BRITISH COLUMBIA HYDRO AND POWER AUTHORITY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 2016 AND 2015
British Columbia Hydro and Power Authority
The debt to equity ratio at March 31, 2016, and March 31, 2015 was as follows:
(in millions) 2016 2015
Total debt, net of sinking funds $ 18,046 $ 16,721
Less: Cash and cash equivalents (44) (39)
Net Debt $ 18,002 $ 16,682
Retained earnings $ 4,397 $ 4,068
Contributed surplus 60 60
Accumulated other comprehensive income 43 42
Total Equity $ 4,500 $ 4,170
Net Debt to Equity Ratio 80 : 20 80 : 20
Payment to the Province
The Company is required to make an annual Payment to the Province (the Payment) on or before June 30
of each year. The Payment is equal to 85 per cent of the Company’s net income for the most recently
completed fiscal year unless the debt to equity ratio, as defined by the Province, after deducting the
Payment, is greater than 80:20. If the Payment would result in a debt to equity ratio exceeding 80:20, then
the Payment is the greatest amount that can be paid without causing the debt to equity ratio to exceed
80:20. The Payment accrued at March 31, 2016 is $326 million (March 31, 2015 - $264 million), which is
included in accounts payable and accrued liabilities and is less than 85 per cent of the net income due to the
80:20 cap.
NOTE 18: EMPLOYEE BENEFITS – POST-EMPLOYMENT BENEFIT PLANS
The Company provides a defined benefit statutory pension plan to substantially all employees, as well as
supplemental arrangements which provide pension benefits in excess of statutory limits. Pension benefits
are based on years of membership service and highest five-year average pensionable earnings. The plan
also provides pensioners a conditional indexing fund. Employees make basic and indexing contributions to
the plan funds based on a percentage of current pensionable earnings. The Company contributes amounts
as prescribed by the independent actuary. The Company is responsible for ensuring that the statutory
pension plan has sufficient assets to pay the pension benefits upon retirement of employees. The
supplemental arrangements are unfunded. The most recent actuarial funding valuation for the statutory
pension plan was performed at December 31, 2012. The next valuation for funding purposes is being
prepared as at December 31, 2015, and the results will be available in September 2016.
The Company also provides post-employment benefits other than pensions including limited medical,
extended health, dental and life insurance coverage for retirees who have at least 10 years of service and
qualify to receive pension benefits. Certain benefits, including the short-term continuation of health care
and life insurance, are provided to terminated employees or to survivors on the death of an employee.
These post-employment benefits other than pensions are not funded. Post-employment benefits include the
pay out of benefits that vest or accumulate, such as banked vacation.