Table of Contents

 
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): September 30, 2005
 	 	 	 	 	
 	 	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 (17CFR 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. Neither registrant is filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

 

TABLE OF CONTENTS
 	 	 	 	 	
 	 	Page	
Item 2.02 Results of Operations and Financial Condition	 	 	2	 	
Item 7.01 Regulation FD Disclosure	 	 	3	 	
Item 9.01 Financial Statements and Exhibits	 	 	4	 	
Signatures	 	 	5	 	
  Exhibit 99.1	
  Exhibit 99.2	
  Exhibit 99.3	
  Exhibit 99.4	
  Exhibit 99.5	
  Exhibit 99.6	
  Exhibit 99.7	
  Exhibit 99.8	
  Exhibit 99.9	
  Exhibit 99.10	

Table of Contents
Item 2.02. Results of Operations and Financial Condition
     Certain of the Information referenced in Item 7.01 below relates to Pinnacle West Capital Corporation’s (“Pinnacle West” or the “Company”) results of operations for its fiscal quarter ended September 30, 2005. This Information is attached hereto as Exhibits 99.2, 99.3, 99.7, 99.9, and 99.10.
     On October 27, 2005, the Company issued a press release regarding its financial results for its fiscal quarter ended September 30, 2005. A copy of the press release is attached hereto as Exhibit 99.9.
     The information being furnished pursuant to this Item 2.02 and in Exhibits 99.2, 99.3, 99.7, 99.9 and 99.10 of this report relating to the Company’s financial results for its fiscal quarter ended September 30, 2005 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
     Exhibit 99.9 to this report contains certain “non-GAAP financial measures,” as defined in Item 10(e) of Regulation S-K of the Exchange Act. We describe these non-GAAP financial measures as “on-going earnings” and “on-going earnings per share.” Exhibit 99.9 contains a table that reconciles each of these non-GAAP financial measures to net income, which is the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We believe on-going earnings provide investors with a useful indicator of our results that is comparable among periods because it excludes the effects of unusual items that may occur on an irregular basis. Investors should note that these non-GAAP financial measures involve judgments by management, including whether an item is classified as an unusual item. We use on-going earnings, or similar concepts, to measure our performance internally in reports for management.
2

Table of Contents
Item 7.01. Regulation FD Disclosure
Financial and Business Information
     The Company is providing quarterly consolidated statistical summaries, earnings variance explanations, and a glossary of relevant terms (collectively, “Information”) to help interested parties better understand its business (see Exhibits 99.1, 99.2, 99.3, 99.4, 99.5, 99.6, 99.7, 99.8 and 99.10). This Information is concurrently being posted to the Company’s website at www.pinnaclewest.com . The Information may not represent all of the factors that could affect the Company’s operating or financial results for various periods. Some of the Information is preliminary in nature and could be subject to significant adjustment. Some of the Information is based on information received from third parties and may contain inaccuracies. The Company is not responsible for any such inaccuracies. Although the Company may update or correct the Information if it is aware that such Information has been revised or is inaccurate, the Company assumes no obligation to update or correct the Information and reserves the right to discontinue the provision of all or any portion of the Information at any time or to change the type of Information provided.
3

Table of Contents
Item 9.01. Financial Statements and Exhibits

 	(c)	 	Exhibits.	
 	 	 	 	 	
Exhibit	 	 	 	 	
No.	 	Registrant(s)	 	Description	
 	 	 	 	 	
99.1	 	Pinnacle West Arizona Public Service Company (“APS”)	 	Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).	
 	 	 	 	 	
99.2	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended September 30, 2005 and 2004.	
 	 	 	 	 	
99.3	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2005.	
 	 	 	 	 	
99.4	 	Pinnacle West	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2004.	
 	 	 	 	 	
99.5	 	Pinnacle West	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.	
 	 	 	 	 	
99.6	 	Pinnacle West	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.	
 	 	 	 	 	
99.7	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation earnings variance explanations for periods ended September 30, 2005 and 2004 and condensed consolidated statements of income for the three and nine months ended September 30, 2005 and 2004.	
 	 	 	 	 	
