-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QZP8u59rFIq1SYtO5BeIDOF6+XkjeauHJETCc565KidnSILk8FS64nRl2QpkqITB wdwrKWCeKMN0rKqKKVdWdw== 0000950147-97-000223.txt : 19970410 0000950147-97-000223.hdr.sgml : 19970410 ACCESSION NUMBER: 0000950147-97-000223 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970407 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970409 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARIZONA PUBLIC SERVICE CO CENTRAL INDEX KEY: 0000007286 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 860011170 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04473 FILM NUMBER: 97577421 BUSINESS ADDRESS: STREET 1: 400 N FIFTH ST STREET 2: P O BOX 53999 CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6022501000 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 7, 1997 ---------------- ARIZONA PUBLIC SERVICE COMPANY ------------------------------ (Exact name of registrant as specified in its charter) Arizona 1-4473 86-0011170 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona 85004 -------------------------------------------------------- ----- (Address of principal executive offices) (Zip code) (602) 250-1000 ---------------------------------------------------- (Registrant's telephone number, including area code) NONE ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statement, Pro Forma Financial Information and -------------------------------------------------------------- Exhibits -------- (c) Exhibits. The Registrant hereby files the following Exhibit to its Registration Statements on Form S-3 (Nos. 33-55473, 33-64455 and 333-15379) which were declared effective on October 3, 1994, December 22, 1995 and November 14, 1996, respectively. Exhibit No. Description - ------- ----------- 1.4 Terms Agreement, dated April 7, 1997, in connection with the offering of $50,000,000 of 6.72% Senior Notes Due 1999. 4.8 Fifty-fifth Supplemental Indenture dated as of April 1, 1997, relating to the issuance of $50,000,000 of the Company's First Mortgage Bonds, Senior Note Series B. 4.9 Specimen of Bond of First Mortgage Bonds, Senior Note Series B. 4.10 Second Supplemental Indenture dated as of April 1, 1997 relating to the issuance of $50,000,000 of 6.72% Senior Notes Due 1999. 4.11 Specimen of Note of 6.72% Senior Notes Due 1999. 12.2 Computation of Ratio of Earnings to Fixed Charges. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ARIZONA PUBLIC SERVICE COMPANY (Registrant) Dated: April 9, 1997 By: Nancy E. Felker --------------------------- Nancy E. Felker Treasurer EX-1.4 2 TERMS AGREEMENT Arizona Public Service Company ("Company") Medium-Term Notes, Series B Due Nine Months or More from Date of Issue TERMS AGREEMENT --------------- April 7, 1997 Arizona Public Service Company 400 North 5th Street Phoenix, AZ 85004 Attention: Treasurer Ladies and Gentlemen: We offer to purchase, on and subject to the terms and conditions of the Distribution Agreement filed as an exhibit to the Company's registration statement on Form S-3 (No. 333-15379) ("Distribution Agreement"), the following Securities ("Notes") on the following terms: Title: 6.72% Senior Notes Due 1999 Currency or Currency Units: United States dollars Stated Maturity: April 1, 1999 Principal Amount: $50,000,000 Public Offering Price: 100% Original Issue Discount Security: Yes No X ---- ----- Denominations: $1,000 and integral multiples thereof. Purchase Price (to be paid in immediately available funds): 99.750%, plus accrued interest, if any, from April 10, 1997 Underwriting Discount or Commission received from the Company (%): .250% Proceeds to Company (If different from Public Offering Price) (%): 99.750% Optional Redemption (option of the Company): As described in pages S-3 to S-4 of the Prospectus Supplement, dated December 26, 1996 (the "Prospectus Supplement") Optional Redemption (option of the Holder): None Sinking Fund: None Other Terms: None Trade Date: April 7, 1997 Settlement Date (Issue Date): April 10, 1997 * * * * * Details for Settlement - ---------------------- Exact name in which the Note or Notes are to be registered ("registered owner"): Cede & Co. Principal amount of each Note in authorized denominations to be delivered to registered owner: $50,000,000 * * * * * Our agreement to purchase the Notes hereunder is subject to the conditions set forth in the Distribution Agreement, including the conditions, and the delivery of the documents, set forth in Section 5 thereof. If for any reason the purchase by the undersigned of the Notes is not consummated other than because of a default by the undersigned or a failure to satisfy a condition set forth in clause (ii), (iii) or (v) of Section 5(c) of the Distribution Agreement, the Company shall reimburse the undersigned for all out-of-pocket expenses reasonably incurred by the undersigned in connection with the offering of the Notes and not otherwise required to be reimbursed pursuant to Section 4 of the Distribution Agreement. The Notes will have the terms described in the Prospectus as supplemented by the Prospectus Supplement dated December 26, 1996 and the Pricing Supplement No. 1 dated April 7, 1997 (the "Pricing Supplement"). The principal amount of Notes to be purchased by each Distributor is as specified in the Pricing Supplement. The obligations of the Distributors to purchase the Notes shall be several and not joint. Notwithstanding the terms of the Distribution Agreement, the Company and the Distributors agree that the Company shall prepare the Pricing Supplement within a reasonable time following the Settlement Date (Issue Date) for the Senior Notes and, on the date of the filing thereof with the Commission, to hold the Closing Date specified in Section 3(e) of the Distribution Agreement at 8:00 A.M., Phoenix time, on such date. If any Distributor or Distributors default in their obligations to purchase Notes pursuant to this Terms Agreement and the principal amount of the Notes that such defaulting Distributor or Distributors agreed but failed to purchase is ten percent (10%) or less of the principal amount of the Notes, the Distributors may make arrangements satisfactory to the Company for the purchase of the Notes by other persons, including any of the Distributors, but if no such arrangements are made by the Settlement Date (Issue Date) the nondefaulting Distributors shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Notes that such defaulting Distributor or Distributors agreed but failed to purchase. If any Distributor or Distributors so default and the aggregate principal amount of Notes with respect to which such default or defaults occur is more than the above described amount and arrangements satisfactory to the remaining Distributors and the Company for purchase of such Notes by other persons are not made within thirty-six hours after such default, this -2- Terms Agreement will terminate without liability on the part of any non-defaulting Distributor, except as provided in Section 9 of the Distribution Agreement. As used in this Terms Agreement, the term "Distributor" includes any person substituted for a Distributor under this paragraph. Nothing herein will relieve a defaulting Distributor from liability for its default. Credit Suisse First Boston Corporation is acting as representative for the Distributors specified in the Pricing Supplement in connection with the offering to which this Terms Agreement relates, and any action under this Terms Agreement taken by Credit Suisse First Boston Corporation in such capacity will be binding upon the Distributors to which this Terms Agreement relates. -3- This Terms Agreement shall constitute an agreement between the Company and the undersigned for the sale and purchase of the Notes upon the terms set forth herein and in the Distribution Agreement. Very truly yours, CREDIT SUISSE FIRST BOSTON CORPORATION SALOMON BROTHERS INC By: CREDIT SUISSE FIRST BOSTON CORPORATION By Helena Willner -------------------------------------------- Vice President Accepted and agreed to as of the date set forth above. ARIZONA PUBLIC SERVICE COMPANY By Nancy E Felker --------------------------------- Treasurer -4- EX-4.8 3 FIFTY-FIFTH SUPPLEMENTAL INDENTURE ================================================================================ ARIZONA PUBLIC SERVICE COMPANY (formerly Central Arizona Light and Power Company) TO THE BANK OF NEW YORK As trustee under Central Arizona Light and Power Company's Mortgage and Deed of Trust, Dated as of July 1, 1946. --------------- Fifty-fifth Supplemental Indenture --------------- Dated as of April 1, 1997 This Mortgage covers real property, personal property and chattels. This instrument and the above-mentioned Mortgage and Deed of Trust contain after-acquired property provisions. ================================================================================ FIFTY-FIFTH SUPPLEMENTAL INDENTURE --------------- INDENTURE, dated as of the 1st day of April, 1997, made and entered into by and between ARIZONA PUBLIC SERVICE COMPANY, a corporation of the State of Arizona, the principal place of business and mailing address of which is 400 North Fifth Street, Phoenix, Arizona 85004 (hereinafter sometimes called the Company), party of the first part, and THE BANK OF NEW YORK, a New York banking corporation, the mailing address of which is 101 Barclay Street, 21st Floor West, New York, New York 10286 (hereinafter sometimes called the Trustee), party of the second part, as Trustee under the Mortgage and Deed of Trust, dated as of July 1, 1946 (hereinafter called the Mortgage), which Mortgage was executed and delivered by the Company under its former name, Central Arizona Light and Power Company, to secure the payment of bonds issued or to be issued under and in accordance with the provisions of the Mortgage, reference to which said Mortgage is hereby made, this Indenture (hereinafter called the Fifty-fifth Supplemental Indenture) being supplemental thereto; WHEREAS, said Mortgage was recorded and filed in Counties in the State of Arizona as follows:
Filed and Abstracted Recorded as Real Mortgage as Chattel Mortgage ----------------------------------- ------------------- Chattel Date Book or Mortgage County Recorded Docket Page Book Page ------ -------- ------ ---- ------------ ---- Apache........................... 7-28-50 16 1 9 154 Cochise.......................... 2-3-53 80 28 19 292 Coconino......................... 1-20-53 39 1 10 286 Gila............................. 1-17-53 32 84 17 -- Graham........................... 12-3-63 92 87 15 223 Maricopa......................... 8-6-46 408 163 92 204 Mohave........................... 11-13-57 28 68 12 13 Navajo........................... 10-14-49 31 483 16 521 Pima............................. 1-24-53 558 351 14 -- Pinal............................ 10-25-52 68 31 12 591 Yavapai.......................... 8-7-46 79 1 12 223 Yuma............................. 8-1-47 58 173 21 265
and in Counties in the State of New Mexico as follows: McKinley......................... 5-31-61 36 153 4 295 San Juan......................... 1-31-61 472 140 (No. 72441)
the copy recorded in Yuma County, Arizona also being effective for La Paz County, Arizona, formed on December 31, 1982; and copies of said Mortgage were filed with the office of the Bureau of Indian Affairs at Window Rock, Arizona, and with the Navajo Tribe of Indians at Window Rock, Arizona, and in the offices of the Secretary of State and the State Land Department of the State of Arizona (all the said counties and the said offices above referred to being herein referred to as "jurisdictions"); and 2 WHEREAS, by the Mortgage, the Company covenanted that it would execute and deliver such supplemental indenture or indentures and such further instruments and do such further acts as might be necessary or proper to carry out more effectually the purposes of the Mortgage and to make subject to the Lien of the Mortgage any property thereafter acquired, made or constructed and intended to be subject to the Lien thereof; and WHEREAS, the Company has executed and delivered to the Trustee fifty-four indentures supplemental to the Mortgage (hereinafter respectively called the First through the Fifty-fourth Supplemental Indentures) dated as of December 1, 1947, April 1, 1949, February 1, 1950, December 1, 1950, February 1, 1953, November 1, 1953, March 1, 1954, October 1, 1957, March 1, 1959, November 1, 1961, June 1, 1962, December 1, 1962, September 1, 1963, September 1, 1967, April 1, 1970, March 15, 1972, April 1, 1974, February 15, 1975, June 1, 1975, November 15, 1975, April 15, 1977, January 15, 1978, March 1, 1979, October 15, 1979, May 15, 1980, February 2, 1982, April 15, 1982, July 1, 1983, October 15, 1983, June 15, 1984, January 15, 1985, May 1, 1985, June 1, 1985, November 1, 1985, January 15, 1986, March 1, 1986, May 1, 1986, February 1, 1987, June 1, 1987, November 15, 1987, April 1, 1989, February 15, 1990, May 15, 1990, April 15, 1991, December 15, 1991, January 15, 1992, March 1, 1992, June 15, 1992, February 1, 1993, August 1, 1993, August 1, 1993, September 15, 1993, March 1, 1994, and November 15, 1996, each of which has been or will be recorded or filed in, or a recording or filing is or will be effective with respect to, each jurisdiction referred to above; and WHEREAS, in addition to the property described in the Mortgage, as heretofore supplemented and amended, the Company has acquired certain other property, rights and interests in property; and WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Mortgage, as heretofore supplemented and amended, bonds of a series entitled and designated First Mortgage Bonds, 2 3/4% Series due 1976 (hereinafter called the bonds of the First Series), in the aggregate principal amount of Eight Million Five Hundred Thousand Dollars ($8,500,000); bonds of a series entitled and designated First Mortgage Bonds, 3 1/8% Series due 1977 (hereinafter called the bonds of the Second Series), in the aggregate principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000); bonds of a series entitled and designated First Mortgage Bonds, 3% Series due 1979 (hereinafter called the bonds of the Third Series), in the aggregate principal amount of Four Million Dollars ($4,000,000); bonds of a series entitled and designated First Mortgage Bonds, 2 3/4% Series due 1980 (hereinafter called the bonds of the Fourth Series), in the aggregate principal amount of Five Million Dollars ($5,000,000); bonds of a series entitled and designated