content_image/165812.jpg
## 14. CAPITAL MANAGEMENT 

The Company’s objectives with respect to its capital structure are to maintain effective access to capital on a long-term basis at reasonable rates, and to deliver appropriate financial returns. In order to ensure ongoing effective access to capital, the Company targets to maintain an “A” category long-term credit rating. 

The Company considers its capital structure to consist of shareholder’s equity, preferred shares, long-term debt, and cash and cash equivalents. At December 31, 2013 and 2012, the Company’s capital structure was as follows: 

<img src='content_image/165812.jpg'>

The Company has customary covenants typically associated with long-term debt. Among other things, Hydro One’s long-term debt and credit facility covenants limit the permissible debt to 75% of the Company’s total capitalization, limit the ability to sell assets and impose a negative pledge provision, subject to customary exceptions. At December 31, 2013 and 2012, Hydro One was in compliance with all of these covenants and limitations. 

## 15. PENSION AND POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS 

Hydro One has a defined benefit pension plan, a supplementary pension plan, and post-retirement and post-employment benefit plans. The defined benefit pension plan (Pension Plan) is contributory and covers all regular employees of Hydro One and its subsidiaries, except Hydro One Brampton Networks. Employees of Hydro One Brampton Networks participate in the OMERS plan, a multiemployer public sector pension fund. The supplementary pension plan provides members of the Pension Plan with benefits that would have been earned and payable under the Pension Plan but for the limitations imposed by the Income Tax Act  (Canada). The supplementary pension plan obligation is included with other post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets. 

## The OMERS Plan 

Hydro One contributions to the OMERS plan for the year ended December 31, 2013 were $2 million (2012 – $2 million). Company contributions payable at December 31, 2013 and included in accrued liabilities on the Consolidated Balance Sheets were $0.2 million (2012 – $0.2 million). Hydro One contributions do not represent more than 5% of total contributions to the OMERS plan, as indicated in OMERS’s most recently available annual report for the year ended December 31, 2012. 

