ML20137N632
| ML20137N632 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 12/31/1984 |
| From: | ARIZONA PUBLIC SERVICE CO. (FORMERLY ARIZONA NUCLEAR |
| To: | |
| Shared Package | |
| ML17299A821 | List: |
| References | |
| NUDOCS 8512040170 | |
| Download: ML20137N632 (44) | |
Text
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or about 45 pcccent of the state's About the ComEanM population,in an area that includes AnnualMeetin$ of Arizona Public Service Company all or part of11 of Arizona's Stockbolders is engaged principallyin the 15 counties. generation and sale of electricity. Allstockholders areinvited to. Successor to a series of small ttend the company's sixty-fifth utility operations originatingin nnual Report annual meeting. It will be held 1886, the company was incor- This report is published to provide t 10 a.m.Thursdav, April 18,1985 porated in1920 under the laws of generalinformation concerning n the Grand Ballroom of the Phoenix Hilton,111 North Central Arizona and has operated under the company and not in connection Avenue, Phoenix, Arizona. its present name since 1952. with any sale, cifer for sale, or Our electric service reaches solicitation of an offer to buy, ," 3";,T, ",Il'a'""j"sl"!,$$,',",icagn ,. approximately 1,382,000. people, any securities. Annual Report orugn: Karen Ngherty. APS Graphic Smnces.
Arizona PublicService Company
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and PW- ~ ~ - " - - - - --- - - - ~ ~ - - ' ' ' - ~ - - - - - - - - - - -
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- ~T;tal ~ utility plant, year-end ~ ~ " ~ ~ $5,088,243,000 ~ $4,761,265,000 $4,198,466,000 ~ '--
- Funds used for capital expenditures- ~ - ' - - - -- S -- 408,935,000 : - $ - 454,854,000 ~ $ - 451,856,000 - ~
- Salesand Customers: - - - . . . - . - - - - - - . - - - - - . -
7 Oper tinq revenues-continuing electric operations - S - 994,967,000 . - $ - 871,875,000 ~ . $ - 866,486,000 --- _2 Operating revenues-discontinued gas operations - . S 174,728,000 _ : $ . 202,134,000 . $;.197,967.000
' Totalclectric sales (mwh)
~ ~~ ~ ~ ~ ~
13,054,987 ' ~ ~12,753,542 ~~12,950,727
] Electric customes, year-end ~~ 499,751' 468,768 ~ ~ 449,244~-
. income, Earnings, Dividends: " ~ - - - - - - - - - -- - - - - - -
" Net income" ~ ~~~~~ '
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^ S ~ 271,067,000 ~~ $ 264,797,000 7$: 231,043,000 ^~ ~~
mEarningsforcommon stock -- -
--- - --'- -S -222,692,000 $ 221,056,000 - - $ -196,227,000 -
+ Average common shares outstanding -.-- _ -_ . . ._ -._ 68,308,131 _ . 63,865,210. . - 59,549,685 _
. .. . E~ rnings (loss)(based on average shares outstanding),_ .._ . _. ._ _ , . _ .._
Continuing operations S 3.65 $ 3.53 $ 3.25
~ ~ ~~ ~ Discontinued oberations~ ~$ ~~ ~ (0.39)~ ~ '$ (0.07) ~ " $ ' ~ ~ ~ ~ ' ~ ' O.05 ~~ ~ '
e- Total--- - - - ' -- -- - ' - $ ~ - -- 3.26 - $ - - - - 3.46 - ^$~ - ~ -- 3.30 '
- Dividends declared per share of common stock-- S. 2.60 - - S . ~ - - 2.56 - - $ - - -- 2.40 -
Shareholders: _ _ ._ _ _ __. ._ _ . _ . _ . _ _. _ _ _ _ . . _ . _ _ _ _ . ~ Common '~~ ~ 124,274~ 127,387 120,623 ~
^PEfirred ~ ~' ' ~ 8,615 ~ 8,990 9,033
~-- ~ Employees, year-end: 7,642 ' ' ~ 7,047 ~
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~ 7,358 -
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Common StockPrice Ranges-
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.(Symbol: AZP)- - - -
-~ 1984~ ~ High Low Per Share
~ ~ ~ ~
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1st Quarter 21 18 $.65 2 rid Quart'er 18% 14% .65
' 3rd Quarte'r 20% 16 .65
~4th Quarter ~ 22% 19% .65 1983 1st Quarter - 26 22% .63 2nd Quarter.. 26% 23% .63 3rd Quarter . 26%. 23% .65 4th Ouarter 25% 17% .65 _
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#' Id ebiskons,' chief among them the : markstheendSf alongtraditionj MArizona Corporation Commis ? of naturalgas' service to customers
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sion's approval of theinclusion of in many parts of Arizona,it is 5 some Cons'truction WorkIn Prog- allowing us to focus our efforts on Those of you who havefollowed - ress (CWIP) m our rates, a factor the moreprofitable business of hr ugh h that will help restore our financial generating'and selling electricity. Nm h k ow that w integrity while reducing the overall Meanwhile, new and mnovative challengedin1984 as never impact of rising rates. programslaur.ched during the before. We're pleased to be able to Especially gratifying was our year have helped re,nforce i our report to you that we not only met our challenges with marked success, success at the Arizona Nuclear long-standmg commitment to mak-Power Project, where1984 saw mg quality customer service our but consider 1984 to be a turnaround year for our company, the resolution of construction and first priority. , testmg problems that had surfaced These programs involve our The year produced the greatest the year before. Thanks to the customers more directly m efforts h ' hi dde . 0,9 n e - skills and commitment of our to control rising energy costs; they experienced project management provide the tools customers can t ra customers to aur service area. team, we began loading fuel into use to get more for their energy N1 ore signiticaatly, our overall hn.m ial resuh s for the year were the Palo Verde Unit 1 reactor on dollars. Our goalis to reduce the the best ever, showingimprove-J nu ry 7, nearly three months need for construction of large and head of the anticipated date increasingly expensive generatmg ments in both cash flow and announced last year. units. In turn, we can lessen the Now we have begun the lengthy impact such massive utility expen-I ommon share testing phase that will lead to ditures have on our customers. no61 s ; 20 m 1084, compared . to tin s ; ie c.u oni m 1083 per tion later this year. During It we are successful in our these tests, Palo Verde will be efforts, our rates in the decade nHn t[nr a non rn urring 3h cents-pi : sh.n e loss n om t he sale of our pr ducing signititant amounts of ahead should increase at a pace electric energy for our customers. much slower than the anticipated r hommes~ ( ountennn this were em n w , nom out1 ont m u my We are confident that Unit 1 will rate of inflation. op,unons Mn, h m, icased iv 12e be brought on-line successfully, But we are managing a far more m o oJo, , a in or J total tigure of f 11 wed by the swift completion complex business today. Many of of its two sister units. our actions have become matters Though the sale of our gas of public debate as well as t h to our hnancial p , t.a e u o E o u N e rate distribution system m November important considerations before regulatory bodies. Consumers are
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s begun to take effect; we can see the w rm o u om
+ > beginnings of a very positive our performance-for both share- Our future will be both interest-1 future; for'our company, for our holc er and consumer-have suc- ing and demanding. We hope you
, 3 employees, and for you, our ceeded in the year past, and how will be with us to share in the efshareholdersi we expect this performance to results of our eiforts. l
- i hithe final analysis, our success continue into the months ahead. l
; Eat injproving our profitability will
" depend on how well we work in We hope you will read our report, and that you will feel free
[ Keith L. Turlev
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, *Iharmony with our customers and to call or write us if you have 7 the public atlarge;by how well we questions. Chairman and t hmt Executive
" demonstrate our ability to perform. We could not have accomplished Officer in this report we have spelled the tasks we set for ourselves in '
out how our efforts to improve 1984 without your support. We'll need continued support as we take
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our company in new directions O. Mark De Michele i in the years ahead. President and Chief Operating Officer l u- .,
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l n THE YEAR IN e 4-3 ggyjgw
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-e 9, ' ?o Though the financial challenges
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{ ..gf;q look back over the past twelve months with genuine satisf action
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M, c. ,1, and optimism.
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the responsibility to demonstrate
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',, f tinue devoting a great deal of time,
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stronger financial base and to
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' s e77 6 ' p*] f , The year's successes did not
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areas of our operations grew into a-- . l - dramatic buoget cuts in 1084. We ( y f, p i yg2 j
.. <- made a more concerted effort to vamAmremmusedEgrsig;mwee.ggmaam;nd improve our productivity and we l i Si ^l 14 w t 5i 46 E f i ,o o e,i i , o 5 i. ,5s,,e 6 a
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Eamings. Reinvested Eamings, and Dividends Per Average Share of Common Stock 47 Mb
, Arizona Public Service Company l recommitted ourselves to finding allowance reversed the trend new and better ways to conduct our day-to-day business. ',. * {w wherein a growing portion of our reported income was comprised
-4 of noncash earnings (AFC).
4 Dividends paid per common 0lir1ZHGHClGI :. . '1 4 share totaled $2.60 in 1984
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TESllftS SflO10 Steady c emnerea to 52.se ie >983. The
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i current annual dividend rate llHpTOUement , remeine s2.eo per shere. Still feeling the effects of 1983's ' i* c'.3:p'7 I Y. . ; Satisfactory dividend levels con-tinue to be a major factor in our lowered credit ratings, insufficient - J rate relief and decreased cash flow,
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ability to raise needed capital. We we took aggressive steps in 1984 .- M. ' ^ [, - WUI
- ke every effort to continue to improve our company's finan-
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' - -! pursumg a competitive dividend Results of such efforts do not N 1E p hcy in 1985 and beyon<l.
, l come quickly, but by continuing to A 3y ;
seek ways to reduce operating . s C- 7 , budgets and continue a tight, f(, +I. 4* % AS G Single-CHergy no-frills operation, we began see-ing steady improvements in almost
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all financialindicators. For example, carnings from our m ,:
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continuing operations increased l,; J : .L, , ; j ???Grke pfGCE by 12e to produce a total of $3.65 l ' ! ;;[- E.. i , We charted a new course for our per share. However, after account-ing for a non-recurringloss of 39C -
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, g ,' i company in 1984 when we sold our gas facilities to Southwest Gas per share resulting from the sale of '; i ;.f~!.
Corporation of Las Vegas, Nevada. our gas properties,1984 year-end ?I E: V Though the sale marks the end of , earnings per share totaled $3.26. ! : l' ; - (. . i a long tradition of natural gas l The quality of ourearnings was . i 0 sc i service to customers in many parts ) improved by the Corporation E l: E ~~T T i of Arizona, it is allowing us to Commission's October approval $ I st;L 4~ 7 '1 E ! .:. L.,1 better concentrate our cfforts on (discussed later in this report) of M .. 1 the effective marketing of electric some Construction Work in i
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The transaction with Southwest currently enjoys a major share of - _ Ri _ brought a sale price near $112 the new-home market, with the million, amnunting to approxi- prospects for continued domi- ? , mately 85 percent of book value. nance in the years ahead. This can . 1 As part of the final sale arrange-ment, we agreed to purchase up to be attributed both to an estab-lished consumer preference for ' 4 D ! p~ !
$50 million of Southwest's prefer- electric energy and our own plans 4 l
ence stock,if necessary, over a for a more aggressive marketing 4 three-year period. The purchase program. d will help finance Southwest's v continuation of a program, launched Ar[ Zona's growth by our company several weeks before the sale, to replace older Continues tc test plastic pipein the distribution system. Our reSOUTCeS Throughout sale negotiations, a We take pride in our ability to , primary concern was for the economic security of approxi-provide the electric energy our w _ _ a customers need. But unlike many mately 700 of our employees who other areas of the nation where the outperform national marks. would be displaced. We're pleased demand for electricity has peaked, Construction should also be to say that all affected employees the Southwest continues to see strong, with retail sales projected obtained nav positions, most with growth in both customers and to increase by 11 percent. And Southwest Gas, others within demand. through the coming decade, our APS. Still, we continue to feel a Arizona remains one of the state's population is expected personalloss at the departure of fastest-growing states in the nation, to increase by 36 percent. those many experienced and dedi- having added more than 97,000 During 1984, Maricopa County cated individuals who helped new citizens during 1984. Accord- issued a record number of new build our company. ing to Arizona State University housing permits, outpaced only by Our decision to sell was rein- economists, Arizona's1984 cco- the Dallas area in the nation's forced by the fact that, in recent nomic growth rate was the highest home building market. This years, the natural gas distribution in more than two decades; and marked the greatest growth year in business had not been profitable though a match is not expected in our company's history and helped for us, nor did it offer significant 1985, the year ahead should still bring a record 30,900 new electric ) opportunities forlong-term growth be outstanding, with some 70,000 customers to our service area, and earnings. new jobs created statewide in an Some of this growth resulted On the other hand, electricity economy that will continue to from thelate 1984 aquisition of iii~ii"i~~~ 3 w A llI
. .g . . .,
I., =
!d Customer Growth Expectations-Residential Electric
Arizona Public Service Commmy the Arizona portion of the Colo- - .. .'/ -
> . ;~ c m ,r. m.. .. . - -
,m.
e- ,; ur & ++ , rado River Indian Irn.gation
% .c . J lc. .. . f. 7f ;;c ;2 y c;.n.l @ ' :. 3 Project's oil-reservation electric .
LH s .
.k: - ;; ;.._. .f
. : ' ; .' ?
tacilities, serving approximately -
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3 M.M 2,100 residential and 200 com- .
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l. L.3: fs]}
, . ~
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mertial electric customers. . Our state's improving economy - . O
*- I$
contributed to increased sales as . well. Our system peak reached just 3 ld over 2,070 megawatts, a 2.5 4'Ty i. .
^
{, .
. ~ . ? :h
. - H percent increase over 1083. This :
- 3. .. , .-l ; ...
occurred despite lost sales resulting 'i.'.. . , . ,
e .
' ,. ' 7<j
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Y trom a r" duction in operations at a .. _. <. 4 O
.g .e,f'
'- ',' ij major copper mine, one of our largest customers. $ ' ' ,'
"~.' .
~-*
+
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- j Residential and commercial sales j - ; ., , .-.
( . .
,g[
{ rere up due primarily to increased . .
,-.y;' -- + ..
customer growth; irrigation loads :- 3~
. it
-j
'41 -
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were higher as the result of the 3 . M; '
' .. ; i lif ting of the federal Payment-in- 9 Kind program which had reduced : .
j, $ .
- j tarm production in 1083 , .
s .. 4
- 'L .
i Overall, our year's energy sales .;.' were increased from the previous .t ,.. 4 i. 7"" 'j year by approximately 2.4 percent,
~
.g to 13 million megawatthours.
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- f' Y t Our sah s came f rom a diversity .
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of customers, about one-third .
+ .
~
residential, one-third commercial M%fc-. and one-third industrial, agricul- d h ) j .' g' j
,k',fg tural and other. A similar mix is .
l- *
- projected through 1004, thus -
g ( .g
'QW providing additional stability to g
our overall sales revenues and ; - :, - 4 minimizing the ettects of changes
. - 4g.
in any one category. w-' w w c m # - ~--- s <" -. w- m D * - CA 1. a 1 l
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_a j Also projected are efforts by our af new light indu3try will more megawatts by 1994. Electric sales customers to make increasingly than offset any etteu on sales. are expected to continue to grow efficient use of ekctric energy. We estimate that our peak by about 3.8 percent annually, I lowever, we believe that popula- ch ctric demand will increase by reaching approximately 18.9 mil-tion increases, continued eco- abnut 3.6 peuent each year, lion megawatthours in 1994. nomic development and the influx reaching approximately 4,200 in i l' .1 4H 1 4104 11 1 'I '84
- . '94 10 0 ? i t
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Customer Use Trends- Residential Electric S t
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Arizona Public Service Company costs will lessen customer " rate and our Four Comen power plants, Thougb less tban shock by reducing the interest and timing and construction requested, TGfe costs incurred in completing the costs for the three Palo Verde units. facility. The plan adopted by the com-IMCreGSes granted Late in November, the commis- mission, which includes a 52.86 bGUB belped our sion approved an additional rate billion cap on our share of Palo
. . . increase of 5 percent, which Verde construction costs, is more flMGMClG/ plCture becemeeffectiveinFeb,ue,yef evere than the gien grege ed by in an October ruling, the Arizona 1985, after fuelloading at Palo APS at the commission's request; Corporation Commission made Verde Unit 1 was completed. but it was a major factor in permanent a 7.3 percent interim The rate increase, which added gaining the commission's approval electric rate increase that had been another $200 million of CWIP to of additional rate relief.
in effect since February 1. The our rate base, was coupled with a Overall, the three increases commission also granted an addi_ comprehensive incentive / penalty approved in 1984 resulted in a tional 1.5 percent rate increase, plan based on operating perfor- 14.4 percent increase in base effective immediately. mances at both Palo Verde Unit 1 electric rates. The commission's approval of , , , the inclusion of $260 million of - - Construction Work In Progress ;' S: ~. . . ~ (CWIP) for Palo Verde Unit 1 in $9Es w:0 ' V z ., .-
^'
our rate base was a major factor in -[ ' O I". . < .
