UNITED STATES
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): June 30, 2009
 	 	 	 	 	
 	 	Exact Name of Registrant as Specified in	 	 	
 	 	Charter; State of Incorporation;	 	IRS Employer	
Commission File Number	 	Address and Telephone Number	 	Identification Number	
 	 	 	 	 	
1-8962	 	Pinnacle West Capital Corporation
(an Arizona corporation)
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ 85072-3999
(602) 250-1000	 	86-0512431	
 	 	 	 	 	
1-4473	 	Arizona Public Service Company
(an Arizona corporation)
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ 85072-3999
(602) 250-1000	 	86-0011170	
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 		
o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 		
o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 		
o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
This combined Form 8-K is separately filed by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries. Except as stated in the preceding sentence, neither registrant is filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

 
Item 2.02. Results of Operations and Financial Condition
On August 4, 2009, Pinnacle West Capital Corporation (the “Company” or “Pinnacle West”) issued a press release regarding its financial results for its fiscal quarter ended June 30, 2009. A copy of the press release is attached hereto as Exhibit 99.2.
Certain of the information referenced in Item 7.01 below relates to the Company’s results of operations for its fiscal quarter ended June 30, 2009. This information is attached hereto as Exhibits 99.1, 99.2 and 99.3.
Item 7.01. Regulation FD Disclosure
Financial and Business Information
The Company is providing a quarterly consolidated statistical summary and a copy of the slide presentation made in connection with the quarterly earnings conference call on August 4, 2009 to help interested parties better understand its business (see Exhibits 99.1 and 99.3). This information is concurrently being posted to the Company’s website at www.pinnaclewest.com , which also contains a glossary of relevant terms.
2009 Earnings Outlook
In this discussion, earnings per share amounts are after income taxes and are based on diluted common shares outstanding. The earnings guidance in this Form 8-K supersedes all previous earnings guidance provided by Pinnacle West.
Our earnings forecasts are subject to numerous risks, including those described under “Forward-Looking Statements” below and under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
We estimate that our consolidated earnings for 2009 will be within a reasonable range around $2.30 per share, excluding the impact of SunCor Development Company (“SunCor”). This guidance takes into account the effects of milder weather in the first quarter, as well as the 2009 portion of the annualized pretax cost savings identified in our March 2009 report to the Arizona Corporation Commission (the “ACC”), as required by the ACC’s interim rate decision in December 2008.
We estimate that Arizona Public Service Company’s (“APS”) earnings contribution included in such consolidated earnings will be within a reasonable range around $2.35 per share (equivalent to a return on APS’ average common equity of about 7%). This estimate assumes that the interim base rate surcharge will remain in effect throughout 2009. We currently estimate that holding company expenses and other items, net, will be a net loss within a reasonable range around $0.05 per share. For additional details regarding the major factors affecting our consolidated earnings outlook for 2009, see Exhibit 99.4 attached hereto.
2010 Earnings Outlook
Assuming APS’ proposed general retail rate settlement is approved as proposed and is effective for the entire year, we estimate that our consolidated earnings for 2010, with negligible impact from SunCor, if any, will be within a reasonable range around $3.00 per share. We estimate that APS’ earnings contribution included in such 2010 consolidated earnings will be within a reasonable range around $3.00 per share (equivalent to a return on APS’ average common equity of about 9%). We currently estimate that holding company expenses and other items, net, will not have any meaningful impact on our 2010 consolidated financial results. For additional details regarding major factors affecting our consolidated earnings outlook for 2010, see Exhibit 99.5 attached hereto.
 
 2 

 

Forward-Looking Statements
This Form 8-K contains forward-looking statements regarding our 2009 and 2010 earnings outlook. Neither Pinnacle West nor APS assumes any obligation to update these statements or make any further statements on any of these issues, except as required by applicable law. These forward-looking statements are often identified by words such as “estimate,” “predict,” “hope,” “may,” “believe,” “anticipate,” “plan,” “expect,” “require,” “intend,” “assume” and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by Pinnacle West or APS. In addition to the Risk Factors described in Item 1A of the Pinnacle West/APS Annual Report on Form 10-K for the fiscal year ended December 31, 2008, these factors include, but are not limited to, state and federal regulatory and legislative decisions and actions, including the outcome or timing of the pending rate case of APS; increases in our capital expenditures and operating costs and our ability to achieve timely and adequate rate recovery of these increased costs; our ability to reduce capital expenditures and other costs while maintaining reliability and customer service levels, and unexpected developments that would limit us from achieving all or some of our planned capital expenditure reductions; volatile fuel and purchased power costs, including fluctuations in market prices for natural gas, coal, uranium and other fuels used in our generating facilities, availability of supplies of such commodities, and our ability to recover the costs of such commodities; the outcome and resulting costs of regulatory, legislative and judicial proceedings, both current and future, including those related to environmental matters and climate change; the availability of sufficient water supplies to operate our generation facilities, including as the result of drought conditions; the potential for additional restructuring of the electric industry, including decisions impacting wholesale competition and the introduction of retail electric competition in Arizona; regional, national and international economic and market conditions, including the strength of the real estate, credit and financial markets; the potential adverse impact of current economic conditions on our results of operations; the cost of debt and equity capital and access to capital markets; changes in the market price of our common stock; restrictions on dividends or other burdensome provisions in new or existing credit agreements; our ability, or the ability of our subsidiaries, to meet debt service obligations; current credit ratings remaining in effect for any given period of time; the performance of the stock market and the changing interest rate environment, which affect the value of our nuclear decommissioning trust, pension, and other postretirement benefit plan assets, the amount of required contributions to Pinnacle West’s pension plan and contributions to APS’ nuclear decommissioning trust funds, as well as the reported costs of providing pension and other postretirement benefits and our ability to recover such costs; volatile market liquidity, any deteriorating counterparty credit and the use of derivative contracts in our business (including the interpretation of the subjective and complex accounting rules related to these contracts); the potential shortfall in insurance coverage for a loss resulting from an insurer failing to meet, or being unwilling to meet, its obligations under our insurance policies, or from our commercially reasonable levels of insurance failing to fully cover the loss incurred; changes in accounting principles generally accepted in the United States of America, the interpretation of those principles and the impact of the adoption of new accounting standards; customer growth and energy usage; weather variations affecting local and regional customer energy usage; power plant performance and outages; transmission outages and constraints; the completion of generation and transmission construction in the region, which could affect customer growth and the cost of power supplies; risks inherent in the operation of nuclear facilities, such as environmental, regulatory, health and financial risks, risk of terrorist attack, planned and unplanned outages, and unfunded decommissioning costs; the ability of our power plant participants to meet contractual or other obligations; technological developments in the electric industry; the results of litigation and other proceedings resulting from the California and Pacific Northwest energy situations; the performance of Pinnacle West’s subsidiaries and any resulting effects on its cash flow; the strength of the real estate and credit markets and economic and other conditions affecting the real estate and credit markets in SunCor’s market areas, which include Arizona, Idaho, New Mexico and Utah; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of Pinnacle West and APS.
 