First Mortgage Bonds, 2 7/8% Series due 1980 (hereinafter called the bonds of the Fifth Series), in the aggregate principal amount of Six Million Dollars ($6,000,000); bonds of a series entitled and designated First Mortgage Bonds, 3 1/2% Series due 1983 (hereinafter called the bonds of the Sixth Series), in the aggregate principal amount of Fourteen Million Five Hundred Thousand Dollars ($14,500,000); bonds of a series entitled and designated First Mortgage Bonds, 3 1/2% Series due November 1, 1983 (hereinafter called the bonds of the Seventh Series), in the aggregate principal amount of Five Million Seven Hundred Twenty-three Thousand Dollars ($5,723,000); bonds of a series entitled and designated First Mortgage Bonds, 3 1/4% Series due 1984 (hereinafter called the bonds of the Eighth Series), in the aggregate principal amount of Fifteen Million Dollars ($15,000,000); bonds of a series entitled and designated First Mortgage Bonds, 5 1/8% Series due 1987 (hereinafter called the bonds of the Ninth Series), in the aggregate principal amount of Fifteen Million Dollars ($15,000,000); bonds of a series entitled and designated First Mortgage Bonds, 4.70% Series due 1989 (hereinafter called the bonds of the Tenth Series), in the aggregate principal amount of Twenty Million Dollars ($20,000,000); bonds of a series entitled and designated First Mortgage Bonds, 4.80% Series due 1991 (hereinafter called the bonds of the Eleventh Series), in the aggregate 3 principal amount of Thirty-five Million Dollars ($35,000,000); bonds of a series entitled and designated First Mortgage Bonds, 4.45% Series due 1992 (hereinafter called the bonds of the Twelfth Series), in the aggregate principal amount of Twenty-five Million Dollars ($25,000,000); bonds of a series entitled and designated First Mortgage Bonds, 4.40% Series due 1992 (hereinafter called the bonds of the Thirteenth Series), in the aggregate principal amount of Twenty-five Million Dollars ($25,000,000); bonds of a series entitled and designated First Mortgage Bonds, 4.50% Series due 1993 (hereinafter called the bonds of the Fourteenth Series), in the aggregate principal amount of Fifteen Million Dollars ($15,000,000); bonds of a series entitled and designated First Mortgage Bonds, 6.25% Series due 1997 (hereinafter called the bonds of the Fifteenth Series), in the aggregate principal amount of Twenty-five Million Dollars ($25,000,000); bonds of a series entitled and designated First Mortgage Bonds, 8.50% Series due 1975 (hereinafter called the bonds of the Sixteenth Series), in the aggregate principal amount of Thirty Million Dollars ($30,000,000); bonds of a series entitled and designated First Mortgage Bonds, 7.45% Series due 2002 (hereinafter called the bonds of the Seventeenth Series), in the aggregate principal amount of Sixty Million Dollars ($60,000,000); bonds of a series entitled and designated First Mortgage Bonds, 6.20% Series due 2004 (hereinafter called the bonds of the Eighteenth Series), in the aggregate principal amount of Fifty Million Dollars ($50,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9.50% Series due 1982 (hereinafter called the bonds of the Nineteenth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9.80% Series due 1980 (hereinafter called the bonds of the Twentieth Series), in the aggregate principal amount of Seventy-five Million Dollars ($75,000,000); bonds of a series entitled and designated First Mortgage Bonds, 10.625% Series due 2000 (hereinafter called the bonds of the Twenty-first Series), in the aggregate principal amount of Seventy-five Million Dollars ($75,000,000); bonds of a series entitled and designated First Mortgage Bonds, 6.45% Series A due 2007 (hereinafter called the bonds of the Twenty-second Series), in the aggregate principal amount of Thirteen Million Dollars ($13,000,000); bonds of a series entitled and designated First Mortgage Bonds, 6.45% Series B due 2007 (hereinafter called the bonds of the Twenty-third Series), in the aggregate principal amount of Thirty Million Dollars ($30,000,000); bonds of a series entitled and designated First Mortgage Bonds, 6% Series A due 2008 (hereinafter called the bonds of the Twenty-fourth Series), in the aggregate principal amount of Thirty-four Million Dollars ($34,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9.95% Series due 2004 (hereinafter called the bonds of the Twenty-fifth Series), in the aggregate principal amount of Seventy-five Million Dollars ($75,000,000); bonds of a series entitled and designated First Mortgage Bonds, 12 1/8% Series due 2009 (hereinafter called the bonds of the Twenty-sixth Series), in the aggregate principal amount of Seventy-five Million Dollars ($75,000,000); bonds of a series entitled and designated First Mortgage Bonds, 12 7/8% Series due 2000 (hereinafter called the bonds of the Twenty-seventh Series), in the aggregate principal amount of One Hundred Eighty-five Million Dollars ($185,000,000); bonds of a series entitled and designated First Mortgage Bonds, 10 3/8% Series due 1985 (hereinafter called the bonds of the Twenty-eighth Series), in the aggregate principal amount of Sixty Million Two Hundred Fifty Thousand Dollars ($60,250,000); bonds of a series entitled and designated First Mortgage Bonds, 16% Series due 1992 (hereinafter called the bonds of the Twenty-ninth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 12 3/4% Series due 2013 (hereinafter called the bonds of the Thirtieth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 13 1/2% Series due 2013 (hereinafter called the bonds of the Thirty-first Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 15% Series due 1994 (hereinafter called the bonds of the Thirty-second Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 12% Series due 1995 (hereinafter called the bonds of the 4 Thirty-third Series), in the aggregate principal amount of One Hundred Twenty-five Million Dollars ($125,000,000); bonds of a series entitled and designated First Mortgage Bonds, 13 1/4% Series due 2007 (hereinafter called the bonds of the Thirty-fourth Series), in the aggregate principal amount of Fifty Million Dollars ($50,000,000); bonds of a series entitled and designated First Mortgage Bonds, 11 1/2% Series due 2015 (hereinafter called the bonds of the Thirty-fifth Series), in the aggregate principal amount of One Hundred Fifty Million Dollars ($150,000,000); bonds of a series entitled and designated First Mortgage Bonds, 11 1/2% Series due November 1, 2015 (hereinafter called the bonds of the Thirty-sixth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 11% Series due 2016 (hereinafter called the bonds of the Thirty-seventh Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9 1/4% Series due 1996 (hereinafter called the bonds of the Thirty-eighth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9% Series due 1996 (hereinafter called the bonds of the Thirty-ninth Series), in the aggregate principal amount of One Hundred Twenty-five Million Dollars ($125,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9% Series due 2017 (hereinafter called the bonds of the Fortieth Series), in the aggregate principal amount of One Hundred Fifty Million Dollars ($150,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9 7/8% Series due 1997 (hereinafter called the bonds of the Forty-first Series), in the aggregate principal amount of One Hundred Twenty-five Million Dollars ($125,000,000); bonds of a series entitled and designated First Mortgage Bonds, 10 3/4% Series due 2017 (hereinafter called the bonds of the Forty-second Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 10 3/4% Series due 2019 (hereinafter called the bonds of the Forty-third Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 10 1/4% Series due 2000 (hereinafter called the bonds of the Forty-fourth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 10 1/4% Series due 2020 (hereinafter called the bonds of the Forty-fifth Series), in the aggregate principal amount of One Hundred Twenty-five Million Dollars ($125,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9 1/2% Series due 2021 (hereinafter called the bonds of the Forty-sixth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 9% Series due 2021 (hereinafter called the bonds of the Forty-seventh Series), in the aggregate principal amount of One Hundred Fifty Million Dollars ($150,000,000); bonds of a series entitled and designated First Mortgage Bonds, 7 1/8% Series due 1997, in the aggregate principal amount of One Hundred Fifty Million Dollars ($150,000,000), and bonds of a series entitled and designated First Mortgage Bonds, 8 3/4% Series due 2024, in the aggregate principal amount of One Hundred Seventy-five Million Dollars ($175,000,000) (hereinafter collectively called the bonds of the Forty-eighth Series); bonds of a series entitled and designated First Mortgage Bonds, 7 5/8% Series due 1998, in the aggregate principal amount of One Hundred Million Dollars ($100,000,000), and bonds of a series entitled and designated First Mortgage Bonds, 8 1/8% Series due 2002, in the aggregate principal amount of One Hundred Twenty-five Million Dollars ($125,000,000) (hereinafter collectively called the bonds of the Forty-ninth Series); bonds of a series entitled and designated First Mortgage Bonds, 7 5/8% Series due 1999 (hereinafter called the bonds of the Fiftieth Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 8% Series due 2025 (hereinafter called the bonds of the Fifty-first Series), in the aggregate principal amount of One Hundred Fifty Million Dollars ($150,000,000); bonds of a series entitled and designated First Mortgage Bonds, 7 1/4% Series due 2023 (hereinafter called the bonds of the Fifty-second Series), in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage 5 Bonds, 5 7/8% Series due 2028 (hereinafter called bonds of the Fifty-third Series), in the aggregate principal amount of Twelve Million Eight Hundred Fifty Thousand Dollars ($12,850,000); bonds of a series entitled and designated First Mortgage Bonds, 5 7/8% Series due 2028 (hereinafter called bonds of the Fifty-fourth Series), in the aggregate principal amount of One Hundred Forty-one Million One Hundred Fifty Thousand Dollars ($141,150,000); bonds of a series entitled and designated First Mortgage Bonds, 5 1/2% Series due 2028 (hereinafter called bonds of the Fifty-fifth Series), in the aggregate principal amount of Twenty-five Million Dollars ($25,000,000); bonds of a series entitled and designated First Mortgage Bonds, 5 3/4% Series due 2000 (hereinafter called bonds of the Fifty-sixth Series) in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); bonds of a series entitled and designated First Mortgage Bonds, 6 5/8% Series due 2004 (hereinafter called bonds of the Fifty-seventh Series) in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); and bonds of a series entitled and designated First Mortgage Bonds, Senior Note Series A (hereinafter called bonds of the Fifty-eighth Series) in the aggregate principal amount of One Hundred Million Dollars ($100,000,000); and WHEREAS, said The Bank of New York, by an instrument in writing, effective on the opening of business on September 29, 1995, succeeded to Bank of America National Trust and Savings Association as Trustee under the Mortgage; and, pursuant to Section 104 of the Mortgage, The Bank of New York is the successor Trustee under the Mortgage; and WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds (other than bonds of the First Series) issued thereunder shall be established by Resolution of the Board of Directors of the Company and that the form of each series, as established by said Board of Directors, shall specify the descriptive title of the bonds and various other terms thereof, and may also contain such provisions not inconsistent with the provisions of the Mortgage as the Board of Directors may, in its discretion, cause to be inserted therein expressing or referring to the terms and conditions upon which such bonds are to be issued and/or secured under the Mortgage; and WHEREAS, Section 120 of the Mortgage provides, among other things, that any power, privilege or right expressly or impliedly reserved to or in any way conferred upon the Company by any provision of the Mortgage, whether such power, privilege or right is in any way restricted or is unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if at the time unrestricted or to additional restriction if already restricted, and the Company may enter into any further covenants, limitations or restrictions for the benefit of any one or more series of bonds issued thereunder, or the Company may cure any ambiguity contained therein, or in any supplemental indenture, or may establish the terms and provisions of any series of bonds other than said First Series, by an instrument in writing executed and acknowledged by the Company in such manner as would be necessary to entitle a conveyance of real estate to record in all of the states in which any property at the time subject to the Lien of the Mortgage shall be situated; and WHEREAS, the Company now desires to create a new series of bonds to be issued under and pursuant to the Mortgage in accordance with the provisions of Article VI thereof, and to add to its covenants and agreements contained in the Mortgage, as heretofore supplemented and amended, certain other covenants and agreements to be observed by it and to alter and amend in certain respects the covenants and provisions contained in the Mortgage, as heretofore supplemented and amended; and WHEREAS, the Company has agreed to issue Fifty Million Dollars ($50,000,000) in aggregate principal amount of its 6.72% Senior Notes Due 1999 (the "Senior Notes Due 1999") pursuant to the provisions of the Indenture dated as of November 15, 1996 (the "Senior Note Indenture"), between the 6 Company and The Bank of New York, as trustee (said trustee or any successor trustee under the Senior Note Indenture being hereinafter referred to as the "Senior Note Trustee"), as supplemented by the First Supplemental Indenture, dated as of November 15, 1996, and the Second Supplemental Indenture dated as of April 1, 1997, between the Company and the Senior Note Trustee; and WHEREAS, in order to secure the Company's obligation to pay principal, premium, if any, and interest on the Senior Notes Due 1999 prior to the Release Date (as hereinafter defined), the Company desires to provide for the issuance under the Mortgage to the Senior Note Trustee of a new