@P ' T 1 -Mrdb "F8 k the rate increase. (The Federal Energy Regulatory Commission ,-
- f' ,..P '
also approved the allowance of ,.f ; ~ ' c * *'"~ ~
' - ]5 -.g#, .1 g ,
some CWIP in increased whole- . . -
- + , .. j c:T '"J j
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sale electric rates.)
. :(. l The Arizona regulatory body's P ' . .h .: ..
., up I Mg ruling came on the heels of one of . . bc s. m . 2 X i 4 .
. M @Mh%%,. C
'T the most vigorously debated rate ; " C' ol' ' l actions in our company's history.
~
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- *'s# u. Ow d M ,"*6;C S l Opponents of CWIP argued that c -*
4.y [g^ f*g *1**g'y.E4; # #31V'*DO Jl
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- P ratepayers should not pay for Palo
&; l Verde-related financing costs until after the plant becomes operational.
f . [J~..!.........
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But the commission's decision . 1 !!i N ? recognized that phasing in those E " "" *=e i N E W ~ M - - ^"*"* A
.a 1
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-e 1 a t. . w:J : % e <-1.Z MW~ L 1 .- m J.$! .a Yc$ "~
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, ,h*. g \\'hlle we were (llsap[>olnted
~ t hat the new r ate level .illi>wed iis 4'
.+ > %,
- 4 .- $ ' l' ' -
.M
> was less than ne had requested ae
- n [V.;- J [i, p.i , . 'G. A. , , . . nere understanJably pleased by
." J' c.. .,.4
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$.3 e pp ,M%.g . the int lusion of C\\'IP
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.T '. I l ' O d :. j[Y l,( " N;.T.' - ~- ~ * ? I he t ommission's det ision
' '- I '
marks the tirst time we h.we been
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>- 7 allowed to earn a permanent cash
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return on our mvestment in the
'i. e . Mdq .g#'i
.yTyshCid ef? ci./.M ^" """ N "' l e" r l '""e r l'r"ic" -
ana' represents an important 1irst i w . m .~Fg,- u. .. e.m u ,. - .s. . .. ...t. * .
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1[g'. '< I , ,. - "' l A [ . 5Ie p In ed51n g Ihe p a nt s ptIIenIla
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mpac t on ( tm rates as it bn omes oociatlona! over the next
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icw years. t[' .
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'} N [)* \\'c w;ll (onunue to seek
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( '.-[ : ? ., 4 .-' ' adtf ktltTnal portions of lbltik,erde,s 4 dgR ;,
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ff 7 . $ 1 - .gy '(2 . costs in our rates as l' nit I nears
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t ommeraal operation. in order to y .! 2 1[ 4" improve our overall finant ul (ggdjtjgg,
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j coy lfyolll17qcos[9 < s T g4 f ,. ; . ( isc acknowledge our t ustomers
.' , . . . . - T d. tears about what tomorrow \ elec-7"-
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e Arizona Public Service Compmy service, making some increases Under the ECC program, resi- incremental and fixed costs of the unavoidable, we can reduce the dential customers who purchase unit, including a return to our effect higher rates have on our heat pumps or air conditioners shareholders for their investment customers. with high efficiency ratings can in the plant. Through the past few years, we receive rebates of up to several We will need to purchase some have provided our customers a hundred dollars as a credit on their series of programs that help them monthly bills. Credit rebates are y control their energy use. .in ways also available for other products q that also reduce our service costs. that help customers control the # 0 Our variety of " energy- way they use electricity. y g%. C' zk * : 1 efficiency" rates, for example, give Later this year we will introduce -h. . g (. . . customers the incentive to gain greater control over their monthly a second phase of the program through which customers may { g . M_. .gn i ~ 'y
- - - - " - ij bills and, at the same time, cut .d
~
obtain interest-free, no-money- - peak energy demand. As do our efficiency rates, our down loans for the purchase and installation of certain load- N 1l . 3 i
]
;d load-management programs control products. $ ? ,.[ s? ' ~' -
encourage the off-peak use of electricity. This slows the increase Although our load-manage- i / . east - <' G1 ment programs have helped reduce -
?. ; - -
j3 in our system peak, thereby post- our cumulative peak load and ;fi^ ~ . poning the need for expensive new delayed the need for new generat- 7.
;~ m - 4 power plants. Since our first load- ing units, new capacity will be muumezed management programs were intro- needed if we are to meet Arizona's duced in 1977, we have reduced future growth. power in 1985 to meet our own our peak demand by a total of 2o3 But because the investments re- customers' demands, but our costs megawatts from what it would quired for major plant additions- will be substantially less than the have been without suc h an effort. and the impact they have on the revenue derived from the Cholla 4 Also included in the program rates we must charge our customers sale. Additionally, the retrieval of are home energy auditr, a compre- -have grown so great, a flexible Cholla 4 in mid-1989 will mean hensive plan for educating custom- approach is dictated. our recapture of economical coal-ers about energy use, and a For example, in 1980 we con- fired generation tomorrow, from a recently reinstated Energy Control tracted to sell the entire output of plant built at yesterday's lower Credit (ECC) program that had new Cholla Unit 4 to Southern construction costs.
achieved notable success when California Edison Company, in Looking further into the future, first introduced in 1982. exchange for its payment of all we are developing a strategy aaaa axaaaaaaa,aaaaaa1a b O N N N IbN$I N kbi! e n} m 0 p h E l#" j k 9 t f[ - n p $g(-
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. %m,,, e .. - o Peak Load and Electric Resources iI s k
that would avoid building anylarge, if our efforts are successful,our Absorbing thelargest portion of baseload generating units until rates through the remaining 15 that construction expenditure was the turn of the century. This years of this century willincrease our share of funding for the approach may enable us to delay at a much slower pace than they Arizona Nuclear Power Project. construction of a fifth unit at Cholla. did through the10 years just Palo Verde's progress in late An important factor in our past and, in the decade beyond, at 1983 and 1984 was delayed for a strategy is a continuing effort to a pace bdow the anticipated period of about one year as we upgrade and improve the reliabil- rate of inflation. modified low pressure safety injec-ity of our existing generating tion pumps, made repairs to stations. We're also looking to reactor coolant pumps that were develop additionalinterties with We mUsf Complete, damaged, and implemented a neighboring utilities, to review . # revised start-up program to assure reserve margins and reliability QUICIClM GM the safety and quality of the plant. indices, to expand the size and gfficjgg[fy, fbOse Although we continued to enjoy scope of ourload-management relatively strong support for Palo program, and to explore invest- prOjeCfs nOw Verde, we were challenged by ments in cogeneration and third- allegations that the project's prime party-financed facilities. ggjg$ gg((p contractor, Bechtel Power Cor-But our strategy also includes During1984 we spent approxi- poration, had buried usable tools examination of renewable energy mately $329 million to meet and equipment on the plant site. sources that could help meet our Arizona's growing electric needs as While a network television news future energy requirements. well as to upgrade our facilities. story tended to give credence to the allegations, a thorough investi-gation by the Arizona attorney 2-6 : /. . g .- 7. .-
' 3%.h:
A
- 4. .
c-? E i. l. 1: q . general-financed by a $300,000 contribution from Bechtel-proved the charges groundless. Meanwhile, our project manage-ment team pressed forward with F . _ [.) jd D the completion of Palo Verde Unit 1, o 7.y 7 ? ci~d, y y[.gg q' .j-.g NW o, _f where fuelloading was com-
..>..L "
? j ay 3,. .j , J . gg( . % .
pleted on January 11. Commercial
,. '_.g:. 7. 74 g g f.1 1, y WW ... '.%. ..; operation of the unit is anticipated "3 *J 'f : @ < !., L . . '~ j ' ' >
V . .] by the end of1985. HL ., ;2s v 3 . ;d 3/ - S,1 1 Unit 2 is expected to be ready wwwaww w%M - - d for fuelloadingin thelast quarter 5~! I55555 j E
,2 l
12 1 i* i m a w a a w O f e, me p e> en ro ,.a ca Construction Expenditures e,cwc;
Arizona Public Service Company of 1985 and operation in 1986; Unit 3 is scheduled for fuel loading o ..g7 .>g{w p yg ,. 2,7 . y* 1 . /J .J
- 2. .- .
- ' 7 , N ',A. rp ; y3
' I,. :
in the first quarter of 1987 and . CJ; o
.I . t ,w y
_j
, - n operation later that year. ~ r a =-
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We are proud of our accomplish- -
; -.. s. : .m,$ %N" '.' '.D j K
ments at Palo Verde, considered to :. <
. v . . J.V -
e -
~i be one of the best-managed <
g , , s
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nuclear construction projects in . g' '
~
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the nation. Though ANPP costs *. -- .
? .h have increased, a recent update of ;#
~' ' ' ~
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I . #- ~~Y.
~ -
a study done early last year for -( Southern California Edison Co. , 1 .- cs '
- D' H ~ [$jj shows Palo Verde Unit I was i' ' -,5 --
" T.
- 1~.- Bjj completed at a cost about 12 : '-'J -
5
+nq 35
~ ' ' . . e*.4 percent below the average for 23 , .
3 ; , _j g other nuclear projects built in the !
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same time frame. 4k'::..J-13 I~he study also shows the time i . .
-- - ', . f - .
elapsed between the first concrete '.
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~
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pour and fuelloading of Unit 1 to - - t. =- .. be one year less than the average. -
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in Arizona's future . . . k'.?.N ' ~ Y Nf. Lw $. ? ' k'- .; . p Oltrflitilre
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Because of our efforts to ensure the quality and safe operation of
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Palo Verde, we believe the project
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will be a positive example of the ' " p safety and efficiency of nuclear . f. :. 6 - l ~ j
.i i [f .j power. ,
4 * ,A, More importantly, we expect ~. haMe2&RhemuWMWarmemmmwdl
.(. ,
Palo Verde to play a key role in E n. g s
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providing the energy needed in By year-end 1984 we had our fast-growm, g Southwest. completed two sulfur dioxide Oterf.uel mix helps To make this energy available to removal projects at our Four prOUrde a hedge our customers whenever needed, Corners Power Plant. Upgrading i we must have a transmission and of equipment for Units 1,2 and 3 GgG nSt f0mOrrOID S distribution system capable of was completed ahead of schedule in mid-1984, while work on Units IMCertaintieS delivering the power. During1984 weinvested some 4 and 5 was completed on Though nuclear-powered Palo $111millionin programs to build December 31. Verde will soon become a major or upgrade transmission and distri- The SO2-removal projects were source of baseload generation, bution facilities designed to con- part of a multi-faceted environ- economical coal-fired plants will nect our generating plants with mentalimprovement program continue to provide thelion's our customers or with the systems designed to minimize particulate share of the electric energy our of other utilities. and sulfur dioxide emissions from customers use. One major project completed in our Four Corners plant. The During1984, we were able to 1984 was a 120-mile 500-kilovolt program waslaunched in1980 meet approximately 92 percent of line extending from the switchyard following an agreement by APS, our customers' needs with coal-at Palo Verde to a Yuma substation other owners of the plant, the fired generation from the jointly and beyond to the California Environmental Protection Agency, owned Four Corners and Navajo border. A joint project with San the New Mexico Environmental projects, as well as the APS-owned Diego Gas and Electric Company Improvement Board and various Cholla Power Plant. and the Imperial Irrigation District, environmental groups. The 5450 This was duein part to the the newline will help meet Yuma's million total effort will make Four exceptional performance of our growing energy needs while at the Corners one of the cleanest coal- coal-fired units. During 1984, we same time allowing SDG&E to fired plants ofits size and vintage achieved the highest equivalent purchase power from APS and in the country. availability on record for our share other Southwestern utilities. _ ,, ., of these plants.This mark was Our new computer-based Energy Management System, the first
- yy.w i PK .,c ., 3, substantially above theindustry 7- 1- average for comparably sized units.
phase of which began operating g s. i A tentative agreement has been early in 1985, willincrease our 6'E . ? VQn ,7*(< reached with the Navajo Tribe electric system's overall reliability. .~a,. and our supplier regarding Four Our responsibility, however, X A 'k , y;.y
~
1 - . 1 : g 8. : , . . .: Corner's coal.The agreement extends beyond providing energy. *g$ N. i '! would increase royalty rates in We must also ensure that our W "'N ... . ' J. . exchange for a new pricing s facilities do not adversely affect *" " formula for transmission rights-of-the surrounding environment. a llIlllllyp 74 'F5 'F6 '7T 78 'T9 80 81 82 83 84 i. b TOtalbl b
bTl:01ll1 Pidilic Semce Gmipmy
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4 2: .t .. tvay, additional .1sh disposal area ventional fuels are finile. Alterna- technology. l)uring 108-l, tve con-and firmed up luture \valer rights. tive energies must be developed if tinued to produce energy f rom the As sve end this decade svith all sve are to ensure that energy 225-kilosvatt Sky liarbor solar three of Palo Verde's nutlear- needed ior the survival of our photovoltaic f acility; and \ve met posvered units on line, sve look f or state and our nation is available. approximately -10 per(ent of the 05 percent of our customers' Thus our research group svill energy needs of an experimental energy requirements to be met f ocus its ettorts on analy/ing the photovoltaic home in southern tvith a combination of coal and teasibility of renetvable energy Ari/ona. nu(lear luels. We believe this sources lsut h as solar, biomass, in another area 20 electric-combination tvill otter the most svind and additional hydro) that posvered licet vehicles used by economical generation available, svill help meet APS' tuture energy Al'S since 1081 are providing tvhile pr ote( ting our company requirements. They'll also examine important experience that should f rom unexpe( ted f uel supply inter- the potential of ne\v tet hnologies help accelerate the development of ruptions or cost increases. f or enhancing (onservation and elect ric vehicles.1)uring the next While ne strive to get the most reducing our peak requirements. few years, we svill continue look-out of today's luels and let h- We have already positioned ing at ways to make them even nologies, we recogni/e that con- ourselves as a leader in solar more competitive.
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l l in so doing we reached a goal we equity from these sales enabled us Financing our , had set for ourselves in 1975, an to maintain our capital structure at progress is a major atromplishment that can be con- our targeted level of 40 percent. sidered a major achievement. CI2a//enge sye m,de ne mew gesii< eem. 3 < .; . . 7
I We financed 21 percent of our mon stock offerings in 1984; but -
construction program with inter-nally generated cash in 1984, approximately 2.3 million shares of common steck were issued 6 ' IMe. compared with about 4 percent generated internally during 1983. through our Stock Purchase and Dividend Reinvestment Plan. The
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.,a. AR n,)~%. 5<
; ~ M$m a) 4 ngm. w t
M %,; EAmmzi'ihussauawNiu g- Q "41
- Rate increases and continued L
e g y cost-control efforts in 1984 - fg
~
improved our cash flow and helped us meet our overall funding
' ^ '
N ird -
.4 requirements. Still, the demands of financing an aggressive construc-tion program require that we i
continue using the capital markets
, for many of our needs.
e In March, we borrowed EffiS.2 ELM;ELT5?GE0l?s*Z"2MZWd%EZEETSIGM $37.5 million in pollution control IL l 1. It /t 41 j
- het m [. m p[e e-gth. _m E[
4 t g,s. t@$id[RETIIs , j'I .-%Kd] _ 'h 't E KAis] Q' 'O
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R3 f.[ s M4 { e u i.m m ,m.,..,n.., k * "FNfG'f T l k Ili O I (IMff'I(ifl !)li W b Capitalization Ratios !
