APS 2012 Annual Report Download - page 133

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
108
See “Financial Assurances” in Note 11 for discussion of APS’s separate outstanding letters of
credit.
Debt Provisions
Although provisions in APS’s articles of incorporation and ACC financing orders establish
maximum amounts of preferred stock and debt that APS may issue, APS does not expect any of these
provisions to limit its ability to meet its capital requirements. On February 6, 2013, the ACC issued a
financing order in which it, subject to specified parameters and procedures, (a) approved APS’s short-
term debt authorization equal to a sum of (i) 7% of APS’s capitalization, and (ii) $500 million (which is
required to be used for costs relating to purchases of natural gas and power), (b) approved an increase in
APS’s long-term debt authorization from $4.2 billion to $5.1 billion in light of the projected growth of
APS and its customer base and the resulting projected financing needs, and (c) authorized APS to enter
into derivative financial instruments for the purpose of managing interest rate risk associated with its
long- and short-term debt. This financing order is set to expire on December 31, 2017.
6. Long-Term Debt and Liquidity Matters
All of Pinnacle West’s and APS’s debt is unsecured. The following table presents the
components of long-term debt on the Consolidated Balance Sheets outstanding at December 31, 2012
and 2011 (dollars in thousands):
December 31,
Maturity
Dates (a)
Interest
Rates
2012
2011
APS
Pollution Control Bonds:
Variable
2029-2038
(b)
$ 75,580
$ 43,580
Fixed
2024-2034
1.25%-6.00%
490,275
522,275
Pollution control bonds with senior
notes
5.05%
--
90,000
Total Pollution Control Bonds
565,855
655,855
Senior unsecured notes
2014-2042
4.50%-8.75%
2,575,000
2,625,000
Palo Verde sale leaseback lessor notes
2015
8.00%
65,547
96,803
Capitalized lease obligations
(c)
--
1,029
Unamortized discount
(9,486)
(7,198)
Total APS long-term debt
3,196,916
3,371,489
Less current maturities
122,828
477,435
Total APS long-term debt less current
maturities
3,074,088
2,894,054
Pinnacle West
Term loan
2015
(d)
125,000
125,000
TOTAL LONG-TERM DEBT
LESS CURRENT MATURITIES
$ 3,199,088 $ 3,019,054
(a) This schedule does not reflect the timing of redemptions that may occur prior to
maturities.
(b) The weighted-average rate for the variable rate pollution control bonds was 0.13%-
0.15% at December 31, 2012 and 0.09% at December 31, 2011.
(c) The weighted-average interest rate was 5.27% at December 31, 2011.