series of bonds designated "First Mortgage Bonds, Senior Note Series B," having the same rate of interest, interest payment dates, maturity date and redemption provisions and in the same aggregate principal amount as the Senior Notes Due 1999; and WHEREAS, the execution and delivery by the Company of this Fifty-fifth Supplemental Indenture, and the terms of the bonds of the Fifty-ninth Series hereinafter referred to, have been duly authorized by the Board of Directors of the Company by appropriate Resolutions of said Board of Directors; NOW THEREFORE, THIS INDENTURE WITNESSETH: That Arizona Public Service Company, in consideration of the premises and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustee and in order further to secure the payment of both the principal of and interest and premium, if any, on the bonds from time to time heretofore, herewith or hereafter issued under the Mortgage, according to their tenor and effect, and the performance of all the provisions of the Mortgage (including any instruments supplemental thereto and any modifications made as in the Mortgage provided) and of said bonds, hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the Mortgage) unto The Bank of New York, as Trustee under the Mortgage, and to its successor or successors in said trust, and to said Trustee and its successors and assigns forever, all the properties of the Company described in the Mortgage, as heretofore supplemented and amended (except any properties which have been released from the Lien of the Mortgage), and all the properties specifically described in Article V hereof. Also all other property, real, personal and mixed, of the kind or nature specifically mentioned in Article V hereof or of any other kind or nature (except any herein or in the Mortgage, as heretofore supplemented and amended, expressly excepted and except any which may not lawfully be mortgaged or pledged hereunder), now owned or, subject to the provisions of subsection (I) of Section 87 of the Mortgage, hereafter acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) and wheresoever situated, including (without in anywise limiting or impairing by the enumeration of the same the scope and intent of the foregoing or of any general description contained in this Fifty-fifth Supplemental Indenture) all lands, power sites, flowage rights, water rights, water locations, water appropriations, ditches, flumes, reservoirs, reservoir sites, canals, raceways, dams, dam sites, aqueducts, and all other rights or means for appropriating, conveying, storing and supplying water; all rights of way and roads; all plants for the generation of electricity by steam, water and/or other power; all power houses, gas plants, street lighting systems, standards and other equipment incidental thereto, telephone, radio and television systems, air-conditioning systems and equipment incidental thereto, water works, water systems, steam heat and hot water plants, substations, lines, service and supply systems, bridges, culverts, tracks, ice or refrigeration plants and equipment, offices, buildings and other structures and equipment thereof; all machinery, engines, boilers, dynamos, electric, gas and other machines, regulators, meters, transformers, generators, motors, electrical, gas and 7 mechanical appliances, conduits, cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes, fittings, valves and connections, pole and transmission lines, wires, cables, tools, implements, apparatus, furniture and chattels; all franchises, consents or permits; all lines for the transmission and distribution of electric current, gas, steam heat or water for any purpose including towers, poles, wires, cables, pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate, lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and other rights in or relating to public or private property, real or personal, or the occupancy of such property and (except as herein or in the Mortgage, as heretofore supplemented and amended, expressly excepted) all the right, title and interest the Company may now have or hereafter acquire in and to any and all property of any kind or nature appertaining to and/or used and/or occupied and/or enjoyed in connection with any property hereinbefore or in the Mortgage, as heretofore supplemented and amended, described. TOGETHER WITH all and singular the tenements, hereditaments, prescriptions, servitudes and appurtenances belonging or in anywise appertaining to the aforementioned property or any part thereof, with the reversion and reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage) the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the estate, right, title, interest and claim whatsoever, at law as well as in equity, which the Company now has or may hereafter acquire in and to the aforementioned property and franchises and every part and parcel thereof. IT IS HEREBY AGREED by the Company that, subject to the provisions of subsection (I) of Section 87 of the Mortgage and to the extent permitted by law, all the property, rights and franchises acquired by the Company (by purchase, consolidation, merger, donation, construction, erection or in any other way) after the date hereof, except any herein or in the Mortgage, as heretofore supplemented and amended, expressly excepted, shall be and are as fully granted and conveyed hereby and as fully embraced within the lien hereof and the Lien of the Mortgage as if such property, rights and franchises were now owned by the Company and were specifically described herein and conveyed hereby. PROVIDED that the following are not and are not intended to be now or hereafter granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed hereunder and are hereby expressly excepted from the lien and operation of this Fifty-fifth Supplemental Indenture and from the Lien and operation of the Mortgage, viz.: (1) cash, shares of stock, bonds, notes and other obligations and other securities not hereafter specifically pledged, paid, deposited, delivered or held under the Mortgage or covenanted so to be; (2) merchandise, equipment, apparatus, materials or supplies held for the purpose of sale or other disposition in the usual course of business; fuel, oil and similar materials and supplies consumable in the operation of any of the properties of the Company; construction equipment acquired for temporary use; all aircraft, tractors, rolling stock, trolley coaches, buses, motor coaches, automobiles, motor trucks and other vehicles and materials and supplies held for the purpose of repairing or replacing (in whole or part) any of the same; all timber, minerals, mineral rights and royalties and all Natural Gas and Oil Production Property, as defined in Section 4 of the Mortgage; (3) bills, notes and accounts receivable, judgments, demands and choses in action, and all contracts, leases and operating agreements not specifically pledged under the Mortgage or covenanted so to be; (4) the last day of the term of any lease or leasehold which may be or become subject to the Lien of the Mortgage; (5) electric energy, gas, steam, ice and other materials or products generated, manufactured, produced, purchased or acquired by the Company for sale, distribution or use in the ordinary course of its business; and (6) the Company's franchise to be a corporation; provided, however, that the property and rights expressly excepted from the Lien and operation of the Mortgage in the above subdivisions (2) and (3) shall (to the extent permitted by law) 8 cease to be so excepted in the event and as of the date that the Trustee or a receiver or trustee shall enter upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article XIII of the Mortgage by reason of the occurrence of a Default as defined in Section 65 thereof. TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company as aforesaid, or intended so to be, unto The Bank of New York, the Trustee, and its successors and assigns forever. IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions and subject to and with the same provisos and covenants as are set forth in the Mortgage, as supplemented and amended. AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants and provisions contained in the Mortgage, as supplemented and amended, shall affect and apply to the property hereinbefore described and conveyed and to the estate, rights, obligations and duties of the Company and the Trustee and the beneficiaries of the trust with respect to said property, and to the Trustee and its successors as Trustee of said property in the same manner and with the same effect as if the said property had been owned by the Company at the time of the execution of the Mortgage and had been specifically and at length described in and conveyed to said Trustee by the Mortgage as a part of the property therein stated to be conveyed. The Company further covenants and agrees to and with the Trustee and its successors in said trust under the Mortgage, as follows: ARTICLE I. FIFTY-NINTH SERIES OF BONDS. SECTION 1. There shall be a series of bonds designated "First Mortgage Bonds, Senior Note Series B" (hereinafter sometimes referred to as the "Fifty-ninth Series" or the "Senior Note Series B Bonds"), limited to the aggregate principal amount of $50,000,000, each of which shall also bear the descriptive title First Mortgage Bond, and the form thereof, which shall be established by Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect to the matters hereinafter specified in this Supplemental Indenture. Bonds of the Fifty-ninth Series shall be dated as provided in Section 10 of the Mortgage; shall mature, subject to the provisions for prior redemption hereinafter set forth, on April 1, 1999; shall be issued as fully registered bonds in denominations of One Thousand Dollars or any integral multiple thereof, and shall be registered in the name of the Senior Note Trustee; and shall bear interest from April 10, 1997 or from the most recent Interest Payment Date (as defined below) to which interest has been paid at the rate of 6.72% per annum (calculated on the basis of a 360-day year of twelve 30-day months), payable on April 1 and October 1 of each year (each an "Interest Payment Date"), commencing October 1, 1997, to the holders thereof of record on the March 15 or September 15, as the case may be, next preceding such Interest Payment Date (subject to the provisions of Section 12 of the Mortgage concerning legal holidays and bank closings), and the principal of and interest on, and premium or other amounts, if any, payable upon redemption of, each said bond to be payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, in such coin or currency of the United States of America as, at the time of payment, is legal tender for public and private debts; provided, however, that payment of interest may be made at 9 the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the registration books of the Company. The Company's obligation to make payments with respect to the principal, premium and/or interest on the Senior Note Series B Bonds shall be fully or partially, as the case may be, satisfied and discharged to the extent that, at the time that any such payment shall be due, the corresponding amount of principal of, premium, if any, and/or interest then due on the Senior Notes Due 1999 shall have been fully or partially paid, as the case may be, or there shall have been deposited with the Senior Note Trustee pursuant to Section 501, Section 1103, Section 1205 or Article Fourteen of the Senior Note Indenture trust funds sufficient under the provisions of said Sections and Article to fully or partially pay, as the case may be, the corresponding amount of principal, premium, if any, and/or interest then due on the Senior Notes Due 1999. SECTION 2. Upon payment of the principal of, premium, if any, and interest due on the Senior Notes Due 1999, whether at maturity or prior to maturity by redemption or otherwise, or upon provision for the payment thereof having been made in accordance with Section 501 or Section 1402 of the Senior Note Indenture, Senior Note Series B Bonds in a principal amount equal to the principal amount of Senior Notes Due 1999 so paid or for which such provision for payment has been made shall be deemed fully paid, satisfied and discharged and the obligations of the Company thereunder shall be terminated and such Senior Note Series B Bonds shall be surrendered to and cancelled by the Trustee. From and after such date as all bonds issued under the Mortgage (other than Senior Note First Mortgage Bonds, as such term is defined in the Senior Note Indenture) have been retired through payment, redemption, or otherwise at, before or after maturity thereof (the "Release Date"), the Senior Note Series B Bonds shall be deemed fully paid, satisfied and discharged and the obligation of the Company thereunder shall be terminated. On the Release Date, the Senior Note Series B Bonds shall be surrendered to and cancelled by the Trustee. SECTION 3. At the option of the registered owner, any bonds of the Fifty-ninth Series, upon surrender thereof, for cancellation, at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, together with a written instrument of transfer, if required by the Company or by the Trustee, duly executed by the registered owner or by his duly authorized attorney, shall (subject to the provisions of Section 12 of the Mortgage) be exchangeable for a like aggregate principal amount of bonds in registered form of the same series of other authorized denominations without payment of any sum other than taxes or other governmental charges. Bonds of the Fifty-ninth Series shall be transferable (subject to the provisions of Section 12 of the Mortgage) at said office or agency of the Company without payment of any sum other than taxes or other governmental charges. ARTICLE II. REDEMPTION OF SENIOR NOTE SERIES B BONDS The Senior Note Series B Bonds shall be redeemed, in whole or in part, from time to time, on the date on which a corresponding principal amount of Senior Notes Due 1999 are redeemed as provided in the Senior Note Indenture upon the Senior Note Trustee's notification of the Trustee of such redemption, at a redemption price equal to the redemption price of such Senior Notes Due 1999 being so redeemed. Any such notice shall be received by the Trustee no later than 5 days prior to any redemption date fixed for the Senior Note Series B Bonds to be redeemed and shall specify the principal amount