Arizona Public Service Company bonds for Palo Verde, followed percent first mortgage bonds. We by additional pollution contro; also called $60 million of 17 % OlH'TPSpOHS[bi((fV v borrowings of approximately percent Eurobonds, originally due CXfCHdS beyOHd Ibe
$60 million in late 1984. This brings in October 1986. -
C!CC,II,IC IIICICI,e the total of Palo Verde pollution More recently, the Arizona control bonds issued in late 1983 Corporation Commission approved [/ITOlig/lOlif Ifle and 1984 to $254 million, our 1985 financing plans. Though . . . approximately $107 million of we do noi anticipate using all of CO?HHillHIfleS lH which is still subject to IRS ruling, the financing approved, we asked 7phjgj77pggg7pg The issues bear interest at for the maximum allowable in significantly lower rates than are each category to provide flexibility A utility company can only be as otherwise available and also in today's changing financial market. strong as the community it serves. enabk i us to remain out of the Providing additional reassur- Thus we beliew it is in our own commercial paper rearket through- ance is a $200 million revolving self-interest to help meet the social out the entire first quarter of 1984. needs of our community. In May, we took advantage of ..' ((((J During 1984, our social respon-one of the last leveraged preferred sibility commitment included such stock issues prior to their . efforts as Project S.H.A.R.E., a dissallowance by the Tax Act of . program to help needy Arizonans 1984. A total of 500,000 shares confrontal with unexpected energy-issued produced net proceeds of = related problems. Funds for the about $50 million. The transac-j project are donated by employees, tion yielded a lower dividend rate 7 stockholders and customers, and (11.5 percent) than conventional distributed by the Salvation Army. 1 preferred issues. y , During 1984, more than 3,155 Proceeds of the preferred sale + ; Arizona f amilies benefitted from were used primarily to reduce short- q .
! Project S.H.A.R.E..
term debt, as were proceeds from a 3 . 1 We have initiated several pro-public sale of $100 million in _ s grams aimed at developing 10-year first mortgage bonds. The twVm e 'Mw partnerships with our customers. bonds carry a 15 percent coupon. Among these was the launching of In other financing, we called for line of credit arranged with six Project VOICE, the heart of which the early redemption of two major banks. The credit will is a panel of customer volunteers separate bond issues in 1984. supplement existing short-term lines who will provide consumer input Proceeds from the gas sale were or credit and help ensure our and help us respond more effec-used to edeem $100 million of 16 financing capabilities. tively to customers' concerns. a u u.n.m, ) i som sonds siw o m An. im
= :':: :=: =
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= 1M t" " 8:: =
****1.. - c , ' ".* "~ "L.*~ J" p s e si e s %0 usy
( e.n
- t. m.e 11 SOT um Fines l Summary of 1984 Financings.
I~ ? mi i
We also laid the groundwork , this annual report.We offer a num-for a forum dedicated to the e g" d ber of programs aimed at helping unique energy needs of older meet your information needs. Arizonans.The Arizona Energy and Older Adult Network, com- ' 7 x;
,M * . y x.h 9)
For example, we publish three quarterly reports each year to prised of leaders from government, . t.g im update you on events as they public and private organizations, } f ., hop. develop. will be active by mid-1985. : We also maintain a shareholder
-7 J'.m..$: Q_p{lp. y,. @M J j We believe such programs will j , Q i information phoneline, and invite help us maintain a positive busi- D '
your comments, questions and ness environment in which the '$ $. ...
,.j < -[ 1 suggestions throughout the year.
public can gain a greater under- ~; - M..; Out-of-state shareholders may call standing of our business. Outstanding employee volun-
- 1. . _ . . . ~: % ~
our toll-free number,1-800-x 457-2983;if you live in Arizona, trers were honored through the L1L sw : -- w.J call 1-800-621-9093. We also third annual Those Who Care invite you to write to our program, a company-sponsored total accidents, but their severity Shareholder Relations effort which recognizes employees was greater. Department, PO. Box 21666, for their unselfish contributions to We cannot allow our safety Phoenix, AZ. 85036. their communities. record to continue to deteriorate. Finally, we hope to see you at last year, we reported that our In 1985 we have rededicated our annual meeting on April 18, confidence in our ability to meet ourselves to maintaining our 1985; our annual Sun City share-1984's many challenges stemmed company's position as an industry holder meetingin May 1985; or at in great part from the strengths of leader in terms of employee safety. ne of our other shareholder our employees. During 1984, our meetings planned for 1985 in key employees improved productivity cities nationwide. records, provided innovative new IMe CHCOUTGge Jfollr , .^......... ideas, and aggressively supported X
? ;f .- -
our goals and positions. parflCipGflOH -Q' All of our employees can be Throughout this report, we've
. 1 g ., ', L x i proudof theiraccomplishments; tried to give vou-our share- .-
p their safety has always been one of holders-a clear picture of how .? ? 5 .p.1.k. l' e -
. .* 'M our top priorities.Though in recent we're managing your investment ~
-' . ' bz 1n j .,
years we have set industry records in Arizona Public Service Company. u - L* ' 1 ' O for safety, this past year was not But our commitment to keeping
- - 8, m3 2 as positive. We experienced fewer you informed goes well beyond C"""
Ela) r i l l l ,. ------- - - - - - - - - - - - - - - - - - - _ - - - - - - ----- J
Arizona Public Service Company FinancialData m =.
.e=*
+
.u.-,.~
.gsr s..m=.+
3A*. 9 *
.#, , . . ~
%.** +
. .e,-
hWM de, mW " ".**' > erh 4h. wy,=-.+.- < w --
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..e w= , syv4 4a.ne.,. F. y e it f-c.p':=.am p" h .. P " b 3*: . . m__.._ .. . .
0, >%, syw . ar ,.w.~. LL - Selected consolidated financial data m.. . - --
..s., . . .
1 (Dollars in Thousands, Except Per Share Arnounts) er Continuing Operations: .
. t ElectricOperating Revenues S 994,967 $ 871,875 $ 866,486 $ 730,788 $ 621,864 e &n . - + + ., n .- - -nn~~ . . . . -
Aga. Operating Expenses: -
- . ... . ~ F Operatio, n and maintena.nce 358,665 349.150 349,975 311,479 311,784 g- dn 87,494 83,707 79,676 70,988 '59.559 H WTaxesN. -;ww .v. -
285,548 185,606 173,736 98,597 86,475 - - a,_ ;% __ [ g g ;-Total- , , , , _ _ 731,707 618,463 603,387 481,064 457,818
+, g -
g,, g,, . p.Q. 9. 4 . __ , . d;JOlherincome" a __ _ 190,818 134,459 . . 83,040 _ _58,617 _ _ _43,300 interest rM=*=is-Net'2L 156,508 118,819 117,838 106,073 65,133 g - " .;. 'J rincornoisomCongnuingOpershons - - - -
-297,570 - 269,052 : ~ 228,301 ~ - 202,268- - 142,213 m %. income (l.ces)from Discontinued Operations _ _ (26,503) 2,742 , _ (4,834)_ _ _ 1,077 i Notincome 271,067 (4,255) 264,797 . .231,043 197,434 143,290 -
g peelerredDividendRequirements . - - 2 48,375- - .43,741 - - -34,816 - " ---26,786- 125,062 4a
. ._f._ y -
. . -.m .-_ . _ . _ . - ~ ,- . _ - - g.-
g,_ EamingsforCommon_ Stocky . a _ _ , _
,S 222,692_;$J 221,056 3 196,227_ S 170,648 S 118,228, l'
- m. . . .a a _~ ~ , '- --
L iTotalAssets . J}[ > - S 4,653,774 - $ 4,386,312 - $ - 3,888,536 $ 3,396,790 $ 2,928,484
:
- M and~~ ^ M ^ ^ - - ' - ~ ' ' - ~ - ~ ~ ' ~ " - -
- w. , Redeemsble Progened Stock 4.1,967,486 $ 1,892,477 . $ .1,610,486 $ 1,618,048. $...1.455.286_
l1 ' Common Stock Date:1 f4HBookvaluepershare t~~ - - - - ~
'S- - 24.18 $ - 23.78 - $ - 22.94 - $ - - 22.13 $ - - 21.97 : -
! a ;Eamings (loss) pershare.(based on average ,
' ' ' ~ -sharesoutstanding):
pc- aContinuingOperations - S- 3.65 $ 3.53 $ - 3.25 $ -- 3.36 $ -2,73 -- Ma . .... Discontinued Operations S (0.39) $ (0.07) $ 0.05 $ (0.10) $ 0.02
~
47.' TC'T-~ ~r . S 3.26 3 3.46 3 3.30 $ 3.26~ $ ~ 2.75 ~ ~ ~ hiDividendsdeclared pershare 6 2.60 $. 2.56 3 2.40 $ 2.20 $ 2.06
' < Sharesof common ? - -year end - * - - -
70,128,329 66,710,852 62,894,490 57,648,791- 47,813,847 *
- - averace_ . . .. . , . 68,308,131 63,865,210 59,549,685 52,289,259 42,960,655 L_~ _1N'umberof commonshareholders
- i. ' . 124,274 127,387 120,623 119,825 110.416 h/w., y_-4 ,-
~ _ - .
~7 ' Federal and State income taxes are included in Taxes and in Other income.
MTotal income tax expense was as follows (in thousands): 1984, $137,072; 1983, $93,930; 1982, $93,100; 1981, $19,876; 1980, $15,719. 4 2, - -
;.;a 4w.a,.~..
4 Erd
Arizona Public Service Company L- . Other financial and operating statistics 1984 1983 1982 1980 1981 (Thousands of Dollars) s p
? JCommonequity- S 1,695,923 5 1.586.671 3 1,442,639 $ 1,275,623 $ 1,050,651
- Non-redeemable preferred 7 ~ stock ' 218,561 218,561 168,561 118,561 118,561
-~N Redeemable preferred stock - ~ 282,740 237,400 241,220 199,280 185,280-
+ - i Long-term debt + 1,684,746 1,655,077- 1,369,266 1,418,768 1,048,500 -
a i Project financing liability - - - - - 221,506
. x Total i -_ __ $ 3,881,970. $ 3,697,709 3 3,22.1,686 $ 3,012.232 S 2,624,498 c-'M Utinty Plant-Gross - -
S 5,088,243 - $ 4,761,265 - $ 4,198,466 $ 3,688,270 $ 3,199,927 -
-.i Utility Plant-Net - ~ c,.. S.4,344,083 $ . 4,033,400 $ 3,551,949 $ 3,111,773 $ 2,694,408 1e -Numberof Employees a;fQYear-End a ; _ _ 7,358 7,642 7,047 6,231 _
.5,538;
{ AverageWegeperHour' S 13.61 s 13.11 s 12.27 s 11.20 $ 10.12 4xElectric: q -m . . . _
&JElest,ric resources (kw){
_3,425,900 3,528,400 3.532,900 3,634,300, _3,307,2,00
.2,970,600 2,899,000 _ 2,898,700 3,018,700 2,772,700:
7 . L Peakload(kw): . 7 Electricsales-total (mwh)~ ~ 13,054,987 ~ 12,753,542 12,950,727 13,387,998 ~ '11,877,722 644 Number 6f cus'tomers W '- -
~
421,803:
' at year-end - . 499,751 -468,768 449,244 438,853 i y q. + , : .. . .x - - - -
+~ ~ ~ ~ - - - .-
> 1 Operating revenues
"# - 1984- 1983 1982. 1981 1980.
. c .,ym _ . _.
(Thousandsof Dollars) hg .gContinuingOperations-Electric
' Residential $378,536 $314,404 $294,498 $252,907 $220,920
'7""
- .fCbmmercial' 343,971 296,364 286,262 238,975 210,226
~' Industrial ~ 128,187 122,184 128,464 113,736 95,644' h
h,. J Other 1 wIrrigation-25,540 86,394 15,113 90,118 23,391 92,490 22,916 81,565 19,215 59,391 Total. 960,628 838,183 825.105 710.099 605,396
- ITransmission forothers 13,023 12,555 11,104 9,173 8,817 Miscellaneous services 21,316 21,137 30,277 11,516 7,651 ga
_-4. Total Operating Revenues-Continuing Operations $994,967 $871,875 5866.486 $730,788 $ 621,864 4 . f4 ef
u__s : __ _ - . - _ _ _ _ _ - _ GT meilt SCUSSiol G $G Ql}}Si ofibanC$Gl HAib$ TI. YY
~ - --
-- --ancl reSultS of opemtion- - -- - - - -
1.lquidity and CapitalResources __._-__ __ _ Year Ended December 31, 1The Company's large capital requirements for its on- 1984 1983 1982
- going construction program and for the refunding of matur- - - - -- --
a ing securities, and its heavy reliance on external financing Energy related: (Thousandsof Dollars) " - 7 to meet those requirements, are discussed earlier in this --- -- Volume increases ~ ---- - ' - -
~ ~
4 report and in Notes 3 and 4 of Notes to Consolidated __ -_. _ (decreases) (1)_,, . , $ 29,216__ $ _.13,438_$ (16,267) __ Financial Statements.The Company has a degree of flexi. Priceincreases
' T bility in adjusting its construction program to its financing - - - (decreases)(2) s . . - - 93,229- (360)- -131,273 -
_ . capability. However, that flexibility is limited,and the Com. __ _ _ N,on-energy related: ,
-- pany's long-term liquidity will depend on its access to the Revenueincreases_ ___ _ _ _ _ _
" capital markets,which in turn will depend on sufficiency -- (decreases)(3) .. . ---_647 - - (7,689)~ 20,692 ~ _
of the Company's rates to provide adequate coverages on Net increase . . . , . $123,092 3 5,389 $135,698 ~
~ "its senior securities and an adequate rate of return on its ' .
F .2 common stock equity. Adequate earnings and coverage , (1) Calculated by summing the products derived by ___ are critical to the maintenance of satisfactory credit ratings multiplying the year-to-year increases in units sold 7 on the Cornpany's senior securities, and,as calculated - - in each customer class by the weighted average - _ in accordance with the governing instruments, are preregt ._ .. _ _ _of the applicable rate levels in effect for th_e prior year. luisite to the Company's legal ability to issue such securities. m See Page 21 with respect to the Company's capital - . (2) Calculated by summing the products der,ved i by _ .- structure at December 31,1984. Its target structure consists- multiplying the year-to-year increases in the of no more than 50% debt (including current maturities weighted average of rate levels in each customer
. and short-term obligations) and 40% common stock equity,- - - class times the applicable number of units sold in lith the balance consisting of preferred stock.The Com. the current year. Relative contributions by rate
~ Epany regards common stock Oguity as its most expensive ~~ - - - increases and by effects of the adjustment clauses -
. form tf permanent financing,but it intends to maintain that _ vary according to the timing of general rate pro _ , ,
ceedings and the extent to which accumulated category at approximately the 40% level in order to support
- the credit ratings on its senior securities. lf interest and ' effects of the adjustment clauses are incorporated --
dividend rates on new issues of long-term debt and preferred . in new rates. stock rise rapidly in the future,the Company's average cost ' - ~ -~ (3) includes revenues for miscellaneous service and -
- ~~ of capital will rise accordingly as maturing securities, bear-- - - . . transmissial for others._. a_ - _ . _
ing relatively low rates, are refunded and the Company's ~ - ~ ~ ~ ~ The increast in volume-related electric revenues in 1984 was primarily due to higher sales in the residential ~ '-~~~
~
7 plant C x pands~.- " ~~~~ -~ ~ ~ ~ _ _i See Note 5 of Notes to Consolidated Financial State-n_ and commercial classes.These sales increases were mainly . ments with respect to short-term borrowings available to ( the result of customer growth and the more humid weather-
' the Company (there being a statutory limitation on the -- --- conditions experienced during the summer of 1984.These -
; amount of such borrowings that can be outstanding without : ._ _ _ factors were partially offset by decreased industrial sales _
consent from the ACC). Funds from operations after the - to the copper industry and decreased resale sales resulting r payment of dividends have contributed only marginally to - - - from the loss of a major customer. The increase in unit - +
; total sources of funds in the last few years (see Consolidated sales of electricity in 1983 was primarily due to customer ~ Statements of Changes in Financial Position).This situation- ~' growth in the residential aqd commercial classes partially " '~l d expected to continue to some degree until Palo Verde . . - C of fset by decreased retail and resale irrigation usage . ..,
1 Unit 1 is fully included in rate base so as to give rise to resulting from the U.S. Government's Payment-in-Kind
- 1 additional cash earnings rather than the normash allowance - ~ Program. Unit sales of electricity were depressed in 1982 ' -
A or funds f used during construction.The Company's retention _ due to a general slowdown in the economy and more normal _ _ _ [ ' of funds from operations has also been affected by the temperatures than had been experienced in 1981. Conser- _l
- Company's policy of increasing common stock dividen ds - " valion efforts by customers in response to higher energy ' - -;
* "peilodically. - -
~ ' ~
costs have affected unit sales,are expected to continue
~,
' ~ ~
Operaung Rom s ~ to do so, and are being aided by the Company's own load-Total operating revenues reflect the effects of rate -- - . management programs.The year-to-year changes in non- . increases and adjustment clauses (see Note 1d of Notes to ' energy related electric revenues reflect changes in capacity sold to other utilities.~ ~ - iConsolidated Financial Statements) on pnces of ~ units sold. Operating revenues also reflect the volume changes in - - Although unit fuel costs have cont, m ued to rise,the 1
- unit sales shown on page 21.The foregoing factors con- Company s cost of fuel per kilowatt-hour generated has
" tributed to annual increases in electric revenues for the been tempered by the large portion of coal in the fuel mix -
, _ preceding calendar years as follows: - -_ ~,
and the continuing high capacity factors achieved at the ,l Company's coal-fired plants. In 1984, increases in the unit
-~. . - costs of fuel for generation were offset by the improved . H fuel mix and high capacity factors.The slight increase in j gm. E ,
~ 22 F . .
m _
Arizona Public Service Company a_ _
~
~ 'fu ,1 expenses in 1984 reflects increased generation and a credit to interest deductions,is primarily a function
- requirements. In 1983, increases in fuel expenses reflect of the amount of construction work in progress during any increases in the unit costs of fuel for generation partially given period and ceases to accrue on those portions of
~'~ offset by decreased unit sales. construction work in progress that are included in rate base.
