APS 2011 Annual Report Download - page 92

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Contractual Obligations
The following table summarizes Pinnacle West’s consolidated contractual requirements as of
December 31, 2011 (dollars in millions):
2012
2013-
2014
2015-
2016 Thereafter Total
Long-term debt payments,
including interest: (a)
APS $ 666 $ 952 $ 924 $ 2,846 $ 5,388
Pinnacle West 3 6 126 -- 135
Total long-term debt payments,
including interest and capital
lease obligations 669 958 1,050 2,846 5,523
Fuel and purchased power
commitments (b) 449 1,009 1,026 6,558 9,042
Renewable energy credits (c) 58 65 64 388 575
Purchase obligations (d) 131 75 12 265 483
Nuclear decommissioning
funding requirements 17 34 20 71 142
Noncontrolling interests 11 37 35 -- 83
Operating lease payments 21 33 15 23 92
Total contractual commitments $ 1,356 $ 2,211 $ 2,222 $ 10,151 $ 15,940
(a) The long-term debt matures at various dates through 2041 and bears interest principally at
fixed rates. Interest on variable-rate long-term debt is determined by using average rates at
December 31, 2011 (see Note 6).
(b) Our fuel and purchased power commitments include purchases of coal, electricity, natural gas,
renewable energy and nuclear fuel (see Notes 3 and 11).
(c) Contracts to purchase renewable energy credits in compliance with the RES.
(d) These contractual obligations include commitments for capital expenditures and other
obligations. These amounts do not include the purchase of SCE’s interest in Four Corners
Units 4 and 5 due to additional approvals required. See discussion in “Overview.”
This table excludes $136 million in unrecognized tax benefits because the timing of the future
cash outflows is uncertain. This table also excludes approximately $65 million, $160 million and $160
million in estimated minimum pension contributions for 2012, 2013 and 2014, respectively (see
Note 8).
CRITICAL ACCOUNTING POLICIES
In preparing the financial statements in accordance with GAAP, management must often make
estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and
related disclosures at the date of the financial statements and during the reporting period. Some of
those judgments can be subjective and complex, and actual results could differ from those estimates.
We consider the following accounting policies to be our most critical because of the uncertainties,
judgments and complexities of the underlying accounting standards and operations involved.