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• | material and labor; |
• | contractor costs; |
• | capitalized leases; |
• | construction overhead costs (where applicable); and |
• | allowance for funds used during construction. |
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Cash paid (received) during the period for: | |||||||||||
Income taxes, net of refunds | $ | (102,154 | ) | $ | 18,537 | $ | 2,543 | ||||
Interest, net of amounts capitalized | 177,074 | 184,010 | 200,923 | ||||||||
Significant non-cash investing and financing activities: | |||||||||||
Accrued capital expenditures | $ | 44,712 | $ | 33,184 | $ | 26,208 | |||||
Dividends declared but not paid | 65,790 | 62,528 | 59,789 | ||||||||
Liabilities assumed relating to acquisition of SCE Four Corners’ interest (see Note 3) | — | 145,609 | — |
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• | A test year ended December 31, 2010, adjusted to include plant that is in service as of March 31, 2012; |
• | Deferral for future recovery or refund of property taxes above or below a specified 2010 test year level caused by changes to the Arizona property tax rate as follows: |
• | Deferral of increases in property taxes of 25% in 2012, 50% in 2013 and 75% for 2014 and subsequent years if Arizona property tax rates increase; and |
• | A procedure to allow APS to request rate adjustments prior to its next general rate case related to APS’s acquisition of additional interests in Units 4 and 5 and the related closure of Units 1-3 of Four Corners (APS made its filing under this provision on December 30, 2013, see "Four Corners" below); |
• | Implementation of a “Lost Fixed Cost Recovery” rate mechanism to support energy efficiency and distributed renewable generation; |
• | Modifications to the Environmental Improvement Surcharge to allow for the recovery of carrying costs for capital expenditures associated with government-mandated environmental controls, subject to an existing cents per kWh cap on cost recovery that could produce up to approximately $5 million in revenues annually; |
• | A limitation on the use of the RES surcharge and the DSMAC to recoup capital expenditures not required under the terms of the 2009 Settlement Agreement discussed below; |
• | Allowing a negative credit that existed in the PSA rate to continue until February 2013, rather than being reset on the anticipated July 1, 2012 rate effective date; |
• | Modification of the TCA to streamline the process for future transmission-related rate changes; and |
• | Implementation of various changes to rate schedules, including the adoption of an experimental “buy-through” rate that could allow certain large commercial and industrial customers to select alternative sources of generation to be supplied by APS. |
• | APS records deferrals for recovery or refund to the extent actual retail fuel and purchased power costs vary from the Base Fuel Rate; |
• | an adjustment to the PSA rate is made annually each February 1 (unless otherwise approved by the ACC) and goes into effect automatically unless suspended by the ACC; |
• | the PSA uses a forward-looking estimate of fuel and purchased power costs to set the annual PSA rate, which is reconciled to actual costs experienced for each PSA Year (February 1 through January 31) (see the following bullet point); |
• | the PSA rate includes (a) a “Forward Component,” under which APS recovers or refunds differences between expected fuel and purchased power costs for the upcoming calendar year and those embedded in the Base Fuel Rate; (b) a “Historical Component,” under which differences between actual fuel and purchased power costs and those recovered through the combination of the Base Fuel Rate and the Forward Component are recovered during the next PSA Year; and (c) a “Transition Component,” under which APS may seek mid-year PSA changes due to large variances between actual fuel and purchased power costs and the combination of the Base Fuel Rate and the Forward Component; and |
• | the PSA rate may not be increased or decreased more than $0.004 per kWh in a year without permission of the ACC. |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Beginning balance | $ | 21 | $ | 73 | |||
Deferred fuel and purchased power costs - current period | 27 | (21 | ) | ||||
Amounts charged to customers | (41 | ) | (31 | ) | |||
Ending balance | $ | 7 | $ | 21 |
Remaining Amortization | December 31, 2014 | December 31, 2013 | |||||||||||||||
Period | Current | Non-Current | Current | Non-Current | |||||||||||||
Pension and other postretirement benefits | (a) | $ | — | $ | 485 | $ | — | $ | 314 | ||||||||
Income taxes — AFUDC equity | 2044 | 5 | 118 | 4 | 105 | ||||||||||||
Deferred fuel and purchased power — mark-to-market (Note 16) | 2017 | 51 | 46 | 5 | 29 | ||||||||||||
Transmission vegetation management | 2016 | 9 | 5 | 9 | 14 | ||||||||||||
Coal reclamation | 2026 | — | 7 | 8 | 18 | ||||||||||||
Palo Verde VIEs (Note 18) | 2046 | — | 35 | — | 41 | ||||||||||||
Deferred compensation | 2036 | — | 34 | — | 34 | ||||||||||||
Deferred fuel and purchased power (b) (c) | 2015 | 7 | — | 21 | — | ||||||||||||
Tax expense of Medicare subsidy | 2024 | 2 | 14 | 2 | 15 | ||||||||||||
Loss on reacquired debt | 2034 | 1 | 16 | 1 | 17 | ||||||||||||
Income taxes — investment tax credit basis adjustment | 2044 | 2 | 46 | 1 | 39 | ||||||||||||
Pension and other postretirement benefits deferral | 2015 | 4 | — | 8 | 4 | ||||||||||||
Four Corners cost deferral | 2024 | 7 | 70 | — | 37 | ||||||||||||
Lost fixed cost recovery | 2015 | 38 | — | 25 | — | ||||||||||||
Transmission cost adjustor | 2014 | — | — | 8 | 2 | ||||||||||||
Retired power plant costs | 2033 | 10 | 136 | 3 | 18 | ||||||||||||
Deferred property taxes | (d) | — | 30 | — | 11 | ||||||||||||
Other | Various | 2 | 12 | 2 | 14 | ||||||||||||
Total regulatory assets (e) | $ | 138 | $ | 1,054 | $ | 97 | $ | 712 |
(a) | This asset represents the future recovery of pension and other postretirement benefit obligations through retail rates. If these costs are disallowed by the ACC, this regulatory asset would be charged to OCI and result in lower future revenues. See Note 7 for further discussion. |
(b) | See “Cost Recovery Mechanisms” discussion above. |
(c) | Subject to a carrying charge. |
(d) | Per the provision of the 2012 Settlement Agreement. |
(e) | There are no regulatory assets for which the ACC has allowed recovery of costs, but not allowed a return by exclusion from rate base. FERC rates are set using a formula rate as described in “Transmission Rates, Transmission Cost Adjustor and Other Transmission Matters.” |
Remaining Amortization | December 31, 2014 | December 31, 2013 | |||||||||||||||
Period | Current | Non-Current | Current | Non-Current | |||||||||||||
Removal costs | (a) | $ | 31 | $ | 273 | $ | 28 | $ | 303 | ||||||||
Asset retirement obligations | 2044 | — | 296 | — | 266 | ||||||||||||
Renewable energy standard (b) | 2017 | 25 | 23 | 33 | 15 | ||||||||||||
Income taxes — change in rates | 2043 | — | 72 | — | 74 | ||||||||||||
Spent nuclear fuel | 2047 | 5 | 66 | 6 | 36 | ||||||||||||
Deferred gains on utility property | 2019 | 2 | 8 | 2 | 10 | ||||||||||||
Income taxes — deferred investment tax credit | 2043 | 4 | 93 | 3 | 79 | ||||||||||||
Demand side management (b) | 2015 | 31 | — | 27 | — | ||||||||||||
Other postretirement benefits | (c) | 32 | 199 | — | — | ||||||||||||
Other | Various | 1 | 21 | — | 18 | ||||||||||||
Total regulatory liabilities | $ | 131 | $ | 1,051 | $ | 99 | $ | 801 |
(a) | In accordance with regulatory accounting guidance, APS accrues for removal costs for its regulated assets, even if there is no legal obligation for removal (see Note 11). |
(b) | See “Cost Recovery Mechanisms” discussion above. |
(c) | See Note 7. |
|
2014 | 2013 | 2012 | |||||||||
Total unrecognized tax benefits, January 1 | $ | 41,997 | $ | 133,422 | $ | 136,005 | |||||
Additions for tax positions of the current year | 4,309 | 3,516 | 5,167 | ||||||||
Additions for tax positions of prior years | 751 | 13,158 | — | ||||||||
Reductions for tax positions of prior years for: | |||||||||||
Changes in judgment | (2,282 | ) | (108,099 | ) | (7,729 | ) | |||||
Settlements with taxing authorities | — | — | — | ||||||||
Lapses of applicable statute of limitations | — | — | (21 | ) | |||||||
Total unrecognized tax benefits, December 31 | $ | 44,775 | $ | 41,997 | $ | 133,422 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 25,054 | $ | (81,784 | ) | $ | (3,493 | ) | |||
State | 10,382 | 10,537 | 8,395 | ||||||||
Total current | 35,436 | (71,247 | ) | 4,902 | |||||||
Deferred: | |||||||||||
Federal | 167,365 | 279,973 | 200,322 | ||||||||
State | 17,904 | 21,865 | 28,280 | ||||||||
Total deferred | 185,269 | 301,838 | 228,602 | ||||||||
Total income tax expense | 220,705 | 230,591 | 233,504 | ||||||||
Less: income tax benefit on discontinued operations | — | — | (3,813 | ) | |||||||
Income tax expense — continuing operations | $ | 220,705 | $ | 230,591 | $ | 237,317 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax expense at 35% statutory rate | $ | 225,540 | $ | 234,695 | $ | 229,709 | |||||
Increases (reductions) in tax expense resulting from: | |||||||||||
State income tax net of federal income tax benefit | 18,149 | 21,387 | 23,819 | ||||||||
Credits and favorable adjustments related to prior years resolved in current year | — | (3,356 | ) | — | |||||||
Medicare Subsidy Part-D | 830 | 823 | 483 | ||||||||
Allowance for equity funds used during construction (see Note 1) | (8,523 | ) | (6,997 | ) | (6,158 | ) | |||||
Palo Verde VIE noncontrolling interest (see Note 18) | (9,135 | ) | (11,862 | ) | (11,065 | ) | |||||
Investment tax credit amortization | (4,928 | ) | (3,548 | ) | (2,030 | ) | |||||
Other | (1,228 | ) | (551 | ) | 2,559 | ||||||
Income tax expense — continuing operations | $ | 220,705 | $ | 230,591 | $ | 237,317 |
December 31, | |||||||
2014 | 2013 | ||||||
Current asset | $ | 122,232 | $ | 91,152 | |||
Long-term liability | (2,582,636 | ) | (2,351,882 | ) | |||
Deferred income taxes — net | $ | (2,460,404 | ) | $ | (2,260,730 | ) |
December 31, | |||||||
2014 | 2013 | ||||||
DEFERRED TAX ASSETS | |||||||
Risk management activities | $ | 57,505 | $ | 44,920 | |||
Regulatory liabilities: | |||||||
Asset retirement obligation and removal costs | 229,772 | 235,959 | |||||
Unamortized investment tax credits | 96,232 | 82,116 | |||||
Other postretirement benefits | 90,496 | — | |||||
Other | 60,409 | 42,609 | |||||
Pension liabilities | 205,227 | 140,773 | |||||
Other postretirement liabilities | — | 57,869 | |||||
Renewable energy incentives | 65,169 | 65,434 | |||||
Credit and loss carryforwards | 68,347 | 133,070 | |||||
Other | 138,729 | 148,492 | |||||
Total deferred tax assets | 1,011,886 | 951,242 | |||||
DEFERRED TAX LIABILITIES | |||||||
Plant-related | (2,958,369 | ) | (2,903,730 | ) | |||
Risk management activities | (12,171 | ) | (16,191 | ) | |||
Other postretirement assets | (59,170 | ) | — | ||||
Regulatory assets: | |||||||
Allowance for equity funds used during construction | (48,286 | ) | (43,058 | ) | |||
Deferred fuel and purchased power | (2,498 | ) | (8,282 | ) | |||
Deferred fuel and purchased power — mark-to-market | (38,187 | ) | (13,343 | ) | |||
Pension and other postretirement benefits | (191,747 | ) | (129,250 | ) | |||
Retired power plant costs (see Note 3) | (57,255 | ) | (8,199 | ) | |||
Other | (99,123 | ) | (85,003 | ) | |||
Other | (5,484 | ) | (4,916 | ) | |||
Total deferred tax liabilities | (3,472,290 | ) | (3,211,972 | ) | |||
Deferred income taxes — net | $ | (2,460,404 | ) | $ | (2,260,730 | ) |
2014 | 2013 | 2012 | |||||||||
Total unrecognized tax benefits, January 1 | $ | 41,997 | $ | 133,241 | $ | 135,824 | |||||
Additions for tax positions of the current year | 4,309 | 3,516 | 5,167 | ||||||||
Additions for tax positions of prior years | 751 | 13,158 | — | ||||||||
Reductions for tax positions of prior years for: | |||||||||||
Changes in judgment | (2,282 | ) | (107,918 | ) | (7,729 | ) | |||||
Settlements with taxing authorities | — | — | — | ||||||||
Lapses of applicable statute of limitations | — | — | (21 | ) | |||||||
Total unrecognized tax benefits, December 31 | $ | 44,775 | $ | 41,997 | $ | 133,241 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 40,115 | $ | (97,531 | ) | $ | (11,650 | ) | |||
State | 15,598 | 11,983 | 12,308 | ||||||||
Total current | 55,713 | (85,548 | ) | 658 | |||||||
Deferred: | |||||||||||
Federal | 165,027 | 305,389 | 216,367 | ||||||||
State | 16,620 | 25,254 | 27,371 | ||||||||
Total deferred | 181,647 | 330,643 | 243,738 | ||||||||
Total income tax expense | $ | 237,360 | $ | 245,095 | $ | 244,396 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax expense at 35% statutory rate | $ | 239,638 | $ | 246,384 | $ | 235,027 | |||||
