APS 2012 Annual Report Download - page 7

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STRONG FINANCIAL PROFILE
With the rate case concluded and the accompanying uncertainty removed, we were able to achieve
other long-held goals.
In October, we improved the cash component of our return to shareholders by increasing our annual
dividend $0.08 per share to $2.18. We will take a conservative approach, but our goal is to deliver
dividend growth of approximately 4 percent annually.
In November, Standard & Poor’s upgraded key APS and Pinnacle West credit ratings for the second
time in two years. S&P was the last of the three major rating agencies to award us a BBB+ rating or
its equivalent, giving us greater financial flexibility and access to capital markets.
Another major objective for 2012 was to complete a multi-year effort to streamline our business.
We accomplished that goal when we exited the last of our major unregulated businesses. We are now
tightly focused on what we do best: run a very good, growing electric utility.
Efficiency initiatives within several APS business units have helped keep operating and maintenance costs
in line with sales growth for five consecutive years. We built on those successes in 2012 with a corporate
initiative to look across our company for additional opportunities to work more effectively. We named
it the Sustainable Cost Management Initiative to underscore that we are working from a position of
financial strength and will not make short-term cuts at the expense of safety, operating performance
or the long-term health of our business.
The initiative comprises a series of coordinated projects that are adding rigor to our business planning,
improving collaboration among front-line business units and the corporate resources that support them,
benchmarking our performance against the best in our industry, and using process improvements to
create opportunities for natural attrition through retirements. I look forward to sharing our progress
in future reports.
MOMENTUM 2012 ANNUAL REPORT
As we moved into 2012, our most important
goal was to secure a constructive outcome in
our retail rate case. We succeeded.