APS 2011 Annual Report Download - page 129

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
104
The following table shows the net deferred income tax liability recognized on the Consolidated
Balance Sheets (dollars in thousands):
December 31,
2011 2010
Current asset $ 130,571 $ 124,897
Long-term liability (1,925,388) (1,863,861)
Deferred income taxes – net $ (1,794,817) $ (1,738,964)
On February 17, 2011, Arizona enacted legislation (H.B. 2001) that included a four year phase-
in of corporate income tax rate reductions beginning in 2014. As a result of these tax rate reductions,
Pinnacle West has revised the tax rate applicable to reversing temporary items in Arizona. In
accordance with accounting for regulated companies, the benefit of this rate reduction is substantially
offset by a regulatory liability. In 2011, APS increased regulatory liabilities by a total of $62 million,
with a corresponding decrease in accumulated deferred income tax liabilities to reflect the impact of
this change in tax law.