- Variationsin purchased power and interchange-net See Note 1e of Notes to Consolidated Financial State-reflect varying degrees of availability of relatively low- ments for changes in rates of AFC. See " Liquidity and priced power from other sources,the needs of the Company Capital Resources" above with respect to the non-cash
- a. to cugment its own generating sources from time to time, aspectof AFC.
End the Company's ability to sell energy to neighboring The increase in interest on long-term debt in recent
" utilities. In 1984, an increase due to the accounting treat- years reflects large amounts of new borrowings at relatively ment for the Company's fuel and purchased power expense high interest rates. See " Liquidity and Capital Resources" discussed in Note 1d of Notes to Consolidated Financial above and Note 4 of Notes to Consolidated Financial St tements was largely of fset by increased interchange Statements.The increase in interest on short-term borrow-sales to other utilities.The decrease in purchased power ings in 1982 and 1984 resulted primarily from increased (nd interchange-net expense in 1983 was primarily due ~
borrowings; in 1983 the decrease was primarily due to to the accounting treatment for fuel and purchased power. reduced interest rates. Also contributing to the decrease in 1983 was an allowance Consolidated net income and earnings for common permitted by the ACC for recovery of costs associated stock represent composite of cash and non-cash items (see with certain losses of electricity in the transmission and Consolidated Statements of Changes in Financial Position) distribution process and the exclusion of the of fect of and,in part, reflect accounting practices unique to regulated a portion of profits on interchange sales from the recover- public utilities. tble fuel costs reflected in the account.This decrease Effects of Inflation was partially offset by reduced interchange sales to in contrast to the analysis of increases in operating oth rutilities. revenues in the table at the beginning of " Operating See "Elfects of Inflation" below .m regard to main- Results"above, it is sometimes difficult,in the case of opera-t:nInce expense,which is also a function of the size of tion and maintenance expenses, to distinguish between th3 Company's utility plant and is af fected by the timing of ef!ects of volume increases and rises in unit costs (which, mijor overhauls.The increase in operations excluding fuel , for purposes of this discussion, are all attributed to infla-expense in 1984 was due in large part to higher franchise tionary pressures). expenses directly related to increased, residential and Certain inflationary ef fects, such as those on costs of commercial revenues, as well as nsmg msurance expenses. generating fuel, are passed through to customers pursuant Depreciation and amortization expenses increase to rate adjustment procedures (see Note 1d of Notes to with the size of the Company's utility plant. Ad valorem taxes- Consolidated Financial Statements). Nevertheless, the also af fected by such increases, were offset in 1983 and Company attempts to minimize such effects t:y means that 1984 by a change m asse include increasing the availability of its coal-fired units Notes to Consolidatedmancial F,ssment rates. See Statements Notead for both 10 of to result in a more economical fuel mix.This increase has vitorem and sales taxes (the latter being a function of been achieved by an intensive maintenance program, the operating revenues),which are the principal components cost of which is not covered by the adjustment clauses. of other taxes. There are a number of other major expense items that are The income tax increase in 1984 was largely a result of also beyond the scope of the adjustment clauses. Infla-ths Company's compliance with an ACC acccunting order- tionary pressures on these items have given rise to a sig-cffective October 1,1983,the aggregate etfect of which nificant earnings attrition between general rate increases. WIS to require the Company to normalize substantially all See earlier discussion with respect to the Company's income tax timing differences (see Note 1f of Notes to most recent rate filings. Consolidated Financial Statements). See Note 13 of Notes to Consolidated Financial State-The aggregate amount of AFC, shown as other m.come ments for perspectives on other effects of inflation. I Accountants' Opinion Arizona Public Service Company: We have examined the consolidated balance sheets of in our opinion, such consolidated financial statements Arizona Public Service Company and its subsidiaries as present fairly the financial position of Arizona Public Service cf December 31,1984 and 1983 and the related consoli- Company and its subsidiaries at December 31,1984 and dated statements of income, retained earnings and changes 1983 and the results of their operations and the changes in financial position for each of the three years in the in their financial position for each of the three years in period ended December 31,1984. Our examinations were the period ended December 31,1984,in conformity with mide in accordance with generally accepted auditing generally accepted accounting principles applied on a stindards and,accoroingly, included such tests of the consistent basis. cccounting records and such other auditing procedures ts we considered necessary in the circumstances. DE!DFITE HASKINS & SEU.S Phoenix, Arizona February 22,1985 e t _ _ _ -
i h . _ . - . . . _ _ - _ _ - . _ . - . . _ - - _ _ - - - . - - - - - ~ - , - - - - - - - . - - - -- - E .
.m_m L
Consolida_ted- _ statements ofincome .-- - . . _. ' Year Ended December 31,~
~ ~~ ~
- g. . _ _ _ _ _ . . , _ . - -
- -- 1964 - - - 1963 - - - - - 1962 -
_ _ _- _ _ _ _ _ .. - (Dollars in Thousands Except Per Share Amounts) _ .-._ _ Electric Operating Revenues (Note 11) - 8- 994,967 $ 871,875 $ 866,486 _ Fuel Espenses. "
~~-~~185,504 - ~ ~'"177,095'
-~~~ Fuel for elecidEgeneration - 186,276 ~
+ Purchased power and interchange-net - ~ ~ -- - -
-6,647 - - - - 6,454 - - -- 27,358 -
A Total - - - - u- ~ -192,923 - - 191,958 - 204,453 - Operating Revenues Lees Fuel Espenses _. . _ _ - - _ __ 802,044 --. 679,917 - -662,0331 .
. . OtherOperating Empenses: _ _ _ _ . _ . _ _ _ _ ._ _ _ _ - ,
Operations excluding fuelexpenses 97,535 94,511 84,887
' ^'
62,681'
~
' Maintenance' ~ ~ ' ~ 68,207 ~ ~ ~ 60,635-~
Depreciation and amortization ~ - - 87,494 83.707 -
- 79,676' -
- . Income taxes (Note 7) _ m _ _ . _ _ . . 191.100 103,186 90,248 Other taxes (Note 10) 94,448 82,420 83,488 Total 538,784 426,505 398,934 '
~
Operatingincome 263,260 253,412 26'3,099 Otherincome(Deductionth
~ ' Allowance for equity funds used during construction - 134,359 ' 121,390 79,846
- < income taxes (Note 7} . - . 54,028 - 9.256- - (2.852) .
; Other-net , ,_
2,431 3,813 6.046 , , _ Total 190,818 134,459 83,040 income BeforeInterest Deductions 454,078 387,871 346,139 Interest Deductions:
' ~ Interest on long-term debt ~ 191,079 ~ 170,830 ' ~ 161,239 4 Interest on short-term borrowings - --
12,281- 11,430- - 14,496-Debt discount, premium and expense . __
.2,465 _
_ .1,959 . .2,201 Allowance for borrowed funds used during construction (49,317) (65,400) (60,098) Total 156,506 118,819 117,838
~
income From Continuing Operations i 297,570 ~ 269,052 228,301
~-
Income (loss) from operations of gas -- - - -- - - - _, .. (4,255) 2,742
'm . ...syste_m--net of tax __ ._ , , _ ,
(33) . Loss on disposal of gas system-net of tax (26,470) , - - (26,503) ~ ' ~ ~ ' (4,255) ' ~ ~
'2,742'
~ ' income (Loss) From Discontinued Operations
- - Netincome "~ - " ' -- - ~
^ 271,067 ' ' 264,797 ~ ~ ' 231,043 -
y Preferred Dividend Requirements 48,375 43,741 34,816 l EemingsforCommon Stock 8 222,692 $- 221,056- $ 196,227 '
'_ _ AueregoCommon Shores Outetending 68,308,131 63,865,21.0 _59,549,685 j Per Shoreof Common Stock: l f ' Earnings (Loss)(based on average shares outstanding): ~
~
j s 1 Continuing operations -- -: 3.66 - - ~ 3.53 3.25 Discontinued operations 0.05
, (0.39) (0.07) - 4 Total- 8 3.26 $ 3.46 $ 3.30 l
~l
' Dividends declared ,- -- .
8 2.60 . .
$ 2.56 $- 2.40 ,
J See Notes to Consolidated Financial Statements. . .- o
~
'l
,N pOE.
- 5. . ._
Arizona Public Service Company
-. - l Consolidated statements of changes in financial position
~ ~ ~ '
Year Ended December 31, 1984 1983 1982
, Source _of Funds: , _
(Thousandsof Dollars) Funds from operations:
-~ Continuingoperations: -
_ . Income from continuing operations 6 297,570 $ 269,052 $ 228,301 Principal non-fund charges (credits) to income: Depreciation and amortization 87,494 83,707 79,676 Allowance for equity funds used during construction (134,359) (121,390) (79,846) _ _ Deferred income taxes-net 43,464 27,033 22,966 Deferred investment tax credit-net 56,002 29,960 52,158
~
Other (385) 4,967 (6,537)
- Total funds from continuing operations 349,786 293,329 296.718
. Discontinued operations:
Income (Loss) from discontinued operations (26,503) (4,255) 2,742 Principal non-fund charges to income:
- Loss ondisposalof gas system-noncurrent 19,513 - -
Other-net 3,897 9,371 8,581 Total funds from discontinued operations (3,093) 5,116 11,323 Total funds from operations 346,693 298,445 308,041 Funds from externalsources: Proceeds from salo of gas system 114,657 - - Common stock 63,800 86,918 115,707 Preferred stock 50,000 48,875 94,843 Long-term debt 264,179 419,126 298,278 Short term borrowings-not 73,492 (3,308) 1,616 Other items-not (3,916) 4,141 (3,080) Total funds from external sources 562,212 555,752 507,364 Total source of funds S 908,905 $ 854,197 $ 815,405 Application of Funds: Funds used for capital expenditures: Continuing operations S 377,278 $ 425,130 $ 431,578 Discontinued operations 31,657 29,724 20,278 investments and other assets (13,299) (4,955) 15,277 Repayment of long-term debt 275,833 185,653 174,085 Redemption of redeemable preferred stock 4,660 3,820 5,060 Dividends on proferred and common stock 225,615 206,558 176,953 increase (Decrease) in working capital
- 7,161 _
8,267 (7,826) f Totalapplication of funds S 908,905 $ 854,197 $ 815,405 ! Increase (Decrosse) in Working Capital *- l Cash and temporary cash investments S (25,704) $ 24,801 $ 1,098 l' Accounts receivable (2,216) (950) 16.160 f Materials, supplies and fuel (1,420) (2,760) 6,662 Deferred fuel and other assets (4,191) (2.048) 4,400 Accounts payable and accrued expenses 32,881 (23,904) (16.241) D;forred fuel and other liabilities 7,811 13,128 (19,905) Netincrease(decrease) _$ 7,161 _
$ 8.267 $ (7,826)
- Excluding short term be trowings-not and current matunties of long-term debt-See Notes to Consolidated Financial Statements.
b g y
u w ,,, . + < .
~ ~ - . L ' Consolidated balance sheets
_ December 31, Assets 1984 1983 (Thousands of Dollars) Utility Plant (Notes 4,6 and 11):
~
' PI:nt in service:
Electric - 52,747,464 $2,476,126 Gas . - 174,038 Common,used in allservices - 90,577 Total. . 2,747,464 2,740,741 Construction workin progross 2,304,306 1,986,052 Plint held for future use 36,473 34,472 Totai Utility Plant' ~ 5,088,243 4.761,265
' Less accumulated depreciation and amortization 744,160 727,865
~ Utility Plant--not 4,344,063 4,033,400 Irweetments and Other Assets:
Investments in and receivables from subsidiaries 61,693 44,740 Time deposits designated for capital ex penditures - - 30,141 _ Other i,westments and notes receivable . 5,588 5.699 .. t Total Investments and Other Assets - - - - - - 67,281 . < 80,580 - Current Assets: - - - iCash(Note 5) - . - . _. _ .7.565 . 11,735 - Temporary cash investments . _ 21,000;
- Special deposits and working funds (Note 5), , , , . _
3,339 3,873
' ~ ~ ~ ' " ' ~ ~ ~~ '~ ~ ~ ~'
Accounts receivable:~
~-
- Service customers - ' - - -
- - 70,560- -
-89,428-
- a.. # Other- .u. . . _ 35,329- _ .19,686
- Allowance for doubtful accounts _ . _ _ , , , , _ _,.
_(1,434) . (2,443) - Materials and supplies (at average cost) ' 42,942 - 41,261
~
~~ ~ "^'
[ Fuel (at average cost) 30,163 ' 33,264^
' > ~- -
. Deferred fuel ' - - -
'927- - 7,463-y ~ Other- - -
6,036- -- 3,691
- - --Total Current Assets -
195,427 - 228,958 DeferredM ~ *
. Unamortized gas expioration cost --- 12,967.. 14,728.. -- i Unamortized debtissue costs- _ _
,13,931 .14,422 Other 20,065 14,224 Total Deferred Debits 46,963 43,374 Total $4,653,774 $4,386.312 ,
l
-A.:. m F<55- A
{ 5
.N9 . - . _
Arizona Public Service Company .
' ~~ '~ ~
. Lonsolidated balancesheets December 31,
, Listnlities 1984 1983
~ ~
(Thousandsof Dollars)
~~
Capitalization (Not'es 2.3 ahd 4):~
~^
$ ~ 175,321 ' S ' ~ 166,777
~ Common stock
= Premiums and expenses-net - -
1,015,188 959,932
. Retained earnings 505,414. .459.962.
- Common stock equity . . . - 1,695,923 1,586,671.
'Non-redeemable preferred stock 218,561 218,561 Redeemable preferred stock 282,740 237,400 Long-term debt less current maturities '1,684,746 ~ ~ ~ 1,655,077
~ ~
TotalCapitalization 3,881,970 3.697.709 Current Listnlities.
~
Notes payable (Note 5) ' 1,800 ~ 86,308 Commercial paper - ' -- - 158,000 - Current maturities of long-term debt (Note 4) - 70,890 115,833 - - Accounts payable. _
. 68,090 91,176 Accrued taxes 49,348 52,369
. Accruedinterest 55,906 63,112
' Accrueddividends~ 4,143 3,711':
; Deferred fuel > - -
14,146-Other 32,405 26.070
. Total Current Liabilities - 440,582- 452,725
- Deterred Credits and Other:
. Deferredinvestmenttaxcredit 138,120 -82,118 Delerredincome taxes 110,821 73,361 Unamortized credit related to sale of tax benefits (Note 7) . 45,333 47,020
~ Customers' advances for construction 21,351 '18,039 - ~
Other - -
-15,597 -15.340-TotalDeferred Credits and Other 331,222 235,878-Commitments (Note 9)
Total $4,654.774 S4,386,312 ( ,
, . 1 See Notes to Consolidated Financial Statements.
