Finance and Corporate Secretary

(34)

S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 29 31 S M T W TH F S S M T W TH F S 1 2 3 4 5 1 2 6 7 8 9 10 11 12 3 4 5 6 7 8 9 13 14 15 16 17 18 19 10 11 12 13 14 15 16 20 21 22 23 24 25 26 17 18 19 20 21 22 23 27 28 29 30 31 24 25 26 27 28 29 30 S M T W TH F S S M T W TH F S 1 2 3 4 5 6 7 1 2 3 4 8 9 10 11 12 13 14 5 6 7 8 9 10 11 15 16 17 18 19 20 21 12 13 14 15 16 17 18 22 23 24 25 26 27 28 19 20 21 22 23 24 25 29 30 31 26 27 28 29 30 S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 29 30 31 31 S M T W TH F S S M T W TH F S 1 2 3 1 4 5 6 7 8 9 10 2 3 4 5 6 7 8 11 12 13 14 15 16 17 9 10 11 12 13 14 15 18 19 20 21 22 23 24 16 17 18 19 20 21 22 25 26 27 28 29 30 23 24 25 26 27 28 29 30 31 S M T W TH F S S M T W TH F S 1 2 3 4 5 1 2 3 6 7 8 9 10 11 12 4 5 6 7 8 9 10 13 14 15 16 17 18 19 11 12 13 14 15 16 17 20 21 22 23 24 25 26 18 19 20 21 22 23 24 27 28 29 30 25 26 27 28 29 30 31

Statutory Declared Holiday School Holidays ~ March 14-18, 2016 MONDAY MEETINGS

EWE Board of Directors @ 9:00am TUESDAY MEETINGS

WCU & EWU Audit & Finance Committees - Joint Meeting @ 9:15 am *January 12 @ 9:30 am EWU Board of Directors @ 9:15 am

EWU & WUC Special Audit & Finance Committee @ 9:15 am (WUC Capital Budget) THURSDAY MEETINGS

EWU Governance & Human Resources Committee @ 10:30am WCU Board of Directors @ 10:30am

ALL MEETINGS HELD AT 787 OUELLETTE IN THE SECOND FLOOR BOARDROOM DECEMBER 2016 MAY 2016 JUNE 2016

JULY 2016 AUGUST 2016

NOVEMBER 2016

DRAFT SCHEDULE OF MEETINGS - 2016

ENWIN GROUP OF COMPANIES

SEPTEMBER 2016 OCTOBER 2016 JANUARY 2016 FEBRUARY 2016

MARCH 2016 APRIL 2016

WCU Board of Directors Meeting - Administrative Business

(35)

S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 29 31 S M T W TH F S S M T W TH F S 1 2 3 4 5 1 2 6 7 8 9 10 11 12 3 4 5 6 7 8 9 13 14 15 16 17 # 19 10 11 12 13 14 15 16 20 21 22 23 24 25 26 17 18 19 20 21 22 23 27 28 29 30 31 24 25 26 27 28 29 30 S M T W TH F S S M T W TH F S 1 2 3 4 5 6 7 1 2 3 4 8 9 10 11 12 13 14 5 6 7 8 9 10 11 15 16 17 18 19 20 21 12 13 14 15 16 17 18 22 23 24 25 26 27 28 19 20 21 22 23 24 25 29 30 31 26 27 28 29 30 S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 29 30 31 31 S M T W TH F S S M T W TH F S 1 2 3 1 4 5 6 7 8 9 10 2 3 4 5 6 7 8 11 12 13 14 15 16 17 9 10 11 12 13 14 15 18 19 20 21 22 23 24 16 17 18 19 20 21 22 25 26 27 28 29 30 23 24 25 26 27 28 29 30 31 S M T W TH F S S M T W TH F S 1 2 3 4 5 1 2 3 6 7 8 9 10 11 12 4 5 6 7 8 9 10 13 14 15 16 17 18 19 11 12 13 14 15 16 17 20 21 22 23 24 25 26 18 19 20 21 22 23 24 27 28 29 30 25 26 27 28 29 30 31 Statutory Declared Holiday

School Holidays ~ March 14-18, 2016 TUESDAY MEETINGS

WUC Governance Committee @ 10:30am THURSDAY MEETINGS

WUC Audit & Finance Committee @ 9:15 am

WUC /EWU Audit & Finance Committee @ 9:15 am (Capital Budget) FRIDAY MEETINGS

WUC Board of Commissioners @ 9:15 am

ALL MEETINGS HELD AT 787 OUELLETTE IN THE SECOND FLOOR BOARDROOM JULY 2016 AUGUST 2016

SEPTEMBER 2016 OCTOBER 2016

DRAFT SCHEDULE OF MEETINGS - 2016

JANUARY 2016 FEBRUARY 2016

NOVEMBER 2016 DECEMBER 2016 MARCH 2016 APRIL 2016

MAY 2016 JUNE 2016

Figure

Updating...

References