99.8	 	Pinnacle West
APS	 	Glossary of Terms.	
 	 	 	 	 	
99.9	 	Pinnacle West
APS	 	Earnings News Release issued on October 27, 2005.	
 	 	 	 	 	
99.10	 	Pinnacle West
APS	 	Reconciliation of Operating Income to Gross Margin (Non-GAAP Financial Measure).	
4

Table of Contents
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: October 27, 2005 	By:  	/s/ Barbara M. Gomez  	 	
 	 	Barbara M. Gomez 	 	
 	 	Vice President and Treasurer 	 	

 	ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
 	 	
Dated: October 27, 2005 	By:  	/s/ Barbara M. Gomez  	 	
 	 	Barbara M. Gomez 	 	
 	 	Vice President and Treasurer 	 	
 	
5

Table of Contents
INDEX TO EXHIBITS
 	 	 	 	 	
Exhibit	 	 	 	 	
No.	 	Registrant(s)	 	Description	
 	 	 	 	 	
99.1	 	Pinnacle West Arizona Public Service Company (“APS”)	 	Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).	
 	 	 	 	 	
99.2	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended September 30, 2005 and 2004.	
 	 	 	 	 	
99.3	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2005.	
 	 	 	 	 	
99.4	 	Pinnacle West	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2004.	
 	 	 	 	 	
99.5	 	Pinnacle West	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.	
 	 	 	 	 	
99.6	 	Pinnacle West	 	Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.	
 	 	 	 	 	
99.7	 	Pinnacle West
APS	 	Pinnacle West Capital Corporation earnings variance explanations for periods ended September 30, 2005 and 2004 and condensed consolidated statements of income for the three and nine months ended September 30, 2005 and 2004.	
 	 	 	 	 	
99.8	 	Pinnacle West
APS	 	Glossary of Terms.	
 	 	 	 	 	
99.9	 	Pinnacle West
APS	 	Earnings News Release issued on October 27, 2005.	
 	 	 	 	 	
99.10	 	Pinnacle West
APS	 	Reconciliation of Operating Income to Gross Margin (Non-GAAP Financial Measure).	
6

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
List of Contents
2005 Third Quarter Summary
2005 Year-to-Date
2004 by Quarter
2003 by Quarter
2002 by Quarter
Quarters may not sum to totals due to rounding.
Certain current and prior year amounts have been reclassified to conform to current period presentation.
The definitions of terms used in this statistical summary are contained
in the “Glossary of Terms” on the Pinnacle West website at:
http://www.pinnaclewest.com/files/investors/2005Q3QuarStatsGloss.pdf
This statistical data may be graphed in various quarterly or annual comparisons
using the “Interactive Charts” tool on the Pinnacle West website at:
http://www.pinnaclewest.com/main/pnw/investors/financials/quarterly/landing.html

 

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	3 Mo. Ended September	 	 	9 Mo. Ended September	 	
Line	 	 	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	
 	 	 	 	EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	1	 	 	Arizona Public Service	 	$	61	 	 	$	95	 	 	$	(34	)	 	$	152	 	 	$	185	 	 	$	(33	)	
 	2	 	 	Pinnacle West Energy	 	 	(71	)	 	 	1	 	 	 	(72	)	 	 	(80	)	 	 	(35	)	 	 	(45	)	
 	3	 	 	APS Energy Services	 	 	—	 	 	 	1	 	 	 	(1	)	 	 	(3	)	 	 	4	 	 	 	(7	)	
 	4	 	 	SunCor	 	 	6	 	 	 	4	 	 	 	2	 	 	 	26	 	 	 	10	 	 	 	16	 	
 	5	 	 	El Dorado	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(1	)	 	 	33	 	 	 	(34	)	
 	6	 	 	Parent Company	 	 	89	 	 	 	3	 	 	 	86	 	 	 	105	 	 	 	12	 	 	 	93	 	

 	7	 	 	Income From Continuing Operations	 	 	85	 	 	 	104	 	 	 	(19	)	 	 	199	 	 	 	209	 	 	 	(10	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	8	 	 	Loss From Discontinued Operations — Net of Tax	 	 	19	 	 	 	1	 	 	 	18	 	 	 	(44	)	 	 	—	 	 	 	(44	)	
 	9	 	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	