S A -+ 6 7 4, m ,
- . 1
h T
~ . i= TCoiiioliditedstatements ofretained earnings ~ -
p._-. . Year Ended December 31, 1984 1983 1982 (Thousandsof Dollars)'
~
Roteined sernings'at beginning of y' ear $459,962 ~ ' $401,723~ $347,633
' Add-Notincome ~ ~
271,067 ~ 264,797' '231,043- -
~ ' ' ' ' ~ ' ' '
Total ~ 731,029 '666,520 ' 578,676 ~
' gD educt--Dividends:
Common stock (Notes 2 and 3) - 177,240 162,817 ~ 142,137 - Preforted stock (see below)' - 48,375 ~ :43,741 34,816 u -
~
" Total - - --
$225,615 - - 206,558 - 176,953 -
% Roteined earnings et end of year - - '
$505,414 $459,962 - $401,723
'~ ~
1 Dividends on' preferred stock': c :" . $1.10 preferred - ' - -
- , 8 - ~ 172 - $ 172 ^$- -172-
. $2.50 preferred : -258. -
258 . 258-c $2.36 preferred . _ 94 94 94 .
. $4,35 proferred 326 326 326 u..-- ,
; $2.40 Series A 576~ 576 ~ 576*
~ $2.625 Series C i-- -- - - ~
630- :630 - -
- 630 - -
$2.275 Series D . . 455 _ 455. 455. .~
}$3.25 Series E , _
1,040 ' _ 1,040 1,040
, $8.50 Series F - -
61
^
T$8.50 Series G '500~
"401 561
- $10 Series H -
3,147 3,307 -3,467
;$10,70 Series 1 - 2,595 2.875 2,956
$8.32 Series J . _
4,160 4,160 4,160
$8.80 Series K 5,280 5,260 5,280
~
- $9.70 Series L 4,656 4,656 4,656
- $1195 Series M ' 2,330 2.330 2,330 -
- $12.90 Series N 4,773 4,773 3,235
$3.58 Series O 7,160 7.160 4,455 Adjustable Rate Series P 1,250 1,250 104 Adjustable Rate Series O 5,223 3,899 -
' $11.50 Series R 3,849 - -
Total $ 48,375 $ 43,741 $ 34,816 See Consolidated Statemer'i ' ,o for dividends per share of common stock.
' See Notes to Consolidated. , dtatements.
m
Arizona Public Service Company Rotes 50 consolidated financial statements -. t Summary of Significent Accounting Policies. , scribed by the FERC and the ACC, the Company capitalizes
- a. System of accounts-The accounting records of an allowance for the cost of funds used to finance its con-
- Arizona Public Service Company (the " Company") are - struction program ("AFC"). A,FC,which does not represent -
. maintained in accordance with the uniform system of _ _ current cash earnings,is defined as the net cost dunng accounts prescribed by the Federal Energy Regulatory the period of construction of borrowed funds for construc ~
- tion,and a reasonable rate of return on equity funds so .
Commissicc '"FERC"). - - used.The calculated amount is capitalized as a part of the -
- b. Consohdation-The consolidated financial state.
1 ments include the accounts of the Company and those of ' cost of utility plant.' two of its wholly-owned subsidiaries, APS Finance Com. AFC has been calculated using composite rates of pany NV (" Finance"), organized to serve as a financing 12.75%,13.00% and 13.25% in 1984,1983 and 1982, respec-
- corporation to raise funds outside the United States of - - tively. In July 1983 the Company began compounding 1 America,and APS Fuels Company, organized to manage _ . AFC semi-annually and.in October 1983, recording the bor-Investments in certain fuel resources. All significant inter. rowed funds portion on a" net of tax" basis through charges -
company balances and transactions have been eliminated.- . to income taxes-operating expense and credits to income Other subsidiaries,which are shown on the equity basis, taxes-other income. AFC ceases to accrue on those are not considered material for financial reporting purposes. portions of conctruction work in progress allowed in rate base.
. O, Plant and depreciation-Property is stated at original ~ .
.f. Income taxes-The Company uses accelerated
- cost as defined for regulatory purposes.The cost of addi, depreciation methods for income tax purposes. As pre-
" ' tions to utility plant and replacements of retirement units - scribed by the ACC, deferred income taxes are provided -
t capitalized, Replacements of minor items of property are ._ for certain timing dif forences arising from the recording, charged to expense as incurred. in addition to direct costs, for income tax and financial reporting purposes,of depreci-
- capitalized items include the present value of certain ation of property placed in service atterJanuary 1,1977. -
future lease payments (see Note 4), research and develop.' In October 1983 the Company, in accordance with an ACC mont expenditures pertaining to construction projects, order, began deferring amounts equal to the change in ~ indirect charges for engineering, supervision,transporta. _ income taxes arising from substantially all uther timing . . . . tion and similar costs,and an allowance for funds used dif ferences. Prior to October, such ditferences were reflected during construction. Costs of depreciable units of plant currently in income. At December 31,1984 the Company - - retired are eliminated from plant accounts and such costs had flowed through to income currently approximately
. plus removal expenses less salvage are charged to $275,000,000 of income tax benefits an, sing from income 7 accumulated depreciation. Contributions in aid of construc. - tax timing dilferences for which deferred taxes ha ve not tion are credited to plant cost. been provided.
Depreciation is provided on a straight-line basis at in 1982 the Company, in compliance with an ACC ~ rates authorized by the Arizona Corporation Commission order, began deferring amounts equal to the reduction in CACC") annually. The applicable rates for 1982 through federal income taxes arising from investment tax credits
' 1984 range from 3 07% to 4.16% for electric plant and 2.86% and amortizing these amounts to other income over the to 9.60% for common and general plant. estimated life of the related assets. Before 1982 such
- d. Revenues and fuel costs-Operating revenues are amounts were flowed through income currently. Investment
' recognized when billed on a monthly cycle billing basis. tax credits previously recognized as a reduction of deferred -
Retail rate schedules include adjustment clauses wnich income taxes are being recovered over a twelve-year period. permit recovery of costs of certain fueland purchased g. Research and development costn-The Company power. Regulatory hearings are held periodically to adjust expenses research and development costs on a current the rates applicable under fuel adjustment clauses to more basis, except that costs which may result in additions to nearly match actual fuel cost 1 Temporary net under or utility plant are deferred for subsequent inclusion in plant over-recoveriesof costsresulting fromapplicationof the or to be written of f if the applicable project is abandoned. adjustment clauses are recognized as a deferred fuel asset h. Gas exploration costs-The excess of costs over
' or liability, respectively, with an of fsetting amount recognized sales proceeds of the Company's discontinued gas explora-
,in purchased power and interchange-net expense. As of tion program has been deferred to be recovered, without October 1983, allowances permitted by the ACC for recovery interest, over a,10-year period pursuant to an order of the
- costs associated with certain losses of electricity in the ACC, from certain classes of gas customers. Such amounts transmission and distribution process and the exclusion of are now to be remitted to the Company by Southwest the etfect of a portion of profits on interchange sales are Gas Corporation as a result of the sale of the gas distribution reflected in the Company's iuol adjustment accounting, system.See Note it. . ..
Otiier procedures apply to the recovery of fuel costs to I. Discontinued Operations- As described in Note II,
" wholesale customers and of specified taxes. the Company sold its gas distribution system elfective
- c. Allowance for funds used during construction-in November 1,1984. Accordingly. prior years' statements of accordance with the regulatory accounting practice pre. Income discont,have been reclassified to report separately this inued operation.
r nj ' o -
+4>.'t,m m e , .ne,,y r TCommon and Non-Hodeemsble Preferred Stock. ~
' The balances at December 31,1984 and 1983 of common stock,and of preferred stock which is not redeemable except
~ pursuant to call by the Company at its option, are shown below. _ Numberof Shares ParValue Outstanding at - Outstanding at December 31, Call p, December 31, p,ge, p, Authorized 1984 1983 Share 1984 1983- ' Share (a) (Thousandsof Dollars) Common Stock . . . .. . 100.000,000 70,128,329 66,710,852 $ 2.50 6175,321 $166.777
- Non-Redeemable Preferred -
Stock (cumulative):
$1.10 preferred . . . . . . 160.000 155,945 155,945 $ 25.00 6 3,898 $ 3,898 $ 27.50
$2.50 preferred . . . 105,000 103,254 103.254 50.00 5,163 5.163 51.00
$2.36 preferred . . . . . . . . ~ 120,000 40,000 40.000 50.00 2,000 2,000 '51.00
_ $4.35 preferred . . . . . . . . . 150,000 75,000 75,000 100.00 7,500 7,500 102.00 Seria! preferred . . . . . . . 1,000,000
~ $2.40 Series A . . . . . . 240,000 240,000 50.00 12,000 12,000 '50.50
$2.625 Series C . , , . . . . . . , , 240,000 240,000 50.00 - 12,000 12,000 51.00
$2.275 Series D , . . . . . . . . 200,000 200,000 50.00 10,000 10,000 50.50
$3.25 Series E . . . . , 320,000 320,000 50.00 18,000 16,000 51.00 Serial proferred . . . , . . .
$8.32 Series J . . . . . . . .
4,000,000(b) - ' 500,000 500,000
~
100.00 50,000 50.000 '(c) Adjustable rate series O . .. 500,000 500,000 100.00 50,000 50,000 -(d) Serial proferred . . . . . . . . . . 10.000,000
' $3.58 Series O . . . . 2,000,000 2,000,000 25.00 50,000 50,000 (e)
Total, , .. .. . .. . 4,374,199 - 4,374,199 $218,581 $218.561 (a) In each case plus accrued dividends. . The holders of preferred stock are entitled to one vote ' (b) This authorization also covers outstanding redeemable for each share held of record,as are holders of common proferred shares shown in Note 3, as well as the non- stock.Special requirements for favorable votes of holders rede9mable sharesindicated above. of preferred stock, voting by the classes respectively pre- ~~ ( _) At $105.50 through Augt.st 31,1987; at $103.00 through scribed for the several purposes, pertain to (i) certain con-August 31,1992; and at $101.00 thereaf ter. versions or exchanges of outstanding preferred stock,(ii) (d) Bears dividends at a rate. adjusted on a quarterly basis, the authorization of any stock ranking prior to the pre-2% below the rate borne by certain United States ferred stock,(iii) making any change in the terms and pro-Treasury Securities, but in no event less than 6% per- visions of preferred stock that would adversely af fect the annum.or greater than 12% per annum. Redeemable . . rights and preferences of the holders thereof,(iv) the issu-on or atter March 1,1988 at the option of the Company anceof anyadditionalsharesof preferred stockexcept at $103.00 through February 28,1993; and at under prescribed circumstances or (v) a merger, consolida- -
$100.00 thereafter. ' tion or sale of substantially all the assets of the Company.
(:) Not redeemable prior to June 1,1987 through certain The foregoing voting rights attach to both redeemable and refunding operations that would result in a lower rate non-redeemable proferred stock,as do the rights that would of cost to the Company than the dividend rate on the arise out of dividend arrearages as discussed in Note 3. shares to be redeemed; otherwise at $28.58 through May 31,1987; at $27.39 through May 31,1992; at $20.19 through May 31,1997; and at $25.00 thereafter.
%,ed
Arizona Public Service Company ,- .,p-..
- , .-.~.,,m _
[ Common and noniedeemalile preferred stock sales and changes in premiums and expenses dunng each of the three
" years in the period ended December 31,1984 were as follows (dollars in thousands):
, , . - -- ~- Non-F.edeemeble Pre " Common Stock (cumulative) and _ _ m - ...- - Number ParValue Number PorValue Expenses Description of Shares Amount of Shares Amount Net
- Balance, December 31,1981 57,648,791 8144,122 1,874,199 $118,561 8 783,868
- Common Stock < 6,245,699- 13,114 -- - 101,744-Non-Redeemable Preferred Stock, $3.58 Series O ~ - - 2,000,000 50,000 (1,932)
-Balance December 31,1982 ' 62,894,490 157,236- 3,874,199 168,561 883,680
% ,.i Common Stock .. . . . . 3,816.362 9,541 - - 77,557
' Non-Redeemable Preferred
- - Stock, Adiustable Rate Series O - - 500,000 50,000 (1,305) H : Balance, December 31c1983 - 66,710,852 166,777 4,374,199 218,561 959,932 Common Stock 3,417,477 8,544 - - 55,256 Balance. December 31,1984 - 70,128,329 $175.321 4,374,199 $218,561 81,015,188
' Premiums and expenses-net also include those of redeemable preferred stock issues (see Note 3).
~
. The Company has a stock purchase and dividend rein- ing of employee contributions on certain terms or pro-
' vestment plan wh )reby newly issued shares of its common visions pursuant to which limited federal tax credits can be
- stock may be p9rchased at market on the applicable dates - - - obtained by reason of voluntary contributions) would, by any participant in the plan. it also has an employee sav- involve its issuance of new shares of common stock, Contri.
' ings plan under which the investment of certain funds con- " butions made by the Company to its employee retirement l , tributed by participating employees could,and its own _ plan may also involve one or more such issuances.
contributions (pursuant to provisions calling for the match-p
- 3. Redesmoble Preferred Stock. _ . . . , , _.
The balances at December 31,1984 and 1983 of preferred stock which is redeemable at the option of the holders or pursuant ' ~ ~ F ~ h sinking fund obligations,in addition to being callable by the Company, are shown belowJ
.;w -
p, y,gg, H -
- Outseending at Outstanding at j December 31, p, December 31, CaN Price :
1984 -1983 Shore 1984 1983 PerShere(b)
^
b Redeemable Preferred (Thousandsof Dollars) -~~
~ --"
U - - - -- - Stock (cumulative) g , serialpreferred:(a) _.. . , ~
. 88.50 Series G . , . . . . . . . , -38,400- 54,000 " $100 00~~ $ ' ~ 3,840' ST 5,400' (c) ~ ~
'H ' $10 Series H , . ., , . m . . - - ;304,000 - 320,000 " 100.00 * - 30,400 - - 32,000 - - ~(d)- L
-. 810.70 Series 1 . . . . . . . . . , - 240,000 ~ 255,000 ~ 100.00 24,000 25.500 (e) h 88.80 Series K, . .~ , '. . . . . , , 600.000 ~ ' " J 600,000 ' ~~ ~ 100.00 ' 60,000 ~ ~ ~ 60,000 ~ " (f) .
L- - .- 89.70 Series L , . . . . . . . . . _.480,000 - 1480,000 100.00 ._ _48,000 48,000. - - (g). - -
. $11.96 Series M . . , , . . . . . . 195,000 195,000 19,500 19,500 r 100.00 ' (h)
" S12,90 Series N ~. . , c.T.'. c :370,000 - 370,000
- r100.00 - 37,000 ~ 37,000 ' (i)'
; Adjustable Rate Series P, c. _ i100,000 J 00,000_ 100.00 _ _10,000 _ _ .10,000 - - 0) . . _ .
$11.50 Series R , . . . , , . . . , ' 500,000 -- 100.00 50,000 -
(k)
.N ~
~
Total ~. . , , , . , , . , , . , , , . . ~ 2,827,400 ~ 2,374,000 ' ~ $282,740 8237,400 I (a) See Note 2 for authorized number of shares. _ , . September 1,2002. Applicable sinking fu'nd pr s, p . ' (b)in each case plus acc ued dividends . . . (c) Redeemable at par at the option of either the Com- 7 require the redemption of 16,000 theres at par annually (representing annual paymonts of $1,000,000). .