Increases (reductions) in tax expense resulting from: | |||||||||||
State income tax net of federal income tax benefit | 21,148 | 23,970 | 25,379 | ||||||||
Credits and favorable adjustments related to prior years resolved in current year | — | (3,231 | ) | — | |||||||
Medicare Subsidy Part-D | 830 | 823 | 483 | ||||||||
Allowance for equity funds used during construction (see Note 1) | (8,523 | ) | (6,997 | ) | (6,158 | ) | |||||
Palo Verde VIE noncontrolling interest (see Note 18) | (9,135 | ) | (11,862 | ) | (11,065 | ) | |||||
Investment tax credit amortization | (4,928 | ) | (3,548 | ) | (2,030 | ) | |||||
Other | (1,670 | ) | (444 | ) | 2,760 | ||||||
Income tax expense | $ | 237,360 | $ | 245,095 | $ | 244,396 |
December 31, | |||||||
2014 | 2013 | ||||||
Current asset (liability) | $ | 55,253 | $ | (2,033 | ) | ||
Long-term liability | (2,571,365 | ) | (2,347,724 | ) | |||
Deferred income taxes — net | $ | (2,516,112 | ) | $ | (2,349,757 | ) |
December 31, | |||||||
2014 | 2013 | ||||||
DEFERRED TAX ASSETS | |||||||
Regulatory liabilities: | |||||||
Asset retirement obligation and removal costs | $ | 229,772 | $ | 235,959 | |||
Unamortized investment tax credits | 96,232 | 82,116 | |||||
Other postretirement benefits | 90,496 | — | |||||
Other | 60,409 | 42,609 | |||||
Risk management activities | 57,505 | 44,920 | |||||
Pension liabilities | 194,541 | 132,263 | |||||
Other postretirement liabilities | — | 53,950 | |||||
Renewable energy incentives | 65,169 | 65,434 | |||||
Credit and loss carryforwards | — | 38,183 | |||||
Other | 161,379 | 166,781 | |||||
Total deferred tax assets | 955,503 | 862,215 | |||||
DEFERRED TAX LIABILITIES | |||||||
Plant-related | (2,958,369 | ) | (2,903,730 | ) | |||
Risk management activities | (12,171 | ) | (16,191 | ) | |||
Other postretirement benefit assets | (58,495 | ) | — | ||||
Regulatory assets: | |||||||
Allowance for equity funds used during construction | (48,286 | ) | (43,058 | ) | |||
Deferred fuel and purchased power | (2,498 | ) | (8,282 | ) | |||
Deferred fuel and purchased power — mark-to-market | (38,187 | ) | (13,343 | ) | |||
Pension and other postretirement benefits | (191,747 | ) | (129,250 | ) | |||
Retired power plant costs (see Note 3) | (57,255 | ) | (8,199 | ) | |||
Other | (99,123 | ) | (85,003 | ) | |||
Other | (5,484 | ) | (4,916 | ) | |||
Total deferred tax liabilities | (3,471,615 | ) | (3,211,972 | ) | |||
Deferred income taxes — net | $ | (2,516,112 | ) | $ | (2,349,757 | ) |
|
Credit Facility | Expiration | Amount Committed | Unused Amount (a) | Commitment Fees | |||||||||
Pinnacle West Revolving Credit Facility | May 2019 | $ | 200 | $ | 200 | 0.175 | % | ||||||
APS Revolving Credit Facility | May 2019 | 500 | 500 | 0.125 | % | ||||||||
APS Revolving Credit Facility | April 2018 | 500 | 353 | 0.125 | % | ||||||||
Total | $ | 1,200 | $ | 1,053 |
(a) | At December 31, 2014, APS had $147 million of outstanding commercial paper. Accordingly, at such date, the total combined amount available under its two $500 million credit facilities was $853 million. |
Credit Facility | Expiration | Amount Committed | Unused Amount (a) | Commitment Fees | |||||||||
Pinnacle West Revolving Credit Facility | November 2016 | $ | 200 | $ | 200 | 0.175 | % | ||||||
APS Revolving Credit Facility | November 2016 | 500 | 347 | 0.125 | % | ||||||||
APS Revolving Credit Facility | April 2018 | 500 | 500 | 0.125 | % | ||||||||
Total | $ | 1,200 | $ | 1,047 |
(a) | At December 31, 2013, APS had $153 million of outstanding commercial paper. Accordingly, at such date the total combined amount available under its two $500 million credit facilities was $847 million. |
|
Maturity | Interest | December 31, | |||||||||
Dates (a) | Rates | 2014 | 2013 | ||||||||
APS | |||||||||||
Pollution Control Bonds: | |||||||||||
Variable | 2029-2038 | (b) | $ | 156,405 | $ | 75,580 | |||||
Fixed | 2024-2034 | 0.45%-5.75% | 249,300 | 426,125 | |||||||
Total Pollution Control Bonds | 405,705 | 501,705 | |||||||||
Senior unsecured notes | 2015-2044 | 3.35%-8.75% | 2,875,000 | 2,675,000 | |||||||
Palo Verde sale leaseback lessor notes | 2015 | 8.00% | 13,420 | 38,869 | |||||||
Unamortized discount | (9,206 | ) | (8,732 | ) | |||||||
Unamortized premium | 4,866 | 5,047 | |||||||||
Total APS long-term debt | 3,289,785 | 3,211,889 | |||||||||
Less current maturities | (d) | 383,570 | 540,424 | ||||||||
Total APS long-term debt less current maturities | 2,906,215 | 2,671,465 | |||||||||
Pinnacle West | |||||||||||
Term loan | 2017 | (c) | 125,000 | 125,000 | |||||||
TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES | $ | 3,031,215 | $ | 2,796,465 |
Year | Consolidated Pinnacle West | Consolidated APS | ||||||
2015 | $ | 384 | $ | 384 | ||||
2016 | 357 | 357 | ||||||
2017 | 157 | 32 | ||||||
2018 | 32 | 32 | ||||||
2019 | 500 | 500 | ||||||
Thereafter | 1,989 | 1,989 | ||||||
Total | $ | 3,419 | $ | 3,294 |
As of December 31, 2014 | As of December 31, 2013 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Pinnacle West | $ | 125 | $ | 125 | $ | 125 | $ | 125 | |||||||
APS | 3,290 | 3,714 | 3,212 | 3,454 | |||||||||||
Total | $ | 3,415 | $ | 3,839 | $ | 3,337 | $ | 3,579 |
|
Pension | Other Benefits | ||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||
Service cost-benefits earned during the period | $ | 53,080 | $ | 64,195 | $ | 63,502 | $ | 18,139 | $ | 23,597 | $ | 27,163 | |||||||||||
Interest cost on benefit obligation | 129,194 | 112,392 | 119,586 | 41,243 | 41,536 | 46,467 | |||||||||||||||||
Expected return on plan assets | (158,998 | ) | (146,333 | ) | (140,979 | ) | (46,400 | ) | (45,717 | ) | (45,793 | ) | |||||||||||
Amortization of: | |||||||||||||||||||||||
Transition obligation | — | — | — | — | — | 452 | |||||||||||||||||
Prior service cost (credit) | 869 | 1,097 | 1,143 | (9,626 | ) | (179 | ) | (179 | ) | ||||||||||||||
Net actuarial loss | 10,963 | 39,852 | 44,250 | 1,175 | 11,310 | 20,233 | |||||||||||||||||
Net periodic benefit cost | $ | 35,108 | $ | 71,203 | $ | 87,502 | $ | 4,531 | $ | 30,547 | $ | 48,343 | |||||||||||
Portion of cost charged to expense | $ | 21,985 | $ | 38,968 | $ | 36,333 | $ | 6,000 | $ | 18,469 | $ | 19,321 |
Pension | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Change in Benefit Obligation | |||||||||||||||
Benefit obligation at January 1 | $ | 2,646,530 | $ | 2,850,846 | $ | 890,418 | $ | 990,418 | |||||||
Service cost | 53,080 | 64,195 | 18,139 | 23,597 | |||||||||||
Interest cost | 129,194 | 112,392 | 41,243 | 41,536 | |||||||||||
Benefit payments | (128,550 | ) | (125,269 | ) | (29,054 | ) | (26,675 | ) | |||||||
Actuarial (gain) loss | 378,394 | (255,634 | ) | 150,188 | (138,458 | ) | |||||||||
Plan amendments | — | — | (388,599 | ) | — | ||||||||||
Benefit obligation at December 31 | 3,078,648 | 2,646,530 | 682,335 | 890,418 | |||||||||||
Change in Plan Assets | |||||||||||||||
Fair value of plan assets at January 1 | 2,264,121 | 2,079,181 | 748,339 | 684,221 | |||||||||||
Actual return on plan assets | 292,992 | 150,546 | 105,223 | 76,995 | |||||||||||
Employer contributions | 175,000 | 140,500 | 770 | 14,438 | |||||||||||
Benefit payments | (116,709 | ) | (106,106 | ) | (19,707 | ) | (27,315 | ) | |||||||
Fair value of plan assets at December 31 | 2,615,404 | 2,264,121 | 834,625 | 748,339 | |||||||||||
Funded Status at December 31 | $ | (463,244 | ) | $ | (382,409 | ) | $ | 152,290 | $ | (142,079 | ) |
2014 | 2013 | ||||||
Projected benefit obligation | $ | 3,078,648 | $ | 2,646,530 | |||
Accumulated benefit obligation | 2,873,741 | 2,469,889 | |||||
Fair value of plan assets | 2,615,404 | 2,264,121 |
Pension | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Noncurrent asset | $ | — | $ | — | $ | 152,290 | $ | — | |||||||
Current liability | (9,508 | ) | (10,860 | ) | — | — | |||||||||
Noncurrent liability | (453,736 | ) | (371,549 | ) | — | (142,079 | ) | ||||||||
Net amount recognized | $ | (463,244 | ) | $ | (382,409 | ) | $ | 152,290 | $ | (142,079 | ) |
Pension | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net actuarial loss | $ | 577,976 | $ | 344,540 | $ | 148,006 | $ | 57,816 | |||||||
Prior service cost (credit) | 1,203 | 2,072 | (379,269 | ) | (296 | ) | |||||||||
APS’s portion recorded as a regulatory (asset) liability | (485,037 | ) | (265,107 | ) | 230,916 | (49,298 | ) | ||||||||
Income tax expense (benefit) | (36,890 | ) | (32,204 | ) | 851 | (2,528 | ) | ||||||||
Accumulated other comprehensive loss | $ | 57,252 | $ | 49,301 | $ | 504 | $ | 5,694 |
Pension | Other Benefits | ||||||
Net actuarial loss | $ | 28,180 | $ | 5,651 | |||
Prior service cost (credit) | 595 | (37,968 | ) | ||||
Total amounts estimated to be amortized from accumulated other comprehensive loss (gain) and regulatory assets (liabilities) in 2014 | $ | 28,775 | $ | (32,317 | ) |
Benefit Obligations As of December 31, | Benefit Costs For the Years Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | ||||||||||||
January - September | October - December | |||||||||||||||
Discount rate – pension | 4.02 | % | 4.88 | % | 4.88 | % | 4.88 | % | 4.01 | % | 4.42 | % | ||||
Discount rate – other benefits | 4.14 | % | 5.10 | % | 5.10 | % | 4.41 | % | 4.20 | % | 4.59 | % | ||||
Rate of compensation increase | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||
Expected long-term return on plan assets - pension | N/A | N/A | 6.90 | % | 6.90 | % | 7.00 | % | 7.75 | % | ||||||
Expected long-term return on plan assets - other benefits | N/A | N/A | 6.80 | % | 4.25 | % | 7.00 | % | 7.75 | % | ||||||
Initial healthcare cost trend rate (pre-65 participants) | 7.00 | % | 7.50 | % | 7.50 | % | 7.50 | % | 7.50 | % | 7.50 | % | ||||
Initial healthcare cost trend rate (post-65 participants) | 5.00 | % | 7.50 | % | 7.50 | % | 5.00 | % | 7.50 | % | 7.50 | % | ||||
Ultimate healthcare cost trend rate | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | ||||
Number of years to ultimate trend rate (pre-65 participants) | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||
Number of years to ultimate trend rate (post-65 participants) | 0 | 4 | 4 | 0 | 4 | 4 |
1% Increase | 1% Decrease | ||||||
Effect on other postretirement benefits expense, after consideration of amounts capitalized or billed to electric plant participants | $ | 10 | $ | (4 | ) | ||
Effect on service and interest cost components of net periodic other postretirement benefit costs | 12 | (9 | ) | ||||
Effect on the accumulated other postretirement benefit obligation | 110 | (88 | ) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Other (b) | Balance at December 31, 2014 | |||||||||||||||
Pension Plan: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 387 | $ | — | $ | — | $ | — | $ | 387 | |||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | — | 1,162,096 | — | — | 1,162,096 | ||||||||||||||
U.S. Treasury | 291,817 | — | — | — | 291,817 | ||||||||||||||
Other (a) | — | 113,265 | — | — | 113,265 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 246,387 | — | — | — | 246,387 | ||||||||||||||
International Companies | 18,069 | — | — | — | 18,069 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 127,336 | — | — | 127,336 | ||||||||||||||
International Equities | — | 317,167 | — | — | 317,167 | ||||||||||||||
Real estate | — | 129,715 | — | — | 129,715 | ||||||||||||||
Partnerships | — | 138,337 | 27,929 | — | 166,266 | ||||||||||||||
Short-term investments and other | — | 26,016 | — | 16,883 | 42,899 | ||||||||||||||
Total Pension Plan | $ | 556,660 | $ | 2,013,932 | $ | 27,929 | $ | 16,883 | $ | 2,615,404 | |||||||||
Other Benefits: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 318 | $ | — | $ | — | $ | — | $ | 318 | |||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | — | 187,961 | — | — | 187,961 | ||||||||||||||
U.S. Treasury | 130,967 | — | — | — | 130,967 | ||||||||||||||
Other (a) | — | 35,291 | — | — | 35,291 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 265,106 | — | — | — | 265,106 | ||||||||||||||
International Companies | 17,813 | — | — | — | 17,813 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 88,258 | — | — | 88,258 | ||||||||||||||
International Equities | — | 85,746 | — | — | 85,746 | ||||||||||||||
Real Estate | — | 11,657 | — | — | 11,657 | ||||||||||||||
Short-term investments and other | — | 7,408 | — | 4,100 | 11,508 | ||||||||||||||
Total Other Benefits | $ | 414,204 | $ | 416,321 | $ | — | $ | 4,100 | $ | 834,625 |
(a) | This category consists primarily of debt securities issued by municipalities. |
(b) | Represents plan receivables and payables. |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Other (b) | Balance at December 31, 2013 | |||||||||||||||