of such Senior Note Series B Bonds to be redeemed, the redemption date, and the amount of accrued interest and premium, if any, to be paid thereon. The Company shall deposit in trust with the Trustee on the redemption date an 10 amount of money sufficient to pay the principal amount including accrued interest, if any, and premium, if any, on the Senior Note Series B Bonds to be redeemed. Upon presentation to the Trustee of any Senior Note Series B Bonds by the Senior Note Trustee for payment, such Senior Note Series B Bonds so presented shall be redeemed and paid in full. In the event the principal of all Senior Notes Due 1999 is declared due and payable or becomes automatically due and payable pursuant to Section 602 of the Senior Note Indenture, upon the filing with the Trustee of a written demand for the acceleration of the payment of principal of all Senior Note Series B Bonds, the payment of principal on all Senior Note Series B Bonds shall become immediately due and payable and the Trustee shall provide to the Senior Note Trustee an irrevocable, valid and unconditional notice of acceleration of all Senior Note Series B Bonds. Redemption of the Senior Note Series B Bonds shall be effected, without further notice by the Company to the Trustee, by the payment by the Company of the applicable redemption price specified in this Article II at the place specified for payment of principal of and interest on such bonds. The Senior Note Series B Bonds will not be subject to prepayment or redemption prior to maturity except as provided herein, notwithstanding the provisions of Section 39 or Section 64 of the Mortgage, or with "Proceeds of Released Property," as defined in the Mortgage. The Senior Note Series B Bonds will not be subject to any sinking fund. The Company covenants and agrees that, prior to Release Date, it will not take any action (except as required by this Article II hereof) that would cause the outstanding principal amount of the Senior Note Series B Bonds to be less than the then outstanding principal amount of the Senior Notes Due 1999. ARTICLE III. REPLACEMENT FUND PROVISIONS -- OTHER RELATED PROVISIONS OF THE MORTGAGE -- DIVIDEND COVENANT -- RECORD DATES -- AUTHENTICATING AGENT. SECTION 4. The Company covenants that the provisions of Section 39 of the Mortgage, which were to remain in effect so long as any bonds of the First Series remained Outstanding, shall remain in full force and effect so long as any bonds of the Thirty-fourth, Forty-third, Forty-fourth, Forty-fifth, Forth- sixth, Forty-seventh, Forty-ninth, Fiftieth, Fifty-first, Fifty-second, Fifty-third, Fifty-fourth, Fifty-fifth, Fifty-sixth, Fifty-seventh, Fifty-eighth, or Fifty-ninth Series are Outstanding. Clause (d) of subsection (II) of Section 4 of the Mortgage, as heretofore amended, clause (6) and clause (e) of Section 5 of the Mortgage, as heretofore amended, and Section 29 of the Mortgage, as heretofore amended, are hereby further amended by inserting therein the words "and Fifty-ninth Series" after the words "bonds of the First Series and Second Series and Third Series and Fourth Series and Fifth Series and Sixth Series and Seventh Series and Eighth Series and Ninth Series and Tenth Series and Eleventh Series and Twelfth Series and Thirteenth Series and Fourteenth Series and Fifteenth Series and Sixteenth Series and Seventeenth Series and Eighteenth Series and Nineteenth Series and Twentieth Series and Twenty-first Series and Twenty-second Series and Twenty-third Series and Twenty-fourth Series and Twenty-fifth Series and Twenty-sixth Series and Twenty-seventh Series and Twenty-eighth Series and Twenty-ninth Series and Thirtieth Series and Thirty-first Series and Thirty-second Series and Thirty-third Series and Thirty-fourth Series and Thirty-fifth Series and Thirty-sixth Series and Thirty-seventh Series and Thirty-eighth Series and Thirty-ninth Series and Fortieth Series and 11 Forty-first Series and Forty-second Series and Forty-third Series and Forty-fourth Series and Forty-fifth Series and Forty-sixth Series and Forty-seventh Series and Forty-eighth Series and Forty-ninth Series and Fiftieth Series and Fifty-first Series and Fifty-second Series and Fifty-third Series and Fifty-fourth Series and Fifty-fifth Series and Fifty-sixth Series and Fifty-seventh Series and Fifty-eighth Series" each time such words occur therein. Clause (e) of subsection (II) of Section 4 of the Mortgage, as heretofore amended, is hereby further amended by the insertion therein after the words "and Fifty-eighth" the words "and Fifty-ninth." The last paragraph of Section 12 of the Mortgage, as heretofore amended, the last paragraph of Section 17 of the Mortgage, as heretofore amended, and the last paragraph of Section 110 of the Mortgage, as heretofore amended, are hereby amended by inserting therein the words "or the Fifty-ninth Series" after the words "Fifty-eighth Series" each time such words occur therein.. ARTICLE IV. MISCELLANEOUS PROVISIONS. SECTION 5. The terms defined in the Mortgage, as supplemented and amended, shall, for all purposes of this Fifty-fifth Supplemental Indenture, have the meanings specified therein, except that the term "Mortgage" shall mean only the original Mortgage and Deed of Trust, dated as of July 1, 1946; the term "Mortgage, as heretofore supplemented and amended" shall mean the Mortgage, as supplemented and amended by the First through Fifty-fourth Supplemental Indentures hereinabove referred to; and the term "Mortgage, as supplemented and amended," shall mean the Mortgage, as supplemented and amended by the First through Fifty-fourth Supplemental Indentures hereinabove referred to and as supplemented and amended by this Fifty-fifth Supplemental Indenture and any future supplemental indentures. SECTION 6. The Trustee hereby accepts the trusts herein declared, provided, created, supplemented or amended and agrees to perform the same upon the terms and conditions herein and in the Mortgage, as heretofore supplemented and amended, set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Fifty-fifth Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XVII of the Mortgage shall apply to and form part of this Fifty-fifth Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and insertions, if any, as may be appropriate to make the same conform to the provisions of this Fifty-fifth Supplemental Indenture. SECTION 7. Whenever in this Fifty-fifth Supplemental Indenture either of the parties hereto is named or referred to, this shall, subject to the provisions of Articles XVI and XVII of the Mortgage, be deemed to include the successors and assigns of such party, and all the covenants and agreements in this Fifty-fifth Supplemental Indenture contained by or on behalf of the Company or by or on behalf of the Trustee shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed or not. 12 SECTION 8. Nothing in this Fifty-fifth Supplemental Indenture, expressed or implied, is intended or shall be construed to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the holders of the bonds Outstanding under the Mortgage, any right, remedy or claim under or by reason of this Fifty-fifth Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and agreements in this Fifty-fifth Supplemental Indenture contained by or on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto and of the holders of the bonds Outstanding under the Mortgage. SECTION 9. This Fifty-fifth Supplemental Indenture may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. ARTICLE V. SPECIFIC DESCRIPTION OF PROPERTY. SECTION 10. CERTAIN REAL PROPERTY LOCATED IN: MARICOPA COUNTY Javelina Substation That portion of the Southeast quarter of the Southeast quarter of the Southeast quarter of Section 1, Township 3 North, Range 2 West of the Gila and Salt River Base and Meridian, Maricopa County, Arizona, more particularly described as follows: COMMENCING at the Southeast corner of said Section; Thence North 00 degrees 59 minutes 19 seconds West along the East line of said Section 1, a distance of 420 feet to the POINT OF BEGINNING of the property herein described; Thence South 89 degrees 00 minutes 41 seconds West, 305 feet; Thence North 00 degrees 59 minutes 19 seconds West, 240 feet; Thence North 89 degrees 00 minutes 41 seconds East, 305 feet to a point on the East line of said Section 1, said point bears North 00 degrees 59 minutes 19 seconds West, 660 feet from the Southeast corner of said Section 1; Thence South 00 degrees 59 minutes 19 seconds East along said East Section line, a distance of 240 feet to the POINT OF BEGINNING. EXCEPT the East 33 feet. MOHAVE COUNTY Kingman Power Plant Parcel 14-B as shown on the Record of Survey recorded September 19, 1996 in Book 14 of Records of Survey, Page 64, and being a portion of Parcel 14-B shown on Record of Survey recorded October 16, 1995, in Book 13 of Records of Survey, Page 23, being located in the North half (N1/2) of Section 14, Township 19 North, Range 18 West of the Gila and Salt River Base and Meridian, Mohave County, Arizona. 13 TOGETHER WITH an easement for ingress, egress, and public utilities installation located within the easement shown on Record of Survey recorded in Book 14 of Records of Survey, Page 64, described as follows: Beginning at the Northeast corner of said Section 14, being a found 2 inch brass disk in concrete, down 1.5 feet on dirt road, LS 6452; thence South 0 degrees 13 minutes 47 seconds West along the East line of said Section 14, a distance of 42.00 feet to a point on the current Southerly right-of-way line of Yucca Drive, being a found 5/8 inch rebar with an aluminum cap stamped LS 25074, Holmquist, herein described as (mon.), said point being the TRUE POINT OF BEGINNING; thence South 0 degrees 13 minutes 47 seconds West along said East line, a distance of 8.00 feet to mon.; thence North 89 degrees 40 minutes 57 seconds West parallel to and 50.00 feet Southerly of the North line of said Section 14, a distance of 264.92 feet to a mon. and a point of a curvature; thence Southwesterly along a curve LEFT, an arc distance of 78.62 feet, having a radius of 50.00 feet, and a delta of 90 degrees 05 minutes 29 seconds to a mon.; thence South 0 degrees 13 minutes 47 seconds West, a distance of 599.85 feet to a mon., and a point on the Northerly line of Parcel 14-B1 (ROS 14/64); thence North 89 degrees 46 minutes 13 seconds West along said Northerly line, a distance of 100.00 feet to a mon.; thence North 0 degrees 13 minutes 47 seconds East, a distance of 600.15 feet to a mon., and a point of curvature; thence Northwesterly along a curve LEFT, an arc distance of 78.46 feet, having a radius of 50.00 feet, and a delta of 89 degrees 54 minutes 31 seconds to a mon.; thence North 0 degrees 19 minutes 03 seconds East, a distance of 8.00 feet to a point on the current Southerly right-of-way line of Yucca Drive; thence South 89 degrees 40 minutes 57 seconds East along said right-of-way line, a distance of 464.91 feet more or less, returning to the TRUE POINT OF BEGINNING. YAVAPAI COUNTY Prescott Service Center A That portion of Sheldon Street of the Original Townsite of Prescott as recorded in Book 4 of Maps, and Plats, Page 22 on file at the Office of the Yavapai County Recorder, Yavapai County, Arizona, more particularly described as follows: Commencing at the intersection of the Westerly right-of-way of Granite Street and the Southerly right-of-way of Sheldon Street, said intersection point also being the Northeast corner of Lot 1, Block "A" of said original Townsite; Thence West (assumed bearing) along the Southerly right-of-way of said Sheldon Street, 209.12 feet to the TRUE POINT OF BEGINNING of this description; Thence continuing West along the said Southerly right-of-way of Sheldon Street, 124.12 feet to the intersection of the said Southerly right-of-way of Sheldon Street and the Easterly right-of-way of McCormick Street in said block "A"; Thence North, 66.25 feet to the intersection of the Northerly right-of-way of said Sheldon Street and the Northerly prolongation of the Easterly right-of-way of McCormick Street; Thence East along the Northerly right-of-way of said Sheldon Street, 124.12 feet; Thence South, 66.25 feet to the TRUE POINT OF BEGINNING. 14 Prescott Service Center B That part of Lot 7, Section 33, Township 14 North, Range 2 West of the Gila and Salt River Base and Meridian, Yavapai County, Arizona, described as follows: COMMENCING at that certain point from whence the one quarter corner of said Section 33 and Section 34 bears North 60' 11" East a distance of 2571.65 feet; thence North 0(degree) 46' 43" East, a distance of 130 feet to a point; thence South 89(degree) 13' 17" East, a distance of 180 feet to a point; thence North 0(degree) 46' 43" East, a distance of 75 feet to a point; thence South 89(degree) 13'17" East, a distance of 160 feet to a point; thence North 0(degree) 46' 43" East a distance of 150 feet to the TRUE POINT OF BEGINNING; thence North 56(degree) 00' East 48.2 feet to a corner of the property described in instrument recorded in Book 158 of Deeds, page 389, records of Yavapai County, Arizona; thence along the Westerly boundary line of property described in instrument recorded in Book 158 of Deeds, page 389, records of Yavapai County, Arizona, over the following courses: East 13.0 feet to a point; North 5(degree) 00' East 32.0 feet to a point; North 85(degree) 00' West 16.0 feet to a point; North 4(degree) 01' East 25.7 feet to a point; North 59(degree) 14' East to the point of intersection with the Southerly boundary line or the Easterly extension thereof of Bashford Addition First Subdivision, accord to Book 2 of Maps, page 94, records of Yavapai County, Arizona; thence Westerly along the said Southerly line and the Easterly extension thereof of said Bashford Addition First Subdivision to the point of intersection with the Easterly line of property described in instrument recorded in Book 19 of Deeds, page 575, records of Yavapai County, Arizona; thence Southerly along the said Easterly line of property described in instrument recorded in Book 19 of Deeds, page 575, records of Yavapai County, Arizona, to the point of intersection with the Northerly boundary line of property described in Parcel 3 of instrument recorded in Book 193 of Deeds, page 46, records of Yavapai County, Arizona; thence North 89(degree) 13' 17" West along said Northerly boundary line a distance of 325 feet; thence North 0(degree) 46' 43" East, a distance of 20 feet to a point; thence south 89(degree) 13' 17" East, a distance of 160 feet to the TRUE POINT OF BEGINNING. SECTION 11. THE ELECTRIC SUBSTATIONS OF THE COMPANY, including all buildings, structures, towers, poles, all equipment, appliances and devices for transforming, converting and distributing electric energy, and all land owned by the Company upon which the same are situated, and all of the Company's easements, rights of way, rights, machinery, equipment, appliances, devices, licenses and supplies forming a part of said substations, or any of them, including additions and improvements to any of the foregoing, or used or enjoyed or capable of being used or enjoyed in conjunction with any thereof. SECTION 12. Additions, extensions and improvements to THE ELECTRIC TRANSMISSION SYSTEMS of the Company including, among other things, 4.3 miles of 69kV from Willow Lake to Bald Mountain; 3.0 miles of 69kV from Casa Grande to East Gate Tap; 242.7 miles of 500kV (joint ownership) from West Wing to Mead; and 13.3 miles of 500kV (joint ownership) from Mead to Market Place. 