APS 2012 Annual Report Download - page 177

Download and view the complete annual report

Please find page 177 of the 2012 APS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 256

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255
  • 256

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
152
APSES – On August 19, 2011, Pinnacle West sold its investment in APSES. The sale
resulted in an after-tax gain from discontinued operations of approximately $10 million. In June
2010, APSES sold its district cooling business. As a result of that sale, we recorded an after-tax gain
from discontinued operations of approximately $25 million. Prior period income statement amounts
related to these sales and the associated revenues and costs are reflected in discontinued operations.
The following table provides revenue, income (loss) before income taxes and income (loss)
after taxes classified as discontinued operations in Pinnacle West’s Consolidated Statements of
Income for the years ended December 31, 2012, 2011 and 2010 (dollars in millions):
2012
2011
2010
Revenue:
SunCor
$ --
$ 1
$ 30
APSES
--
36
127
Total revenue
$ --
$ 37
$ 157
Income (loss) before taxes:
SunCor
$ (10)
$ (2)
$ (10)
APSES
--
21
51
Total income (loss) before taxes
$ (10)
$ 19
$ 41
Income (loss) after taxes:
SunCor
$ (6)
$ (1)
$ (6)
APSES
--
12
31
Total income (loss) after taxes
$ (6)
$ 11
$ 25
22. Nuclear Decommissioning Trusts
To fund the costs APS expects to incur to decommission Palo Verde, APS established
external decommissioning trusts in accordance with NRC regulations. Third-party investment
managers are authorized to buy and sell securities per their stated investment guidelines. The trust
funds are invested in fixed income securities and equity securities. APS classifies investments in
decommissioning trust funds as available for sale. As a result, we record the decommissioning trust
funds at their fair value on our Consolidated Balance Sheets. See Note 14 for a discussion of how
fair value is determined and the classification of the nuclear decommissioning trust investments
within the fair value hierarchy. Because of the ability of APS to recover decommissioning costs in
rates and in accordance with the regulatory treatment for decommissioning trust funds, we have
deferred realized and unrealized gains and losses (including other-than-temporary impairments on
investment securities) in other regulatory liabilities. The following table includes the unrealized
gains and losses based on the original cost of the investment and summarizes the fair value of APS’s
nuclear decommissioning trust fund assets at December 31, 2012 and December 31, 2011 (dollars in
millions):