 	10	 	 	Net Income	 	$	104	 	 	$	105	 	 	$	(1	)	 	$	155	 	 	$	209	 	 	$	(54	)	

 	 	 	 	EARNINGS PER SHARE BY SUBSIDIARY — DILUTED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	11	 	 	Arizona Public Service	 	$	0.62	 	 	$	1.04	 	 	$	(0.42	)	 	$	1.59	 	 	$	2.02	 	 	$	(0.43	)	
 	12	 	 	Pinnacle West Energy	 	 	(0.72	)	 	 	0.01	 	 	 	(0.73	)	 	 	(0.83	)	 	 	(0.39	)	 	 	(0.44	)	
 	13	 	 	APS Energy Services	 	 	—	 	 	 	0.01	 	 	 	(0.01	)	 	 	(0.03	)	 	 	0.05	 	 	 	(0.08	)	
 	14	 	 	SunCor	 	 	0.07	 	 	 	0.05	 	 	 	0.02	 	 	 	0.27	 	 	 	0.11	 	 	 	0.16	 	
 	15	 	 	El Dorado	 	 	(0.01	)	 	 	—	 	 	 	(0.01	)	 	 	(0.01	)	 	 	0.36	 	 	 	(0.37	)	
 	16	 	 	Parent Company	 	 	0.90	 	 	 	0.03	 	 	 	0.87	 	 	 	1.09	 	 	 	0.13	 	 	 	0.96	 	

 	17	 	 	Income From Continuing Operations	 	 	0.86	 	 	 	1.14	 	 	 	(0.28	)	 	 	2.08	 	 	 	2.28	 	 	 	(0.20	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	18	 	 	Loss From Discontinued Operations — Net of Tax	 	 	0.19	 	 	 	0.01	 	 	 	0.18	 	 	 	(0.46	)	 	 	0.01	 	 	 	(0.47	)	
 	19	 	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	

 	20	 	 	Net Income	 	$	1.05	 	 	$	1.15	 	 	$	(0.10	)	 	$	1.62	 	 	$	2.29	 	 	$	(0.67	)	

 	21	 	 	BOOK VALUE PER SHARE	 	$	35.82	 	 	$	32.55	 	 	$	3.27	 	 	$	35.82	 	 	$	32.55	 	 	$	3.27	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	COMMON SHARES OUTSTANDING — DILUTED (Thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	22	 	 	Average	 	 	98,816	 	 	 	91,491	 	 	 	7,325	 	 	 	95,755	 	 	 	91,430	 	 	 	4,325	 	
 	23	 	 	End of Period	 	 	98,881	 	 	 	91,443	 	 	 	7,438	 	 	 	98,881	 	 	 	91,443	 	 	 	7,438	 	
 	 	 	
See Glossary of Terms.	 	Page 2 of 31	

 

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	3 Mo. Ended September	 	 	9 Mo. Ended September	 	
Line	 	 	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	
 	 	 	 	ELECTRIC OPERATING REVENUES (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Retail	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	24	 	 	Residential	 	$	414	 	 	$	360	 	 	$	54	 	 	$	872	 	 	$	794	 	 	$	78	 	
 	25	 	 	Business	 	 	308	 	 	 	289	 	 	 	19	 	 	 	798	 	 	 	757	 	 	 	41	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	26	 	 	Total retail	 	 	722	 	 	 	649	 	 	 	73	 	 	 	1,670	 	 	 	1,551	 	 	 	119	 	
 	 	 	 	Wholesale revenue on delivered electricity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	27	 	 	Traditional contracts	 	 	9	 	 	 	6	 	 	 	3	 	 	 	17	 	 	 	13	 	 	 	4	 	
 	28	 	 	Off-system sales	 	 	8	 	 	 	—	 	 	 	8	 	 	 	20	 	 	 	—	 	 	 	20	 	
 	29	 	 	Transmission for others	 	 	7	 	 	 	8	 	 	 	(1	)	 	 	21	 	 	 	24	 	 	 	(3	)	
 	30	 	 	Other miscellaneous services	 	 	7	 	 	 	8	 	 	 	(1	)	 	 	21	 	 	 	18	 	 	 	3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	31	 	 	Total regulated electricity	 	 	753	 	 	 	671	 	 	 	82	 	 	 	1,749	 	 	 	1,606	 	 	 	143	 	
 	 	 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	32	 	 	Electricity and other commodity sales	 	 	107	 	 	 	91	 	 	 	16	 	 	 	267	 	 	 	290	 	 	 	(23	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	33	 	 	Total operating electric revenues	 	$	860	 	 	$	762	 	 	$	98	 	 	$	2,016	 	 	$	1,896	 	 	$	120	 	