15 SECTION 13. Additions, extensions and improvements to THE ELECTRIC DISTRIBUTION SYSTEMS of the Company, including the construction of additional facilities throughout the Company's service area, as well as extension of residential and downtown underground distribution facilities, including associated distribution equipment such as voltage regulators, capacitor banks, sectionalizing equipment, transformers, street lighting systems, meters and services, including reconstruction and improvements to provide efficient Company operation. 16 IN WITNESS WHEREOF, ARIZONA PUBLIC SERVICE COMPANY, party hereto of the first part, has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its President, one of its Vice Presidents, or its Treasurer, and its corporate seal to be attested by its Secretary or one of its Assistant Secretaries or Associate Secretaries for and in its behalf, in the City of Phoenix, Arizona, and THE BANK OF NEW YORK, party hereto of the second part, has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Vice Presidents or Assistant Vice Presidents and its corporate seal to be attested by one of its Assistant Vice Presidents or Assistant Treasurers for and in its behalf, in the City of New York, New York, all as of the 1st day of April, 1997. ARIZONA PUBLIC SERVICE COMPANY Nancy E. Felker ------------------------------ Treasurer Attest: Betsy A. Pregulman - -------------------------------------- Associate Secretary Executed, sealed and delivered by ARIZONA PUBLIC SERVICE COMPANY in the presence of: Brenda M. Kucharek - -------------------------------------- Brenda M. Kucharek Marie A. Papietro [SEAL] - -------------------------------------- Marie A. Papietro THE BANK OF NEW YORK, As Trustee Walter N. Gitlin --------------------------------- Vice President Attest: Stephen Giurlando - -------------------------------------- Assistant Vice President Executed, sealed and delivered by THE BANK OF NEW YORK in the presence of: Laura Mullen - -------------------------------------- Laura Mullen [SEAL] Jason Gregory - -------------------------------------- Jason Gregory 17 STATE OF ARIZONA ) ) ss.: COUNTY OF MARICOPA ) On this 9th day of April, 1997, before me, Maria R. Marrs, the undersigned officer, personally appeared Nancy E. Felker, who acknowledged herself to be the Treasurer of ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation, and that she, as such Treasurer being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by herself as Treasurer. IN WITNESS WHEREOF, I have hereunto set my hand and seal. Maria R. Marrs ----------------------------------------- Notary Public My Commission Expires July 21, 1998 [SEAL] ------------------- STATE OF ARIZONA ) ) ss.: COUNTY OF MARICOPA ) On this 9th day of April, 1997, before me, Maria R. Marrs, the undersigned officer, personally came Nancy E. Felker, to me known, who being by me duly sworn, did depose and say that she resides in Phoenix, Arizona, that she is the Treasurer of ARIZONA PUBLIC SERVICE COMPANY, the corporation described in and which executed the above instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that she signed her name thereto by like order. IN WITNESS WHEREOF, I have hereunto set my hand and seal. Maria R. Marrs ----------------------------------------- Notary Public My Commission Expires July 21, 1998 [SEAL] ------------------- STATE OF ARIZONA ) ) ss.: COUNTY OF MARICOPA ) This instrument was acknowledged before me on April 9, 1997 by Nancy E. Felker and Betsy A. Pregulman, as Treasurer and Associate Secretary, respectively, of ARIZONA PUBLIC SERVICE COMPANY. Maria R. Marrs ----------------------------------------- Notary Public My Commission Expires July 21, 1998 [SEAL] ------------------- 18 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this 8th day of April, 1997, before me, William J. Cassels, Notary Public in and for the County and State aforesaid, residing therein, duly commissioned and sworn, personally appeared Walter N. Gitlin, known to me to be a Vice President of THE BANK OF NEW YORK, New York banking corporation, which executed the within instrument, and Stephen J. Giurlando known to me to be a Assistant Vice President of The Bank of New York, who being by me duly sworn, acknowledged before me that the seal affixed to said instrument is the corporate seal of The Bank of New York, that they, being authorized so to do, executed the within instrument on behalf of The Bank of New York by authority of its board of directors, and that said instrument is the free act and deed of The Bank of New York for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. William J. Cassels ----------------------------------------- Notary Public My Commission Expires May 16, 1998 [SEAL] ------------------- STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) This instrument was acknowledged before me on April 8, 1997 by Walter N. Gitlin and Stephen J. Giurlando as Vice President and Assistant Vice President, respectively, of THE BANK OF NEW YORK. William J. Cassels ----------------------------------------- Notary Public My Commission Expires May 16, 1998 [SEAL] ------------------- EX-4.9 4 SPECIMEN OF BOND OF FIRST MORTGAGE BOND Number B-1 $50,000,000 APS ARIZONA PUBLIC SERVICE COMPANY FIRST MORTGAGE BOND, SENIOR NOTE SERIES B Arizona Public Service Company, a corporation of the State of Arizona (hereinafter called the Company), for value received, hereby promises to pay to THE BANK OF NEW YORK, as Trustee, or registered assigns, the principal sum of Fifty Million Dollars on April 1, 1999, and to pay interest thereon from April 10, 1997 or from the most recent Interest Payment Date (as defined below) with respect to which interest has been paid or duly provided for, semianually, on April 1 and October 1 in each year (each an "Interest Payment Date"), commencing October 1, 1997, at the rate of 6.72% per annum (calculated on the basis of a 360-day year of twelve 30-day months), until the principal hereof is paid or made available for payment to the holder of record of this bond on the March 15 or September 15, as the case may be, next preceding such Interest Payment Date, unless such day is a legal holiday or a day on which banking institutions in The City of New York are authorized to remain closed, in which case on the next preceding day which shall not be a legal holiday or day on which such institutions are authorized by law to remain closed. Payment of the principal of (and premium, if any) and interest on this bond will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, New York, in such coin or currency of the United States of America as, at the time of payment is legal tender for payment of public and private debts, provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the registration books of the Company. This bond shall not become obligatory until The Bank of New York, the Trustee under the Mortgage, or its successor thereunder, shall have signed the form of authentication certificate endorsed hereon. IN WITNESS WHEREOF, Arizona Public Service Company has caused this bond to be signed in its corporate name by its President or one of its Vice Presidents and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or one of its Assistant Secretaries. DATED: April 10, 1997 ARIZONA PUBLIC SERVICE COMPANY George A. Schreiber, Jr. ----------------------------------- Executive Vice President and Chief Financial Officer ATTEST: Nancy C. Loftin ----------------------------------- Vice President, Chief Legal Counsel and Secretary TRUSTEE'S AUTHENTICATION CERTIFICATE This bond is one of the bonds, of the series herein designated, described or provided for in the within mentioned Mortgage. THE BANK OF NEW YORK, AS TRUSTEE By Walter N. Gitlin ------------------------------ Authorized Signatory ARIZONA PUBLIC SERVICE COMPANY First Mortgage Bond, Senior Note Series B This bond is one of an issue of bonds of the Company issuable in series and is one of a series known as its First Mortgage Bonds, Senior Note Series B, all bonds of all series issued and to be issued under and equally secured (except insofar as any sinking or other fund, established in accordance with the provisions of the Mortgage hereinafter mentioned, may afford additional security for the bonds of any particular series) by a Mortgage and Deed of Trust (herein, together with any indenture supplemental thereto, including the supplemental indentures dated as of December 1, 1947, April 1, 1949, February 1, 1950, December 1, 1950, February 1, 1953, November 1, 1953, March 1, 1954, October 1, 1957, March 1, 1959, November 1, 1961, June 1, 1962, December 1, 1962, September 1, 1963, September 1, 1967, April 1, 1970, March 15, 1972, April 1, 1974, February 15, 1975, June 1, 1975, November 15, 1975, April 15, 1977, January 15, 1978, March 1, 1979, October 15, 1979, May 15, 1980, February 2, 1982, April 15, 1982, July 1, 1983, October 15, 1983, June 15, 1984, January 15, 1985, May 1, 1985, June 1, 1985, November 1, 1985, January 15, 1986, March 1, 1986, May 1, 1986, February 1, 1987, June 1, 1987, November 15, 1987, April 1, 1989, February 15, 1990, May 15, 1990, April 15, 1991, December 15, 1991, January 15, 1992, March 1, 1992, June 15, 1992, February 1, 1993, August 1, 1993, August 1, 1993, September 15, 1993, March 1, 1994, November 15, 1996, and April 1, 1997, called the Mortgage) dated as of July 1, 1946, executed by the Company to The Bank of New York, as Trustee. Reference is made to the Mortgage for a description of the property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the bonds and of the Trustee in respect thereof, the duties and immunities of the Trustee, the terms and conditions upon which the bonds are and are to be secured, and the circumstances under which additional bonds may be issued. With the consent of the Company and to the extent permitted by and as provided in the Mortgage, the rights and obligations of the Company and/or the rights of the holders of the bonds and/or the terms and provisions of the Mortgage may be modified or altered by affirmative vote of the holders of at least seventy per centum (70%) in principal amount of the bonds then outstanding under the Mortgage and, if the rights of the holders of one or more, but less than all, series of bonds then outstanding are to be affected, then also by affirmative vote of the holders of at least seventy per centum (70%) in principal amount of the bonds then outstanding of each series of bonds so to be affected (excluding in any case bonds disqualified from voting by reason of the Company's interest therein as provided in the Mortgage); provided that, without the consent of the holder hereof, no such modification or alteration shall, among other things, impair or affect the right of the holder to receive payment of the principal of and interest on this bond and other amounts, if any, payable upon the redemption hereof on or after the respective due dates expressed herein, or permit the creation of any lien equal or prior to the lien of the Mortgage or deprive the holder of the benefit of a lien on the mortgaged and pledged property. The Company has issued Fifty Million Dollars ($50,000,000) in aggregate principal amount of its 6.72% Senior Notes Due 1999 (the "Senior Notes Due 1999") pursuant to the provisions of the Indenture dated as of November 15, 1996 (the "Senior Note Indenture"), between the Company and The Bank of New York, as trustee (said trustee or any successor trustee under the Senior Note Indenture being hereinafter referred to as the "Senior Note Trustee"), as supplemented by the First Supplemental Indenture, dated as of November 15, 1996, and the Second Supplemental Indenture dated as of April 1, 1997 between the Company and the Senior Note Trustee (each, the "First Supplemental Indenture" and the "Second Supplemental Indenture," and collectively, the "Supplemental Indentures"). The Company has issued the bonds of this series to secure the Company's obligation to pay principal, premium, if any, and interest on the Senior Notes Due 1999 prior to the Release Date (as hereinafter defined). The Company's obligation to make payments with respect to the principal, premium and/or interest on the bonds of this series shall be fully or partially, as the case may be, satisfied and discharged to the extent that, at the time that any such payment shall be due, the corresponding amount of principal of, premium, if any, and/or interest then due on the Senior Notes Due 1999 shall have been fully or partially paid, as the case may be, or there shall have been deposited with the Senior Note Trustee pursuant to Section 501, Section 1103, Section 1205 or Article Fourteen of the Senior Note Indenture trust funds sufficient under the provisions of said Sections and Article to fully or partially pay, as the case may be, the corresponding amount of principal, premium, if any, and/or interest then due on the Senior Notes Due 1999. Upon payment of the principal of, premium, if any, and interest due on the Senior Notes Due 1999, whether at maturity or prior to maturity by redemption or otherwise, or upon provision for the payment thereof having been made in accordance with Section 501 or Section 1402 of the Senior Note Indenture, bonds of this series in a principal amount equal to the principal amount of Senior Notes Due 1999 so paid or for which such provision for payment has been made shall be deemed fully paid, satisfied and discharged