 3 

 
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
 	 	 	 	 	 	 	
Exhibit	 	 	 	 	
No.	 	Registrant(s)	 	Description	
 	 	 	 	 	 	 	
 	99.1	 	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the three-month and six-month periods ended June 30, 2009 and 2008.	
 	 	 	 	 	 	 	
 	99.2	 	 	Pinnacle West
APS	 	Earnings News Release issued on August 4, 2009.	
 	 	 	 	 	 	 	
 	99.3	 	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation Second Quarter 2009 slide presentation accompanying August 4, 2009 conference call.	
 	 	 	 	 	 	 	
 	99.4	 	 	Pinnacle West
APS	 	2009 Earnings Outlook Reconciliation.	
 	 	 	 	 	 	 	
 	99.5	 	 	Pinnacle West
APS	 	2010 Earnings Outlook Reconciliation.	
 
 4 

 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
 	PINNACLE WEST CAPITAL CORPORATION
(Registrant)
 	 	
Dated: August 4, 2009 	By:  	/s/ James R. Hatfield  	 	
 	 	James R. Hatfield
Senior Vice President and 	 	
 	 	Chief Financial Officer 	 	
 	
 	ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
 	 	
Dated: August 4, 2009 	By:  	/s/ James R. Hatfield  	 	
 	 	James R. Hatfield
Senior Vice President and 	 	
 	 	Chief Financial Officer 	 	
 
 5 

 

 	 	 	 	 	
Exhibit Index
 	 	 	 	 	 	 	
Exhibit	 	 	 	 	
No.	 	Registrant(s)	 	Description	
 	 	 	 	 	 	 	
 	99.1	 	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the three-month and six-month periods ended June 30, 2009 and 2008.	
 	 	 	 	 	 	 	
 	99.2	 	 	Pinnacle West
APS	 	Earnings News Release issued on August 4, 2009.	
 	 	 	 	 	 	 	
 	99.3	 	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation Second Quarter 2009 slide presentation accompanying August 4, 2009 conference call.	
 	 	 	 	 	 	 	
 	99.4	 	 	Pinnacle West
APS	 	2009 Earnings Outlook Reconciliation.	
 	 	 	 	 	 	 	
 	99.5	 	 	Pinnacle West
APS	 	2010 Earnings Outlook Reconciliation.	
 
 6 

Exhibit 99.1
Last Updated 8/4/2009
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2009 and 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	3 Months Ended June	 	 	6 Months Ended June	 	
Line	 	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1	 	Arizona Public Service	 	$	78	 	 	$	125	 	 	$	(47	)	 	$	63	 	 	$	119	 	 	$	(56	)	
2	 	APS Energy Services	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(1	)	 	 	—	 	 	 	(1	)	
3	 	SunCor	 	 	(14	)	 	 	(6	)	 	 	(8	)	 	 	(238	)	 	 	(10	)	 	 	(228	)	
4	 	El Dorado	 	 	—	 	 	 	(5	)	 	 	5	 	 	 	(6	)	 	 	(6	)	 	 	—	 	
5	 	Parent Company	 	 	7	 	 	 	(1	)	 	 	8	 	 	 	85	 	 	 	3	 	 	 	82	 	

6	 	Income (Loss) From Continuing Operations	 	 	71	 	 	 	113	 	 	 	(42	)	 	 	(97	)	 	 	106	 	 	 	(203	)	

 	 	Income (Loss) From Discontinued Operations — Net of Tax	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
7	 	SunCor	 	 	(5	)	 	 	21	 	 	 	(26	)	 	 	(9	)	 	 	23	 	 	 	(32	)	
8	 	Other	 	 	2	 	 	 	—	 	 	 	2	 	 	 	4	 	 	 	—	 	 	 	4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
9	 	Total	 	 	(3	)	 	 	21	 	 	 	(24	)	 	 	(5	)	 	 	23	 	 	 	(28	)	

10	 	Net Income (Loss)	 	 	68	 	 	 	134	 	 	 	(66	)	 	 	(102	)	 	 	129	 	 	 	(231	)	
 		
11	 	Less: Net Income (Loss) Attributable to Noncontrolling Interests	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(14	)	 	 	—	 	 	 	(14	)	

12	 	Net Income (Loss) Attributable to Common Shareholders	 	$	68	 	 	$	134	 	 	$	(66	)	 	$	(88	)	 	$	129	 	 	$	(217	)	

 	 	EARNINGS PER SHARE BY SUBSIDIARY — DILUTED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
13	 	Arizona Public Service	 	$	0.78	 	 	$	1.24	 	 	$	(0.46	)	 	$	0.62	 	 	$	1.18	 	 	$	(0.56	)	
14	 	APS Energy Services	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.01	)	 	 	0.01	 	 	 	(0.02	)	
15	 	SunCor	 	 	(0.14	)	 	 	(0.06	)	 	 	(0.08	)	 	 	(2.35	)	 	 	(0.09	)	 	 	(2.26	)	
16	 	El Dorado	 	 	(0.01	)	 	 	(0.05	)	 	 	0.04	 	 	 	(0.06	)	 	 	(0.07	)	 	 	0.01	 	
17	 	Parent Company	 	 	0.07	 	 	 	(0.01	)	 	 	0.08	 	 	 	0.84	 	 	 	0.03	 	 	 	0.81	 	

18	 	Income (Loss) From Continuing Operations	 	 	0.70	 	 	 	1.12	 	 	 	(0.42	)	 	 	(0.96	)	 	 	1.06	 	 	 	(2.02	)	

 	 	Income (Loss) From Discontinued Operations — Net of Tax	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
19	 	SunCor	 	 	(0.04	)	 	 	0.21	 	 	 	(0.25	)	 	 	(0.09	)	 	 	0.23	 	 	 	(0.32	)	
20	 	Other	 	 	0.02	 	 	 	—	 	 	 	0.02	 	 	 	0.04	 	 	 	(0.01	)	 	 	0.05	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
21	 	Total	 	 	(0.02	)	 	 	0.21	 	 	 	(0.23	)	 	 	(0.05	)	 	 	0.22	 	 	 	(0.27	)	