Pension Plan: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 504 | $ | — | $ | — | $ | — | $ | 504 | |||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | — | 898,621 | — | — | 898,621 | ||||||||||||||
U.S. Treasury | 231,590 | — | — | — | 231,590 | ||||||||||||||
Other (a) | — | 84,011 | — | — | 84,011 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 239,036 | — | — | — | 239,036 | ||||||||||||||
International Companies | 19,429 | — | — | — | 19,429 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 116,150 | — | — | 116,150 | ||||||||||||||
International Equities | — | 367,551 | — | — | 367,551 | ||||||||||||||
Fixed Income | — | 137,520 | — | — | 137,520 | ||||||||||||||
Real estate | — | 119,739 | — | — | 119,739 | ||||||||||||||
Partnerships | — | — | 8,660 | — | 8,660 | ||||||||||||||
Short-term investments and other | — | 41,060 | — | 250 | 41,310 | ||||||||||||||
Total Pension Plan | $ | 490,559 | $ | 1,764,652 | $ | 8,660 | $ | 250 | $ | 2,264,121 | |||||||||
Other Benefits: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | $ | — | $ | 153,888 | $ | — | $ | — | $ | 153,888 | |||||||||
U.S. Treasury | 98,704 | — | — | — | 98,704 | ||||||||||||||
Other (a) | — | 27,936 | — | — | 27,936 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 252,181 | — | — | — | 252,181 | ||||||||||||||
International Companies | 20,892 | — | — | — | 20,892 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 80,751 | — | — | 80,751 | ||||||||||||||
International Equities | — | 92,382 | — | — | 92,382 | ||||||||||||||
Real Estate | — | 10,761 | — | — | 10,761 | ||||||||||||||
Short-term investments and other | — | 8,414 | — | 2,430 | 10,844 | ||||||||||||||
Total Other Benefits | $ | 371,777 | $ | 374,132 | $ | — | $ | 2,430 | $ | 748,339 |
(a) | This category consists primarily of debt securities issued by municipalities. |
(b) | Represents plan receivables and payables. |
Pension | ||||||||
Partnerships | 2014 | 2013 | ||||||
Beginning balance at January 1 | $ | 8,660 | $ | 2,419 | ||||
Actual return on assets still held at December 31 | 927 | (498 | ) | |||||
Purchases | 19,984 | 7,377 | ||||||
Sales | (1,642 | ) | (638 | ) | ||||
Transfers in and/or out of Level 3 | — | — | ||||||
Ending balance at December 31 | $ | 27,929 | $ | 8,660 |
Year | Pension | Other Benefits | ||||||
2015 | $ | 139,013 | $ | 25,134 | ||||
2016 | 155,968 | 27,311 | ||||||
2017 | 160,080 | 29,253 | ||||||
2018 | 167,600 | 31,258 | ||||||
2019 | 177,470 | 33,190 | ||||||
Years 2020-2024 | 983,557 | 184,772 |
|
Year | Pinnacle West Consolidated | APS | ||||||
2015 | $ | 18 | $ | 15 | ||||
2016 | 6 | 6 | ||||||
2017 | 5 | 5 | ||||||
2018 | 4 | 4 | ||||||
2019 | 3 | 3 | ||||||
Thereafter | 63 | 62 | ||||||
Total future lease commitments | $ | 99 | $ | 95 |
|
Percent Owned | Plant in Service | Accumulated Depreciation | Construction Work in Progress | ||||||||||||||
Generating facilities: | |||||||||||||||||
Palo Verde Units 1 and 3 | 29.1 | % | $ | 1,734,918 | $ | 1,051,670 | $ | 16,955 | |||||||||
Palo Verde Unit 2 (a) | 16.8 | % | 556,472 | 349,960 | 13,710 | ||||||||||||
Palo Verde Common | 28.0 | % | (b) | 612,190 | 224,208 | 68,896 | |||||||||||
Palo Verde Sale Leaseback | (a) | 351,050 | 229,795 | — | |||||||||||||
Four Corners Generating Station | 63.0 | % | 811,648 | 578,772 | 33,150 | ||||||||||||
Navajo Generating Station Units 1, 2 and 3 | 14.0 | % | 272,208 | 159,198 | 2,716 | ||||||||||||
Cholla common facilities (c) | 63.3 | % | (b) | 155,856 | 49,954 | 866 | |||||||||||
Transmission facilities: | |||||||||||||||||
ANPP 500kV System | 33.6 | % | (b) | 106,369 | 35,035 | 3,731 | |||||||||||
Navajo Southern System | 22.5 | % | (b) | 59,994 | 18,119 | 1,113 | |||||||||||
Palo Verde — Yuma 500kV System | 18.2 | % | (b) | 12,925 | 4,943 | 12 | |||||||||||
Four Corners Switchyards | 47.5 | % | (b) | 33,034 | 10,035 | 386 | |||||||||||
Phoenix — Mead System | 17.1 | % | (b) | 39,777 | 12,843 | 105 | |||||||||||
Palo Verde — Estrella 500kV System | 50.0 | % | (b) | 89,572 | 16,491 | 736 | |||||||||||
Morgan — Pinnacle Peak System | 64.4 | % | (b) | 130,840 | 8,970 | 1,690 | |||||||||||
Round Valley System | 50.0 | % | (b) | 497 | 276 | 1 | |||||||||||
Palo Verde — Morgan System | 90.0 | % | (b) | — | — | 69,377 | |||||||||||
Hassayampa - North Gila System | 80.0 | % | (b) | 8,902 | 3,634 | 142,645 |
(a) | See Note 18. |
(b) | Weighted-average of interests. |
(c) | PacifiCorp owns Cholla Unit 4 and APS operates the unit for PacifiCorp. The common facilities at Cholla are jointly-owned. |
|
Years Ended December 31, | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Coal take-or-pay commitments (a) | $ | 151 | $ | 171 | $ | 195 | $ | 190 | $ | 194 | $ | 2,469 |
(a) | Total take-or-pay commitments are approximately $3.4 billion. The total net present value of these commitments is approximately $2.2 billion. |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Total payments | $ | 237 | $ | 188 | $ | 196 |
|
2014 | 2013 | ||||||
Asset retirement obligations at the beginning of year | $ | 347 | $ | 357 | |||
Changes attributable to: | |||||||
Accretion expense | 24 | 24 | |||||
Settlements | (30 | ) | (12 | ) | |||
Assumed SCE’s obligation | — | 34 | |||||
Estimated cash flow revisions | 44 | (56 | ) | ||||
Newly incurred obligation | 6 | — | |||||
Asset retirement obligations at the end of year | $ | 391 | $ | 347 |
|
2014 Quarter Ended | 2014 | ||||||||||||||||||
March 31, | June 30, | Sept. 30, | Dec. 31, | Total | |||||||||||||||
Operating revenues | $ | 686,251 | $ | 906,264 | $ | 1,172,667 | $ | 726,450 | $ | 3,491,632 | |||||||||
Operations and maintenance | 212,882 | 211,222 | 223,418 | 260,503 | 908,025 | ||||||||||||||
Operating income | 75,170 | 254,113 | 421,775 | 60,184 | 811,242 | ||||||||||||||
Income taxes | 6,405 | 74,540 | 134,753 | 5,007 | 220,705 | ||||||||||||||
Income from continuing operations | 24,691 | 141,384 | 248,086 | 9,535 | 423,696 | ||||||||||||||
Net income attributable to common shareholders | 15,766 | 132,458 | 243,961 | 5,410 | 397,595 | ||||||||||||||
Earnings Per Share: | |||||||||||||||||||
Net income attributable to common shareholders — Basic | $ | 0.14 | $ | 1.20 | $ | 2.20 | $ | 0.05 | $ | 3.59 | |||||||||
Net income attributable to common shareholders — Diluted | 0.14 | 1.19 | 2.20 | 0.05 | 3.58 |
2013 Quarter Ended | 2013 | ||||||||||||||||||
March 31, | June 30, | Sept. 30, | Dec. 31, | Total | |||||||||||||||
Operating revenues | $ | 686,652 | $ | 915,822 | $ | 1,152,392 | $ | 699,762 | $ | 3,454,628 | |||||||||
Operations and maintenance | 223,250 | 229,300 | 233,323 | 238,854 | 924,727 | ||||||||||||||
Operating income | 86,923 | 259,812 | 415,688 | 83,900 | 846,323 | ||||||||||||||
Income taxes | 12,469 | 77,043 | 131,912 | 9,167 | 230,591 | ||||||||||||||
Income from continuing operations | 32,836 | 139,598 | 234,718 | 32,814 | 439,966 | ||||||||||||||
Net income attributable to common shareholders | 24,444 | 131,207 | 226,163 | 24,260 | 406,074 | ||||||||||||||
Earnings Per Share: | |||||||||||||||||||
Net income attributable to common shareholders — Basic | $ | 0.22 | $ | 1.19 | $ | 2.06 | $ | 0.22 | $ | 3.69 | |||||||||
Net income attributable to common shareholders — Diluted | 0.22 | 1.18 | 2.04 | 0.22 | 3.66 |
2014 Quarter Ended, | 2014 | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total | |||||||||||||||
Operating revenues | $ | 685,545 | $ | 905,578 | $ | 1,172,190 | $ | 725,633 | $ | 3,488,946 | |||||||||
Operations and maintenance | 208,285 | 208,059 | 212,430 | 253,668 | 882,442 | ||||||||||||||
Operating income | 69,635 | 180,394 | 287,928 | 54,835 | 592,792 | ||||||||||||||
Net income attributable to common shareholder | 19,518 | 134,916 | 251,047 | 15,738 | 421,219 |
2013 Quarter Ended, | 2013 | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total | |||||||||||||||
Operating revenues | $ | 685,827 | $ | 915,065 | $ | 1,151,535 | $ | 698,824 | $ | 3,451,251 | |||||||||
Operations and maintenance | 220,752 | 224,950 | 222,617 | 229,505 | 897,824 | ||||||||||||||
Operating income | 74,862 | 183,728 | 284,251 | 79,024 | 621,865 | ||||||||||||||
Net income attributable to common shareholder | 26,042 | 133,949 | 234,954 | 30,024 | 424,969 |
|
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (a) (Level 3) | Other | Balance at December 31, 2014 | |||||||||||||||||
Assets | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity Contracts | $ | — | $ | 21 | $ | 33 | $ | (23 | ) | (b) | $ | 31 | |||||||||
Nuclear decommissioning trust: | |||||||||||||||||||||
U.S. commingled equity funds | — | 310 | — | — | 310 | ||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. Treasury | 119 | — | — | — | 119 | ||||||||||||||||
Cash and cash equivalent funds | — | 11 | — | (7 | ) | (c) | 4 | ||||||||||||||
Corporate debt | — | 109 | — | — | 109 | ||||||||||||||||
Mortgage-backed securities | — | 89 | — | — | 89 | ||||||||||||||||
Municipality bonds | — | 69 | — | — | 69 | ||||||||||||||||
Other | — | 14 | — | — | 14 | ||||||||||||||||
Subtotal nuclear decommissioning trust | 119 | 602 | — | (7 | ) | 714 | |||||||||||||||
Total | $ | 119 | $ | 623 | $ | 33 | $ | (30 | ) | $ | 745 | ||||||||||
Liabilities | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity contracts | $ | — | $ | (95 | ) | $ | (74 | ) | $ | 59 | (b) | $ | (110 | ) |
(a) | Primarily consists of heat rate options and other long-dated electricity contracts. |
(b) | Represents counterparty netting, margin and collateral. See Note 16. |
(c) | Represents nuclear decommissioning trust net pending securities sales and purchases. |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (a) (Level 3) | Other | Balance at December 31, 2013 | |||||||||||||||||
Assets | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity Contracts | $ | — | $ | 9 | $ | 41 | $ | (9 | ) | (b) | $ | 41 | |||||||||
Nuclear decommissioning trust: | |||||||||||||||||||||
U.S. commingled equity funds | — | 272 | — | — | 272 | ||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. Treasury | 107 | — | — | — | 107 | ||||||||||||||||
Cash and cash equivalent funds | — | 11 | — | (3 | ) | (c) | 8 | ||||||||||||||
Corporate debt | — | 88 | — | — | 88 | ||||||||||||||||
Mortgage-backed securities | — | 85 | — | — | 85 | ||||||||||||||||
Municipality bonds | — | 71 | — | — | 71 | ||||||||||||||||
Other | — | 11 | — | — | 11 | ||||||||||||||||
Subtotal nuclear decommissioning trust | 107 | 538 | — | (3 | ) | 642 | |||||||||||||||
Total | $ | 107 | $ | 547 | $ | 41 | $ | (12 | ) | $ | 683 | ||||||||||
Liabilities | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity contracts | $ | — | $ | (33 | ) | $ | (90 | ) | $ | 21 | (b) | $ | (102 | ) |
(a) | Primarily consists of heat rate options and other long-dated electricity contracts. |
(b) | Represents counterparty netting, margin and collateral. See Note 16. |
(c) | Represents nuclear decommissioning trust net pending securities sales and purchases. |
December 31, 2014 Fair Value (millions) | Valuation Technique | Significant Unobservable Input | Range | Weighted-Average | |||||||||||||
Commodity Contracts | Assets | Liabilities | |||||||||||||||
Electricity: | |||||||||||||||||
Forward Contracts (a) | $ | 30 | $ | 56 | Discounted cash flows | Electricity forward price (per MWh) | $19.51 - $56.72 | $ | 35.27 | ||||||||
Option Contracts (b) | — | 15 | Option model | Electricity forward price (per MWh) | $32.14 - $66.09 | $ | 45.83 | ||||||||||
Natural gas forward price (per MMbtu) | $3.18 - $3.29 | $ | 3.25 | ||||||||||||||
Electricity price volatilities | 23% - 63% | 41 | % | ||||||||||||||
Natural gas price volatilities | 23% - 41% | 31 | % | ||||||||||||||
Natural Gas: | |||||||||||||||||
Forward Contracts (a) | 3 | 3 | Discounted cash flows | Natural gas forward price (per MMbtu) | $2.98 - $4.13 | $ | 3.45 | ||||||||||
Total | $ | 33 | $ | 74 |
(a) | Includes swaps and physical and financial contracts. |
(b) | Electricity and natural gas price volatilities are estimated based on historical forward price movements due to lack of market quotes for implied volatilities. |
December 31, 2013 Fair Value (millions) | Valuation Technique | Significant Unobservable Input | Range | Weighted-Average | |||||||||||||
Commodity Contracts | Assets | Liabilities | |||||||||||||||
Electricity: | |||||||||||||||||
Forward Contracts (a) | $ | 40 | $ | 66 | Discounted cash flows | Electricity forward price (per MWh) | $24.89 - $65.04 | $ | 41.09 | ||||||||
Option Contracts (b) | — | 19 | Option model | Electricity forward price (per MWh) | $39.91 - $85.41 | $ | 58.70 | ||||||||||
Natural gas forward price (per MMbtu) | $3.57 - $3.80 | $ | 3.71 | ||||||||||||||
Electricity price volatilities | 35% - 94% | 59 | % | ||||||||||||||