~
l , pony or the respective holders, Sinking fund provisions (e) Not callable by the Company prior to December 1, _ I require the recomption of a total of 3,600 shares at per 1985 through certain refunding operations that would n.: . r;(representin0 annual payments of 8720,000). result in a lower rate of cost to the Company than the divie
. (d) Redeemable at $106.48 through September 1,1985 dend rate on the shares to be redeemed; otherwise at -
Y ~and thereafter declining by 80.36 per year to par after ' 5107.00 through November 30,1985,at $103.00 through , . . _ , . 4
- T'-r
.a ,
.. AL j
,_ a u . u u __ _ u_-- -- - - __ ,- ~~_..--,.--.,_..a- - .- . - . - . . - - . . . - - - --i
~; November 30,1990, and at $101.00 thereafter. Applicable .. The combined aggregate amount of redemption -)
sinking fund previo6ons require the redemption of 15,000 requirements for the above issues each year through 1989 ' i shares at par annually (representing annual payments ~ are as follows: $3,820,000 in 1985, $15,670,000 in 1986 !
~ f $1,600,000).The o Company may, but is not required to." and 1987, $39,760,00d in 1988, and $20,600,000 in 1989.
a redeem an additional 15,000 shares at par on December 11n - - -- Redeemable preferred stock transactions during each -
' any year. .
of the three years in the period ended December 31,1984
. ' (f) Rodeomable at $106.00 through February 28,1989:
~
were as follows (dollars in thousands): - . at $103.00 through February 28,1994;and thercatter . - . - - - - - Number - , PerValue .. declining in steps to $101.00. Applicable sinking tund provi- Description of Shares Amount I
- - sionu require the redemption of 22,500 shares at par - $ 199,280 . ' ~I Balance, December 31,1981... 1,992.800 annually commencing March 1,1986 (representing annual - - $12.90 Series N . c. . . . . . . . . = 370,000 - - 37,000 - l payments of $2,260,000).The Company may, but is not Adjun, table Rate Series P ' 100,000 '
-- required to, redeem an additional 22.500 shares at par on 10.000 o March 1 in any year beginning in 1986.^
- ' Sinking fund retirements:
~
~ (9) Redeemable at the option of the Company'at $105.39 ' ' ~~ $8.50 Series F "' ~ (12'400) (1 240)
- through February 28.1986, declining by $1.08 per year to " $8.50 Series G ' ' ' ' ' ' ' " ' (7 200) (720)
. $101.07 after March 1,1989. Applicable sinking fur d - ' '- ' 310 Series H 16l000) ' (1,600) ~
' " provisions require the redemption of 96,000 shaaps at par - $10.70Seriesill2 l l ."[ '((15,000) (1,500) _
~ annually commencing March 1,'1986 (represenPng annual~ Balance, December 31,1982 . . . 2,412,200 '
"~~'241,220
~ payments of $9,600,000). Sinking fund retirements: .
.- (h) Redeemable on or after May 1,1986 et the option - 48.50 Series G . . . .., , . . ~ . . (7,200) ' -(720) of the Company at $101.99 through April 30,1987; and there. 510 Series H . , . , , . . . . . . . , , (16,000) (1,600)
'atter at par. All shares then cutstanding are required to
~~ ~
$10.70 Series 1 : . . . . J. . . . . . (15,000)- - (1,500) - -
o be redeemed on May 1,1988 at par. - - - Balance. December 31;1983 . . . = 2,374,000 237,400-- (i) Redeemable after June 1,1992 at the option of $11.50 Series R . ...... . 500,000 50.000; the Company at $106.11 thrcugh June 1,1993, declining by Sinking fund retirements:..
$0.68 per year to $100.00 after June 1,2002 Applicable 58.50 Series G , , . . , , , , . , . (15,600) ' (1,560) -
sinking fund provisions require the redemption between $10 Series H . . . . . . . . . . . . . . (16,000)' (1,600) ' E 1988 and 2002 of all shares according to a predeter" $10.70 Series I . . . . . .. ~ (15.000) ' (1,500) mined schedule' (j) Bears a dividend of $12.50 per share through Balance December 31,1984 . .2.827,400 $282,740 7- . December 1,1987 and a dividend thereafter to be fixed by a - Premiums and expenses-net related to redeemabfe - formula related to the average prime interest rate in 1987. preferred stock issues are included in the amounts presented
- Redeemeble at par on or after December 1,1987 at the option of the Company Applicable sinking fund provisions in the second tablein Note 2' L
require the redemption of 20.000 shares at par each 4.Long Term Debt. December 1 beginning in 1988 (representing annual pay" Details of long-term debt outstanding at December 31,
- ments of $2,000,000). All shares then outstanding are
~
' required to be redeemed on December 1,1992. 1984 and 1983 are as follows December 31, (k) Redeemable after June 1,1994 at the option of the 1984 1983 Company at $105.45, declining each year by a predeter-mined amount to $100 00 after.'une 1,2004. Applicable First mortgage bonds: (Thousandsof Dollars) j sinking fund provistor'.s require the redemption between 3X% Series due March 1,1984. . S - $ ~15,000 ;
1990 and 2004 of all shares according to a predetermined 10X% Series due February 1, schedule. '
- 1985 (a) ~ ~. . . . . . . . . . . . . . .. 60,250 60,250
- Less securities held by
. If there were to be any arrearage in dividends on any of trustee (b) . . . . . . . ... (10,127) (26,372) its preferred stock or in the sinking funds requirements 5%% Series due October 1, applicable to any of its redeemable proferred stock (each 1987................. 15,000 15,000 ^
^ such dividend being cumulative and of equal ranking with 4.70% Series due March 1, other such dividends, and each such requirement being 1989.,,,,..............., 20,000 20,000 cumulattve and of equal ranking with other such requirements), 4.80% Series due November 1, the Company could not pay dividends on its common 1991.. ............ ..... 35,000 35,000 stock or acquire any shares thereof for consideration. lf any 16% Series due April 15,1992.. - 100,000 I such dividend arrearage were to equal six or more quarterly 4.45% Series rfue June 1,1992. 25,000 25,000
. dividends, the holders of preferred stock. in addition to 4.40% Series due December 1, their other voting rights and voting by the classes prescribed 1992..................... 25.000 25,000 for this purpose, could elect a total of six directors (all ' 4.50% Series due September 1,
. series of serial preferred stock, regardless of par value and 1993.......... . ...... , -
15.000 15,000
. whether redeemable or non-redeemable. comprising one 15% Series due June 15,1994.. 100,000 -
~ such class and being entitled to elect two of the six directors). 6.25% Series due September 1.
See Note 2 in regard to other voting rights of holders of 1997................... . 25,000 25,000 preferred stock. 12.875% Series due May 15, 2000........ . .... . 185,000 185.000 m .U f i
F.79% , y= e m, jn , ~ ,
.e x a
hRY ww ',gl% ,3 L,:. , ~ y ,?m y ,
;. f. . '.-
- w - . .
L W& ~ i f b. [ - n - : , - .4 - wy . =, n a . nn. . .= , u,x .. p.. p :: - .4.;.-as _. 4A o .w m .. , - -,w.,. ~ - ~ . n ,. - - ~.
; ,.n ..n-.,-
C ~ MSeriesdueNeuember166 .." ' '
' ' 17M%guerenteeddebentures
% + 3000...c.m ..2.w. m .. e se,877 m es,877 "+- dueOstater 16,100sMm.r" 7"
-+ e0,000 9 a M 7.485SeriesdueMarch16, ISM %guerenteeddebentures ..
. due July 16,ISOS(k) .. . 7.7 50,000"'60,000 7 pngElf . .-. U . . . . . . . . . . . . . C T 00.000 I" 00.000 l .
,, a. &WESeriesdue AAereh t,t wW - - --.- - a".4 716M%guerentooddebentures .- - .' ,. .e .u- - - - u W .'..i,......... 4 ...E<76,000 , o76,000 ,, due Fetwuery 1.100S(k) . . . . 75,000 L -76,000 -. L/.,* 8.SS Sedes dus W L 2004.'N' 00,000 #
- 50,000 ~'T W% gueremeed debeMums ~ ~ *~'~ ' ~T'~ '~ ~ ~ 7~
A 28.485SeriesdueApril16. .au aa.u i- _u bdueFebruary16,1000(k)..a26,000 .. 26,000 L '
' 900F .:. . m. . . . . . '. . . . 4 . . .43,000 -43,000 rT 11Meueranteeddobentures L . .
, On SerbsdusJanuary W, ~ ~ " v"- r -- -due January W.200(k) . . .r-- 00,000 m r 80,000 m "-
48 ! . s i e2005. 12E%.SertosdueOctober
. , , . . . . . ,'. , . 16, . n . g. J34,000_ 34.000_x Capitensed loses obligation
. . . . . .(1)
. . .;. , 4 (,472780)1 ,._48,998 1 s
Unemortlood discount '
- (870)
Wh 9008 a.3 e n micu o v.u.e-75,000 76.000- - Other . . . u u n wr. n .u . n e- 2,30 0 - 2.768 m
- m. 19.70E Serlesdus July 1,2013/ 100,000 ~ ~ ~ ~ 100,000~ '~~~~1meel lonS term debt ' ' ' ' ' ~ 1*766,008- 1*770.910 ~ ~
N85 Sede@h % 7 ~a ' LasseuruselseWupWes. - - - - ~. ..-.-
.. . .. . . . . . . . . . . . . 100,000 .<-_100,000_
,,o.._ . 9013 . - - - -. .. - - _ Unemortleeddiscountand ' .
- SM% Seriesdue March 1,1984 . . - 16,000:.
4 " ^ geomium mn.Wrt."trtre ~ (1,906) ~ (1,772) " - Philullon conbetindstriedness;- -"-- "~ , - e- mistoleretmortestebonds.v1,087.136 ^ 1,006,008 - - due December 2,206i_ ____ _ _ _ SerlosE,notof escurtlios %PbNullensental indebtednessdue-am..m -. _ _ . m_.. . held by trusteem ., . <. . n - - - 37,878 - - ---a Philutioncontrolindebtedness, H" - December W WAS- - - " - - - - - - - - - - ~ ' ' ~ ~ ^ ' ~ " ' ' "
~ ~ h h & N06~' ~
. . Series E (c) . . . . . . . i .
Leesescurteles held try .. . .ja42,000_ _ . Series F. net olesourses -_ _ . . . -.2 - . . r held try tructos. . . . . . . . . . . . 6,622 -
" trustee M n .=,.. 6 . o n .. - - -(4,124) - - - ---PONuMoncontroHndeblodnessi - -
_.Pellutionconbol c_
- __ . - ._. .due December.16,1906-Series 1,netof soeurities U _indebtedReesdue December 16,1006 - _,a _ . . - _ . _ _ . _ . - - hekitry trustee. , .u . . c, ,e 22,661-
. Series F (d) . . . . . . . . . . . c. . 10,000 -
Sinidne fund requirementon
; _ cl.sesseourmosholdby - - ~ ~ -- -'-
wg m g --~ ~ -- -- L tructos M. . w. . . u m u ._ (4,478) - _- Diovember 2,2000....... - - 3,000.- -. 3,000 _ _
- PoNuMonconbei unescurednotespayabledue mt- indebtedneesdue December 16
+- 1 -- -
- 1983and NS4m.c.w. m;; m --- - 98,008 ~ "
Capiteliaod lease obligation (l) .n . _1.606 . 1,464 L __s ,. Serleel(e) ._.10061 26,000 -. _.. _. ,,_
- ............. Other....................... 378 378
. ' '~
" Less escurilles '70,800 ~ '116,003 ~
trustee (b). u . .held
. . by[. .~.CIl2',de) - 1stelcurrent maturWes . . .
.pyg,g,,,,g, p .- - -
lohilonS hrm debt hes r --' ' --- -- y_, _indebtednessdue April 1, , ~_ . _ _ _ current mesurmes . . . . .s1,084,748 81.e66,077_ , i '
. 1908 Series C (e) c. . . . . . . . . .,28,000. -
- m. ' Leeseseurmesheldtry - - - - - - - - - - -
- - (a)The perNon outeteruNng of the 800,200,000 of - ' "--
. c.-
< trustee M. . . . . . . . . . . . . . .- - ..,218)
. ( . .
. 10%% fleet mortgage bonds due Fetwuery 1,1986 ses ciese-~
w . due AprN 1,100s m u .. .... 66,200 _ 66,200 . January 20,1006whentheCompanybonusedthepro a s Philunoncontrol coedsof 848,400.000of adlustablerateannualtender
.*~ heebtednessdue - - ~ ~ - - ---
popuMon compel remnue bouls due February 1,202.The - _m. _ December 1,200e(0) . . o . - . 90,000. .. 90.000 , . . bonds we beer interest through January 31 1000 at the . , _ Leeneesurtuneheldtry c rete of Su and momener at such rate, determined annueNu
- .A grusteeD), an.26. . . a --(14.448) -(22,741)--whichwlGeeusethebondstohaveamarbetvaluewhich "
e P
#.90lueencontal . . . . . .
._._ .approelmates as neerty as poselble, their per welue.The _ . _ _
W A. 21, m Septes G (s) . . . . .J.- 67,000 -- - - - pollred en January 2061006 umi tunds einertelnsl --
. LeessoeurWesheldtry leeuebya revenuebondtructos.
%- -SunseWim. W . m7~ ~ (8,004) ~ ' ~ * "~ M fhpresenungpoNuMoncoMroHumisdepesNedwNC ~ l
.. Philulleneselmi~ i uza ,. ... _ _ _ _ _ a revenue bond trustee and to be eheburned as needed to .
indebtednessdue May 1, pertheoestsof anguletne.construonne,resonstruenne, g7a song _, , , , ,7, g, m, ., . . . 06,7e0 - 06,7e0 - - improving, maintalrNng, equipping or fumleNng me teen. ~ h.~ ~~.Leessoeurtelesheldby ' 'teos financed. trustee M. . . . . . . . . .u . . . . (87) (c) Supported try'an inewoonble letter'of omdit issued r ./u UneceusednelespapeMedue : - - < - by a henk.The bonds metu e en December 16,1986,and, - - p
- 1000 and 1984(1). n . . ,4. . . - 98.003 contingsatonthereceiptof aleverableinternalRevenue
* ' ' ~ ' ' ~ ~
" " ~UnsecurednehspapeMedue ~ MRuNngenmoqueNNoeNonforWfmanche
,..41087 9 . a .,... + ... a .._ .70,000. , 70,000 . of certain teo4Neles,these bonds will beer intemet at 02% -
__ - m ..m - . l ,.,.s; ? x--m
-1.
. _ a_
' ' -. ve q.c f s 1
*-}r , ,
s
?= +
- s , - - ~ < '
y_ , jy .
~
\
.)
g'5D g - n i d,< n 7 1 q- $ U. ,480 y - ~ 46 +" + r-,- - -~-# > ~ - --- -
, vH of he primM. Waverd matiertain conditions'reiahng ~~ ~
18X% debentu'ros due February 1,1989;IedeemableSt[ G .- t theobtaining of such leverable ruhng are not satisfied,
. 101% from February 1,1988 through January 31,19t17; ;
interest will become payable at 110% of this prirre rate from and thereafterat 100%;
~
_ . l medeleofissuance. T'7' ~ ~ ~ ' " ' .
' 18% debentures due February 15 ~1989; redeemable at : -
uii (d)Consisteng of the borrowing from a governmental . _ 101% from February 15,1988 through February 14,1987; 2 l authority which has funded that amount through the issu- and thereafterat 100%; - ance of a series of bonds.These bonds beer interest equal - 11X% debentures due January 15,1990; redeemable at " ,
~D82% of the prime rats. , 1101%% from January 15,1987,through January 14, . -
' :(e) Contingent upon the receipt of a favoiable internal 1988; then at 100%% through January 14,1989; and - ;
- Revenue Servios Ruling on the qualification for the tax '
- thereafter at 100% - -
exempt financin9 of certain facilities, these bonds will bear 17X% debentures due October 15,1988 were redeemed ! interest at 86% of the prime rate. In the event that certain ' on October 15,1984 at 101%% plus accrued interest,' '
, . conditions relating to the obtaining of such favorable - (l) Represents the present value of future lease pay- - i
, ruhng are not satisfied, interest will boccme oevat.le at 110% ments (discounted at the Interest rate of 7.48%)on a com- !
~ of the prirne rate from the dele of issuance. bined cycle plant sold and leased back from the independent !
