Amounts reported in our interim Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the respective annual periods, due to the effects of seasonal temperature variations on energy consumption, timing of maintenance on electric generating units (“EGU”), and other factors.
Our condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments except as otherwise disclosed in the notes) that we believe are necessary for the fair presentation of our financial position, results of operations, and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in conformity with GAAP have been condensed or omitted pursuant to such regulations, although we believe that the disclosures provided are adequate to make the interim information presented not misleading. The accompanying condensed consolidated financial statements and these notes should be read in conjunction with the audited consolidated financial statements and notes included in our 2021 Form 10-K.
On June 30, 2020, the United States Federal Energy Regulatory Commission (“FERC”) issued an order granting a waiver request related to the existing Allowance for Funds Used During Construction (“AFUDC”) rate calculation beginning March 1, 2020, through February 28, 2021. On February 23, 2021, this waiver was extended until September 30, 2021. On September 21, 2021, it was further extended until March 31, 2022. The order provided a simplified approach that companies may elect to implement in order to minimize the significant distorted effect on the AFUDC formula resulting from increased short-term debt financing during the COVID-19 pandemic. APS adopted this simplified approach to computing the AFUDC composite rate by using a simple average of the actual historical short-term debt balances for 2019, instead of current period short-term debt balances, and left all other aspects of the AFUDC formula composite rate calculation unchanged. This change impacted the AFUDC composite rate in 2021 and for the three-month period ended March 31, 2022. Furthermore, the change in the composite rate calculation did not impact our accounting treatment for these costs. The change did not have a material impact on our financial statements. See Note 1 in our 2021 Form 10-K for information on the accounting treatment for AFUDC.
Supplemental Cash Flow Information
The following table summarizes supplemental Pinnacle West cash flow information (dollars in thousands):
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2022 | | 2021 |
Cash paid (received) during the period for: | | | |
Income taxes, net of refunds | $ | (1,746) | | | $ | (788) | |
Interest, net of amounts capitalized | 120,359 | | | 112,010 | |
Significant non-cash investing and financing activities: | | | |
Accrued capital expenditures | $ | 106,033 | | | $ | 105,515 | |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | 11,101 | | | 248,694 | |
Dividends accrued but not yet paid | 96,081 | | | 93,610 | |
| | | |
The following table summarizes supplemental APS cash flow information (dollars in thousands):
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2022 | | 2021 |
Cash paid (received) during the period for: | | | |
Income taxes, net of refunds | $ | (25) | | | $ | 3,317 | |
Interest, net of amounts capitalized | 114,069 | | | 107,044 | |
Significant non-cash investing and financing activities: | | | |
Accrued capital expenditures | $ | 106,033 | | | $ | 105,515 | |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | 7,512 | | | 248,694 | |
Dividends accrued but not yet paid | 96,000 | | | 93,500 | |
| | | |
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