MANAGEMENT’S DISCUSSION AND ANALYSIS  At December 31, 2013, we had $9,045 million in long-term debt outstanding, including the current portion. Our notes and debentures mature  between 2014 and 2062. Long-term financing is provided by our access to the debt markets, primarily through our Medium-Term Note (MTN)  Program. The maximum authorized principal amount of medium-term notes issuable under this program is $3,000 million. At December 31, 2013,  $1,815 million remained available until October 2015. Cash generated from operations, after payment of expected dividends, will not be sufficient to fund capital expenditures, fund the repayment  of our existing indebtedness, and meet other liquidity requirements. We rely on debt financing through our MTN Program and our Commercial  Paper Program to repay our existing indebtedness and fund a portion of our capital expenditures. The credit ratings assigned to our debt securities by external rating agencies are important to our ability to raise capital and funding to support  our business operations. Maintaining strong credit ratings allows us to access capital markets on competitive terms. A material downgrade of  our credit ratings would likely increase our cost of funding significantly, and our ability to access funding and capital through the capital markets  could be reduced. Our corporate credit ratings from approved rating organizations are as follows: Rating Rating Agency  Short-term Debt  Long-term Debt DBRS Limited  R-1 (middle)  A (high) Moody’s Investors Service Inc.  Prime-1  A1 Standard & Poor’s Rating Services Inc. (S&P) 1 A-1 A+ 1 On April 25, 2012, S&P revised their outlook on our company to negative from stable. We have the customary covenants normally associated with long-term debt. Among other things, our long-term debt covenants limit our  permissible debt as a percentage of our total capitalization, limit our ability to sell assets, and impose a negative pledge provision, subject to  customary exceptions. The credit agreements related to our credit facilities have no material adverse change clauses that could trigger default.  However, the credit agreements require that we provide notice to the lenders of any material adverse change within three business days of the  occurrence. The agreements also provide limitations that debt cannot exceed 75% of total capitalization and that third party debt issued by our  subsidiaries cannot exceed 10% of the total book value of our assets. We were in compliance with all these covenants and limitations as at  December 31, 2013. In 2013, we issued $1,185 million of long-term debt under our MTN Program, compared to $1,085 million of long-term debt issued in 2012.  In 2013, we also repaid $600 million in maturing long-term debt, compared to $600 million of long-term debt called and redeemed in 2012,  prior to its maturity date of November 15, 2012. We had no short-term notes outstanding at December 31, 2013 or 2012. Common dividends are declared at the sole discretion of our Board of Directors, and are recommended by management based on results of  operations, maintenance of the deemed regulatory capital structure, financial condition, cash requirements, and other relevant factors, such as  industry practice and shareholder expectations. Common dividends pertaining to our quarterly financial results are generally declared and paid  in the following quarter. In 2013, we paid dividends to the Province in the amount of $218 million, consisting of $200 million in common dividends and $18 million  in preferred dividends. In 2012, we paid dividends to the Province in the amount of $370 million, consisting of $352 million in common  dividends and $18 million in preferred dividends. In 2013, cash dividends per common share were $2,000, compared to $3,523 per  common share in 2012. Cash dividends per preferred share were $1.375 in each of 2013 and 2012. Our objectives with respect to our capital structure are to maintain effective access to capital on a long-term basis at reasonable rates and to  deliver appropriate financial returns to our shareholder.  28 HYDRO ONE ANNUAL REPORT 2013