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r� Financial Highlights € <br /> Forward-Looking Energy <br /> Adjustment Clause <br /> € MMPA's rate structure includes a forward- <br /> ___ looking energy adjustment clause (EAC). At <br /> Y <br /> the beginning of each month, the Agency sets <br /> rates to members based on projected costs. <br /> ar Having a forward-looking EAC helps MMPA <br /> _ maintain liquidity and cash flow by matching <br /> € the timing of revenues and expenses. <br /> k Debt Service Coverage <br /> In 2013, the MMPA Board of Directors approved <br /> a policy of adopting an annual budget that <br /> provides debt service coverage of at least <br /> 1.20 times debt service. This policy creates a <br /> '1 target in excess of the 1.15 times debt service <br /> o , coverage that is required by MMPA's bond <br /> € indenture. The policy is intended to provide the <br /> Agency the flexibility to withstand unexpected <br /> A events without necessarily having to increase <br /> € rates to members to maintain required debt <br /> service coverage. The Agency exceeded its <br /> r target in 2014 with a debt service coverage <br /> € ratio of 1.27 times debt service. <br /> x" Debt Service Coverage Ratio <br /> N 1.30 — <br /> 1.25 — <br /> rr- 1.20 — <br /> 1.15 — <br /> 1.10 <br /> I i - <br /> a 1.05 — <br /> 1.00 — <br /> 2012 2013 2014 <br />