22	 	Net Income (Loss)	 	 	0.68	 	 	 	1.33	 	 	 	(0.65	)	 	 	(1.01	)	 	 	1.28	 	 	 	(2.29	)	
 		
23	 	Less: Net Income (Loss) Attributable to Noncontrolling Interests	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.14	)	 	 	—	 	 	 	(0.14	)	

24	 	Net Income (Loss) Attributable to Common Shareholders	 	$	0.68	 	 	$	1.33	 	 	$	(0.65	)	 	$	(0.87	)	 	$	1.28	 	 	$	(2.15	)	

25	 	BOOK VALUE PER SHARE	 	$	31.70	 	 	$	37.22	 	 	$	(5.52	)	 	$	31.70	 	 	$	37.22	 	 	$	(5.52	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	COMMON SHARES OUTSTANDING (Thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
26	 	Average — Diluted	 	 	101,193	 	 	 	100,917	 	 	 	276	 	 	 	101,048	 	 	 	100,856	 	 	 	192	 	
27	 	End of Period	 	 	101,171	 	 	 	100,706	 	 	 	465	 	 	 	101,171	 	 	 	100,706	 	 	 	465	 	

 	 	 	
See Glossary of Terms.	 	Page 1 of 4	

 

Last Updated 8/4/2009
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2009 and 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	3 Months Ended June	 	 	6 Months Ended June	 	
Line	 	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRIC OPERATING REVENUES (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
28	 	Residential	 	$	377	 	 	$	365	 	 	$	12	 	 	$	633	 	 	$	636	 	 	$	(3	)	
29	 	Business	 	 	389	 	 	 	396	 	 	 	(7	)	 	 	687	 	 	 	696	 	 	 	(9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
30	 	Total retail	 	 	766	 	 	 	761	 	 	 	5	 	 	 	1,320	 	 	 	1,332	 	 	 	(12	)	
 	 	Wholesale revenue on delivered electricity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31	 	Traditional contracts	 	 	17	 	 	 	22	 	 	 	(5	)	 	 	28	 	 	 	34	 	 	 	(6	)	
32	 	Off-system sales	 	 	12	 	 	 	30	 	 	 	(18	)	 	 	34	 	 	 	54	 	 	 	(20	)	
33	 	Transmission for others	 	 	8	 	 	 	8	 	 	 	—	 	 	 	15	 	 	 	15	 	 	 	—	 	
34	 	Other miscellaneous services	 	 	9	 	 	 	8	 	 	 	1	 	 	 	18	 	 	 	17	 	 	 	1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
35	 	Total regulated operating electricity revenues	 	 	812	 	 	 	829	 	 	 	(17	)	 	 	1,415	 	 	 	1,452	 	 	 	(37	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	MARKETING AND TRADING	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
36	 	Electricity and other commodity sales	 	 	—	 	 	 	23	 	 	 	(23	)	 	 	—	 	 	 	53	 	 	 	(53	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
37	 	Total operating electric revenues	 	$	812	 	 	$	852	 	 	$	(40	)	 	$	1,415	 	 	$	1,505	 	 	$	(90	)	

 	 	ELECTRIC SALES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
38	 	Residential	 	 	3,180	 	 	 	3,112	 	 	 	68	 	 	 	5,679	 	 	 	5,886	 	 	 	(207	)	
39	 	Business	 	 	3,842	 	 	 	3,990	 	 	 	(148	)	 	 	7,102	 	 	 	7,328	 	 	 	(226	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
40	 	Total retail	 	 	7,022	 	 	 	7,102	 	 	 	(80	)	 	 	12,781	 	 	 	13,214	 	 	 	(433	)	
 	 	Wholesale electricity delivered	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
41	 	Traditional contracts	 	 	232	 	 	 	319	 	 	 	(87	)	 	 	397	 	 	 	541	 	 	 	(144	)	
42	 	Off-system sales	 	 	720	 	 	 	610	 	 	 	110	 	 	 	1,417	 	 	 	1,026	 	 	 	391	 	
43	 	Retail load hedge management	 	 	225	 	 	 	159	 	 	 	66	 	 	 	377	 	 	 	321	 	 	 	56	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
44	 	Total regulated electricity	 	 	8,199	 	 	 	8,190	 	 	 	9	 	 	 	14,972	 	 	 	15,102	 	 	 	(130	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	MARKETING AND TRADING	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
45	 	Wholesale sales of electricity	 	 	—	 	 	 	979	 	 	 	(979	)	 	 	—	 	 	 	1,890	 	 	 	(1,890	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
46	 	Total electric sales	 	 	8,199	 	 	 	9,169	 	 	 	(970	)	 	 	14,972	 	 	 	16,992	 	 	 	(2,020	)	

 	 	POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
47	 	Deferred fuel and purchased power regulatory asset — beginning balance	 	$	(49	)	 	$	50	 	 	$	(99	)	 	$	8	 	 	$	111	 	 	$	(103	)	
48	 	Deferred fuel and purchased power costs — current period	 	 	15	 	 	 	37	 	 	 	(22	)	 	 	(13	)	 	 	26	 	 	 	(39	)	
49	 	Interest on deferred fuel	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1	 	 	 	(1	)	
50	 	Amounts recovered through revenues	 	 	(37	)	 	 	(64	)	 	 	27	 	 	 	(66	)	 	 	(115	)	 	 	49	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
51	 	Deferred fuel and purchased power regulatory asset — ending balance	 	$	(71	)	 	$	23	 	 	$	(94	)	 	$	(71	)	 	$	23	 	 	$	(94	)	

 	 	 	
See Glossary of Terms.	 	Page 2 of 4	

 

Last Updated 8/4/2009
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2009 and 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	3 Months Ended June	 	 	6 Months Ended June	 	
Line	 	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	AVERAGE ELECTRIC CUSTOMERS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail customers	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
52	 	Residential	 	 	981,749	 	 	 	975,594	 	 	 	6,155	 	 	 	985,212	 	 	 	979,026	 	 	 	6,186	 	
53	 	Business	 	 	125,245	 	 	 	123,802	 	 	 	1,443	 	 	 	125,178	 	 	 	123,318	 	 	 	1,860	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
54	 	Total	 	 	1,106,994	 	 	 	1,099,396	 	 	 	7,598	 	 	 	1,110,390	 	 	 	1,102,344	 	 	 	8,046	 	
55	 	Wholesale customers	 	 	44	 	 	 	54	 	 	 	(10	)	 	 	47	 	 	 	52	 	 	 	(5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
56	 	Total customers	 	 	1,107,038	 	 	 	1,099,450	 	 	 	7,588	 	 	 	1,110,437	 	 	 	1,102,396	 	 	 	8,041	 	

