APS 2013 Annual Report Download - page 113

Table of Contents
PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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, subject to specified parameters and procedures, it (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, 2013 and 2012 (dollars in thousands):
Maturity Interest December 31,
Dates (a) Rates 2013 2012
APS
Pollution Control Bonds:
Variable 2029-2038 (b) $75,580 $75,580
Fixed 2024-2034 1.25%-6.00% 426,125 490,275
Total Pollution Control Bonds 501,705 565,855
Senior unsecured notes 2014-2042 4.50%-8.75% 2,675,000 2,575,000
Palo Verde sale leaseback lessor notes 2015 8.00% 38,869 65,547
Unamortized discount (8,732)(9,486)
Unamortized premium 5,047 —
Total APS long-term debt 3,211,889 3,196,916
Less current maturities (d) 540,424 122,828
Total APS long-term debt less current maturities 2,671,465 3,074,088
Pinnacle West
Term loan 2015 (c) 125,000 125,000
TOTAL LONG-TERM DEBT LESS CURRENT
MATURITIES $2,796,465 $3,199,088
(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 0.03%-0.06% at December 31, 2013 and 0.13%-0.15% at
December 31, 2012.
(c) The weighted-average interest rate was 1.269% at December 31, 2013 and 1.312% at December 31, 2012.
(d) Current maturities include $215 million of pollution control bonds expected to be remarketed in 2014 and $300 million in senior unsecured
notes that mature in 2014.
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