_, .. (f) Consistmg of a borrowing from a 90vernmental owner-trustee formed to own the facility. The lease requires - authority which is funding that amount with a ser es of semi-annual payments of $2,582,000 through June 2001,
- commercial paper borrowings supported by irrevocable and includes renewal and purchase options based on fair - '
letters of cred6t issued by banks and with five year, revolving market value.This plant is included in plant in service at its < han commitments from the banks allowing the authority ' originalcostof $54,405,000;accumulatedamortization
,, ' to obtain borrowmes thereunder in the event of disruptions at December 31,1984 was $19,138,000. -
in the commercial paper market.The cost to the Company
- i of its borrowings from the authority is equal to the latter's Subsequent to December 31,1984, the Company !
icost of.inoney in the commercial paper market plus fees - issued $125,000,000 of 12% Series First Mortgage Bonds I andintomet payable to the banks. which are due January 15,1995.The Company also issued :
^ (g) Consist 6ng of the borrowing from a governmental in an overseas market $75,000,000 of 12%% Debentures authority which has funded that amount through issuance due 1992, .
7 of a series of per walue demand bonde supported by a long- Aggregate annual payments due on long-term debt and 1
, -. term ie revocable letter of credit issued by a bank.These . for sinking fund requirements through 1989 are as follows:
bonds bear interest at such rate, determined weekly, as will 1985,881,971,000;1988,4100,868,000;1987,8102,820,000;'
~
cause the bonds to have a merket value which appromi- 1988,887,796,000; and 1980, 8137,985,000. Other sinking ; mates, as neeth as pose 4ble. their per value. -- fund requirements for each year through 1999 for the out- ~ '
- (h) On May 23,1983 the Company borrowed from a standing first mortgage bonds are as follows: 1985 and m governmental sumority the proceeds of a $66,750,000 -
1988,82,200,000; 1987 and 1988,82,060,000; and 1989,'
.__ineue of per value demand pollution control bonds for the - $1.860,000; as allowed in the bond indenture, requirements purpose of refunding $86,000,000 in aggregate principal - of this type have in the past been satisfied by certification
.4 amount of previouah leeued pollution control bonde due -
- of property additions of 1% times the amount stated and the -
- October 1,1983, plus accrued interest.The 886,750,000 Company expects to meet similar requirements in that
~ 7 IcedJ le supported by a long-term irrevocable letter of manner in the future. For sinking fund requirements and
_ credit issued by a bank,The bonds beer interest at such redemptions at the option of the holders of redeemable i rate, determined weekh, as will cause bonds to have a preferred stock,see Note 3. , market value which approximetos, se neeth as posoeble, - - Substantiallyall utility plant,other than the combined' meir pervalue ^ l
,. 4 cycle plant mentioned at'ove,is subject to the lien of the - -
. (6) Paid in four Installments, with the final payment first mortgage bonds.The indenture respecting the first '
- madeon December 1,1984,; mortgage bonds includes provisions which would restrict '
, (i)Consistingof two kr., _....Emkloansof $60,000,000 the payment of dividends on common stock under certain _ j 1 and $20,000,000, both due in 1987, The principal amounts ~ ' cond6tions which did not exist at December 31,1984. !
' of such toene beer interset,at the Company's option,at one or more of the following annualinterest rates through .5. Short-11erm Borrowings and Componesting Bolenses.
- mid September 1986:(a)the Prime Rale,(b)the CD Rate The Company's lines of credit at December 31,1964 - :
plus ML or (c) the Eurodolier Rate plus %LThereafter, and 1983 are summarized below. No amounts were out- > T d the Company's option, the annual interest rates will standing under the lines at December 31,1984 or 1983.
- ' become:(a)in the case of the first loan,102% of the Prime -
}
iged 1933 Rate or,in the case of the second loan,the Prime Rate plus .
')(L (b) the CD Rete plus %L or (c) the Eurodollar Rate Commercialpaper backuplines: (Thousandsof Dollars) t
'_ , plus ML. _. _ . .- Comestic banks 8125,000 $105,000 ! (k) Representing debentures issued by Finance, the Foreign banks 60,000 50,000 ! payment of principal and interest on which has been Otherdomestic bank lines 245,000(a) 45,000 j uncondet6cnolly guaranteed by the Company. The deben- Total 8420,000 $200,000 i furos are redeemable at the option of Finance as follows.
- FW% debentures due July 16,1988; redeemable at (a) including $200,000,000 available under a credit
!- 1014% from July 15,1986 through July 14,1988; then agreement between the Company and various banks. Such P ^ ~ 1st 100%% through July 14,1987; and thereafter at 1004 credit agreement commenced May 31,1984 and carries a 4 4, commitment fee of X% per annum. m.~ ..~r.. ...,~-.-.,,_._,,___..-_m, .m . - , , ...-__m-._~_m _,.m- m ,, ,_.4 . r,y x ,7
9 ArizonaPkblicService Company i s
~
m , . . . .-- - . .. . - _ . . - . -- -
"The commitment fees for the commercial papef
~
'the' applicable Eurodollar Rate in effect from time'to time.' ' ~
W backup lines with domestic banks were %% per annum in
~ On December 21,1984, the Company borrowed from - - --
. 1984 and 1983. Compensating balances required (but which - a governmental authority the proceeds of $1,980.000 of
- were not legally restricted) for the other domestic bank ~ 'short-term pollution controlindebtedness issued to a bank.7 ~
. lines (;xclusive of the credit agreement referred to in (a) .
. Such indebtedness matures September 30,1985 and, cons
. above) were generally 7%% of the lines plus 5% of the bor- tingent upon the receipt of a favorable Internal Revenue
' rowings in 1984 and 1983. Substartially all cash shown on Service ruling on the qualifications for tax-exempt financing ' -
the balance sheets is considered compensating balances. of certain facilities, bears interest at 65% of the bank's
. Under foreign bank lines, commitment fees were prime rate. In the event that certain conditions relating to
~ ~
- payable at %% per annum in 1984 and 1983.The interest . the obtaining of such favorable ruling are not satisfied,- -
rate on borrowings under these facilities was approximately interest will become payable st the bank's prime rate from
%% per annum over the applicable Eurodollar Rate in the date of issuance. At December 31,1984, $180,000 of -
_ etfect from time to timem . . . . the loan proceeds were on deposit with a revenue bond At December 31,1983, the Company had borrowings trustee, to be disbursed as construction progresses on the
-of $30,141,000 from foreign banks which were not partici- financed Iacilities.
. pants in the lines of credit described above. No amounts By statute the Company's short-term borrowings can-
- were outstanding at December 31,1984. The interest rato not exceed 7% of total capitalization without the consent of on such borrowings was approximately K% per annum over the ACC.
.s. Jointly Owned Facilitlec.
_ . , At December 31,1984,the Company owned the following interests in jointly-owned electric generating and transmission
~ facilities (dollarsin thousands):
Percent Not Construction ownedby Plantin Accumulated Plantin Workin Company Service Depreciation Service Progress Generating Facilities: Arizona Nuclear Power Project (ANPP)-Units 1,2. and 3 . . . . . . . . 29.1% $ -
$ - $ - $2,045,671 Four Corners Steam Generating Plant-U nits 4 and 5 . . . . . . . . . . . . . . . . . . . 15.0% 115,893 16,998 98,895 924 Navalo Steam Generating Plant-E ~ < Units 1,2 and 3. . . . . . 14.0% 119.081 33,933 85.148 -
Transmission Facilities: ANPPTransmission System. . . . . . 35.8%(a) 7,382 595 6,767 36,909
, Navaio Southern Transmission System , . . . . . 31.4%(b) 28.198 8,187 20,011 -
Palo Verde-Yuma 500 KV System , . . . 23.9%(c) 15,638 186 15,452 1,581 Total. . . . . . . . . . . . . $286,172 $59,899 $226,273 $2,085,085 (a) Weighted average of interests varying f rom 34.6% to 43.95%.
-~
(b) Weighted average of interests varying from 14% to 100%. _ . ~ . -
. (') Weighted average of interests varying from 11% to 100%.
w' The foregoing dollar amounts correlate to the Company's percentage interest in each facility. Financing for such interests .
' : penvided by the Company The Company's share of related operating and maintenance expenses is included in operating spenses * * ~ ' ' - - - - ' - '
e - _ . ._ _ - - . , , - . - -
-~._m .a W , --. , ,. - s - . _ , . . . _ . - . . - _
, w i v+,7-. g m. .- + + u . .L- +-,n~ v - ~ v,. - <
, a wg . . _ . - & ,u -- a r a .- - - + c. = < -ar.w...
3 A ,y yy w #. .g e A - . 4 .+vv -. A s - eb
, . . . . ..u & , , . , . , , w w.sse m =a . 46 e q,p g ,,_ ,,,g_ .
--.3 e.q,.. --.++P .*--4h ".
w y 3, y o . e -= " - - " "+ g -
- g. m.
l .> t
~
e-7,incomeTax Expense. '
'At Decor 2er 31,1984 the Company had approximately The components of income tax expense-continuing $ 12,000,000 of Investment tax carryforward which will operations for each of the three years in the period ended expire through tD99.
December 31,1984 were as follows: _ g Year Ended December 31, m , The Company's,p, ension plan, a defined benefit plan, 1984 1983 1982 covers virtually all employees. Pension codMiuding admini-(Thousandsof Dollars) ' strative cost, for 1984,1983, and 1982 was $16,370,000, _ Currently payable; $15,248,000, and $11,865,000, respectively, of which Federal $ 14,578 $ 14,224 $ 6,267 approximately $6,512,000,36,871,000, and $4,971,000, State 16,340 10,742, '11,619 respective,1y, was charged to expense; the remainder Other 3,606 2,870 1,774 was eithei capitalized as a component of coe,ttruction costs 34,524 27,836 w t pa pan soWnWowne@hs. Totalcurrent 19 EO Thefollowingisasummaryof plantilaasof themost Deferred: , recent benefitinformation cate: -
- Depreciation-not 26,276 22,G71 20,709 , . Jcnuary 1,-
Taxes, pension costs and - 1984 -1983 other-net 18,367 .b,627' 2,260 Investment tax credit-not 59,592 ' 39,583 ~ 52,158- Actuarialpresent value of .- .(Thousandsof Dollars)- accumulated plan benefits: Totaldeferred 104,235 67,781 75,127 Vested / $ 115,984 ' ~ $109,818 ' Amortization of tax. - . . . Non-vested 10,499 6,166 benefits sold (1,687) (1,687) (1,687) Total
$126,483 $115,984 Total $ 137,072 $93,930 $93,100 $154,542 Netassetsavailableforbenefits $182fg7 '
in 1981 the Company sold to another corporation The actuarial present value (assuS4ng a 9.00% rate certain federal income tax benefits in exchange for cash. of return) of accumulated plan benefits presented above has The Company, pursuant to an orderof the ACC,has recorde4 not been calculated with reference to the of fects of pro- - the proceeds of the sales as a deferred credit and is amor- jected inflation,whereas such effects he considered by the tizing the amount of such proceeds on a straight-line basis Company with reference to the adequacy of plan assets; over approximately 30 years, , _ ._.
. accordingly, the Company considers the utility of the Following is a summary of the dif ference between comparison suggested to be extremely limited.
income tax expense-continuing operations and the amount in addition to providing pension benefits, the Company obtained by multiplying income before income taxes by provides certain health care and life hsuranc6 benefits the statutory federal income tax raw,. for retired employees. Life insurance benefits are provided Year Ended December 31,- through an insurance company whereas health care costs 1984 ' 1983 1982 are paid as expenses are incurred under a self-insured plan. The cost of providing those benefits for 1,081 retirees Federalincome tax + is not separable from the ccEt of providing benefits for the C3 statutory rate ,,, ,$100,035 $166,972 $147,844 7.403 active employees,The total cost for such in 1984 was increases $13,786,000, of which apprekimately $5,689.000 wa's charged (reductions)in taxes to expense; the remaindar was eithur capitalized as a resulting from: component of constjuction costs or Gilled to participants Tax under booit - - of jointly owned faciHiles. depreciation , , , , 14.165 10,213 8,867 g, Q 'm onts. . Allowance for funds used during The Company has significant purchase commitments construction . , , , (84,491) (83,709) (63,169) in connection with its continuing construction program, investment tax Construction expenditures in 1985 have been estimated credit , , , , . , , , , , (2.827) (1,070) (1,378) at $350,000,000, Taxes, pension 10. Supplementary income Statement Information, costs and other Other taxes chargod to operations during each of Items capitalized, - (6,640) , (8.340) the three years in the period ended December 31,1984 are
. State income tax- as follows:
not of federal - ~ Year Ended December 31, rei, 7,070 7,338 1984 1983 1982
,,,,., 11.172 _
Other,, ,.,,,,,,, (682) 2,3C4 '. 1,038 (Thousands of Dollars) Tota Ad valorem . . $42,581 $44,691 $47,611 s n {9 , Sales . . , , 45,495 32,16A 31,284 staleincomo Oths. 6,372 5,5 W 4,593 tax , , , , , , $ 137,072 $ 03,030 $ 03,100 Totalother taxes ; , $94,448 $82,420 $83,488 y m - J
Arizona PublicService Company - _ .- w .a_ a. n _._- . _ a. ,__ - - ~._ _ _ ._._ .
. , ~~ s % c_4.+., .-n...~-e_ .a y . . - - .A. _ _ _ . - , . _ . . . - - - .. m, . . . .
- 11. Discontinued Operations. ~ ~ ~
~
~ ~ ' lEffectise Novensber 171984(the" Closing Date")th'e~ ~ -costs associated with the accelerated replacsiment of cer '
H Company sold its gas distribution system to Southwest Gas - tain gas pipe included in the gas distribution system - - - Corporation (" Southwest).The purchase price paid to acquired by Southwest by purchasing, under certain "
- the Company on the Closing Date (the " Interim Purchase ~ ~ conditions, up to $50,000,000 in aggregate par value of ~
a Price")was $112,390,000,approximately $100,000,000 of _ cumulative preference stock (the " Stock") to be issued by .
' which was used to redeem certain of the Company's first Southwest. Any such purchases would be made by the -
' mortgage bonds. The Interim Purchase Price is subject to ~ - Company within approximately three years following the - -
_ final adjustment to reflect a certain percentage of the net Closing Date. The Stock would yield an annual dividend _ , _ . book value of the gas distribution system as of October 31, of between 3% and 16% (payable quarterly) based on a
- 1984, estimated at $134,000,000, and to reflect a certain - . formula relating to the operating performance of the gas -
percentage of the value (also as of October 31,1984) of distribution system. The Stock is also redeemable by 7 certain rights purchased and obligations assumed by South- Southwest, at its option, on any dividend payment date,' _ . west with respect to the gas distribution system. Any such . (at the issue price plus accrued dividends), but must be
- adjustment is not expected to be significant.The final sales redeemed no later than seven years after the issuance date
' pric]is expected to result in a non-recurring loss of as to any issue.
approximately $26,470,000, net of an income tax benefit of . _ Revenues from the Company's discontinued gas
$7,094,000 (approximately $0.39 per average share of operations for December 31,1984,1983, and 1982 common stock)in 1934. -
were $174,728,000, $202,134,000, and $197,967,000, The Company has also agreed to fund a portion of the respectively.