and the obligations of the Company thereunder shall be terminated and such bonds of this series shall be surrendered to and cancelled by the Trustee. From and after such date as all bonds issued under the Mortgage (other than Senior Note First Mortgage Bonds, as such term is defined in the Senior Note Indenture) have been retired through payment, redemption, or otherwise at, before or after maturity thereof (the "Release Date"), the bonds of this series shall be deemed fully paid, satisfied and discharged and the obligation of the Company hereunder shall be terminated. On the Release Date, the bonds of this series shall be surrendered to and cancelled by the Trustee. This bond is transferable as prescribed in the Mortgage by the registered owner hereof in person, or by his duly authorized attorney, at the office or agency of the Company or at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, upon surrender and cancellation of this bond, and thereupon a new fully registered bond of the same series for a like principal amount will be issued to the transferee in exchange herefor as provided in the Mortgage. In the manner prescribed in the Mortgage, bonds of this series, upon surrender thereof, for cancellation, at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, together with a written instrument of transfer, if required by the Company or by the Trustee, duly executed by the registered owner or by his duly authorized attorney, are exchangeable for a like aggregate principal amount of bonds in registered form of the same series of other authorized denominations. Bonds of this series are issuable in denominations of One Thousand Dollars or any integral multiples thereof. No service charge shall be made for any such transfer or exchange, but the Company may require the payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The bonds of this series shall be redeemed, in whole or in part, from time to time, on the date on which a corresponding principal amount of Senior Notes Due 1999 are redeemed as provided in the Senior Note Indenture and the Second Supplemental Indenture upon the Senior Note Trustee's notification of the Trustee of such redemption, at a redemption price equal to the redemption price of such Senior Notes Due 1999 being so redeemed. Any such notice shall be received by the Trustee no later than 5 days prior to any redemption date fixed for the bonds of this series to be redeemed and shall specify the principal amount of such bonds of this series to be redeemed, the redemption date, and the amount of accrued interest and premium, if any, to be paid thereon. The Company shall deposit in trust with the Trustee on the redemption date an amount of money sufficient to pay the principal amount including accrued interest, if any, and premium, if any, on the bonds of this series to be redeemed. Upon presentation to the Trustee of any bonds of this series by the Senior Note Trustee for payment, such bonds of this series so presented shall be redeemed and paid in full. In the event the principal of all Senior Notes Due 1999 is declared due and payable or becomes automatically due and payable pursuant to Section 602 of the Senior Note Indenture, upon the filing with the Trustee of a written demand for the acceleration of the payment of principal of all the bonds, such bonds shall become immediately due and payable. Redemption of the bonds of this series shall be effected, without further notice by the Company to the Trustee, by the payment by the Company of the applicable redemption price specified in this bond at the place specified for payment of principal of and interest on such bonds. The Senior Note Series B Bonds will not be subject to prepayment or redemption prior to maturity except as provided herein, notwithstanding the provisions of Section 39 or Section 64 of the Mortgage, or with "Proceeds of Released Property," as defined in the Mortgage. The bonds of this series will not be subject to any sinking fund. The Company covenants and agrees that, prior to Release Date, it will not take any action (except as described in this bond) that would cause the outstanding principal amount of the bonds of this series to be less than the then outstanding principal amount of the Senior Notes Due 1999. The Company and the Trustee may deem and treat the person in whose name this bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes, and neither the Company nor the Trustee shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or interest on this bond against any incorporator or any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company or of any predecessor or successor corporation, as such, either directly or through the Company or any predecessor or successor corporation, under any rule of law, statute or constitution or by the enforcement of any assessment or otherwise, all such liability of incorporators, subscribers, stockholders, officers and directors being released by the holder or owner hereof by the acceptance of this bond and being likewise waived and released by the terms of the Mortgage. EX-4.10 5 SECOND SUPPLEMENTAL INDENTURE AS OF APRIL 1, 1997 ------------------------------------ ARIZONA PUBLIC SERVICE COMPANY TO THE BANK OF NEW YORK Trustee --------------------- Second Supplemental Indenture Dated as of April 1, 1997 To Indenture Dated as of November 15, 1996 --------------------- 6.72% Senior Notes Due 1999 ------------------------------------ SECOND SUPPLEMENTAL INDENTURE, dated as of April 1, 1997, between Arizona Public Service Company, a corporation duly organized and existing under the laws of the State of Arizona (herein called the "Company"), having its principal office at 400 North Fifth Street, Phoenix, Arizona 85004, and The Bank of New York, a New York banking corporation, as Trustee (herein called the "Trustee") under the Indenture dated as of November 15, 1996 between the Company and the Trustee (the "Indenture"). RECITALS OF THE COMPANY The Company has executed and delivered the Indenture to the Trustee to provide for the issuance from time to time of its Senior Notes (the "Notes"), said Notes to be issued in one or more series as in the Indenture provided. The Company has executed and delivered to the Trustee one indenture supplemental to the Indenture (the "First Supplemental Indenture") dated as of November 15, 1996. Pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Notes to be known as its 6.72% Senior Notes Due 1999 (herein called the "Senior Notes Due 1999"), the form and substance of such Senior Notes Due 1999 and the terms, provisions, and conditions thereof to be set forth as provided in the Indenture and this Second Supplemental Indenture. All things necessary to make this Second Supplemental Indenture a valid agreement of the Company, and to make the Senior Notes Due 1999, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been done. NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Senior Notes Due 1999 by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Senior Notes Due 1999 and the terms, provisions, and conditions thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Senior Notes Due 1999, as follows: ARTICLE ONE GENERAL TERMS AND CONDITIONS OF THE SENIOR NOTES DUE 1999 SECTION 101. There shall be and is hereby authorized a series of Notes designated the "6.72% Senior Notes Due 1999," limited in aggregate principal amount to $50,000,000, which amount shall be as set forth in any Company Order for the authentication and delivery of Senior Notes Due 1999. The Senior Notes Due 1999 shall mature and the principal shall be due and payable together with all accrued and unpaid interest thereon on April 1, 1999, and shall be issued in the form of registered Senior Notes Due 1999 without coupons. SECTION 102. The Senior Notes Due 1999 shall be issued in certificated form, except that the Senior Notes Due 1999 shall be issued initially as a Global Note to and registered in the name of Cede & Co., as nominee of The Depository Trust Company, as Depositary therefor. Any Senior Notes Due 1999 to be issued or transferred to, or to be held by, Cede & Co. (or any successor thereof) for such purpose shall bear the depositary legend in substantially the form set forth at the top of the form of Senior Note Due 1999 in Article III hereof (in lieu of that set forth in Section 204 of the Indenture), unless otherwise agreed by the Company, such agreement to be confirmed in writing to the Trustee. Such Global Note may be exchanged in whole or in part for Senior Notes Due 1999 registered, and any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than such Depositary or a nominee thereof only under the circumstances set forth in Clause (2) of the last paragraph of Section 305 of the Indenture, or such other circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305 of the Indenture as to which the Company shall agree, such agreement to be confirmed in writing to the Trustee. Principal of, and premium, if any, and interest on the Senior Notes Due 1999 will be payable, the transfer of Senior Notes Due 1999 will be registrable and Senior Notes Due 1999 will be exchangeable for Senior Notes Due 1999 bearing identical terms and provisions, at the office or agency of the Company in the Borough of Manhattan, The City and State of New York; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Security Register. SECTION 103. Each Senior Note Due 1999 will bear interest at the rate of 6.72% per annum from April 10, 1997 until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum, payable on April 1 and October 1 of each year (each, an "Interest Payment Date"), commencing on October 1, 1997, to the person in whose name such Senior Note Due 1999 or any predecessor Senior Note Due 1999 is registered, at the close of business on the March 15 or September 15 next preceding such Interest Payment Date; provided, however, that the interest payable at maturity will be payable to the person to whom principal shall be payable. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered holders on such regular record date, and may be paid to the person in whose name the Senior Note Due 1999 (or one or more Predecessor Notes) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered holders of the Senior Notes Due 1999 not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Senior Notes Due 1999 may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. Interest will accrue from April 10, 1997 to, but not including, the relevant payment date. In the event that any date on which interest is payable on the Senior Notes Due 1999 is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any 2 such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. A "Business Day" shall mean any day other than a day on which banking institutions in The City of New York are authorized or obligated by law to close. SECTION 104. The Company, at its option, may redeem all, or, from time to time, any part of the Senior Notes Due 1999, upon notice as provided in the Indenture at a redemption price equal to the sum of (a) the principal amount of the Senior Notes Due 1999 (or portion thereof) being redeemed plus accrued interest thereon to the redemption date and (b) the Make-Whole Amount (if any) with respect to the Senior Notes Due 1999 or portion thereof being redeemed. For purposes of this Section 104, the following terms shall have the following meanings: "Make-Whole Amount" means in connection with any optional redemption of any Senior Notes Due 1999, the excess, if any, of (i) the aggregate present value as of the date of such redemption of each dollar of principal being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of each such dollar if such redemption had not been made determined by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given) from the respective dates on which such principal and interest would have been payable, if such redemption had not been made, over (ii) the aggregate principal amount of the Senior Notes Due 1999 being redeemed. "Reinvestment Rate" means 0.10% plus the arithmetic mean of the yields under the respective heading "Week Ending" published in the most recent Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as of the payment date of the principal being redeemed. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purpose of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. "Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time of any determination under the Indenture, then such other reasonably comparable index which shall be designated by the Company. The Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in acting upon the Company's calculation of any redemption price, including any Make-Whole Amount (if any). 