Natural gas price volatilities | 22% - 36% | 27 | % | ||||||||||||||
Natural Gas: | |||||||||||||||||
Forward Contracts (a) | 1 | 5 | Discounted cash flows | Natural gas forward price (per MMbtu) | $3.47 - $4.31 | $ | 3.87 | ||||||||||
Total | $ | 41 | $ | 90 |
(a) | Includes swaps and physical and financial contracts. |
(b) | Electricity and natural gas price volatilities are estimated based on historical forward price movements due to lack of market quotes for implied volatilities. |
Year Ended December 31, | ||||||||
Commodity Contracts | 2014 | 2013 | ||||||
Net derivative balance at beginning of period | $ | (49 | ) | $ | (48 | ) | ||
Total net gains (losses) realized/unrealized: | ||||||||
Included in earnings | — | — | ||||||
Included in OCI | — | — | ||||||
Deferred as a regulatory asset or liability | — | (10 | ) | |||||
Settlements | 12 | 10 | ||||||
Transfers into Level 3 from Level 2 | (2 | ) | — | |||||
Transfers from Level 3 into Level 2 | (2 | ) | (1 | ) | ||||
Net derivative balance at end of period | $ | (41 | ) | $ | (49 | ) | ||
Net unrealized gains included in earnings related to instruments still held at end of period | $ | — | $ | — |
|
2014 | 2013 | 2012 | |||||||||
Units granted | 130,273 | 129,620 | 202,278 | ||||||||
Grant date fair value (a) | $ | 54.91 | $ | 55.21 | $ | 49.31 |
(a) | Weighted-average grant date fair value. |
Nonvested shares | Shares | Weighted-Average Grant Date Fair Value | |||||
Nonvested at January 1, 2014 | 397,976 | $ | 47.74 | ||||
Granted | 130,273 | 54.91 | |||||
Vested | (161,283 | ) | 45.55 | ||||
Forfeited | (13,067 | ) | 51.53 | ||||
Nonvested at December 31, 2014 | 353,899 | 51.23 |
Year | 2014 | 2013 | 2012 | |||||||||
2008 Grant | $ | — | $ | — | $ | 1.9 | ||||||
2009 Grant | — | 3.0 | 1.7 | |||||||||
2010 Grant | 2.3 | 2.3 | 0.6 | |||||||||
2011 Grant | 2.4 | 2.5 | 0.7 | |||||||||
2012 Grant | 2.1 | 2.2 | — | |||||||||
2013 Grant | 2.1 | — | — |
2014 | 2013 | 2012 | |||||||||
Units granted (a) | 166,244 | 176,332 | 185,878 | ||||||||
Grant date fair value (b) | $ | 54.86 | $ | 55.45 | $ | 47.40 |
Nonvested shares (a) | Shares | Weighted-Average Grant Date Fair Value | |||||
Nonvested at January 1, 2014 | 344,396 | $ | 51.13 | ||||
Granted | 166,244 | 54.86 | |||||
Increase in performance factor | 86,558 | 47.40 | |||||
Vested | (258,224 | ) | 47.40 | ||||
Forfeited | (14,744 | ) | 53.30 | ||||
Nonvested at December 31, 2014 | 324,230 | 54.92 |
(a) | Nonvested shares are reflected at target payout level. The increase or decrease in the number of shares from the target level to the estimated actual payout level is included in the increase for performance factor amounts in the year the award vests. |
|
Commodity | Quantity | ||||
Power | 3,915 | GWh | |||
Gas | 136 | Bcf (a) |
(a) | “Bcf” is Billion Cubic Feet. |
Financial Statement | Year Ended December 31, | |||||||||||||
Commodity Contracts | Location | 2014 | 2013 | 2012 | ||||||||||
Loss Recognized in OCI on Derivative Instruments (Effective Portion) | OCI — derivative instruments | $ | (372 | ) | $ | (353 | ) | $ | (37,663 | ) | ||||
Loss Reclassified from Accumulated OCI into Income (Effective Portion Realized) (a) | Fuel and purchased power (b) | (21,415 | ) | (44,219 | ) | (99,007 | ) | |||||||
Gain Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Fuel and purchased power (b) | — | — | 117 |
(a) | During the years ended December 31, 2014, 2013, and 2012, we had zero, zero, and $1.8 million of losses reclassified from accumulated OCI to earnings related to discontinued cash flow hedges. |
(b) | Amounts are before the effect of PSA deferrals. |
Financial Statement | Year Ended December 31, | |||||||||||||
Commodity Contracts | Location | 2014 | 2013 | 2012 | ||||||||||
Net Gain Recognized in Income | Operating revenues | $ | 324 | $ | 289 | $ | 103 | |||||||
Net Loss Recognized in Income | Fuel and purchased power (a) | (66,367 | ) | (10,449 | ) | (2,747 | ) | |||||||
Total | $ | (66,043 | ) | $ | (10,160 | ) | $ | (2,644 | ) |
(a) | Amounts are before the effect of PSA deferrals. |
As of December 31, 2014: (dollars in thousands) | Gross Recognized Derivatives (a) | Amounts Offset (b) | Net Recognized Derivatives | Other (c) | Amount Reported on Balance Sheet | |||||||||||||||
Current Assets | $ | 28,562 | $ | (15,127 | ) | $ | 13,435 | $ | 350 | $ | 13,785 | |||||||||
Investments and Other Assets | 24,810 | (7,190 | ) | 17,620 | — | 17,620 | ||||||||||||||
Total Assets | 53,372 | (22,317 | ) | 31,055 | 350 | 31,405 | ||||||||||||||
Current Liabilities | (86,062 | ) | 33,829 | (52,233 | ) | (7,443 | ) | (59,676 | ) | |||||||||||
Deferred Credits and Other | (82,990 | ) | 32,388 | (50,602 | ) | — | (50,602 | ) | ||||||||||||
Total Liabilities | (169,052 | ) | 66,217 | (102,835 | ) | (7,443 | ) | (110,278 | ) | |||||||||||
Total | $ | (115,680 | ) | $ | 43,900 | $ | (71,780 | ) | $ | (7,093 | ) | $ | (78,873 | ) |
(a) | All of our gross recognized derivative instruments were subject to master netting arrangements. |
(b) | Includes cash collateral provided to counterparties of $43,900. |
(c) | Represents cash collateral and margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $7,443, and cash margin provided to counterparties of $350. |
As of December 31, 2013: (dollars in thousands) | Gross Recognized Derivatives (a) | Amounts Offset (b) | Net Recognized Derivatives | Other (c) | Amount Reported on Balance Sheet | |||||||||||||||
Current Assets | $ | 24,587 | $ | (7,425 | ) | $ | 17,162 | $ | 7 | $ | 17,169 | |||||||||
Investments and Other Assets | 25,364 | (1,549 | ) | 23,815 | — | 23,815 | ||||||||||||||
Total Assets | 49,951 | (8,974 | ) | 40,977 | 7 | 40,984 | ||||||||||||||
Current Liabilities | (50,540 | ) | 26,166 | (24,374 | ) | (7,518 | ) | (31,892 | ) | |||||||||||
Deferred Credits and Other | (72,123 | ) | 1,808 | (70,315 | ) | — | (70,315 | ) | ||||||||||||
Total Liabilities | (122,663 | ) | 27,974 | (94,689 | ) | (7,518 | ) | (102,207 | ) | |||||||||||
Total | $ | (72,712 | ) | $ | 19,000 | $ | (53,712 | ) | $ | (7,511 | ) | $ | (61,223 | ) |
(a) | All of our gross recognized derivative instruments were subject to master netting arrangements. |
(b) | Includes cash collateral provided to counterparties of $19,000. |
(c) | Represents cash collateral and margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $7,518, and cash margin provided to counterparties of $7. |
December 31, 2014 | |||
Aggregate Fair Value of Derivative Instruments in a Net Liability Position | $ | 169 | |
Cash Collateral Posted | 44 | ||
Additional Cash Collateral in the Event Credit-Risk Related Contingent Features were Fully Triggered (a) | 80 |
(a) | This amount is after counterparty netting and includes those contracts which qualify for scope exceptions, which are excluded from the derivative details above. |
|
2014 | 2013 | 2012 | |||||||||
Other income: | |||||||||||
Interest income | $ | 1,010 | $ | 1,629 | $ | 1,239 | |||||
Debt return on the purchase of Four Corners units 4 & 5 | 8,386 | — | — | ||||||||
Miscellaneous | 212 | 75 | 367 | ||||||||
Total other income | $ | 9,608 | $ | 1,704 | $ | 1,606 | |||||
Other expense: | |||||||||||
Non-operating costs | $ | (9,657 | ) | $ | (8,207 | ) | $ | (7,777 | ) | ||
Investment loss — net | (9,426 | ) | (3,711 | ) | (2,453 | ) | |||||
Miscellaneous | (2,663 | ) | (4,106 | ) | (9,612 | ) | |||||
Total other expense | $ | (21,746 | ) | $ | (16,024 | ) | $ | (19,842 | ) |
2014 | 2013 | 2012 | |||||||||
Other income: | |||||||||||
Interest income | $ | 689 | $ | 1,234 | $ | 310 | |||||
Debt return on the purchase of Four Corners units 4 & 5 | 8,386 | — | — | ||||||||
Miscellaneous | 2,220 | 2,662 | 2,558 | ||||||||
Total other income | $ | 11,295 | $ | 3,896 | $ | 2,868 | |||||
Other expense: | |||||||||||
Non-operating costs (a) | $ | (10,397 | ) | $ | (9,626 | ) | $ | (8,706 | ) | ||
Asset dispositions | (615 | ) | (4,992 | ) | (1,511 | ) | |||||
Miscellaneous | (2,391 | ) | (5,831 | ) | (10,933 | ) | |||||
Total other expense | $ | (13,403 | ) | $ | (20,449 | ) | $ | (21,150 | ) |
|
December 31, 2014 | December 31, 2013 | ||||||
Palo Verde sale leaseback property plant and equipment, net of accumulated depreciation | $ | 121 | $ | 125 | |||
Current maturities of long-term debt | 13 | 26 | |||||
Long-term debt excluding current maturities | — | 13 | |||||
Equity-Noncontrolling interests | 152 | 146 |
|
Fair Value | Total Unrealized Gains | Total Unrealized Losses | |||||||||
December 31, 2014 | |||||||||||
Equity securities | $ | 310 | $ | 159 | $ | — | |||||
Fixed income securities | 411 | 17 | (1 | ) | |||||||
Net payables (a) | (7 | ) | — | — | |||||||
Total | $ | 714 | $ | 176 | $ | (1 | ) |
Fair Value | Total Unrealized Gains | Total Unrealized Losses | |||||||||
December 31, 2013 | |||||||||||
Equity securities | $ | 272 | $ | 129 | $ | — | |||||
Fixed income securities | 373 | 11 | (6 | ) | |||||||
Net payables (a) | (3 | ) | — | — | |||||||
Total | $ | 642 | $ | 140 | $ | (6 | ) |
(a) | Net payables relate to pending purchases and sales of securities. |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Realized gains | $ | 5 | $ | 6 | $ | 7 | |||||
Realized losses | (5 | ) | (7 | ) | (4 | ) | |||||
Proceeds from the sale of securities (a) | 356 | 446 | 418 |
(a) | Proceeds are reinvested in the trust. |
Fair Value | |||
Less than one year | $ | 14 | |
1 year – 5 years | 116 | ||
5 years – 10 years | 122 | ||
Greater than 10 years | 159 | ||
Total | $ | 411 |
|
Year Ended December 31, 2014 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (23,058 | ) | $ | (54,995 | ) | $ | (78,053 | ) | ||||||
OCI (loss) before reclassifications | (810 | ) | (5,419 | ) | (6,229 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 13,483 | (a) | 2,658 | (b) | 16,141 | ||||||||||
Net current period OCI (loss) | 12,673 | (2,761 | ) | 9,912 | |||||||||||
Ending balance | $ | (10,385 | ) | $ | (57,756 | ) | $ | (68,141 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
Year Ended December 31, 2013 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (49,592 | ) | $ | (64,416 | ) | $ | (114,008 | ) | ||||||
OCI (loss) before reclassifications | (213 | ) | 5,594 | 5,381 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 26,747 | (a) | 3,827 | (b) | 30,574 | ||||||||||
Net current period OCI | 26,534 | 9,421 | 35,955 | ||||||||||||
Ending balance | $ | (23,058 | ) | $ | (54,995 | ) | $ | (78,053 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
Year Ended December 31, 2014 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (23,059 | ) | $ | (30,313 | ) | $ | (53,372 | ) | ||||||
OCI (loss) before reclassifications | (809 | ) | (10,415 | ) | (11,224 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 13,483 | (a) | 2,780 | (b) | 16,263 | ||||||||||
Net current period OCI (loss) | 12,674 | (7,635 | ) | 5,039 | |||||||||||
Ending balance | $ | (10,385 | ) | $ | (37,948 | ) | $ | (48,333 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
Year Ended December 31, 2013 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (49,592 | ) | $ | (39,503 | ) | $ | (89,095 | ) | ||||||
OCI (loss) before reclassifications | (214 | ) | 5,387 | 5,173 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 26,747 | (a) | 3,803 | (b) | 30,550 | ||||||||||
Net current period OCI | 26,533 | 9,190 | 35,723 | ||||||||||||
Ending balance | $ | (23,059 | ) | $ | (30,313 | ) | $ | (53,372 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
|
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating revenues | $ | 642 | $ | 799 | $ | 6,133 | |||||
Operating expenses | 23,507 | 24,930 | 12,125 | ||||||||
Operating loss | (22,865 | ) | (24,131 | ) | (5,992 | ) | |||||
Other | |||||||||||
Equity in earnings of subsidiaries | 411,528 | 420,926 | 391,528 | ||||||||
Other expense | (3,276 | ) | (1,999 | ) | (2,001 | ) | |||||
Total | 408,252 | 418,927 | 389,527 | ||||||||
Interest expense | 3,663 | 3,226 | 4,868 | ||||||||
Income from continuing operations | 381,724 | 391,570 | 378,667 | ||||||||
Income tax benefit | (15,871 | ) | (14,504 | ) | (7,079 | ) | |||||
Income from continuing operations — net of income taxes | 397,595 | 406,074 | 385,746 | ||||||||
Loss from discontinued operations — net of income taxes | — | — | (4,204 | ) | |||||||
Net income attributable to common shareholders | 397,595 | 406,074 | 381,542 | ||||||||
Other comprehensive income — attributable to common shareholders | 9,912 | 35,955 | 38,155 | ||||||||
Total comprehensive income — attributable to common shareholders | $ | 407,507 | $ | 442,029 | $ | 419,697 |
December 31, | |||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 3,088 | $ | 5,798 | |||
Accounts receivable | 99,958 | 80,108 | |||||
Current deferred income taxes | 66,979 | 93,185 | |||||