~ ~~
- 12. Selected Quarterly Financial Data (Unaudited)
. _ . ~~ ~ "~
l income (loss) Earnings Earnings (loss) per share of '
-- - . from . from from for common stock
- Continuing Continuing Discontinued Net Common Continuing Discontinued Operations Operations Operations income Stock- Operations = ~ Operations '
Quarter - - -
- (Dollars in Thousands, Except Per Share Amounts) 1984
~
F
' ~ ~ ~
~ ~ $203,937 ~ ' $ '~ 51,324 ~ ~ ' $ 1,397 $ 52,721 ~ $41,598 ~ $0.60 $0.02
. Second- - _ . - - - - . 236,712 - 61,889- - _ (185) 61,704 ~ _49,600- 0.73 -
Third 311,845 103,118 (1,028) 102,090 89,456 1.32 (0.02)
~
- Fourth '242,473" 81,239 (26,687)- 54,552 ' 42,038 0.99 (0.39)
_ _1983 ._ _ __ First _190,618 49,096 1,979 51,075 40,954 0.62 0.03
- Second - --
-205,831- - 59,795-- (2,555) ~ - 57,240 46,008 - 0.77 - (0.04) -
Third 266,939 92,597 (3,633) 88,964 77,750 1.28 (0.06)
~ Fourth ~ ~ 208,487 '67,564 (46) 67,518 56,344 0.86 -
' =d
- 13. Supplementary information to Disclose the Effects of Changing Prioes(Unaudited),
~The following supplementary information is furnished portion of the investment,which was not reflected in 1984
- pursuant to Statement No. 33 as amended by Statement depreciation or in the Company's return, and which is No.82 of the Financial Accounting Standards Board for the therefore not " recoverable
purpose of illustrating the of fects of changing prices in an ~ For these presentations," current cost" amounts were
~
inflationary environment.it offers some perspectives of calculated by applying certain indices (or ratios derived approximated etfects of inflation, and is not intended as therefrom) to certain historical or other smounts.The pri-precise measurements of those of fects. mary index was the Handy Whitman Index of Public Utility The Company and other public utilities similarly situ- Construction Costs (an estimate of which was used for the ated are subject to rate-making procedures which, by law last half of 1984), although the Consumer Price Index
- - - and practice in large part utilize the historical cost of utility was used for construction work in progress.The Company plant in the determination of the allowed recovery (through believes that the Handy Whitman Index is the more accurate
'~
~ depreciation) of the investment therein and return thereon. of the two in estimating the prices it would incur to dupli-Th:3 precludes or restricts a rate-making response to the cate at various times its utility plant in service at the indi-of fects of realizing such recovery and return in inflated cated dates. Over the period from 1980 through 1984
" dollars, compared to those in which the investment was the Consumer Price Index rnse faster than the Handy made,The first table below presents an approximate Whitman index.
measurement of those offects from the perspective of that M, ad
u a. ., ; .. -- _ . . _ .,,__ a - - -
. ~ ~ .._ ,,.w~~..__.._ . - . ~ - , . , ~ . _ . _ ~ _ . . _ . . . . _ .
-._.,m. Electric depreciation expense for 1984 was recal . As contrasted to the assumed net value losses which,
+" culated by applying the Company's composite depreciation - - in the presentation below, are associated with the holding -
~"~
rate to depreciable base determined by indexing certain ~
~~~
of assets committed to a regulated business, there is an
~
appraised values from the times of appraisal.The amount assumed " holding gsin" associated with borrowings that - ~ - by which the expense so recalculated exceeds that shown --will be repaid with inflated dollars.The 1984 decline in the -
'on the Company's 1984 Consolidated Statement of income purchasing power of net amounts owed by the Company
- ' appears as an adjustment to income from continuing----(measured by the Consumer Price Index) appears to result ~ _ . _ i operations.. . __-._ - . ___.___ _.- ._ in a" net" difference between the assumed holding losses . _. The sum of the depreciation adjustment and the figure and gain. -- shown lower as the " reduction to net recoverable cost" - - -- Inferences which. in the case of some industries,- -- n, was derived through application of 1984. increases in the . _. _may be drawn from information in the nature of that pre .__ Consumer Price Index to historical costs of the Company's sented below as to the adequacy of future cash flows in
..- utility plant.- ~ - --- -- -- ---
- relation to future plant replacement requirements are - -
The Company did not make adjustments to asset believed by the Company to be less valid in the case of
~~ values,or related consolidated income statement amounts,~ ~public utilities which.~like itself,'should be able to establish'~ "
u o erthan th those discussed above in regard to utility plant-. _ rates to coverincreased costs of new plant. However, the.._ _ _ and depreciation thereon. Fuel inventories and fuel expenses information may provide some indication of the expanded are.in effect, monetary items,due to applicable rate -~ - capital structure that will be required for making plant - - % _. making procedures which include adjustment clauses. In _ _ repts. cements and additions with inflated dollars... ____ accordance with Statement No. 33, as amended by State-
- ' ment No. 82, income taxes were not adjusted.- - -- - - - - - - -- - -- -
_.y______ . . ... _ . .._ _ _ _ _ _ . _. _ __ . __
-%.~.-_..--~m.m..m . ... ... .. m. ._ .,,, ,,, _ _ , , , . . _ _ , _ , . , _ . _ . _ _ . , _ . , _ _, , , , , _ , , . , _ _
Income From Operations Adjusted for Changing Prices for the Year Ended December 31,1984 ..- - - u _ .; . _.__..n___.a.. _ ._ __ -_ _- ._ _ ___ _ _. _ ._ Current Cost : _ ! Average p._ __._.22_ ._ a _. .. _ _._.m_._. . _ _ _ _ . _ . _ _._.-1984 Dollars i -- L ._ _. ~ -._ _ ~ - . _ _ _ _ _ _ . - . . _ . . . _ _ ~ . ~ . . . __ .(DollarsinThousands, _.
~
' Except Per Share Amounts)
"' ' ~ Inc6me from continuing ~ ope ~rstions"a'i~r~el5ortid in Consolidated Statements'ot income ~. . .T ~. . ~. ' T." J $297,570 ~ ~' ~
H - . - Adjustment to restate depreciation expense , . . n ... - .n m....u - m.v. m -..,,...n..n.c.... - (74,931) - -
._a_ income from continuing operations (excluding reduction to net recoverable cost) . ~ . . . . . . . . . ... . . . . . . 3222.639 ... -
___.u_..~.__ Ir _._.. Income and excluding from continuing reduction to net recoverable operations cost) . . per common share (after preferred stock
. . .... . .. . . .5 dividend 2.55 requirem , - Increase in specific prices (current cost) of utility .
plant held during the year (a) c. r;. . .; ;. ' ~ ....... .. . m.. m . ~.m . t r er~ .~. cr. $195.404 ~ - _. _ Reduction to net recoverable cost . . . , . . . . , . . . u .
. .. _ . .. . .. . . . (36,899) __
Elfect of increase in general price level . . . . . . . . . . . . . . (242,350).
" ~
Excess'of increase in general price level over increase '
' ~ ~
~~ ~ ~ ~~
._ -. in specific prices after reduction to net recoverable cost . . . . . . _ . . . . . . . . . . . . . . . . . ..... .......... (83.845) _._ _
. Gain from decline in purchasing power of net amounts owed . . . 89,940 Net . . . . . . . . . .. . . .. . ..$ 6,095
^ ~ ~
s :(a) At December 31,1984. Current Cost of Utility Plant-net was $6,565,228. pa % Ch % e.en w.agn i .+ % 4.,,,% . _ . , .&.,.., w_. ._,.,..m. . , , , , u m=.,..%.+-ar%%._,... . . . _ _ ..
- Chb-.'dF'.y=.>%PW.-bmtw**.q.ri,;. .
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l 2rizona Public Service Company Jf.-.h . _. n -.- - .: - - - .: .- . - .---. - -- - - . - . - . . - - - . - - . - . .
.. ~ .__ . .
_ _._ _-_._ Veer . _
,Five Comparison of Selected Supplementary Financial Data MM for Effect of Changing Prices _
_ ___ _ a._ a . - _. a __ _ _ . _ ...;_c _ . _ __ - ~'*- ~~~ ~~- IIner Ended December 31 u-. __ . . . . .. , - u.- _ggg4- -1983 ~- -- 1982 --1981 - - 1980 - -
- 2. _ , _..._7 --___._ _ .-. .u- (Amerage 1984 DollarsinThousands, Except Per Shore Amounts) u..
_;. Electric operating revenues M ,.u,u w m ... m . , ,. .. S 994,967_ $2 908,9822$ _932,424_32834.6111$, 783,881__ Currentoostinformation . H Income from continuing operations (excluding m-~" .
------ - - - r- H --- - -- -
reduction to net recoverable cost) . . . . . . . . . . . . . . . $ 222,639 . $ : 203,662~~~170,261-~~~ ~
$ $~ ~158,071~ $~~111,254
~~ ~ '"~ - ~ ~ ~
"Eincome from continuing operahons per common
-. share (after dividend requirements on preferred . _ -. ,_ _ _.a._.___-.- _~ _ . _ _
stock and excluding reduction to net recoverable . cost);=.Z . . ~. . .T.Tir.n'.T T.~. T.~r' . . . . $ - 2.55 $~ 2.47 ~~ $- - - ~ 2.23 ' ~ $ - 2.43 ' $ ~'- - - 1.86 - - . Excessofincreaseingeneralpricelevelover . _ _. _ _ _ . . . . _ _ . _ _ .._ _.._. _ _ . _ . . _ _ _ _ _ , increase in specific prices after reduction to net .
- -recoverable cost m., crc .t .w. . . . . . . . . . . ... -$ (83,845) - $ --(65,901)-- $ - (54,717) - $ (201,062) 7 $ -(285,641) - - -
Net assets at year-end at net recoverable cost * . . . $1,887,784 $1,850,437 $1,714,241 $1,540,783 $1,407,669 7 Re' uction'to d net recoverable cost!.' . '~. .' T'i.7$ 36,899 ~ s ~42,834 $ ~ ~32,226" ~$~198,892 ~~$ J 208,252' ~
. Generallnlormation -., .a - - - - - -.-- - - - . ~ .--- --. - - - - - . - . .._ ._ _ .~.- _ _
Gain from decline in purchasing power of net - . _.~ amounts owed C .'. .T;'. .~!!?~ ^Ti. . . . ~~~T ZTT' $ ~ 89,940- $ ^ ^ 82.516 - $ ' 76,941 ~ $~ ~ 165,159 $ ~ 214,989 ~~~~
.. Cash dividends declared per common share .. m. . . . . _ $ . _ . 2.60 .. $ .. ...2.67. . $ . . 2.59_ $ _._ . 2.51 _ $ -
2.60 - _ Market price per common share at year-end . . . $ 22.00 $ 19.88 $ 25.94 $ 21.41 $ 21.22
- Averageconsumerpriceindex~ r. . . . . T- - 311.1 - - 298.4 -
289.1- ~ 272.4- - 246.8 -
- __, _ . - _ ._-._ __ . ~ ._ _ _ - ~ _ - _ _ . _ _ . _ _ _ . _ _ _ - . _. ._- _ __. _ _ _
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h \.f r f idfb #ff h. $; .- 4 de f.d ki 'P f e "3 k Y a 'i f , f [as y f (( F, ( ,.s ' est f h\s, [. g e r t , f sp a, Boarrlo Directors tloc Acosta, el, iounder At osta. Cordova /olm R. Nor ton Ill,50, pr(sident, l.R. +Alamice R. Tnmcr; e3,(hairnun of the
& l'ittnun, C.l?A.s,I?A.,l'hoenit An/ona Norton Co. l agncultural procha tion i, luurd antf ( hief exec utive officer, The I)ino I)cConcini,51, attorney at law, of I'hoenit Ari/ona Ianner Companies u onstrut tion and counwl to 1 )cConcmi Nh lionaki lirammer lolm 1. Rlro,Ics, v8, iormer member of materials supply 6,l'hoenit Ari/ona Yetw in & I acy. I!C., l'hoenit An/ona the l'.S. Ilouse or Represent.itives and +1(cith L Tiolev,01, chairman of the board i
+0. Alark I)c Alichcle,51, pusittent and :urtner in the 1.nv iirm of Rhodes & laylor, and (hief executive of ta er of the (ompany
( hief operating ottit er of the company, Washington, IlC. I'hoenit Ari/ona l'hoenit An/ona lIcnr v li. Sargent, Ir.,50, cux utive vic e +tl)onglas J. !\hl!,58, member of the law
+ Aar/ Filer,50,( b.urman of the lio.u d.The pnsident and ( hiet tinancial ott a er of the firm of N1angum Wall Stoops & War,!..n, Cin le K Corporation, Phoenit An/ona t om;uny, l'hoenis Ari/ona llagstatt, Arizona
+ lVillwn I Garland, v8. pa sident of IVil"ta IV SiIncada 58, civic leader and + Atorricon E l\hnen el professor ementus
(,arland I and Co. tland development). homenuker. Iempe, Ari/ona of education. Ari/ona State l'niversity, Sedona, Ari/ona la,ncs I: Sinn rous,00,( hairnun lempe, An/ona ; fl'arnc[a ( s'rar!t kor f, -lp, (11alIman N t lUc} oI tlW !'oart!. [ nitet} l$ank ot Ari/ona, t[ic7! b IVi((/ ants, [E,53, nuyor of t he eux ut ive ot t a cr, ( ;ohlwaters, t hvisnin l'hoenit Ari/ona City ot I)ouglas and attorney at law, of Ass (x uted I)ry (;oods K;cneral + Na harJ Se:cil,51. ( hairnun of ihe boani ITouglas Ari/ona Nicn antitet Swttsdale, An/ona and president. Ranuda Inns Ini . Tho,nas (;. Ihde, /t,5S, exet utive vit e tlai k A1. Alorgan, of, attorney at 1.nv and l'hoenit An/ona presa!cnt for the Arizona Nuclear l'ower state sen.itor, I ar nungton New Nicxa o * / beald N. So.'d.ceJcl. e0, presa!cnt. Projet t, Phoenit An/ona Ala rm R. Alorrison, el, tarmer, i attle Wester n New spapers. Ini .. T unu, An/ona let't!ct and dalfvnun, Nlornson l$nithers *
*l ','
Rani h. t hglet An/ona
-it ] l 5ms 9
Arizona Public Service Company n~' ^. wiiiiams,39, vice Registrars Officers president and treasurer, Finance D. Louis Broussard,64, vice and Tax Services Th' Vall'Y N "al Bank of An. zona,Phoemx, Arizona president, Research and Develop-ment (Ret. 6/84)
"""8 Y E N"58, l The First National Bank of Boston executive vice president, An. zona B ston, Massachusetts (common O. Mark De Michele,51, president Nuclear Power Project (Ret.2/85) stock only) and chief operating officer Walter E Ekstrom,47, vice (Age n AnnualMeetingdate, April 18,1985) president, Electric Operations *In February 1985 Thomas C. Woods, Jr.
KarlEller;56,chairmanof the retired fr m the company and Edwin Van Snell & Wilmer, Phoenix, Arizona
. Brunt, Jr., formerly vice president, Nuclear, execut.ive committee was namca executive vice president for ihe
' P $ i!l Auditots David W. Ellis,46, vice president, ^/jj}"'oNh n rd o@i .
Research, Development and Deloitte Haskins & Sells Alternative Energy Applications Phoenix, Arizona Kathryn A. Forbes,34, Shareholder general auditor Stock Purchaseand Dividend ' faseph A. Gelinas,40, vice OMahOn Reinvestment Plan president, Employee Relations Stocklistmg A Prospectus describing this plan B. l aul Hart,61, vice president, (SymbohAZP) forholdersof thecompany'sstock Rates and Regulation Commonstockof thecompany; is available to shareholders upon Russell D. Hulse, 57, vice president, the $10.70 cumulative preferred request. Write:Officeof the stock, Senes I; the $3.58 cumula- Secretary, Sta.1892, at the Resources Planning t,ve preferred stock, Senes 0; i address below. Jerry Human,54, vice president, and the adjustable cumulative pre-Customer Services, State Region ferred stock, Series Q, which Charles D. fannan,49, vice ended the year at $2.438; arelisted Fonn M president, Engineering and for trading on the New York A copy of our Annual Report to Construction Stock Exchange. Common Stock is the Securities and Exchange Com-alsolisted on the Pacific Stock mission, Form 10-K, will be Guy W Lunt, Jr.,51, vice president, Exchange. available after March 31,1985, Customer Services, Metro Region without charge, upon written faron B. Norberg,47, senior vice request of shareholders. Write: president and corporate counsel TransferAgents Office of the Secretary, Sta.1892, John C. Ogden,39, vice president, First Interstate Bank of at theaddress below.
~
Customer and Administrative Arizona, N.A.
- Services Corporate Trust Operations Statistical Report William J. Pbst,34, controller Dept. 958, RO. Box 29715 Phoenix, Arizona 85038 A detai!ed Statistical Report for Shirley A. Richard,38, v. ice Financial Analysis 1974-1984 will (602)271-1620 president, Corporate Relations be available by mid-April on H. B. Sargent, Jr.,50, executive request. Write:Officeof the The First National Bank of Boston Treasurer, Sta.1820, at the vice president and chief financial Shareholder Relations . officer, Corporate Finance, ddress below.
PO. Box 644 Planning and Control Boston, Massachusetts 02102 MAILINGADDRESS: Keith L 7isrley,61, chairman and (617) 929-6498 (common PO. Box 21666
- chief executive officer stock only) Phoenix, Arizona 85036 *E E Van Bnmt, Jr.,53, vice president,-Arizona Nuclear Power Project fuye Widenmann,36, secretary
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