APS 2013 Annual Report Download - page 69

Table of Contents
each of Units 4 and 5 of Four Corners and to replenish cash used to re-acquire two series of tax-exempt indebtedness.
Available Credit Facilities. Pinnacle West and APS maintain committed revolving credit facilities in order to enhance liquidity and provide credit
support for their commercial paper programs.
At December 31, 2013, Pinnacle West’s $200 million credit facility, which matures in November 2016, was available to refinance indebtedness of
the Company and for other general corporate purposes, including credit support for its $200 million commercial paper program. Pinnacle West has the option
to increase the amount of the facility up to a maximum of $300 million upon the satisfaction of certain conditions and with the consent of the lenders. At
December 31, 2013, Pinnacle West had no outstanding borrowings under its credit facility, no letters of credit outstanding, and no commercial paper
borrowings.
On April 9, 2013, APS refinanced its $500 million revolving credit facility that would have matured in February 2015, with a new $500 million
facility. The new revolving credit facility matures in April 2018.
At December 31, 2013, APS had two credit facilities totaling $1 billion, including a $500 million credit facility that was refinanced in April 2013
(see above) and a $500 million credit facility that matures in November 2016. APS may increase the amount of each facility up to a maximum of $700
million upon the satisfaction of certain conditions and with the consent of the lenders. APS can use these facilities to refinance indebtedness and for other
general corporate purposes. Interest rates are based on APS’s senior unsecured debt credit ratings.
The facilities described above are available to support APS’s $250 million commercial paper program, for bank borrowings or for issuances of
letters of credit. At December 31, 2013, APS had no outstanding borrowings or letters of credit under its revolving credit facilities. APS had commercial paper
borrowings of $153 million at December 31, 2013.
See “Financial Assurances” in Note 11 for a discussion of APS’s separate outstanding letters of credit.
Other Financing Matters. See Note 3 for information regarding the PSA approved by the ACC.
See Note 3 for information regarding the settlement related to the 2008 retail rate case, which includes ACC authorization and requirements of equity
infusions into APS.
See Note 17 for information related to the change in our margin and collateral accounts.
Debt Provisions
Pinnacle West’s and APS’s debt covenants related to their respective bank financing arrangements include maximum debt to capitalization ratios.
Pinnacle West and APS comply with this covenant. For both Pinnacle West and APS, this covenant requires that the ratio of consolidated debt to total
consolidated capitalization not exceed 65%. At December 31, 2013, the ratio was approximately 47% for Pinnacle West and 45% for APS. Failure to comply
with such covenant levels would result in an event of default which, generally speaking, would require the immediate repayment of the debt
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