Income tax receivable | 7,329 | 1,853 | |||||
Other current assets | 124 | 242 | |||||
Total current assets | 177,478 | 181,186 | |||||
Investments and other assets | |||||||
Investments in subsidiaries | 4,630,570 | 4,455,049 | |||||
Other assets | 43,051 | 13,789 | |||||
Total investments and other assets | 4,673,621 | 4,468,838 | |||||
Total Assets | $ | 4,851,099 | $ | 4,650,024 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 5,250 | $ | 3,279 | |||
Accrued taxes | 12,220 | 8,538 | |||||
Common dividends payable | 65,790 | 62,528 | |||||
Other current liabilities | 38,992 | 31,295 | |||||
Total current liabilities | 122,252 | 105,640 | |||||
Long-term debt less current maturities | 125,000 | 125,000 | |||||
Deferred credits and other | |||||||
Deferred income taxes | 12,055 | 4,158 | |||||
Pension and other postretirement liabilities | 29,228 | 37,611 | |||||
Other | 43,462 | 37,155 | |||||
Total deferred credits and other | 84,745 | 78,924 | |||||
Common stock equity | |||||||
Common stock | 2,509,569 | 2,487,250 | |||||
Accumulated other comprehensive loss | (68,141 | ) | (78,053 | ) | |||
Retained earnings | 1,926,065 | 1,785,273 | |||||
Total Pinnacle West Shareholders’ equity | 4,367,493 | 4,194,470 | |||||
Noncontrolling interests | 151,609 | 145,990 | |||||
Total Equity | 4,519,102 | 4,340,460 | |||||
Total Liabilities and Equity | $ | 4,851,099 | $ | 4,650,024 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 397,595 | $ | 406,074 | $ | 381,542 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Equity in earnings of subsidiaries — net | (411,528 | ) | (420,926 | ) | (391,528 | ) | |||||
Depreciation and amortization | 94 | 95 | 94 | ||||||||
Deferred income taxes | 4,406 | (28,806 | ) | (15,135 | ) | ||||||
Accounts receivable | (22,945 | ) | 21,671 | 28,763 | |||||||
Accounts payable | 2,017 | (2,449 | ) | 879 | |||||||
Accrued taxes and income tax receivables — net | (1,795 | ) | 1,402 | (3,103 | ) | ||||||
Dividends received from subsidiaries | 253,600 | 242,100 | 222,200 | ||||||||
Other | 18,432 | (15,065 | ) | (4,589 | ) | ||||||
Net cash flow provided by operating activities | 239,876 | 204,096 | 219,123 | ||||||||
Cash flows from investing activities | |||||||||||
Investments in subsidiaries | (10,236 | ) | (3,400 | ) | — | ||||||
Repayments of loans from subsidiaries | 322 | 2,149 | 996 | ||||||||
Advances of loans to subsidiaries | (1,450 | ) | (2,099 | ) | (1,200 | ) | |||||
Net cash flow used for investing activities | (11,364 | ) | (3,350 | ) | (204 | ) | |||||
Cash flows from financing activities | |||||||||||
Issuance of long-term debt | 125,000 | — | 125,000 | ||||||||
Dividends paid on common stock | (246,671 | ) | (235,244 | ) | (225,075 | ) | |||||
Repayment of long-term debt | (125,000 | ) | — | (125,000 | ) | ||||||
Common stock equity issuance | 15,288 | 17,319 | 15,955 | ||||||||
Other | 161 | 298 | 170 | ||||||||
Net cash flow used for financing activities | (231,222 | ) | (217,627 | ) | (208,950 | ) | |||||
Net increase (decrease) in cash and cash equivalents | (2,710 | ) | (16,881 | ) | 9,969 | ||||||
Cash and cash equivalents at beginning of year | 5,798 | 22,679 | 12,710 | ||||||||
Cash and cash equivalents at end of year | $ | 3,088 | $ | 5,798 | $ | 22,679 |
|
Column A | Column B | Column C | Column D | Column E | |||||||||||||||
Additions | |||||||||||||||||||
Description | Balance at beginning of period | Charged to cost and expenses | Charged to other accounts | Deductions | Balance at end of period | ||||||||||||||
Reserve for uncollectibles: | |||||||||||||||||||
2014 | $ | 3,203 | $ | 3,942 | $ | — | $ | 4,051 | $ | 3,094 | |||||||||
2013 | 3,340 | 4,923 | — | 5,060 | 3,203 | ||||||||||||||
2012 | 3,748 | 5,290 | — | 5,698 | 3,340 |
Column A | Column B | Column C | Column D | Column E | ||||||||||||||||
Additions | ||||||||||||||||||||
Description | Balance at beginning of period | Charged to cost and expenses | Charged to other accounts | Deductions | Balance at end of period | |||||||||||||||
Reserve for uncollectibles: | ||||||||||||||||||||
2014 | $ | 3,203 | $ | 3,942 | $ | — | $ | 4,051 | $ | 3,094 | ||||||||||
2013 | 3,340 | 4,923 | — | 5,060 | 3,203 | |||||||||||||||
2012 | 3,748 | 5,290 | — | 5,698 | 3,340 |
|
• | material and labor; |
• | contractor costs; |
• | capitalized leases; |
• | construction overhead costs (where applicable); and |
• | allowance for funds used during construction. |
|
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Cash paid (received) during the period for: | |||||||||||
Income taxes, net of refunds | $ | (102,154 | ) | $ | 18,537 | $ | 2,543 | ||||
Interest, net of amounts capitalized | 177,074 | 184,010 | 200,923 | ||||||||
Significant non-cash investing and financing activities: | |||||||||||
Accrued capital expenditures | $ | 44,712 | $ | 33,184 | $ | 26,208 | |||||
Dividends declared but not paid | 65,790 | 62,528 | 59,789 | ||||||||
Liabilities assumed relating to acquisition of SCE Four Corners’ interest (see Note 3) | — | 145,609 | — |
|
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
Beginning balance | $ | 21 | $ | 73 | |||
Deferred fuel and purchased power costs - current period | 27 | (21 | ) | ||||
Amounts charged to customers | (41 | ) | (31 | ) | |||
Ending balance | $ | 7 | $ | 21 |
Remaining Amortization | December 31, 2014 | December 31, 2013 | |||||||||||||||
Period | Current | Non-Current | Current | Non-Current | |||||||||||||
Pension and other postretirement benefits | (a) | $ | — | $ | 485 | $ | — | $ | 314 | ||||||||
Income taxes — AFUDC equity | 2044 | 5 | 118 | 4 | 105 | ||||||||||||
Deferred fuel and purchased power — mark-to-market (Note 16) | 2017 | 51 | 46 | 5 | 29 | ||||||||||||
Transmission vegetation management | 2016 | 9 | 5 | 9 | 14 | ||||||||||||
Coal reclamation | 2026 | — | 7 | 8 | 18 | ||||||||||||
Palo Verde VIEs (Note 18) | 2046 | — | 35 | — | 41 | ||||||||||||
Deferred compensation | 2036 | — | 34 | — | 34 | ||||||||||||
Deferred fuel and purchased power (b) (c) | 2015 | 7 | — | 21 | — | ||||||||||||
Tax expense of Medicare subsidy | 2024 | 2 | 14 | 2 | 15 | ||||||||||||
Loss on reacquired debt | 2034 | 1 | 16 | 1 | 17 | ||||||||||||
Income taxes — investment tax credit basis adjustment | 2044 | 2 | 46 | 1 | 39 | ||||||||||||
Pension and other postretirement benefits deferral | 2015 | 4 | — | 8 | 4 | ||||||||||||
Four Corners cost deferral | 2024 | 7 | 70 | — | 37 | ||||||||||||
Lost fixed cost recovery | 2015 | 38 | — | 25 | — | ||||||||||||
Transmission cost adjustor | 2014 | — | — | 8 | 2 | ||||||||||||
Retired power plant costs | 2033 | 10 | 136 | 3 | 18 | ||||||||||||
Deferred property taxes | (d) | — | 30 | — | 11 | ||||||||||||
Other | Various | 2 | 12 | 2 | 14 | ||||||||||||
Total regulatory assets (e) | $ | 138 | $ | 1,054 | $ | 97 | $ | 712 |
(a) | This asset represents the future recovery of pension and other postretirement benefit obligations through retail rates. If these costs are disallowed by the ACC, this regulatory asset would be charged to OCI and result in lower future revenues. See Note 7 for further discussion. |
(b) | See “Cost Recovery Mechanisms” discussion above. |
(c) | Subject to a carrying charge. |
(d) | Per the provision of the 2012 Settlement Agreement. |
(e) | There are no regulatory assets for which the ACC has allowed recovery of costs, but not allowed a return by exclusion from rate base. FERC rates are set using a formula rate as described in “Transmission Rates, Transmission Cost Adjustor and Other Transmission Matters.” |
Remaining Amortization | December 31, 2014 | December 31, 2013 | |||||||||||||||
Period | Current | Non-Current | Current | Non-Current | |||||||||||||
Removal costs | (a) | $ | 31 | $ | 273 | $ | 28 | $ | 303 | ||||||||
Asset retirement obligations | 2044 | — | 296 | — | 266 | ||||||||||||
Renewable energy standard (b) | 2017 | 25 | 23 | 33 | 15 | ||||||||||||
Income taxes — change in rates | 2043 | — | 72 | — | 74 | ||||||||||||
Spent nuclear fuel | 2047 | 5 | 66 | 6 | 36 | ||||||||||||
Deferred gains on utility property | 2019 | 2 | 8 | 2 | 10 | ||||||||||||
Income taxes — deferred investment tax credit | 2043 | 4 | 93 | 3 | 79 | ||||||||||||
Demand side management (b) | 2015 | 31 | — | 27 | — | ||||||||||||
Other postretirement benefits | (c) | 32 | 199 | — | — | ||||||||||||
Other | Various | 1 | 21 | — | 18 | ||||||||||||
Total regulatory liabilities | $ | 131 | $ | 1,051 | $ | 99 | $ | 801 |
(a) | In accordance with regulatory accounting guidance, APS accrues for removal costs for its regulated assets, even if there is no legal obligation for removal (see Note 11). |
(b) | See “Cost Recovery Mechanisms” discussion above. |
(c) | See Note 7. |
|
2014 | 2013 | 2012 | |||||||||
Total unrecognized tax benefits, January 1 | $ | 41,997 | $ | 133,422 | $ | 136,005 | |||||
Additions for tax positions of the current year | 4,309 | 3,516 | 5,167 | ||||||||
Additions for tax positions of prior years | 751 | 13,158 | — | ||||||||
Reductions for tax positions of prior years for: | |||||||||||
Changes in judgment | (2,282 | ) | (108,099 | ) | (7,729 | ) | |||||
Settlements with taxing authorities | — | — | — | ||||||||
Lapses of applicable statute of limitations | — | — | (21 | ) | |||||||
Total unrecognized tax benefits, December 31 | $ | 44,775 | $ | 41,997 | $ | 133,422 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 25,054 | $ | (81,784 | ) | $ | (3,493 | ) | |||
State | 10,382 | 10,537 | 8,395 | ||||||||
Total current | 35,436 | (71,247 | ) | 4,902 | |||||||
Deferred: | |||||||||||
Federal | 167,365 | 279,973 | 200,322 | ||||||||
State | 17,904 | 21,865 | 28,280 | ||||||||
Total deferred | 185,269 | 301,838 | 228,602 | ||||||||
Total income tax expense | 220,705 | 230,591 | 233,504 | ||||||||
Less: income tax benefit on discontinued operations | — | — | (3,813 | ) | |||||||
Income tax expense — continuing operations | $ | 220,705 | $ | 230,591 | $ | 237,317 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax expense at 35% statutory rate | $ | 225,540 | $ | 234,695 | $ | 229,709 | |||||
Increases (reductions) in tax expense resulting from: | |||||||||||
State income tax net of federal income tax benefit | 18,149 | 21,387 | 23,819 | ||||||||
Credits and favorable adjustments related to prior years resolved in current year | — | (3,356 | ) | — | |||||||
Medicare Subsidy Part-D | 830 | 823 | 483 | ||||||||
Allowance for equity funds used during construction (see Note 1) | (8,523 | ) | (6,997 | ) | (6,158 | ) | |||||
Palo Verde VIE noncontrolling interest (see Note 18) | (9,135 | ) | (11,862 | ) | (11,065 | ) | |||||
Investment tax credit amortization | (4,928 | ) | (3,548 | ) | (2,030 | ) | |||||
Other | (1,228 | ) | (551 | ) | 2,559 | ||||||
Income tax expense — continuing operations | $ | 220,705 | $ | 230,591 | $ | 237,317 |
December 31, | |||||||
2014 | 2013 | ||||||
Current asset | $ | 122,232 | $ | 91,152 | |||
Long-term liability | (2,582,636 | ) | (2,351,882 | ) | |||
Deferred income taxes — net | $ | (2,460,404 | ) | $ | (2,260,730 | ) |
December 31, | |||||||
2014 | 2013 | ||||||
DEFERRED TAX ASSETS | |||||||
Risk management activities | $ | 57,505 | $ | 44,920 | |||
Regulatory liabilities: | |||||||
Asset retirement obligation and removal costs | 229,772 | 235,959 | |||||
Unamortized investment tax credits | 96,232 | 82,116 | |||||
Other postretirement benefits | 90,496 | — | |||||
Other | 60,409 | 42,609 | |||||
Pension liabilities | 205,227 | 140,773 | |||||
Other postretirement liabilities | — | 57,869 | |||||
Renewable energy incentives | 65,169 | 65,434 | |||||
Credit and loss carryforwards | 68,347 | 133,070 | |||||
Other | 138,729 | 148,492 | |||||
Total deferred tax assets | 1,011,886 | 951,242 | |||||
DEFERRED TAX LIABILITIES | |||||||
Plant-related | (2,958,369 | ) | (2,903,730 | ) | |||
Risk management activities | (12,171 | ) | (16,191 | ) | |||
Other postretirement assets | (59,170 | ) | — | ||||
Regulatory assets: | |||||||
Allowance for equity funds used during construction | (48,286 | ) | (43,058 | ) | |||
Deferred fuel and purchased power | (2,498 | ) | (8,282 | ) | |||
Deferred fuel and purchased power — mark-to-market | (38,187 | ) | (13,343 | ) | |||
Pension and other postretirement benefits | (191,747 | ) | (129,250 | ) | |||
Retired power plant costs (see Note 3) | (57,255 | ) | (8,199 | ) | |||
Other | (99,123 | ) | (85,003 | ) | |||
Other | (5,484 | ) | (4,916 | ) | |||
Total deferred tax liabilities | (3,472,290 | ) | (3,211,972 | ) | |||
Deferred income taxes — net | $ | (2,460,404 | ) | $ | (2,260,730 | ) |
2014 | 2013 | 2012 | |||||||||
Total unrecognized tax benefits, January 1 | $ | 41,997 | $ | 133,241 | $ | 135,824 | |||||
Additions for tax positions of the current year | 4,309 | 3,516 | 5,167 | ||||||||