57	 	Customer growth (% over prior year)	 	 	0.7	%	 	 	1.6	%	 	 	(0.9	)%	 	 	0.7	%	 	 	1.8	%	 	 	(1.1	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL SALES (GWH) — WEATHER NORMALIZED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
58	 	Residential	 	 	3,199	 	 	 	3,247	 	 	 	(48	)	 	 	5,808	 	 	 	5,941	 	 	 	(133	)	
59	 	Business	 	 	3,818	 	 	 	4,034	 	 	 	(216	)	 	 	7,104	 	 	 	7,334	 	 	 	(230	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
60	 	Total	 	 	7,017	 	 	 	7,281	 	 	 	(264	)	 	 	12,912	 	 	 	13,275	 	 	 	(363	)	

 	 	RETAIL USAGE (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
61	 	Residential	 	 	3,239	 	 	 	3,190	 	 	 	49	 	 	 	5,764	 	 	 	6,012	 	 	 	(248	)	
62	 	Business	 	 	30,678	 	 	 	32,229	 	 	 	(1,551	)	 	 	56,738	 	 	 	59,424	 	 	 	(2,686	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
63	 	Residential	 	 	3,259	 	 	 	3,328	 	 	 	(69	)	 	 	5,895	 	 	 	6,068	 	 	 	(173	)	
64	 	Business	 	 	30,484	 	 	 	32,581	 	 	 	(2,097	)	 	 	56,753	 	 	 	59,469	 	 	 	(2,716	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRICITY DEMAND (MW)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
65	 	Native load peak demand	 	 	6,452	 	 	 	6,771	 	 	 	(319	)	 	 	6,452	 	 	 	6,771	 	 	 	(319	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	WEATHER INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 		
 	 	Actual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
66	 	Cooling degree-days	 	 	1,583	 	 	 	1,540	 	 	 	43	 	 	 	1,687	 	 	 	1,645	 	 	 	42	 	
67	 	Heating degree-days	 	 	24	 	 	 	—	 	 	 	24	 	 	 	407	 	 	 	583	 	 	 	(176	)	
68	 	Average humidity	 	 	20	%	 	 	17	%	 	 	3	%	 	 	28	%	 	 	29	%	 	 	(1	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	10-Year Averages	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
69	 	Cooling degree-days	 	 	1,550	 	 	 	1,554	 	 	 	(4	)	 	 	1,621	 	 	 	1,650	 	 	 	(29	)	
70	 	Heating degree-days	 	 	25	 	 	 	28	 	 	 	(3	)	 	 	596	 	 	 	545	 	 	 	51	 	
71	 	Average humidity	 	 	22	%	 	 	22	%	 	 	0	%	 	 	31	%	 	 	32	%	 	 	(1	)%	

 	 	 	
See Glossary of Terms.	 	Page 3 of 4	

 

Last Updated 8/4/2009
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2009 and 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	3 Months Ended June	 	 	6 Months Ended June	 	
Line	 	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	 	2009	 	 	2008	 	 	Incr (Decr)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ENERGY SOURCES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
72	 	Nuclear	 	 	2,014	 	 	 	1,856	 	 	 	158	 	 	 	4,506	 	 	 	4,171	 	 	 	335	 	
73	 	Coal	 	 	2,857	 	 	 	3,227	 	 	 	(370	)	 	 	5,807	 	 	 	6,133	 	 	 	(326	)	
74	 	Gas, oil and other	 	 	1,283	 	 	 	1,516	 	 	 	(233	)	 	 	2,306	 	 	 	2,664	 	 	 	(358	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
75	 	Total generation production	 	 	6,154	 	 	 	6,599	 	 	 	(445	)	 	 	12,619	 	 	 	12,968	 	 	 	(349	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Purchased power	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
76	 	Firm load	 	 	1,890	 	 	 	1,603	 	 	 	287	 	 	 	2,398	 	 	 	2,343	 	 	 	55	 	
77	 	Marketing and trading	 	 	726	 	 	 	1,506	 	 	 	(780	)	 	 	986	 	 	 	2,702	 	 	 	(1,716	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
78	 	Total purchased power	 	 	2,616	 	 	 	3,109	 	 	 	(493	)	 	 	3,384	 	 	 	5,045	 	 	 	(1,661	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
79	 	Total energy sources	 	 	8,770	 	 	 	9,708	 	 	 	(938	)	 	 	16,003	 	 	 	18,013	 	 	 	(2,010	)	

 	 	POWER PLANT PERFORMANCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Capacity Factors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
80	 	Nuclear	 	 	81	%	 	 	74	%	 	 	7	%	 	 	91	%	 	 	83	%	 	 	8	%	
81	 	Coal	 	 	75	%	 	 	85	%	 	 	(10	)%	 	 	77	%	 	 	81	%	 	 	(4	)%	
82	 	Gas, oil and other	 	 	17	%	 	 	21	%	 	 	(4	)%	 	 	16	%	 	 	18	%	 	 	(2	)%	
83	 	System average	 	 	45	%	 	 	49	%	 	 	(4	)%	 	 	46	%	 	 	48	%	 	 	(2	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ECONOMIC INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Building Permits — Metro Phoenix (a)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
84	 	Single-family	 	 	1,978	 	 	 	3,732	 	 	 	(1,754	)	 	 	2,815	 	 	 	6,723	 	 	 	(3,908	)	
85	 	Multi-family	 	 	364	 	 	 	2,263	 	 	 	(1,899	)	 	 	903	 	 	 	4,151	 	 	 	(3,248	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
86	 	Total	 	 	2,342	 	 	 	5,995	 	 	 	(3,653	)	 	 	3,718	 	 	 	10,874	 	 	 	(7,156	)	

 	 	Arizona Job Growth (b)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
87	 	Payroll job growth (% over prior year)	 	 	(7.1	)%	 	 	(1.3	)%	 	 	(5.8	)%	 	 	(6.8	)%	 	 	(0.7	)%	 	 	(6.1	)%	
88	 	Unemployment rate (%, seasonally adjusted)	 	 	8.2	%	 	 	5.2	%	 	 	3.0	%	 	 	7.8	%	 	 	4.9	%	 	 	2.9	%	

