APS 2011 Annual Report Download - page 135

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
110
Debt Fair Value
Our long-term debt fair value estimates are based on quoted market prices of the same or
similar issues. Certain of our debt instruments contain third-party credit enhancements and, in
accordance with GAAP, we do not consider the effect of these credit enhancements when determining
fair value. The following table represents the estimated fair value of our long-term debt, including
current maturities (dollars in millions):
As of
December 31, 2011
As of
December 31, 2010
Carrying
Amount
Fair Value
Carrying
Amount Fair Value
Pinnacle West $ 125 $ 123 $ 175 $ 176
APS 3,371 3,803 3,503 3,737
Total $ 3,496 $ 3,926 $ 3,678 $ 3,913
Credit Facilities and Debt Issuances
Pinnacle West
On February 23, 2011, Pinnacle West entered into a $175 million term loan facility that
matures February 20, 2015. Pinnacle West used the proceeds of the loan to repay its 5.91% $175
million Senior Notes. Interest rates are based on Pinnacle West’s senior unsecured debt credit ratings
or, if unavailable, its long-term issuer ratings. As of December 31, 2011, $50 million of the $175
million term loan facility had been repaid.
APS
On August 25, 2011, APS issued $300 million of 5.05% unsecured senior notes that mature on
September 1, 2041. The net proceeds from the sale of the notes were used along with cash on hand to
repay at maturity APS’s $400 million aggregate principal amount of 6.375% senior notes due
October 15, 2011.
On September 7, 2011, APS entered into a new letter of credit agreement supporting its
approximately $27 million aggregate principal amount of Coconino County, Arizona Pollution Control
Corporation Pollution Control Revenue Refunding Bonds (Arizona Public Service Company Navajo
Project), 2009 Series B. The agreement expires September 22, 2016.
On December 8, 2011, APS extended a letter of credit agreement supporting its approximately
$17 million aggregate principal amount of Coconino County, Arizona Pollution Control Corporation
Pollution Control Revenue Bonds (Arizona Public Service Company Project), 1998. The agreement
expires December 8, 2016.
On January 10, 2012, APS issued $325 million of 4.50% unsecured senior notes that mature on
April 1, 2042. The net proceeds from the sale will be used along with other funds to repay at maturity
APS’s $375 million aggregate principal amount of 6.50% senior notes due March 1, 2012.