APS 2015 Annual Report Download - page 69

Table of Contents
Contractual Obligations
The following table summarizes Pinnacle West’s consolidated contractual requirements as of December 31, 2015 (dollars in
millions):
2016
2017-
2018
2019-
2020
Thereafter
Total
Long-term debt payments, including
interest: (a)
APS $ 542
$ 414
$ 1,011
$ 4,422
$ 6,389
Pinnacle West 2
127
—
—
129
Total long-term debt payments,
including interest 544
541
1,011
4,422
6,518
Fuel and purchased power commitments
(b) 643
1,174
1,064
7,559
10,440
Renewable energy credits (c) 42
80
80
432
634
Purchase obligations (d) 233
512
37
213
995
Coal reclamation 15
34
39
262
350
Nuclear decommissioning funding
requirements 2
4
4
62
72
Noncontrolling interests (e) 23
46
46
226
341
Operating lease payments 9
16
11
61
97
Total contractual commitments $ 1,511
$ 2,407
$ 2,292
$ 13,237
$ 19,447
(a) The long-term debt matures at various dates through 2045 and bears interest principally at fixed rates. Interest on variable-
rate long-term debt is determined by using average rates at December 31, 2015 (see Note 6).
(b) Our fuel and purchased power commitments include purchases of coal, electricity, natural gas, renewable energy, nuclear
fuel, and natural gas transportation (see Notes 3 and 10). These amounts include commitments incurred assuming an
additional 7% in the 2016 Coal Supply Agreement.
(c) Contracts to purchase renewable energy credits in compliance with the RES (see Note 3).
(d) These contractual obligations include commitments for capital expenditures and other obligations.
(e) Payments to the noncontrolling interests relate to the Palo Verde Sale Leaseback (see Note 18).
This table excludes $34 million in unrecognized tax benefits because the timing of the future cash outflows is uncertain.
Estimated minimum required pension contributions are zero for 2016, 2017 and 2018 (see Note 7).
CRITICAL ACCOUNTING POLICIES
In preparing the financial statements in accordance with accounting principles generally accepted in the United States of
America (“GAAP”), management must often make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosures at the date of the financial statements and during the reporting period. Some of those
judgments can be subjective and complex, and actual results could differ from those estimates. We consider the following accounting
policies to be our most critical because of the uncertainties, judgments and complexities of the underlying accounting standards and
operations involved.
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