 	 	 	
Sources:	
 		
(a)	 	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business	
 		
(b)	 	Arizona Department of Economic Security	

 	 	 	
See Glossary of Terms.	 	Page 4 of 4	

 	 	 	 	 	
FOR IMMEDIATE RELEASE	 	August 4, 2009	
Media Contact:	 	Alan Bunnell, (602) 250-3376	 	Page 1 of 2	
Analyst Contacts:	 	Rebecca Hickman, (602) 250-5668	 	 	
Web site:	 	Lisa Malagon, (602) 250-5671
www.pinnaclewest.com	 	 	
PINNACLE WEST REPORTS LOWER SECOND-QUARTER EARNINGS
PHOENIX — Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income attributable to common shareholders of $68.3 million, or $0.68 per diluted share of common stock, for the quarter ended June 30, 2009. These results compare with net income attributable to common shareholders of $133.9 million, or $1.33 per diluted share, for the same period a year ago.
The Company’s on-going consolidated earnings in the 2009 second quarter were $77.3 million, or $0.77 per share, compared with $89.2 million, or $0.88 per share in the comparable 2008 quarter. On-going earnings for both quarters exclude results for the Company’s real estate segment. Second-quarter 2008 on-going earnings also exclude income tax credits related to prior years of $30 million.
Arizona Public Service Co. (APS) reported a decrease in on-going earnings, recording income of $78.5 million for the 2009 second quarter, compared with $96.1 million in the 2008 like period. Rising costs incurred by APS to maintain reliability and expand its electric service were the primary factor driving the lower results. These costs included: seasonal power plant overhauls and system maintenance; increased expenses related to infrastructure additions; and lower mark-to-market valuations of fuel contracts. A decrease in kilowatt-hour sales, principally from commercial and industrial customers, also contributed to the diminished quarterly results. An interim retail rate increase implemented in January 2009 and modest customer growth partially offset the negative factors.
“The bottom line is our current electricity prices do not reflect our real cost of doing business,” said Pinnacle West Chairman Don Brandt. “We must continue working with our regulators to better match our prices and costs while continuing to control costs. Cost management alone will not provide the financial strength necessary for APS to reliably serve our customers and provide a fair return for our investors.”
Brandt cited APS’ proposed retail rate settlement pending before the Arizona Corporation Commission as an example of the progress being achieved on the regulatory front. “Our Company is focused on working with the Commission and other interested parties to find positive solutions to complex and difficult energy issues facing our customers now and going forward,” he said. “If approved as proposed, the settlement will provide a measure of price stability for APS customers, and enable APS to attract the capital that is critical to support a sustainable energy future for the state of Arizona.”
The settlement not only addresses pricing and earnings issues, added Brandt, it also promotes renewable resources, energy efficiency and environmental stewardship that provide the building blocks for a recovery of economic vitality for the state of Arizona.

 

 	 	 	
PINNACLE WEST SECOND QUARTER EARNINGS	 	August 4, 2009
Page 2 of 2	
For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/investors .
Conference Call
Pinnacle West invites interested parties to listen to the live web cast of management’s conference call to discuss the Company’s 2009 second-quarter results and recent developments at 12 noon (ET) today, August 4. The web cast can be accessed at www.pinnaclewest.com/presentations and will be available for replay on the web site for 30 days. To access the live conference call by telephone, dial (877) 356-3961 and enter Conference ID Number 16241469. A replay of the call also will be available until 11:55 p.m. (ET), Tuesday, August 11, 2009, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same Conference ID number as above.
Pinnacle West is a Phoenix-based company with consolidated assets of about $11.9 billion. Through its subsidiaries, the Company generates, sells and delivers electricity and sells energy-related products and services to retail and wholesale customers in the western United States.
PINNACLE WEST CAPITAL CORPORATION
ARIZONA PUBLIC SERVICE COMPANY

NON-GAAP FINANCIAL MEASURE RECONCILIATION
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
(GAAP MEASURE) TO ON-GOING EARNINGS (NON-GAAP FINANCIAL MEASURE)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Three Months Ended	 	
 	 	June 30, 2009	 	 	June 30, 2008	 	
 	 	$ in	 	 	Diluted	 	 	$ in	 	 	Diluted	 	
 	 	Millions	 	 	EPS	 	 	Millions	 	 	EPS	 	
PINNACLE WEST CAPITAL CORPORATION	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income attributable to common shareholders	 	$	68.3	 	 	$	0.68	 	 	$	133.9	 	 	$	1.33	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate segment	 	 	9.0	 	 	 	0.09	 	 	 	(14.7	)	 	 	(0.15	)	
Income tax credits related to prior years	 	 	—	 	 	 	—	 	 	 	(30.0	)	 	 	(0.30	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
On-going Earnings	 	$	77.3	 	 	$	0.77	 	 	$	89.2	 	 	$	0.88	 	

ARIZONA PUBLIC SERVICE COMPANY	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income	 	$	78.5	 	 	 	 	 	 	$	125.4	 	 	 	 	 	
Adjustment:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax credits related to prior years	 	 	—	 	 	 	 	 	 	 	(29.3	)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
On-going Earnings	 	$	78.5	 	 	 	 	 	 	$	96.1	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
-30-

 
PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	THREE MONTHS ENDED	 	 	SIX MONTHS ENDED	 	
 	 	JUNE 30,	 	 	JUNE 30,	 	
 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
Operating Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment	 	$	812,510	 	 	$	829,478	 	 	$	1,415,088	 	 	$	1,452,279	 	
Real estate segment	 	 	16,763	 	 	 	23,365	 	 	 	35,129	 	 	 	49,631	 	
Marketing and trading	 	 	—	 	 	 	22,508	 	 	 	—	 	 	 	52,960	 	
Other revenues	 	 	10,782	 	 	 	9,162	 	 	 	19,231	 	 	 	17,899	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	840,055	 	 	 	884,513	 	 	 	1,469,448	 	 	 	1,572,769	 	

Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment fuel and purchased power	 	 	291,699	 	 	 	327,561	 	 	 	539,087	 	 	 	596,939	 	
Real estate segment operations	 	 	23,693	 	 	 	30,594	 	 	 	53,974	 	 	 	61,551	 	
Real estate impairment charge	 	 	632	 	 	 	—	 	 	 	211,938	 	 	 	—	 	
Marketing and trading fuel and purchased power	 	 	—	 	 	 	18,687	 	 	 	—	 	 	 	42,673	 	
Operations and maintenance	 	 	226,245	 	 	 	193,700	 	 	 	433,776	 	 	 	386,723	 	
Depreciation and amortization	 	 	100,063	 	 	 	97,770	 	 	 	199,984	 	 	 	193,364	 	
Taxes other than income taxes	 	 	32,887	 	 	 	33,251	 	 	 	67,015	 	 	 	66,403	 	
Other expenses	 	 	7,733	 	 	 	6,822	 	 	 	14,200	 	 	 	12,760	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	682,952	 	 	 	708,385	 	 	 	1,519,974	 	 	 	1,360,413	 	

Operating Income (Loss)	 	 	157,103	 	 	 	176,128	 	 	 	(50,526	)	 	 	212,356	 	

Other	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for equity funds used during construction	 	 	4,730	 	 	 	5,414	 	 	 	9,722	 	 	 	11,538	 	
Other income	 	 	6,587	 	 	 	3,928	 	 	 	3,568	 	 	 	7,767	 	
Other expense	 	 	(4,187	)	 	 	(10,055	)	 	 	(10,529	)	 	 	(14,951	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	7,130	 	 	 	(713	)	 	 	2,761	 	 	 	4,354	 	

Interest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest charges	 	 	58,951	 	 	 	51,521	 	 	 	114,757	 	 	 	106,223	 	
Capitalized interest	 	 	(3,311	)	 	 	(4,938	)	 	 	(7,145	)	 	 	(10,617	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	55,640	 	 	 	46,583	 	 	 	107,612	 	 	 	95,606	 	

Income (Loss) From Continuing Operations Before Income Taxes	 	 	108,593	 	 	 	128,832	 	 	 	(155,377	)	 	 	121,104	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	37,600	 	 	 	16,025	 	 	 	(58,574	)	 	 	14,484	 	

Income (Loss) From Continuing Operations	 	 	70,993	 	 	 	112,807	 	 	 	(96,803	)	 	 	106,620	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) From Discontinued Operations Net of Income Taxes	 	 	(2,798	)	 	 	21,055	 	 	 	(5,722	)	 	 	22,769	 	

Net Income (Loss)	 	 	68,195	 	 	 	133,862	 	 	 	(102,525	)	 	 	129,389	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Less: Net loss attributable to noncontrolling interests	 	 	(152	)	 	 	—	 	 	 	(14,362	)	 	 	—	 	

Net Income (Loss) Attributable To Common Shareholders	 	$	68,347	 	 	$	133,862	 	 	$	(88,163	)	 	$	129,389	 	

Weighted-Average Common Shares Outstanding — Basic	 	 	101,109	 	 	 	100,653	 	 	 	101,048	 	 	 	100,587	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-Average Common Shares Outstanding — Diluted	 	 	101,193	 	 	 	100,917	 	 	 	101,048	 	 	 	100,856	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings Per Weighted-Average Common Share Outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) from continuing operations — basic	 	$	0.70	 	 	$	1.12	 	 	$	(0.82	)	 	$	1.06	 	
Net Income (Loss) attributable to common shareholders — basic	 	$	0.68	 	 	$	1.33	 	 	$	(0.87	)	 	$	1.29	 	
Income (Loss) from continuing operations — diluted	 	$	0.70	 	 	$	1.12	 	 	$	(0.82	)	 	$	1.06	 	
Net Income (Loss) attributable to common shareholders — diluted	 	$	0.68	 	 	$	1.33	 	 	$	(0.87	)	 	$	1.28	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts Attributable To Common Shareholders	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) from continuing operations, net of tax	 	$	71,145	 	 	$	112,807	 	 	$	(82,441	)	 	$	106,620	 	
Discontinued operations, net of tax	 	 	(2,798	)	 	 	21,055	 	 	 	(5,722	)	 	 	22,769	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) attributable to common shareholders	 	$	68,347	 	 	$	133,862	 	 	$	(88,163	)	 	$	129,389	 	

   

Exhibit 99.3

2nd Quarter 2009 Results August 4, 2009	

 

Forward-Looking Statements This presentation contains forward-looking statements based on current expectations, and neither Pinnacle West nor APS assumes any obligation to update these statements or make any further statements on any of these issues, except as required by applicable law. These forward-looking statements are often identified by words such as "estimate," "predict," "hope," "may," "believe," "anticipate," "plan," "expect," "require," "intend," "assume" and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by Pinnacle West or APS. In addition to the Risk Factors described in Item 1A of the 2008 Form 10-K, these factors include, but are not limited to: state and federal regulatory and legislative decisions and actions, including the outcome or timing of the pending rate case of APS; increases in our capital expenditures and operating costs and our ability to achieve timely and adequate rate recovery of these increased costs; our ability to reduce capital expenditures and other costs while maintaining reliability and customer service levels, and unexpected developments that would limit us from achieving all or some of our planned capital expenditure reductions; volatile fuel and purchased power costs, including fluctuations in market prices for natural gas, coal, uranium and other fuels used in our generating facilities, availability of supplies of such commodities, and our ability to recover the costs of such commodities; the outcome and resulting costs of regulatory, legislative and judicial proceedings, both current and future, including those related to environmental matters and climate change; the availability of sufficient water supplies to operate our generation facilities, including as the result of drought conditions; the potential for additional restructuring of the electric industry, including decisions impacting wholesale competition and the introduction of retail electric competition in Arizona; regional, national and international economic and market conditions, including the strength of the real estate, credit and financial markets; the potential adverse impact of current economic conditions on our results of operations; the cost of debt and equity capital and access to capital markets; changes in the market price of our common stock; restrictions on dividends or other burdensome provisions in new or existing credit agreements; our ability, or the ability of our subsidiaries, to meet debt service obligations; current credit ratings remaining in effect for any given period of time; the performance of the stock market and the changing interest rate environment, which affect the value of our nuclear decommissioning trust, pension, and other postretirement benefit plan assets, the amount of required contributions to Pinnacle West's pension plan and contributions to APS' nuclear decommissioning trust funds, as well as the reported costs of providing pension and other postretirement benefits and our ability to recover such costs; volatile market liquidity, any deteriorating counterparty credit and the use of derivative contracts in our business (including the interpretation of the subjective and complex accounting rules related to these contracts); the potential shortfall in insurance coverage for a loss resulting from an insurer failing to meet, or being unwilling to meet, its obligations under our insurance policies, or from our commercially reasonable levels of insurance failing to fully cover the loss incurred; changes in accounting principles generally accepted in the United States of America, the interpretation of those principles and the impact of the adoption of new accounting standards; customer growth and energy usage; weather variations affecting local and regional customer energy usage; power plant performance and outages; transmission outages and constraints; the completion of generation and transmission construction in the region, which could affect customer growth and the cost of power supplies; risks inherent in the operation of nuclear facilities, such as environmental, regulatory, health and financial risks, risk of terrorist attack, planned and unplanned outages, and unfunded decommissioning costs; the ability of our power plant participants to meet contractual or other obligations; technological developments in the electric industry; the results of litigation and other proceedings resulting from the California and Pacific Northwest energy situations; the performance of Pinnacle West's subsidiaries and any resulting effects on its cash flow; the strength of the real estate and credit markets and economic and other conditions affecting the real estate and credit markets in SunCor's market areas, which include Arizona, Idaho, New Mexico and Utah; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of Pinnacle West and APS.	