Additions for tax positions of prior years | 751 | 13,158 | — | ||||||||
Reductions for tax positions of prior years for: | |||||||||||
Changes in judgment | (2,282 | ) | (107,918 | ) | (7,729 | ) | |||||
Settlements with taxing authorities | — | — | — | ||||||||
Lapses of applicable statute of limitations | — | — | (21 | ) | |||||||
Total unrecognized tax benefits, December 31 | $ | 44,775 | $ | 41,997 | $ | 133,241 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 40,115 | $ | (97,531 | ) | $ | (11,650 | ) | |||
State | 15,598 | 11,983 | 12,308 | ||||||||
Total current | 55,713 | (85,548 | ) | 658 | |||||||
Deferred: | |||||||||||
Federal | 165,027 | 305,389 | 216,367 | ||||||||
State | 16,620 | 25,254 | 27,371 | ||||||||
Total deferred | 181,647 | 330,643 | 243,738 | ||||||||
Total income tax expense | $ | 237,360 | $ | 245,095 | $ | 244,396 |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax expense at 35% statutory rate | $ | 239,638 | $ | 246,384 | $ | 235,027 | |||||
Increases (reductions) in tax expense resulting from: | |||||||||||
State income tax net of federal income tax benefit | 21,148 | 23,970 | 25,379 | ||||||||
Credits and favorable adjustments related to prior years resolved in current year | — | (3,231 | ) | — | |||||||
Medicare Subsidy Part-D | 830 | 823 | 483 | ||||||||
Allowance for equity funds used during construction (see Note 1) | (8,523 | ) | (6,997 | ) | (6,158 | ) | |||||
Palo Verde VIE noncontrolling interest (see Note 18) | (9,135 | ) | (11,862 | ) | (11,065 | ) | |||||
Investment tax credit amortization | (4,928 | ) | (3,548 | ) | (2,030 | ) | |||||
Other | (1,670 | ) | (444 | ) | 2,760 | ||||||
Income tax expense | $ | 237,360 | $ | 245,095 | $ | 244,396 |
December 31, | |||||||
2014 | 2013 | ||||||
Current asset (liability) | $ | 55,253 | $ | (2,033 | ) | ||
Long-term liability | (2,571,365 | ) | (2,347,724 | ) | |||
Deferred income taxes — net | $ | (2,516,112 | ) | $ | (2,349,757 | ) |
December 31, | |||||||
2014 | 2013 | ||||||
DEFERRED TAX ASSETS | |||||||
Regulatory liabilities: | |||||||
Asset retirement obligation and removal costs | $ | 229,772 | $ | 235,959 | |||
Unamortized investment tax credits | 96,232 | 82,116 | |||||
Other postretirement benefits | 90,496 | — | |||||
Other | 60,409 | 42,609 | |||||
Risk management activities | 57,505 | 44,920 | |||||
Pension liabilities | 194,541 | 132,263 | |||||
Other postretirement liabilities | — | 53,950 | |||||
Renewable energy incentives | 65,169 | 65,434 | |||||
Credit and loss carryforwards | — | 38,183 | |||||
Other | 161,379 | 166,781 | |||||
Total deferred tax assets | 955,503 | 862,215 | |||||
DEFERRED TAX LIABILITIES | |||||||
Plant-related | (2,958,369 | ) | (2,903,730 | ) | |||
Risk management activities | (12,171 | ) | (16,191 | ) | |||
Other postretirement benefit assets | (58,495 | ) | — | ||||
Regulatory assets: | |||||||
Allowance for equity funds used during construction | (48,286 | ) | (43,058 | ) | |||
Deferred fuel and purchased power | (2,498 | ) | (8,282 | ) | |||
Deferred fuel and purchased power — mark-to-market | (38,187 | ) | (13,343 | ) | |||
Pension and other postretirement benefits | (191,747 | ) | (129,250 | ) | |||
Retired power plant costs (see Note 3) | (57,255 | ) | (8,199 | ) | |||
Other | (99,123 | ) | (85,003 | ) | |||
Other | (5,484 | ) | (4,916 | ) | |||
Total deferred tax liabilities | (3,471,615 | ) | (3,211,972 | ) | |||
Deferred income taxes — net | $ | (2,516,112 | ) | $ | (2,349,757 | ) |
|
Credit Facility | Expiration | Amount Committed | Unused Amount (a) | Commitment Fees | |||||||||
Pinnacle West Revolving Credit Facility | May 2019 | $ | 200 | $ | 200 | 0.175 | % | ||||||
APS Revolving Credit Facility | May 2019 | 500 | 500 | 0.125 | % | ||||||||
APS Revolving Credit Facility | April 2018 | 500 | 353 | 0.125 | % | ||||||||
Total | $ | 1,200 | $ | 1,053 |
(a) | At December 31, 2014, APS had $147 million of outstanding commercial paper. Accordingly, at such date, the total combined amount available under its two $500 million credit facilities was $853 million. |
Credit Facility | Expiration | Amount Committed | Unused Amount (a) | Commitment Fees | |||||||||
Pinnacle West Revolving Credit Facility | November 2016 | $ | 200 | $ | 200 | 0.175 | % | ||||||
APS Revolving Credit Facility | November 2016 | 500 | 347 | 0.125 | % | ||||||||
APS Revolving Credit Facility | April 2018 | 500 | 500 | 0.125 | % | ||||||||
Total | $ | 1,200 | $ | 1,047 |
(a) | At December 31, 2013, APS had $153 million of outstanding commercial paper. Accordingly, at such date the total combined amount available under its two $500 million credit facilities was $847 million. |
|
Maturity | Interest | December 31, | |||||||||
Dates (a) | Rates | 2014 | 2013 | ||||||||
APS | |||||||||||
Pollution Control Bonds: | |||||||||||
Variable | 2029-2038 | (b) | $ | 156,405 | $ | 75,580 | |||||
Fixed | 2024-2034 | 0.45%-5.75% | 249,300 | 426,125 | |||||||
Total Pollution Control Bonds | 405,705 | 501,705 | |||||||||
Senior unsecured notes | 2015-2044 | 3.35%-8.75% | 2,875,000 | 2,675,000 | |||||||
Palo Verde sale leaseback lessor notes | 2015 | 8.00% | 13,420 | 38,869 | |||||||
Unamortized discount | (9,206 | ) | (8,732 | ) | |||||||
Unamortized premium | 4,866 | 5,047 | |||||||||
Total APS long-term debt | 3,289,785 | 3,211,889 | |||||||||
Less current maturities | (d) | 383,570 | 540,424 | ||||||||
Total APS long-term debt less current maturities | 2,906,215 | 2,671,465 | |||||||||
Pinnacle West | |||||||||||
Term loan | 2017 | (c) | 125,000 | 125,000 | |||||||
TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES | $ | 3,031,215 | $ | 2,796,465 |
Year | Consolidated Pinnacle West | Consolidated APS | ||||||
2015 | $ | 384 | $ | 384 | ||||
2016 | 357 | 357 | ||||||
2017 | 157 | 32 | ||||||
2018 | 32 | 32 | ||||||
2019 | 500 | 500 | ||||||
Thereafter | 1,989 | 1,989 | ||||||
Total | $ | 3,419 | $ | 3,294 |
As of December 31, 2014 | As of December 31, 2013 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Pinnacle West | $ | 125 | $ | 125 | $ | 125 | $ | 125 | |||||||
APS | 3,290 | 3,714 | 3,212 | 3,454 | |||||||||||
Total | $ | 3,415 | $ | 3,839 | $ | 3,337 | $ | 3,579 |
|
Pension | Other Benefits | ||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||
Service cost-benefits earned during the period | $ | 53,080 | $ | 64,195 | $ | 63,502 | $ | 18,139 | $ | 23,597 | $ | 27,163 | |||||||||||
Interest cost on benefit obligation | 129,194 | 112,392 | 119,586 | 41,243 | 41,536 | 46,467 | |||||||||||||||||
Expected return on plan assets | (158,998 | ) | (146,333 | ) | (140,979 | ) | (46,400 | ) | (45,717 | ) | (45,793 | ) | |||||||||||
Amortization of: | |||||||||||||||||||||||
Transition obligation | — | — | — | — | — | 452 | |||||||||||||||||
Prior service cost (credit) | 869 | 1,097 | 1,143 | (9,626 | ) | (179 | ) | (179 | ) | ||||||||||||||
Net actuarial loss | 10,963 | 39,852 | 44,250 | 1,175 | 11,310 | 20,233 | |||||||||||||||||
Net periodic benefit cost | $ | 35,108 | $ | 71,203 | $ | 87,502 | $ | 4,531 | $ | 30,547 | $ | 48,343 | |||||||||||
Portion of cost charged to expense | $ | 21,985 | $ | 38,968 | $ | 36,333 | $ | 6,000 | $ | 18,469 | $ | 19,321 |
Pension | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Change in Benefit Obligation | |||||||||||||||
Benefit obligation at January 1 | $ | 2,646,530 | $ | 2,850,846 | $ | 890,418 | $ | 990,418 | |||||||
Service cost | 53,080 | 64,195 | 18,139 | 23,597 | |||||||||||
Interest cost | 129,194 | 112,392 | 41,243 | 41,536 | |||||||||||
Benefit payments | (128,550 | ) | (125,269 | ) | (29,054 | ) | (26,675 | ) | |||||||
Actuarial (gain) loss | 378,394 | (255,634 | ) | 150,188 | (138,458 | ) | |||||||||
Plan amendments | — | — | (388,599 | ) | — | ||||||||||
Benefit obligation at December 31 | 3,078,648 | 2,646,530 | 682,335 | 890,418 | |||||||||||
Change in Plan Assets | |||||||||||||||
Fair value of plan assets at January 1 | 2,264,121 | 2,079,181 | 748,339 | 684,221 | |||||||||||
Actual return on plan assets | 292,992 | 150,546 | 105,223 | 76,995 | |||||||||||
Employer contributions | 175,000 | 140,500 | 770 | 14,438 | |||||||||||
Benefit payments | (116,709 | ) | (106,106 | ) | (19,707 | ) | (27,315 | ) | |||||||
Fair value of plan assets at December 31 | 2,615,404 | 2,264,121 | 834,625 | 748,339 | |||||||||||
Funded Status at December 31 | $ | (463,244 | ) | $ | (382,409 | ) | $ | 152,290 | $ | (142,079 | ) |
2014 | 2013 | ||||||
Projected benefit obligation | $ | 3,078,648 | $ | 2,646,530 | |||
Accumulated benefit obligation | 2,873,741 | 2,469,889 | |||||
Fair value of plan assets | 2,615,404 | 2,264,121 |
Pension | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Noncurrent asset | $ | — | $ | — | $ | 152,290 | $ | — | |||||||
Current liability | (9,508 | ) | (10,860 | ) | — | — | |||||||||
Noncurrent liability | (453,736 | ) | (371,549 | ) | — | (142,079 | ) | ||||||||
Net amount recognized | $ | (463,244 | ) | $ | (382,409 | ) | $ | 152,290 | $ | (142,079 | ) |
Pension | Other Benefits | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net actuarial loss | $ | 577,976 | $ | 344,540 | $ | 148,006 | $ | 57,816 | |||||||
Prior service cost (credit) | 1,203 | 2,072 | (379,269 | ) | (296 | ) | |||||||||
APS’s portion recorded as a regulatory (asset) liability | (485,037 | ) | (265,107 | ) | 230,916 | (49,298 | ) | ||||||||
Income tax expense (benefit) | (36,890 | ) | (32,204 | ) | 851 | (2,528 | ) | ||||||||
Accumulated other comprehensive loss | $ | 57,252 | $ | 49,301 | $ | 504 | $ | 5,694 |
Pension | Other Benefits | ||||||
Net actuarial loss | $ | 28,180 | $ | 5,651 | |||
Prior service cost (credit) | 595 | (37,968 | ) | ||||
Total amounts estimated to be amortized from accumulated other comprehensive loss (gain) and regulatory assets (liabilities) in 2014 | $ | 28,775 | $ | (32,317 | ) |
Benefit Obligations As of December 31, | Benefit Costs For the Years Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | ||||||||||||
January - September | October - December | |||||||||||||||
Discount rate – pension | 4.02 | % | 4.88 | % | 4.88 | % | 4.88 | % | 4.01 | % | 4.42 | % | ||||
Discount rate – other benefits | 4.14 | % | 5.10 | % | 5.10 | % | 4.41 | % | 4.20 | % | 4.59 | % | ||||
Rate of compensation increase | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | ||||
Expected long-term return on plan assets - pension | N/A | N/A | 6.90 | % | 6.90 | % | 7.00 | % | 7.75 | % | ||||||
Expected long-term return on plan assets - other benefits | N/A | N/A | 6.80 | % | 4.25 | % | 7.00 | % | 7.75 | % | ||||||
Initial healthcare cost trend rate (pre-65 participants) | 7.00 | % | 7.50 | % | 7.50 | % | 7.50 | % | 7.50 | % | 7.50 | % | ||||
Initial healthcare cost trend rate (post-65 participants) | 5.00 | % | 7.50 | % | 7.50 | % | 5.00 | % | 7.50 | % | 7.50 | % | ||||
Ultimate healthcare cost trend rate | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | ||||
Number of years to ultimate trend rate (pre-65 participants) | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||
Number of years to ultimate trend rate (post-65 participants) | 0 | 4 | 4 | 0 | 4 | 4 |
1% Increase | 1% Decrease | ||||||
Effect on other postretirement benefits expense, after consideration of amounts capitalized or billed to electric plant participants | $ | 10 | $ | (4 | ) | ||
Effect on service and interest cost components of net periodic other postretirement benefit costs | 12 | (9 | ) | ||||
Effect on the accumulated other postretirement benefit obligation | 110 | (88 | ) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Other (b) | Balance at December 31, 2014 | |||||||||||||||
Pension Plan: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 387 | $ | — | $ | — | $ | — | $ | 387 | |||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | — | 1,162,096 | — | — | 1,162,096 | ||||||||||||||
U.S. Treasury | 291,817 | — | — | — | 291,817 | ||||||||||||||
Other (a) | — | 113,265 | — | — | 113,265 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 246,387 | — | — | — | 246,387 | ||||||||||||||
International Companies | 18,069 | — | — | — | 18,069 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 127,336 | — | — | 127,336 | ||||||||||||||
International Equities | — | 317,167 | — | — | 317,167 | ||||||||||||||
Real estate | — | 129,715 | — | — | 129,715 | ||||||||||||||
Partnerships | — | 138,337 | 27,929 | — | 166,266 | ||||||||||||||
Short-term investments and other | — | 26,016 | — | 16,883 | 42,899 | ||||||||||||||
Total Pension Plan | $ | 556,660 | $ | 2,013,932 | $ | 27,929 | $ | 16,883 | $ | 2,615,404 | |||||||||
Other Benefits: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 318 | $ | — | $ | — | $ | — | $ | 318 | |||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | — | 187,961 | — | — | 187,961 | ||||||||||||||