3 SECTION 105. The related series of Senior Note First Mortgage Bonds for the Senior Notes Due 1999 is the Company's First Mortgage Bonds, Senior Notes Series B (the "Senior Note Series B Bonds"). SECTION 106. When the obligation of the Company to make payments with respect to the principal of, and premium, if any, and interest on all or any part of the Senior Note Series B Bonds shall be satisfied or deemed satisfied pursuant to Section 403, Section 501, or Article 14 of the Indenture or pursuant to Section 104 of this Second Supplemental Indenture, the Trustee shall, upon written request of the Company and the receipt of the certificate of the Expert described in Section 404(b) of the Indenture (if such certificate is then required by Section 404(b) of the Indenture), deliver to the Company without charge therefor all of the Senior Note Series B Bonds so satisfied or deemed satisfied, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Senior Note Series B Bonds delivered to the Company in accordance with this Section 106 shall be delivered by the Company to the First Mortgage Trustee for cancellation. SECTION 107. The Senior Notes Due 1999 shall be defeasable pursuant to Section 1402 and Section 1403 of the Indenture. ARTICLE TWO ADDITIONAL COVENANTS SECTION 201. (a) From and after the Release Date and so long as any Senior Notes Due 1999 are Outstanding, the Company will not issue, assume, or guarantee any Debt secured by any mortgage, security interest, pledge, or lien (herein referred to as a "mortgage") of or upon any Operating Property of the Company, whether owned at the date of the Indenture or thereafter acquired, and will not permit to exist any Debt secured by a mortgage on any Operating Property created on or prior to the Release Date, without in any such case effectively securing, on the later to occur of the issuance, assumption, or guarantee of any such Debt or the Release Date, the Outstanding Senior Notes Due 1999 (together with, if the Company shall so determine, any other Note or Debt of or guaranteed by the Company ranking senior to, or equally with, the Notes) equally and ratably with such Debt; provided, however, that the foregoing restriction shall not apply to Debt secured by any of the following: (1) mortgages on any property existing at the time of acquisition thereof; (2) mortgages on property of a corporation existing at the time such corporation is merged into or consolidated with the Company, or at the time of a sale, lease, or other disposition of the properties of such corporation or a division thereof as an entirety or substantially as an entirety to the Company, provided that such mortgage as a 4 result of such merger, consolidation, sale, lease, or other disposition is not extended to property owned by the Company immediately prior thereto; (3) mortgages on property to secure all or part of the cost of acquiring, constructing, developing, or substantially repairing, altering, or improving such property, or to secure indebtedness incurred to provide funds for any such purpose or for reimbursement of funds previously expended for any such purpose, provided such mortgages are created or assumed contemporaneously with, or within eighteen (18) months after, such acquisition or completion of construction, development, or substantial repair, alteration, or improvement or within six (6) months thereafter pursuant to a commitment for financing arranged with a lender or investor within such eighteen (18) month period; (4) mortgages in favor of the United States of America or any State thereof, or any department, agency, or instrumentality or political subdivision of the United States of America or any State thereof, or for the benefit of holders of securities issued by any such entity, to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing, developing, or substantially repairing, altering, or improving the property subject to such mortgages; or (5) any extension, renewal or replacement (or successive extensions, renewals, or replacements), in whole or in part, of any mortgage referred to in the foregoing clauses (1) to (4), inclusive; provided, however, that the principal amount of Debt secured thereby and not otherwise authorized by said clauses (1) to (4), inclusive, shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal, or replacement, so secured at the time of such extension, renewal, or replacement. (b) Notwithstanding the provisions of Section 201(a), from and after the Release Date and so long as any Senior Notes Due 1999 are Outstanding, the Company may issue, assume, or guarantee Debt, or permit to exist Debt, secured by mortgages which would otherwise be subject to the restrictions of Section 201(a) up to an aggregate principal amount that, together with the principal amount of all other Debt of the Company secured by mortgages (other than mortgages permitted by Section 201(a) that would otherwise be subject to the foregoing restrictions) and the Value of all Sale and Lease-Back Transactions in existence at such time (other than any Sale and Lease-Back Transaction that, if such Sale and Lease-Back Transaction had been 5 a mortgage, would have been permitted by Section 201(a), other than Sale and Lease-Back Transactions permitted by Section 202 because the commitment by or on behalf of the purchaser was obtained no later than eighteen (18) months after the later of events described in (i) or (ii) of Section 202, and other than Sale and Lease-Back Transactions as to which application of amounts have been made in accordance with clause (z) of Section 202), does not at the time exceed the greater of ten percent (10%) of Net Tangible Assets or ten percent (10%) of Capitalization. (c) If at any time the Company shall issue, assume, or guarantee any Debt secured by any mortgage and if Section 201(a) requires that the Outstanding Senior Notes Due 1999 be secured equally and ratably with such Debt, the Company will promptly execute, at its expense, any instruments necessary to so equally and ratably secure the Outstanding Senior Notes Due 1999 and deliver the same to the Trustee along with: (1) An Officers' Certificate stating that the covenant of the Company contained in Section 201(a) has been complied with; and (2) An Opinion of Counsel to the effect that the Company has complied with the covenant contained in Section 201(a), and that any instrument executed by the Company in the performance of such covenant complies with the requirements of such covenant. In the event that the Company shall hereafter secure Outstanding Senior Notes Due 1999 equally and ratably with any other obligation or indebtedness (including other Notes) pursuant to the provisions of this Section 201, the Trustee is hereby authorized to enter into an indenture or agreement supplemental hereto and to take such action, if any, as it may, in its sole and absolute discretion, deem advisable to enable it to enforce effectively the rights of the Holders of Outstanding Senior Notes Due 1999 so secured, equally and ratably with such other obligation or indebtedness. SECTION 202. From and after the Release Date and so long as any Senior Notes Due 1999 are outstanding, the Company will not enter into any Sale and Lease-Back Transaction with respect to any Operating Property and will not permit to remain in effect any Sale and Lease-Back Transaction entered into on or prior to the Release Date with respect to any Operating Property if, in any case, the commitment by or on behalf of the purchaser is or was obtained more than eighteen (18) months after the later of (i) the completion of the acquisition, construction, or development of such Operating Property or (ii) the placing in operation of such Operating Property or of such Operating Property as constructed, developed, or substantially repaired, altered, or improved, unless (x) the Company would be entitled pursuant to Section 201(a) to issue, assume, or guarantee Debt secured by a mortgage on such Operating Property without equally and ratably securing the Senior Notes Due 1999 or (y) the Company would be entitled pursuant to Section 201(b), after giving effect to such Sale and Lease-Back Transaction, to incur $1.00 of additional Debt secured by mortgages (other than mortgages permitted by Section 201(a)) or (z) the Company shall apply or cause to be applied, in the case of a sale or transfer for cash, 6 an amount equal to the net proceeds thereof (but not in excess of the net book value of such Operating Property at the date of such sale or transfer) and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair value (as determined by the Board of Directors) of the Operating Property so leased, to the retirement, within one hundred eighty (180) days after the later to occur of the effective date of such Sale and Lease-Back Transaction or the Release Date, of Notes or other Debt of the Company ranking senior to, or equally with, the Senior Notes Due 1999; provided, however, that any such retirement of Notes shall be in accordance with the terms and provisions of the Indenture and the Notes; provided, further, that the amount to be applied to such retirement of Notes or other Debt shall be reduced by an amount equal to the sum of (a) an amount equal to the redemption price with respect to Notes delivered within such one hundred eighty (180)-day period to the Trustee for retirement and cancellation and (b) the principal amount, plus any premium or fee paid in connection with any redemption in accordance with the terms of other Debt voluntarily retired by the Company within such one hundred eighty (180)-day period, excluding in each case retirements pursuant to mandatory sinking fund or prepayment provisions and payments at maturity. SECTION 203. Definitions For purposes of Section 201 and Section 202 of this Second Supplemental Indenture, the following terms shall have the following meanings: "Capitalization" means the total of all the following items appearing on, or included in, the consolidated balance sheet of the Company: (i) liabilities for indebtedness maturing more than twelve (12) months from the date of determination; and (ii) common stock, preferred stock, premium on capital stock, capital surplus, capital in excess of par value, and retained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of capital stock of the Company held in its treasury. Subject to the foregoing, Capitalization shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by independent accountants regularly retained by the Company, and may be determined as of a date not more than (sixty) 60 days prior to the happening of an event for which such determination is being made. The term "Debt" means any outstanding debt for money borrowed evidenced by notes, debentures, bonds, or other securities. The term "Net Tangible Assets" means the amount shown as total assets on the consolidated balance sheet of the Company, less the following: (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense and other regulatory assets carried as an asset on the Company's consolidated balance sheet; and (ii) appropriate adjustments, if any, on account of minority interests. 7 Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and that are approved by the independent accountants regularly retained by the Company, and may be determined as of a date not more than (sixty) 60 days prior to the happening of the event for which such determination is being made. The term "Operating Property" means (i) any interest in real property owned by the Company and (ii) any asset owned by the Company that is depreciable in accordance with generally accepted accounting principles. The term "Sale and Lease-Back Transaction" means any arrangement with any person providing for the leasing to the Company of any Operating Property (except for temporary leases for a term, including any renewal thereof, of not more than forty-eight (48) months), which Operating Property has been or is to be sold or transferred by the Company to such person. The term "Value" means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds to the Company from the sale or transfer of the property leased pursuant to such Sale and Lease-Back Transaction or (2) the net book value of such property, as determined in accordance with generally accepted accounting principles by the Company at the time of entering into such Sale and Lease-Back Transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of such Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of such term, without regard, in any case, to any renewal or extension options contained in such lease. ARTICLE THREE FORM OF SENIOR NOTE DUE 1999 SECTION 301. The Senior Notes Due 1999 and the Trustee's certificate of authentication to be endorsed are to be substantially in the following forms: Form of Face of Note. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER 8 USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. ARIZONA PUBLIC SERVICE COMPANY 6.72% Senior Notes Due 1999 No. $50,000,000 ----- CUSIP No. ------- Arizona Public Service Company, a corporation duly organized and existing under the laws of Arizona (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Fifty Million Dollars on April 1, 1999, and to pay interest thereon from April 10, 1997 or from the most recent Interest Payment Date with respect to which interest has been paid or duly provided for, semi-annually on April 1 and October 1 in each year, commencing October 1, 1997, at the rate of 6.72% per annum, until the principal hereof is paid or made available for payment, provided that any principal and premium, and any such instalment of interest, which is overdue shall bear interest at the rate of 6.72% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of (and premium, if any) and such interest on this Note will be made at the office or agency of the Company maintained for that purpose in The City of New 9 York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register. Reference is hereby made to the further provisions of this Note set forth below, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. ARIZONA PUBLIC SERVICE COMPANY By ------------------------------------- Attest: - --------------------------------- Form of Reverse of Note. This Note is one of a duly authorized issue of securities of the Company (herein called the "Notes"), issued and to be issued in one or more series under an Indenture, dated as of November 15, 1996 (herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof, limited in aggregate principal amount to $50,000,000. Prior to the Release Date (as hereinafter defined), this Note will be secured by First Mortgage Bonds, Senior Note Series B (the "Senior Note Series B Bonds") delivered by the Company to the Trustee for the benefit of the Holders of the series of Notes of which this Note 10 is a part, issued under the Mortgage and Deed of Trust, dated as of July 1, 1946, from the Company to The Bank of New York, as successor trustee (the "Mortgage Trustee"), as supplemented and amended (the "First Mortgage"). Reference is made to the First Mortgage for a description of property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the first mortgage bonds under the First Mortgage and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which the Senior Note Series B Bonds are secured and the circumstances under which additional first mortgage bonds may be issued. FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR NOTE FIRST MORTGAGE BONDS, AS SUCH TERM IS DEFINED IN THE INDENTURE) HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER. The Notes of this series are subject to redemption upon not less than 30 days' notice by mail at any time at the option of the Company, in whole or from time to time in part, at a redemption price equal to the sum of (i) the principal amount of the Notes (or portion thereof) being redeemed plus accrued interest thereon to the redemption date and (ii) the Make-Whole Amount (as defined below), if any, with respect to the Notes being redeemed (the "Redemption Price"). If notice has been given as provided in the Indenture and funds for the redemption of any Notes (or any portion thereof) called for redemption shall have been made available on the redemption date referred to in such notice, such Notes (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Notes will be to receive payment of the Redemption Price. Notice of any optional redemption of Notes of this series (or any portion thereof) will be given to Holders at their addresses, as shown in the security register for such Notes, not more than 60 nor less than 30 days prior, to the date fixed for redemption. The notice of redemption will specify, among other items, the Redemption Price and the principal amount of the Notes held by such Holder to be redeemed. If less than all of the Notes are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the portion of such Notes to be redeemed in whole or in part. As used herein: "Make-Whole Amount" means, in connection with any optional redemption of any Notes, the excess, if any, of (i) the aggregate present value as of the date of such redemption of each dollar of principal being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of each such dollar if such redemption had not been made, determined by discounting, on a semi-annual basis, such 11 principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given) from the respective dates on which such principal and interest would have been payable if such redemption had not been made, over (ii) the aggregate principal amount of the Notes being redeemed. "Reinvestment Rate" means 0.10% plus the arithmetic mean of the yields under the respective heading "Week Ending" published in the most recent Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as of the payment date of the principal being redeemed. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purpose of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. "Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time of any determination under the Indenture, then such other reasonably comparable index which shall be designated by the Company. The Notes of this series will not be subject to any sinking fund. In the event of redemption of this Note in part only, a new Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture and, upon such declaration, the Trustee can demand the acceleration of the payment of principal of the Senior Note Series B Bonds as provided in the Indenture. 12 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 13 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. Form of Trustee's Certificate of Authentication. CERTIFICATE OF AUTHENTICATION This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, As Trustee By ---------------------------- Authorized Signatory ARTICLE FOUR ORIGINAL ISSUE OF SENIOR NOTES DUE 1999 SECTION 401. Senior Notes Due 1999 in the aggregate principal amount of $50,000,000, may, upon execution of this Second Supplemental Indenture, or from time to time thereafter, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes to or upon the written order of the Company, signed by its Chairman, its President, or any Vice President and its Treasurer or an Assistant Treasurer, without any further action by the Company. 14 ARTICLE FIVE PAYING AGENT AND REGISTRAR SECTION 501. The Bank of New York will be the Paying Agent and Note Registrar for the Senior Notes Due 1999. ARTICLE SIX SUNDRY PROVISIONS SECTION 601. Except as otherwise expressly provided in this Second Supplemental Indenture or in the form of Senior Notes Due 1999 or otherwise clearly required by the context hereof or thereof, all terms used herein or in said form of Senior Notes Due 1999 that are defined in the Indenture shall have the several meanings respectively assigned to them thereby. SECTION 602. The Indenture, as supplemented by this Second Supplemental Indenture, is in all respects ratified and confirmed, and this Second Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. SECTION 603. The Trustee hereby accepts the trusts herein declared, provided, created, supplemented, or amended and agrees to perform the same upon the terms and conditions herein and in the Indenture, as heretofore supplemented and amended, set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article Seven of the Indenture shall apply to and form part of this Second Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations, and insertions, if any, as may be appropriate to make the same conform to the provisions of this Second Supplemental Indenture. --------------------------------- This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 15 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. ARIZONA PUBLIC SERVICE COMPANY By: Nancy E. Felker --------------------------------- Nancy E. Felker Treasurer Attest: Betsy A. Pregulman - --------------------------------- Betsy A. Pregulman Associate Secretary THE BANK OF NEW YORK, as Trustee By: Walter N. Gitlin --------------------------------- Walter N. Gitlin Vice President Attest: Stephen J. Giurlando - --------------------------------- Stephen J. Giurlando Assistant Vice President 16 STATE OF ARIZONA ) ) ss: COUNTY OF MARICOPA ) On the 9th day of April, 1997, before me personally came Nancy E. Felker, to me known, who, being by me duly sworn, did depose and say that she is the Treasurer of Arizona Public Service Company, one of the corporations described in and which executed the foregoing instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that she signed her name thereto by like authority. Maria R. Marrs ----------------------------------------------- NOTARY PUBLIC My Commission Expires: July 21, 1998 - ------------------------ 17 STATE OF NEW YORK ) ) ss: COUNTY OF NEW YORK ) On the 8th day of April, 1997, before me personally came Walter N. Gitlin, to me known, who, being by me duly sworn, did depose and say that he is the Vice President of The Bank of New York, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. William J. Cassels ----------------------------------------------- NOTARY PUBLIC My Commission Expires: May 16, 1998 - ------------------------ 18 EX-4.11 6 SPECIMAN OF NOTE OF 6.72% SENIOR NOTES DUE 1999 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ARIZONA PUBLIC SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. ARIZONA PUBLIC SERVICE COMPANY 6.72% Senior Notes Due 1999 No. B-1 $50,000,000 CUSIP No. 04055P AA8 ---------- Arizona Public Service Company, a corporation duly organized and existing under the laws of Arizona (herein called the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Fifty Million Dollars on April 1, 1999, and to pay interest thereon from April 10, 1997 or from the most recent Interest Payment Date with respect to which interest has been paid or duly provided for, semi-annually on April 1 and October 1 in each year, commencing October 1, 1997, at the rate of 6.72% per annum, until the principal hereof is paid or made available for payment, provided that any principal and premium, and any such instalment of interest, which is overdue shall bear interest at the rate of 6.72% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of (and premium, if any) and such interest on this Note will be made at the office or agency of the Company maintained for that purpose in The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Note Register. Reference is hereby made to the further provisions of this Note set forth below, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 2 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. ARIZONA PUBLIC SERVICE COMPANY By George A. Schreiber, Jr. ------------------------------------- Executive Vice President and Chief Financial Officer Attest: Nancy c. Loftin - -------------------------------------- Vice President, Chief Legal Counsel and Secretary 3 This Note is one of a duly authorized issue of securities of the Company (herein called the "Notes"), issued and to be issued in one or more series under an Indenture, dated as of November 15, 1996 (herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof, limited in aggregate principal amount to $50,000,000. Prior to the Release Date (as hereinafter defined), this Note will be secured by First Mortgage Bonds, Senior Note Series B (the "Senior Note Series B Bonds") delivered by the Company to the Trustee for the benefit of the Holders of the series of Notes of which this Note is a part, issued under the Mortgage and Deed of Trust, dated as of July 1, 1946, from the Company to The Bank of New York, as successor trustee (the "Mortgage Trustee"), as supplemented and amended (the "First Mortgage"). Reference is made to the First Mortgage for a description of property mortgaged and pledged, the nature and extent of the security, the rights of the holders of the first mortgage bonds under the First Mortgage and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which the Senior Note Series B Bonds are secured and the circumstances under which additional first mortgage bonds may be issued. FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN SENIOR NOTE FIRST MORTGAGE BONDS, AS SUCH TERM IS DEFINED IN THE INDENTURE) HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE MATURITY THEREOF (THE "RELEASE DATE"), THE SENIOR NOTE FIRST MORTGAGE BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER. The Notes of this series are subject to redemption upon not less than 30 days' notice by mail at any time at the option of the Company, in whole or from time to time in part, at a redemption price equal to the sum of (i) the principal amount of the Notes (or portion thereof) being redeemed plus accrued interest thereon to the redemption date and (ii) the Make-Whole Amount (as defined below), if any, with respect to the Notes being redeemed (the "Redemption Price"). If notice has been given as provided in the Indenture and funds for the redemption of any Notes (or any portion thereof) called for redemption shall have been made available on the redemption date referred to in such notice, such Notes (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Notes will be to receive payment of the Redemption Price. Notice of any optional redemption of Notes of this series (or any portion thereof) will be given to Holders at their addresses, as shown in the security register for such Notes, not more than 60 nor less than 30 days prior, to the date fixed for redemption. The notice of redemption will specify, among other items, the Redemption Price and the principal amount of the Notes held by such Holder to be redeemed. If less than all of the Notes are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the portion of such Notes to be redeemed in whole or in part. 4 As used herein: "Make-Whole Amount" means, in connection with any optional redemption of any Notes, the excess, if any, of (i) the aggregate present value as of the date of such redemption of each dollar of principal being redeemed and the amount of interest (exclusive of interest accrued to the date of redemption) that would have been payable in respect of each such dollar if such redemption had not been made, determined by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date such notice of redemption is given) from the respective dates on which such principal and interest would have been payable if such redemption had not been made, over (ii) the aggregate principal amount of the Notes being redeemed. "Reinvestment Rate" means 0.10% plus the arithmetic mean of the yields under the respective heading "Week Ending" published in the most recent Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity, as of the payment date of the principal being redeemed. If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purpose of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. "Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time of any determination under the Indenture, then such other reasonably comparable index which shall be designated by the Company. The Notes of this series will not be subject to any sinking fund. In the event of redemption of this Note in part only, a new Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture and, upon such declaration, the Trustee can demand the acceleration of the payment of principal of the Senior Note Series B Bonds as provided in the Indenture. 5 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Notes of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 6 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. CERTIFICATE OF AUTHENTICATION This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture. Dated: April 10, 1997 THE BANK OF NEW YORK, As Trustee By Walter N. Gitlin ------------------------------ Authorized Signatory 7 EX-12.2 7 COMPUTATION OF RATION OF EARNINGS TO FIXED CHARGES Exhibit 12.2 ARIZONA PUBLIC SERVICE COMPANY COMPUTATION OF EARNINGS TO FIXED CHARGES (Thousands of Dollars)
Twelve Months Ended ----------------------------------------------------------- December 31, ----------------------------------------------------------- 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Earnings: Net Income...................... $243,471 $239,570 $243,486 $250,386 $246,805 Income taxes (1)................ 132,961 141,267 177,244 188,907 181,355 Fixed Charges................... 203,855 214,768 213,581 220,590 246,246 -------- -------- -------- -------- -------- Total......................... $580,287 $595,605 $634,311 $659,883 $674,406 ======== ======== ======== ======== ======== Fixed Charges: Interest expense................ $158,287 $168,175 $166,045 $171,272 $190,746 Amortization of debt discount, premium and expense........... 8,176 8,622 8,854 9,203 8,000 Estimated interest portion of annual rents (2).............. 37,392 37,971 38,682 40,115 47,500 -------- -------- -------- -------- -------- Total......................... $203,855 $214,768 $213,581 $220,590 $246,246 ======== ======== ======== ======== ======== Ratio of Earnings to Fixed Charges (rounded down).................. 2.84 2.77 2.96 2.99 2.73 ======== ======== ======== ======== ======== (1) Income Taxes: Charged to operations........... $178,513 $178,865 $168,202 $168,056 $164,620 Charged (credited) to other accounts...................... (45,552) (37,598) 9,042 20,851 16,735 -------- -------- -------- -------- -------- Total......................... $132,961 $141,267 $177,244 $188,907 $181,355 ======== ======== ======== ======== ======== (2) Estimated interest portion of Unit 2 lease payments included in estimated interest portion of annual rentals.................. $ 35,083 $ 35,422 $ 35,710 $ 37,407 $ 43,581 ========= ========= ========= ========= =========
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