 

CFO Agenda 2nd Quarter Results Earnings Guidance Liquidity	

 

Consolidated EPS Summary 2nd Quarter 2009 vs. 2nd Quarter 2008 Per Share EPS 2009 2008 Reported 0.68 1.33 Reported Per Share On-Going EPS 2009 2008 On-Going 0.77 0.88	

 

Non-GAAP EPS Reconciliation 2nd Quarter 2009 vs. 2nd Quarter 2008 EPS per diluted share as reported: $ 0.68 $ 1.33 $ (0.65) Adjustments: Real estate segment 0.09 (0.15) 0.24 Income tax credits related to prior years - (0.30) 0.30 On-going earnings per share $ 0.77 $ 0.88 $ (0.11) 2nd Qtr 2009 Change 2nd Qtr 2008	

 

2nd Quarter 2008 Misc. Items net Regulated gross margin weather infrastructure 2nd Quarter 2009 0.88 0.88 0.92 0.84 0.77 0.77000000013148 0.04 0.02 0.1 0.07 2nd Qtr. 2008 2nd Qtr. 2009 Regulated electricity gross margin O&M* Infrastructure- related costs Misc. items, net $0.88 $0.02 $(0.10) $(0.07) $0.04 $0.77 On-going earnings declined $0.11 per share. Summary of On-Going EPS Variances 2nd Quarter 2009 vs. 2nd Quarter 2008 *Excludes renewable energy and demand-side management revenue increases due to offsetting O&M increases.	

 

Regulated Electricity Gross Margin Drivers* 2nd Quarter 2009 vs. 2nd Quarter 2008 Interim rates Transmission Rates weather customer usage MTM Other items, net 0.1 0.02 0.07 -0.08 -0.05 -0.04 Transmission rate increases Lower customer usage Weather effects Lower hedge mark-to-market Regulated electricity gross margin variances increased earnings $0.02 per share. Interim retail rate increase Other items, net *Excludes renewable energy and demand-side management revenue increases due to offsetting O&M increases.	

 

Guidance Estimates* 2009 2010 APS $ 2.35 $ 3.00 Parent and all other, net (0.05) - Estimated EPS $ 2.30 $ 3.00 Key Assumptions 2009 Full-year interim base rates No additional base rate increases Includes identified cost savings and mild weather impacts 2010 Rate settlement effective entire year Includes identified cost savings 2009 - 2010 Earnings Guidance As of August 4, 2009 * Within a reasonable range around specified amount Excluding any SunCor impact Majority of SunCor's operations will be reclassified to discontinued operations during 2009	

 

CEO Agenda Regulatory Update Operations Update SunCor Restructuring Status Looking Ahead	

 

Appendix	

 

Renewable Energy and Demand-Side Management Surcharges* Q1 2 Q2 2 Q3 4 Q4 3 Q1 2 Q2 7 Q3 9 Q4 7 Q1 18 Q2 23 * These surcharges have no earnings effect because they were offset by comparable amounts of O&M expense. 2007 2008 2009 Pretax $ Millions	

 

Q1 7 Q2 -3 Q3 -1 Q4 3 Q1 14 Q2 14 Q3 -29 Q4 -9 Q1 -5 Q2 5 2007 2008 2009 Quarterly Mark-to-Market on Hedge Contracts* Pretax $ Millions * APS 10% share under Power Supply Adjustor (PSA), net of related deferrals.	

 

Reconciliation of Regulated Electricity Segment Gross Margin Operating income - closest GAAP measure $ 157 $ 176 Plus: Operations and maintenance expense 226 194 Real estate segment operations expense 24 30 Real estate impairment charge 1 - Depreciation and amortization 100 98 Taxes other than income taxes 33 33 Other expenses 8 7 Marketing and trading fuel and purchased power - 19 Less: Real estate segment revenues 17 23 Other revenues 11 9 Marketing and trading revenues - 23 Regulated electricity segment gross margin - pretax $ 521 $ 502 Less: Renewable energy surcharge (RES) - pretax 23 7 Regulated electricity segment gross margin excluding RES - pretax $ 498 $ 495 Three Months Ended June 30, Increase (Decrease) 2009 2008 $ Millions, except per share amounts Earnings per share - diluted (after-tax) Regulated electricity segment gross margin $ 3.13 $ 3.01 $ 0.12 Less: RES 0.14 0.04 0.10 Regulated electricity segment gross margin excluding RES $ 2.99 $ 2.97 $ 0.02 Non-GAAP Measure Reconciliation - Operating Income (GAAP Measure) To Regulated Electricity Segment Gross Margin (Non-GAAP Measure)	

 

In this presentation, we present "regulated electricity gross margin" per diluted share of common stock. Regulated electricity gross margin refers to regulated electricity segment revenues less regulated electricity segment fuel and purchased power expenses. Regulated electricity segment gross margin is a "non-GAAP financial measure," as defined in accordance with SEC rules. Slide 13 reconciles this non- GAAP financial measure to operating income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP. We view regulated electricity segment gross margin as an important performance measure of the core profitability of our operations. This measure is a key component of our internal financial reporting and is used by our management in analyzing the operations of our business. We believe that investors benefit from having access to the same financial measures that management uses. Non-GAAP Measure Reconciliation - Operating Income (GAAP Measure) To Regulated Electricity Segment Gross Margin (Non-GAAP Measure)	

 

Retail Rate and Financial Stability Plan Proposed Settlement Primary Benefits Strengthens APS' financial condition and supports common dividend Provides greater level of cost recovery and return on investment Demonstrates cooperation among APS, ACC Staff and other intervenors Allows opportunity to help shape Arizona's energy future outside continual rate cases	

