APS 2013 Annual Report Download - page 126

Table of Contents
PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Employee Savings Plan Benefits
Pinnacle West sponsors a defined contribution savings plan for eligible employees of Pinnacle West and its subsidiaries. In 2013, costs related to
APS’s employees represented 99% of the total cost of this plan. In a defined contribution savings plan, the benefits a participant receives result from regular
contributions participants make to their own individual account, the Company’s matching contributions and earnings or losses on their investments. Under
this plan, the Company matches a percentage of the participants’ contributions in cash which is then invested in the same investment mix as participants elect
to invest their own future contributions. Pinnacle West recorded expenses for this plan of approximately $9 million for 2013, $8 million for 2012, and $8
million for 2011.
9. Leases
We lease certain vehicles, land, buildings, equipment and miscellaneous other items through operating rental agreements with varying terms,
provisions and expiration dates.
Total lease expense recognized in the Consolidated Statements of Income was $18 million in 2013, $19 million in 2012, and $21 million in 2011.
APS’s lease expense was $15 million in 2013, $16 million in 2012, and $18 million in 2011.
Estimated future minimum lease payments for Pinnacle West’s and APS’s operating leases, excluding purchased power agreements, are
approximately as follows (dollars in millions):
Year
Pinnacle West
Consolidated APS
2014 $20 $ 17
2015 17 14
2016 6 5
2017 5 5
2018 4 4
Thereafter 59 59
Total future lease commitments $111 $104
In 1986, APS entered into agreements with three separate lessor trust entities in order to sell and lease back interests in Palo Verde Unit 2 and related
common facilities. These lessor trust entities have been deemed VIEs for which APS is the primary beneficiary. As the primary beneficiary, APS consolidated
these lessor trust entities. The above lease disclosures exclude the impacts of these sale leaseback transactions, as lease accounting for these agreements is
eliminated upon consolidation. See Note 19 for a discussion of VIEs.
10. Jointly-Owned Facilities
APS shares ownership of some of its generating and transmission facilities with other companies. We are responsible for our share of operating
costs, as well as for providing our own financing. Our share of operating expenses and utility plant costs related to these facilities is accounted for using
proportional consolidation. The following table shows APS’s interests in those jointly-owned facilities recorded on the Consolidated Balance Sheets at
December 31, 2013 (dollars in thousands):
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