U.S. Treasury | 130,967 | — | — | — | 130,967 | ||||||||||||||
Other (a) | — | 35,291 | — | — | 35,291 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 265,106 | — | — | — | 265,106 | ||||||||||||||
International Companies | 17,813 | — | — | — | 17,813 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 88,258 | — | — | 88,258 | ||||||||||||||
International Equities | — | 85,746 | — | — | 85,746 | ||||||||||||||
Real Estate | — | 11,657 | — | — | 11,657 | ||||||||||||||
Short-term investments and other | — | 7,408 | — | 4,100 | 11,508 | ||||||||||||||
Total Other Benefits | $ | 414,204 | $ | 416,321 | $ | — | $ | 4,100 | $ | 834,625 |
(a) | This category consists primarily of debt securities issued by municipalities. |
(b) | Represents plan receivables and payables. |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Other (b) | Balance at December 31, 2013 | |||||||||||||||
Pension Plan: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 504 | $ | — | $ | — | $ | — | $ | 504 | |||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | — | 898,621 | — | — | 898,621 | ||||||||||||||
U.S. Treasury | 231,590 | — | — | — | 231,590 | ||||||||||||||
Other (a) | — | 84,011 | — | — | 84,011 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 239,036 | — | — | — | 239,036 | ||||||||||||||
International Companies | 19,429 | — | — | — | 19,429 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 116,150 | — | — | 116,150 | ||||||||||||||
International Equities | — | 367,551 | — | — | 367,551 | ||||||||||||||
Fixed Income | — | 137,520 | — | — | 137,520 | ||||||||||||||
Real estate | — | 119,739 | — | — | 119,739 | ||||||||||||||
Partnerships | — | — | 8,660 | — | 8,660 | ||||||||||||||
Short-term investments and other | — | 41,060 | — | 250 | 41,310 | ||||||||||||||
Total Pension Plan | $ | 490,559 | $ | 1,764,652 | $ | 8,660 | $ | 250 | $ | 2,264,121 | |||||||||
Other Benefits: | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Fixed Income Securities: | |||||||||||||||||||
Corporate | $ | — | $ | 153,888 | $ | — | $ | — | $ | 153,888 | |||||||||
U.S. Treasury | 98,704 | — | — | — | 98,704 | ||||||||||||||
Other (a) | — | 27,936 | — | — | 27,936 | ||||||||||||||
Equities: | |||||||||||||||||||
U.S. Companies | 252,181 | — | — | — | 252,181 | ||||||||||||||
International Companies | 20,892 | — | — | — | 20,892 | ||||||||||||||
Common and collective trusts: | |||||||||||||||||||
U.S. Equities | — | 80,751 | — | — | 80,751 | ||||||||||||||
International Equities | — | 92,382 | — | — | 92,382 | ||||||||||||||
Real Estate | — | 10,761 | — | — | 10,761 | ||||||||||||||
Short-term investments and other | — | 8,414 | — | 2,430 | 10,844 | ||||||||||||||
Total Other Benefits | $ | 371,777 | $ | 374,132 | $ | — | $ | 2,430 | $ | 748,339 |
(a) | This category consists primarily of debt securities issued by municipalities. |
(b) | Represents plan receivables and payables. |
Pension | ||||||||
Partnerships | 2014 | 2013 | ||||||
Beginning balance at January 1 | $ | 8,660 | $ | 2,419 | ||||
Actual return on assets still held at December 31 | 927 | (498 | ) | |||||
Purchases | 19,984 | 7,377 | ||||||
Sales | (1,642 | ) | (638 | ) | ||||
Transfers in and/or out of Level 3 | — | — | ||||||
Ending balance at December 31 | $ | 27,929 | $ | 8,660 |
Year | Pension | Other Benefits | ||||||
2015 | $ | 139,013 | $ | 25,134 | ||||
2016 | 155,968 | 27,311 | ||||||
2017 | 160,080 | 29,253 | ||||||
2018 | 167,600 | 31,258 | ||||||
2019 | 177,470 | 33,190 | ||||||
Years 2020-2024 | 983,557 | 184,772 |
|
Year | Pinnacle West Consolidated | APS | ||||||
2015 | $ | 18 | $ | 15 | ||||
2016 | 6 | 6 | ||||||
2017 | 5 | 5 | ||||||
2018 | 4 | 4 | ||||||
2019 | 3 | 3 | ||||||
Thereafter | 63 | 62 | ||||||
Total future lease commitments | $ | 99 | $ | 95 |
|
Percent Owned | Plant in Service | Accumulated Depreciation | Construction Work in Progress | ||||||||||||||
Generating facilities: | |||||||||||||||||
Palo Verde Units 1 and 3 | 29.1 | % | $ | 1,734,918 | $ | 1,051,670 | $ | 16,955 | |||||||||
Palo Verde Unit 2 (a) | 16.8 | % | 556,472 | 349,960 | 13,710 | ||||||||||||
Palo Verde Common | 28.0 | % | (b) | 612,190 | 224,208 | 68,896 | |||||||||||
Palo Verde Sale Leaseback | (a) | 351,050 | 229,795 | — | |||||||||||||
Four Corners Generating Station | 63.0 | % | 811,648 | 578,772 | 33,150 | ||||||||||||
Navajo Generating Station Units 1, 2 and 3 | 14.0 | % | 272,208 | 159,198 | 2,716 | ||||||||||||
Cholla common facilities (c) | 63.3 | % | (b) | 155,856 | 49,954 | 866 | |||||||||||
Transmission facilities: | |||||||||||||||||
ANPP 500kV System | 33.6 | % | (b) | 106,369 | 35,035 | 3,731 | |||||||||||
Navajo Southern System | 22.5 | % | (b) | 59,994 | 18,119 | 1,113 | |||||||||||
Palo Verde — Yuma 500kV System | 18.2 | % | (b) | 12,925 | 4,943 | 12 | |||||||||||
Four Corners Switchyards | 47.5 | % | (b) | 33,034 | 10,035 | 386 | |||||||||||
Phoenix — Mead System | 17.1 | % | (b) | 39,777 | 12,843 | 105 | |||||||||||
Palo Verde — Estrella 500kV System | 50.0 | % | (b) | 89,572 | 16,491 | 736 | |||||||||||
Morgan — Pinnacle Peak System | 64.4 | % | (b) | 130,840 | 8,970 | 1,690 | |||||||||||
Round Valley System | 50.0 | % | (b) | 497 | 276 | 1 | |||||||||||
Palo Verde — Morgan System | 90.0 | % | (b) | — | — | 69,377 | |||||||||||
Hassayampa - North Gila System | 80.0 | % | (b) | 8,902 | 3,634 | 142,645 |
(a) | See Note 18. |
(b) | Weighted-average of interests. |
(c) | PacifiCorp owns Cholla Unit 4 and APS operates the unit for PacifiCorp. The common facilities at Cholla are jointly-owned. |
|
Years Ended December 31, | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Coal take-or-pay commitments (a) | $ | 151 | $ | 171 | $ | 195 | $ | 190 | $ | 194 | $ | 2,469 |
(a) | Total take-or-pay commitments are approximately $3.4 billion. The total net present value of these commitments is approximately $2.2 billion. |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Total payments | $ | 237 | $ | 188 | $ | 196 |
|
2014 | 2013 | ||||||
Asset retirement obligations at the beginning of year | $ | 347 | $ | 357 | |||
Changes attributable to: | |||||||
Accretion expense | 24 | 24 | |||||
Settlements | (30 | ) | (12 | ) | |||
Assumed SCE’s obligation | — | 34 | |||||
Estimated cash flow revisions | 44 | (56 | ) | ||||
Newly incurred obligation | 6 | — | |||||
Asset retirement obligations at the end of year | $ | 391 | $ | 347 |
|
2014 Quarter Ended | 2014 | ||||||||||||||||||
March 31, | June 30, | Sept. 30, | Dec. 31, | Total | |||||||||||||||
Operating revenues | $ | 686,251 | $ | 906,264 | $ | 1,172,667 | $ | 726,450 | $ | 3,491,632 | |||||||||
Operations and maintenance | 212,882 | 211,222 | 223,418 | 260,503 | 908,025 | ||||||||||||||
Operating income | 75,170 | 254,113 | 421,775 | 60,184 | 811,242 | ||||||||||||||
Income taxes | 6,405 | 74,540 | 134,753 | 5,007 | 220,705 | ||||||||||||||
Income from continuing operations | 24,691 | 141,384 | 248,086 | 9,535 | 423,696 | ||||||||||||||
Net income attributable to common shareholders | 15,766 | 132,458 | 243,961 | 5,410 | 397,595 | ||||||||||||||
Earnings Per Share: | |||||||||||||||||||
Net income attributable to common shareholders — Basic | $ | 0.14 | $ | 1.20 | $ | 2.20 | $ | 0.05 | $ | 3.59 | |||||||||
Net income attributable to common shareholders — Diluted | 0.14 | 1.19 | 2.20 | 0.05 | 3.58 |
2013 Quarter Ended | 2013 | ||||||||||||||||||
March 31, | June 30, | Sept. 30, | Dec. 31, | Total | |||||||||||||||
Operating revenues | $ | 686,652 | $ | 915,822 | $ | 1,152,392 | $ | 699,762 | $ | 3,454,628 | |||||||||
Operations and maintenance | 223,250 | 229,300 | 233,323 | 238,854 | 924,727 | ||||||||||||||
Operating income | 86,923 | 259,812 | 415,688 | 83,900 | 846,323 | ||||||||||||||
Income taxes | 12,469 | 77,043 | 131,912 | 9,167 | 230,591 | ||||||||||||||
Income from continuing operations | 32,836 | 139,598 | 234,718 | 32,814 | 439,966 | ||||||||||||||
Net income attributable to common shareholders | 24,444 | 131,207 | 226,163 | 24,260 | 406,074 | ||||||||||||||
Earnings Per Share: | |||||||||||||||||||
Net income attributable to common shareholders — Basic | $ | 0.22 | $ | 1.19 | $ | 2.06 | $ | 0.22 | $ | 3.69 | |||||||||
Net income attributable to common shareholders — Diluted | 0.22 | 1.18 | 2.04 | 0.22 | 3.66 |
2014 Quarter Ended, | 2014 | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total | |||||||||||||||
Operating revenues | $ | 685,545 | $ | 905,578 | $ | 1,172,190 | $ | 725,633 | $ | 3,488,946 | |||||||||
Operations and maintenance | 208,285 | 208,059 | 212,430 | 253,668 | 882,442 | ||||||||||||||
Operating income | 69,635 | 180,394 | 287,928 | 54,835 | 592,792 | ||||||||||||||
Net income attributable to common shareholder | 19,518 | 134,916 | 251,047 | 15,738 | 421,219 |
2013 Quarter Ended, | 2013 | ||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total | |||||||||||||||
Operating revenues | $ | 685,827 | $ | 915,065 | $ | 1,151,535 | $ | 698,824 | $ | 3,451,251 | |||||||||
Operations and maintenance | 220,752 | 224,950 | 222,617 | 229,505 | 897,824 | ||||||||||||||
Operating income | 74,862 | 183,728 | 284,251 | 79,024 | 621,865 | ||||||||||||||
Net income attributable to common shareholder | 26,042 | 133,949 | 234,954 | 30,024 | 424,969 |
|
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (a) (Level 3) | Other | Balance at December 31, 2014 | |||||||||||||||||
Assets | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity Contracts | $ | — | $ | 21 | $ | 33 | $ | (23 | ) | (b) | $ | 31 | |||||||||
Nuclear decommissioning trust: | |||||||||||||||||||||
U.S. commingled equity funds | — | 310 | — | — | 310 | ||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. Treasury | 119 | — | — | — | 119 | ||||||||||||||||
Cash and cash equivalent funds | — | 11 | — | (7 | ) | (c) | 4 | ||||||||||||||
Corporate debt | — | 109 | — | — | 109 | ||||||||||||||||
Mortgage-backed securities | — | 89 | — | — | 89 | ||||||||||||||||
Municipality bonds | — | 69 | — | — | 69 | ||||||||||||||||
Other | — | 14 | — | — | 14 | ||||||||||||||||
Subtotal nuclear decommissioning trust | 119 | 602 | — | (7 | ) | 714 | |||||||||||||||
Total | $ | 119 | $ | 623 | $ | 33 | $ | (30 | ) | $ | 745 | ||||||||||
Liabilities | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity contracts | $ | — | $ | (95 | ) | $ | (74 | ) | $ | 59 | (b) | $ | (110 | ) |
(a) | Primarily consists of heat rate options and other long-dated electricity contracts. |
(b) | Represents counterparty netting, margin and collateral. See Note 16. |
(c) | Represents nuclear decommissioning trust net pending securities sales and purchases. |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (a) (Level 3) | Other | Balance at December 31, 2013 | |||||||||||||||||
Assets | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity Contracts | $ | — | $ | 9 | $ | 41 | $ | (9 | ) | (b) | $ | 41 | |||||||||
Nuclear decommissioning trust: | |||||||||||||||||||||
U.S. commingled equity funds | — | 272 | — | — | 272 | ||||||||||||||||
Fixed income securities: | |||||||||||||||||||||
U.S. Treasury | 107 | — | — | — | 107 | ||||||||||||||||
Cash and cash equivalent funds | — | 11 | — | (3 | ) | (c) | 8 | ||||||||||||||
Corporate debt | — | 88 | — | — | 88 | ||||||||||||||||
Mortgage-backed securities | — | 85 | — | — | 85 | ||||||||||||||||
Municipality bonds | — | 71 | — | — | 71 | ||||||||||||||||
Other | — | 11 | — | — | 11 | ||||||||||||||||
Subtotal nuclear decommissioning trust | 107 | 538 | — | (3 | ) | 642 | |||||||||||||||
Total | $ | 107 | $ | 547 | $ | 41 | $ | (12 | ) | $ | 683 | ||||||||||
Liabilities | |||||||||||||||||||||
Risk management activities — derivative instruments: | |||||||||||||||||||||
Commodity contracts | $ | — | $ | (33 | ) | $ | (90 | ) | $ | 21 | (b) | $ | (102 | ) |
(a) | Primarily consists of heat rate options and other long-dated electricity contracts. |
(b) | Represents counterparty netting, margin and collateral. See Note 16. |
(c) | Represents nuclear decommissioning trust net pending securities sales and purchases. |
December 31, 2014 Fair Value (millions) | Valuation Technique | Significant Unobservable Input | Range | Weighted-Average | |||||||||||||
Commodity Contracts | Assets | Liabilities | |||||||||||||||
Electricity: | |||||||||||||||||
Forward Contracts (a) | $ | 30 | $ | 56 | Discounted cash flows | Electricity forward price (per MWh) | $19.51 - $56.72 | $ | 35.27 | ||||||||
Option Contracts (b) | — | 15 | Option model | Electricity forward price (per MWh) | $32.14 - $66.09 | $ | 45.83 | ||||||||||
Natural gas forward price (per MMbtu) | $3.18 - $3.29 | $ | 3.25 | ||||||||||||||
Electricity price volatilities | 23% - 63% | 41 | % | ||||||||||||||
Natural gas price volatilities | 23% - 41% | 31 | % | ||||||||||||||
Natural Gas: | |||||||||||||||||