 

Base Retail Rates - Annualized revenue increases ($ millions): Non-fuel $ 196 Net fuel-related 11 Net increase $ 207 Allowed ROE (%) 11 Equity ratio (%) 54 Rate base ($ billions) $5.6 Base fuel rate (¢ per kWh) 3.76 Effective date 1/1/2010 Line Extension Fees - 2010-2012 payments received to be recorded as revenues instead of contributions in aid of construction (CIAC) (pretax estimates): 2010 $23 million 2011 $25 million 2012 $49 million Proposed Settlement Retail Rate and Financial Stability Plan Proposed Settlement	

 

Retail Rate and Financial Stability Plan Proposed Settlement Key Financial Provisions - Other Than Base Rates Expense Reduction Commitment Beginning in 2010, identify additional $10 million pretax expense reductions above $20 million identified March 2009 $30 million average annual expense reductions to continue through 2014 Pension and OPEB Deferrals - 2011-2012 defer for future rate recovery differences between actual pension and OPEB costs and 2007 test year ($24 million) as follows (pretax): 2011 deferral not to exceed lower of $13.5 million or 50% of cost above 2007 level 2012 deferral not to exceed $29 million (continued)	

 

Retail Rate and Financial Stability Plan Proposed Settlement Key Financial Provisions - Other Than Base Rates Palo Verde License Extension Extension of operating licenses to 60 years from 40 years requested December 2008 Process expected to take about two years Effective later of NRC approval, or January 1, 2012: Adjust Palo Verde depreciation rates to reflect life extension Estimated pretax annual depreciation decrease $34 million Reduce retail revenues to reflect any reduction of decommissioning trust funding obligations or spent fuel storage costs related to extension Rate adjustment will be earnings neutral to APS Equity Infusions APS to obtain at least $700 million of equity infusions in 2010 through 2014 (continued)	

 

Retail Rate and Financial Stability Plan Proposed Settlement Future rate case process APS to file general base rate cases on or after June 1, 2011 and June 1, 2013 Base rate increase from APS' next rate case to be effective on or after July 1, 2012 Settling parties intend to process future cases within 12 months of sufficiency findings Other key provisions Provides rate stability for APS customers Provides for significant increase in energy efficiency programs Expands renewable energy requirements and programs Future General Base Rate Cases	

 

Retail Rate and Financial Stability Plan Proposed Settlement Proposed Procedural Schedule Term sheet filed May 4, 2009 Definitive settlement agreement filed June 12, 2009 Supporting parties' testimony filed July 1, 2009 Opposing parties' testimony filed July 22, 2009 Supporting parties' reply testimony due August 6, 2009 Hearing begins August 19, 2009 Rate increase effective January 1, 2010	

Exhibit 99.4
Pinnacle West Capital Corporation
Major Factors Affecting Consolidated Earnings Outlook
for Year Ending December 31, 2009
Compared with Year Ended December 31, 2008
(Earnings Per Diluted Share Outstanding)
 	 	 	 	 	
2008 net income	 	$	2.40	 	
 	 	 	 	 	
Adjustments:	 	 	 	 	
Real estate segment	 	 	0.26	 	
Income tax credits related to prior years	 	 	(0.30	)	
Severance costs related to workforce reductions	 	 	0.08	 	
Income from discontinued operations for resolution of a tax issue related to 2005 Silverhawk plant sale	 	 	(0.08	)	

2008 on-going earnings	 	 	2.36	 	
 	 	 	 	 	
Projected increases (decreases) in 2009:	 	 	 	 	
 	 	 	 	 	
Regulated electricity segment gross margin (revenues net of fuel and purchased power costs, excluding Renewable Energy Surcharge and similar rate adjustors) including: retail interim rate increase for full year; transmission revenue increases; higher fuel and purchased power costs (net of deferrals); lower usage due to first quarter 2009 mild weather and customer conservation; and minimal weather-normalized retail sales growth	 	 	0.20 - 0.30	 	
 	 	 	 	 	
Lower marketing and trading gross margin (revenues net of fuel and purchased power costs)	 	 	(0.14	)	
 	 	 	 	 	
Increased operations and maintenance expense (excluding costs for Renewable Energy Standard, other regulatory programs and severance) related primarily to fossil plant maintenance and outages; pension and other post-retirement benefits; partially offset by cost efficiency efforts, including cost reductions reported to ACC	 	 	(0.10) - (0.20	)	
 	 	 	 	 	
Costs related to utility capital expenditures (such as depreciation, property taxes and interest expense, net of capitalized financing costs)	 	 	(0.30) - (0.35	)	
 	 	 	 	 	
Miscellaneous other items — net	 	 	0.15 - 0.20	 	
 	 	 	 	 	
Estimated 2009 earnings — a reasonable range around (excluding potential real estate results)	 	$	2.30	 	

Exhibit 99.5
Pinnacle West Capital Corporation
Major Factors Affecting Consolidated Earnings Outlook
for Year Ending December 31, 2010
Compared with Year Ending December 31, 2009
(Earnings Per Diluted Share Outstanding)
 	 	 	 	 	
Estimated 2009 earnings — a reasonable range around (excluding potential real estate results)	 	$	2.30	 	
 	 	 	 	 	
Projected increases (decreases) in 2010:	 	 	 	 	
 	 	 	 	 	
Retail revenue increase from general rate case settlement in excess of interim revenues	 	 	1.10	 	
 	 	 	 	 	
Other regulated electricity segment gross margin (revenues net of fuel and purchased power costs, excluding Renewable Energy Surcharge and similar rate adjustors) including: transmission revenue increases; higher fuel and purchased power costs (net of deferrals); and minimal weather-normalized retail sales growth	 	 	0.15 - 0.25	 	
 	 	 	 	 	
Increased operations and maintenance expense (excluding costs for Renewable Energy Standard and other regulatory programs) primarily due to inflation; and pension and other post-retirement benefits; partially offset by cost efficiency efforts, including cost reductions reported to ACC	 	 	(0.05) - (0.15	)	
 	 	 	 	 	
Costs related to utility capital expenditures (such as depreciation, property taxes and interest expense, net of capitalized financing costs)	 	 	(0.30) - (0.35	)	
 	 	 	 	 	
Miscellaneous other items — net	 	 	(0.10) - (0.15	)	
 	 	 	 	 	
Estimated 2010 earnings — a reasonable range around (excluding potential real estate results)	 	$	3.00