Forward Contracts (a) | 3 | 3 | Discounted cash flows | Natural gas forward price (per MMbtu) | $2.98 - $4.13 | $ | 3.45 | ||||||||||
Total | $ | 33 | $ | 74 |
(a) | Includes swaps and physical and financial contracts. |
(b) | Electricity and natural gas price volatilities are estimated based on historical forward price movements due to lack of market quotes for implied volatilities. |
December 31, 2013 Fair Value (millions) | Valuation Technique | Significant Unobservable Input | Range | Weighted-Average | |||||||||||||
Commodity Contracts | Assets | Liabilities | |||||||||||||||
Electricity: | |||||||||||||||||
Forward Contracts (a) | $ | 40 | $ | 66 | Discounted cash flows | Electricity forward price (per MWh) | $24.89 - $65.04 | $ | 41.09 | ||||||||
Option Contracts (b) | — | 19 | Option model | Electricity forward price (per MWh) | $39.91 - $85.41 | $ | 58.70 | ||||||||||
Natural gas forward price (per MMbtu) | $3.57 - $3.80 | $ | 3.71 | ||||||||||||||
Electricity price volatilities | 35% - 94% | 59 | % | ||||||||||||||
Natural gas price volatilities | 22% - 36% | 27 | % | ||||||||||||||
Natural Gas: | |||||||||||||||||
Forward Contracts (a) | 1 | 5 | Discounted cash flows | Natural gas forward price (per MMbtu) | $3.47 - $4.31 | $ | 3.87 | ||||||||||
Total | $ | 41 | $ | 90 |
(a) | Includes swaps and physical and financial contracts. |
(b) | Electricity and natural gas price volatilities are estimated based on historical forward price movements due to lack of market quotes for implied volatilities. |
Year Ended December 31, | ||||||||
Commodity Contracts | 2014 | 2013 | ||||||
Net derivative balance at beginning of period | $ | (49 | ) | $ | (48 | ) | ||
Total net gains (losses) realized/unrealized: | ||||||||
Included in earnings | — | — | ||||||
Included in OCI | — | — | ||||||
Deferred as a regulatory asset or liability | — | (10 | ) | |||||
Settlements | 12 | 10 | ||||||
Transfers into Level 3 from Level 2 | (2 | ) | — | |||||
Transfers from Level 3 into Level 2 | (2 | ) | (1 | ) | ||||
Net derivative balance at end of period | $ | (41 | ) | $ | (49 | ) | ||
Net unrealized gains included in earnings related to instruments still held at end of period | $ | — | $ | — |
|
2014 | 2013 | 2012 | |||||||||
Units granted | 130,273 | 129,620 | 202,278 | ||||||||
Grant date fair value (a) | $ | 54.91 | $ | 55.21 | $ | 49.31 |
(a) | Weighted-average grant date fair value. |
Nonvested shares | Shares | Weighted-Average Grant Date Fair Value | |||||
Nonvested at January 1, 2014 | 397,976 | $ | 47.74 | ||||
Granted | 130,273 | 54.91 | |||||
Vested | (161,283 | ) | 45.55 | ||||
Forfeited | (13,067 | ) | 51.53 | ||||
Nonvested at December 31, 2014 | 353,899 | 51.23 |
Year | 2014 | 2013 | 2012 | |||||||||
2008 Grant | $ | — | $ | — | $ | 1.9 | ||||||
2009 Grant | — | 3.0 | 1.7 | |||||||||
2010 Grant | 2.3 | 2.3 | 0.6 | |||||||||
2011 Grant | 2.4 | 2.5 | 0.7 | |||||||||
2012 Grant | 2.1 | 2.2 | — | |||||||||
2013 Grant | 2.1 | — | — |
2014 | 2013 | 2012 | |||||||||
Units granted (a) | 166,244 | 176,332 | 185,878 | ||||||||
Grant date fair value (b) | $ | 54.86 | $ | 55.45 | $ | 47.40 |
Nonvested shares (a) | Shares | Weighted-Average Grant Date Fair Value | |||||
Nonvested at January 1, 2014 | 344,396 | $ | 51.13 | ||||
Granted | 166,244 | 54.86 | |||||
Increase in performance factor | 86,558 | 47.40 | |||||
Vested | (258,224 | ) | 47.40 | ||||
Forfeited | (14,744 | ) | 53.30 | ||||
Nonvested at December 31, 2014 | 324,230 | 54.92 |
(a) | Nonvested shares are reflected at target payout level. The increase or decrease in the number of shares from the target level to the estimated actual payout level is included in the increase for performance factor amounts in the year the award vests. |
|
Commodity | Quantity | ||||
Power | 3,915 | GWh | |||
Gas | 136 | Bcf (a) |
(a) | “Bcf” is Billion Cubic Feet. |
Financial Statement | Year Ended December 31, | |||||||||||||
Commodity Contracts | Location | 2014 | 2013 | 2012 | ||||||||||
Loss Recognized in OCI on Derivative Instruments (Effective Portion) | OCI — derivative instruments | $ | (372 | ) | $ | (353 | ) | $ | (37,663 | ) | ||||
Loss Reclassified from Accumulated OCI into Income (Effective Portion Realized) (a) | Fuel and purchased power (b) | (21,415 | ) | (44,219 | ) | (99,007 | ) | |||||||
Gain Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Fuel and purchased power (b) | — | — | 117 |
(a) | During the years ended December 31, 2014, 2013, and 2012, we had zero, zero, and $1.8 million of losses reclassified from accumulated OCI to earnings related to discontinued cash flow hedges. |
(b) | Amounts are before the effect of PSA deferrals. |
Financial Statement | Year Ended December 31, | |||||||||||||
Commodity Contracts | Location | 2014 | 2013 | 2012 | ||||||||||
Net Gain Recognized in Income | Operating revenues | $ | 324 | $ | 289 | $ | 103 | |||||||
Net Loss Recognized in Income | Fuel and purchased power (a) | (66,367 | ) | (10,449 | ) | (2,747 | ) | |||||||
Total | $ | (66,043 | ) | $ | (10,160 | ) | $ | (2,644 | ) |
(a) | Amounts are before the effect of PSA deferrals. |
As of December 31, 2014: (dollars in thousands) | Gross Recognized Derivatives (a) | Amounts Offset (b) | Net Recognized Derivatives | Other (c) | Amount Reported on Balance Sheet | |||||||||||||||
Current Assets | $ | 28,562 | $ | (15,127 | ) | $ | 13,435 | $ | 350 | $ | 13,785 | |||||||||
Investments and Other Assets | 24,810 | (7,190 | ) | 17,620 | — | 17,620 | ||||||||||||||
Total Assets | 53,372 | (22,317 | ) | 31,055 | 350 | 31,405 | ||||||||||||||
Current Liabilities | (86,062 | ) | 33,829 | (52,233 | ) | (7,443 | ) | (59,676 | ) | |||||||||||
Deferred Credits and Other | (82,990 | ) | 32,388 | (50,602 | ) | — | (50,602 | ) | ||||||||||||
Total Liabilities | (169,052 | ) | 66,217 | (102,835 | ) | (7,443 | ) | (110,278 | ) | |||||||||||
Total | $ | (115,680 | ) | $ | 43,900 | $ | (71,780 | ) | $ | (7,093 | ) | $ | (78,873 | ) |
(a) | All of our gross recognized derivative instruments were subject to master netting arrangements. |
(b) | Includes cash collateral provided to counterparties of $43,900. |
(c) | Represents cash collateral and margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $7,443, and cash margin provided to counterparties of $350. |
As of December 31, 2013: (dollars in thousands) | Gross Recognized Derivatives (a) | Amounts Offset (b) | Net Recognized Derivatives | Other (c) | Amount Reported on Balance Sheet | |||||||||||||||
Current Assets | $ | 24,587 | $ | (7,425 | ) | $ | 17,162 | $ | 7 | $ | 17,169 | |||||||||
Investments and Other Assets | 25,364 | (1,549 | ) | 23,815 | — | 23,815 | ||||||||||||||
Total Assets | 49,951 | (8,974 | ) | 40,977 | 7 | 40,984 | ||||||||||||||
Current Liabilities | (50,540 | ) | 26,166 | (24,374 | ) | (7,518 | ) | (31,892 | ) | |||||||||||
Deferred Credits and Other | (72,123 | ) | 1,808 | (70,315 | ) | — | (70,315 | ) | ||||||||||||
Total Liabilities | (122,663 | ) | 27,974 | (94,689 | ) | (7,518 | ) | (102,207 | ) | |||||||||||
Total | $ | (72,712 | ) | $ | 19,000 | $ | (53,712 | ) | $ | (7,511 | ) | $ | (61,223 | ) |
(a) | All of our gross recognized derivative instruments were subject to master netting arrangements. |
(b) | Includes cash collateral provided to counterparties of $19,000. |
(c) | Represents cash collateral and margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $7,518, and cash margin provided to counterparties of $7. |
December 31, 2014 | |||
Aggregate Fair Value of Derivative Instruments in a Net Liability Position | $ | 169 | |
Cash Collateral Posted | 44 | ||
Additional Cash Collateral in the Event Credit-Risk Related Contingent Features were Fully Triggered (a) | 80 |
(a) | This amount is after counterparty netting and includes those contracts which qualify for scope exceptions, which are excluded from the derivative details above. |
|
2014 | 2013 | 2012 | |||||||||
Other income: | |||||||||||
Interest income | $ | 1,010 | $ | 1,629 | $ | 1,239 | |||||
Debt return on the purchase of Four Corners units 4 & 5 | 8,386 | — | — | ||||||||
Miscellaneous | 212 | 75 | 367 | ||||||||
Total other income | $ | 9,608 | $ | 1,704 | $ | 1,606 | |||||
Other expense: | |||||||||||
Non-operating costs | $ | (9,657 | ) | $ | (8,207 | ) | $ | (7,777 | ) | ||
Investment loss — net | (9,426 | ) | (3,711 | ) | (2,453 | ) | |||||
Miscellaneous | (2,663 | ) | (4,106 | ) | (9,612 | ) | |||||
Total other expense | $ | (21,746 | ) | $ | (16,024 | ) | $ | (19,842 | ) |
2014 | 2013 | 2012 | |||||||||
Other income: | |||||||||||
Interest income | $ | 689 | $ | 1,234 | $ | 310 | |||||
Debt return on the purchase of Four Corners units 4 & 5 | 8,386 | — | — | ||||||||
Miscellaneous | 2,220 | 2,662 | 2,558 | ||||||||
Total other income | $ | 11,295 | $ | 3,896 | $ | 2,868 | |||||
Other expense: | |||||||||||
Non-operating costs (a) | $ | (10,397 | ) | $ | (9,626 | ) | $ | (8,706 | ) | ||
Asset dispositions | (615 | ) | (4,992 | ) | (1,511 | ) | |||||
Miscellaneous | (2,391 | ) | (5,831 | ) | (10,933 | ) | |||||
Total other expense | $ | (13,403 | ) | $ | (20,449 | ) | $ | (21,150 | ) |
|
December 31, 2014 | December 31, 2013 | ||||||
Palo Verde sale leaseback property plant and equipment, net of accumulated depreciation | $ | 121 | $ | 125 | |||
Current maturities of long-term debt | 13 | 26 | |||||
Long-term debt excluding current maturities | — | 13 | |||||
Equity-Noncontrolling interests | 152 | 146 |
|
Fair Value | Total Unrealized Gains | Total Unrealized Losses | |||||||||
December 31, 2014 | |||||||||||
Equity securities | $ | 310 | $ | 159 | $ | — | |||||
Fixed income securities | 411 | 17 | (1 | ) | |||||||
Net payables (a) | (7 | ) | — | — | |||||||
Total | $ | 714 | $ | 176 | $ | (1 | ) |
Fair Value | Total Unrealized Gains | Total Unrealized Losses | |||||||||
December 31, 2013 | |||||||||||
Equity securities | $ | 272 | $ | 129 | $ | — | |||||
Fixed income securities | 373 | 11 | (6 | ) | |||||||
Net payables (a) | (3 | ) | — | — | |||||||
Total | $ | 642 | $ | 140 | $ | (6 | ) |
(a) | Net payables relate to pending purchases and sales of securities. |
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Realized gains | $ | 5 | $ | 6 | $ | 7 | |||||
Realized losses | (5 | ) | (7 | ) | (4 | ) | |||||
Proceeds from the sale of securities (a) | 356 | 446 | 418 |
(a) | Proceeds are reinvested in the trust. |
Fair Value | |||
Less than one year | $ | 14 | |
1 year – 5 years | 116 | ||
5 years – 10 years | 122 | ||
Greater than 10 years | 159 | ||
Total | $ | 411 |
|
Year Ended December 31, 2014 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (23,058 | ) | $ | (54,995 | ) | $ | (78,053 | ) | ||||||
OCI (loss) before reclassifications | (810 | ) | (5,419 | ) | (6,229 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 13,483 | (a) | 2,658 | (b) | 16,141 | ||||||||||
Net current period OCI (loss) | 12,673 | (2,761 | ) | 9,912 | |||||||||||
Ending balance | $ | (10,385 | ) | $ | (57,756 | ) | $ | (68,141 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
Year Ended December 31, 2013 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (49,592 | ) | $ | (64,416 | ) | $ | (114,008 | ) | ||||||
OCI (loss) before reclassifications | (213 | ) | 5,594 | 5,381 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 26,747 | (a) | 3,827 | (b) | 30,574 | ||||||||||
Net current period OCI | 26,534 | 9,421 | 35,955 | ||||||||||||
Ending balance | $ | (23,058 | ) | $ | (54,995 | ) | $ | (78,053 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
Year Ended December 31, 2014 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (23,059 | ) | $ | (30,313 | ) | $ | (53,372 | ) | ||||||
OCI (loss) before reclassifications | (809 | ) | (10,415 | ) | (11,224 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive loss | 13,483 | (a) | 2,780 | (b) | 16,263 | ||||||||||
Net current period OCI (loss) | 12,674 | (7,635 | ) | 5,039 | |||||||||||
Ending balance | $ | (10,385 | ) | $ | (37,948 | ) | $ | (48,333 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
Year Ended December 31, 2013 | |||||||||||||||
Derivative Instruments | Pension and Other Postretirement Benefits | Total | |||||||||||||
Beginning balance | $ | (49,592 | ) | $ | (39,503 | ) | $ | (89,095 | ) | ||||||
OCI (loss) before reclassifications | (214 | ) | 5,387 | 5,173 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | 26,747 | (a) | 3,803 | (b) | 30,550 | ||||||||||
Net current period OCI | 26,533 | 9,190 | 35,723 | ||||||||||||
Ending balance | $ | (23,059 | ) | $ | (30,313 | ) | $ | (53,372 | ) |
(a) | These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA. See Note 16. |
(b) | These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost. See Note 7. |
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