 	 	 	 	ELECTRIC SALES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Retail sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	34	 	 	Residential	 	 	4,449	 	 	 	4,028	 	 	 	421	 	 	 	9,705	 	 	 	9,160	 	 	 	545	 	
 	35	 	 	Business	 	 	4,100	 	 	 	3,937	 	 	 	163	 	 	 	10,826	 	 	 	10,590	 	 	 	236	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	36	 	 	Total retail	 	 	8,549	 	 	 	7,965	 	 	 	584	 	 	 	20,531	 	 	 	19,750	 	 	 	781	 	
 	 	 	 	Wholesale electricity delivered	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	37	 	 	Traditional contracts	 	 	269	 	 	 	210	 	 	 	59	 	 	 	624	 	 	 	543	 	 	 	81	 	
 	38	 	 	Off-system sales	 	 	212	 	 	 	—	 	 	 	212	 	 	 	810	 	 	 	—	 	 	 	810	 	
 	39	 	 	Retail load hedge management	 	 	1,026	 	 	 	943	 	 	 	83	 	 	 	2,478	 	 	 	1,843	 	 	 	635	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	40	 	 	Total regulated electricity	 	 	10,056	 	 	 	9,118	 	 	 	938	 	 	 	24,443	 	 	 	22,136	 	 	 	2,307	 	
 	 	 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	41	 	 	Wholesale sales of electricity	 	 	7,228	 	 	 	8,995	 	 	 	(1,767	)	 	 	17,906	 	 	 	21,834	 	 	 	(3,928	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	42	 	 	Total electric sales	 	 	17,284	 	 	 	18,113	 	 	 	(829	)	 	 	42,349	 	 	 	43,970	 	 	 	(1,621	)	

See Glossary of Terms.	 	Page 3 of 31	

 

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	3 Mo. Ended September	 	 	9 Mo. Ended September	 	
Line	 	 	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	
 	 	 	 	POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	43	 	 	Deferred fuel and purchased power regulatory asset — beginning balance	 	$	38	 	 	$	—	 	 	$	38	 	 	$	—	 	 	$	—	 	 	$	—	 	
 	44	 	 	Deferred fuel and purchased power costs — current period	 	 	105	 	 	 	—	 	 	 	105	 	 	 	143	 	 	 	—	 	 	 	143	 	
 	45	 	 	Amounts recovered through revenues	 	 	—	 	 	 	—	 	 	$	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	46	 	 	Deferred fuel and purchased power regulatory asset — end of period	 	$	143	 	 	$	—	 	 	$	143	 	 	$	143	 	 	$	—	 	 	$	143	 	

  	 	 	 	MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Realized and Mark-To-Market Components	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	47	 	 	Electricity and other commodity sales, realized (a)	 	$	3	 	 	$	13	 	 	$	(10	)	 	$	33	 	 	$	47	 	 	$	(14	)	
 	48	 	 	Mark-to-market reversals on realized sales (b)	 	 	3	 	 	 	(3	)	 	 	6	 	 	 	(5	)	 	 	(4	)	 	 	(1	)	
 	49	 	 	Change in mark-to-market value of forward sales	 	 	14	 	 	 	5	 	 	 	9	 	 	 	24	 	 	 	15	 	 	 	9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	50	 	 	Total gross margin	 	$	20	 	 	$	15	 	 	$	5	 	 	$	52	 	 	$	58	 	 	$	(6	)	

 	 	 	 	By Pinnacle West Entity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	51	 	 	Parent company marketing and trading division	 	$	26	 	 	$	9	 	 	$	17	 	 	$	53	 	 	$	32	 	 	$	21	 	
 	52	 	 	APS	 	 	(8	)	 	 	2	 	 	 	(10	)	 	 	(9	)	 	 	(3	)	 	 	(6	)	
 	53	 	 	Pinnacle West Energy	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5	 	 	 	17	 	 	 	(12	)	
 	54	 	 	APS Energy Services	 	 	2	 	 	 	4	 	 	 	(2	)	 	 	3	 	 	 	12	 	 	 	(9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	55	 	 	Total gross margin	 	$	20	 	 	$	15	 	 	$	5	 	 	$	52	 	 	$	58	 	 	$	(6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Future Marketing and Trading Mark-to-Market Realization
As of Septmeber 30, 2005, Pinnacle West had accumulated net mark-to-market gains of $58 million related to our power marketing and trading activities. We estimate that these gains will be reclassified to realized gains as the underlying commodities are delivered, as follows: 2005, $17 million; 2006, $10 million; 2007, $21 million; and thereafter, $10 million.

(a)	 	The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 47 and in line 48 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The arithmetic opposites of amounts included in line 47 are included in line 48. For example, line 48 shows that a prior-period mark-to-market loss of $3 million was transferred to “realized” for the third quarter of 2005. A $3 million realized loss is included in the $3 million on line 47 for the third quarter of 2005.	
 		
(b)	 	Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.	
 	 	 	
See Glossary of Terms.	 	Page 4 of 31	

 

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	3 Mo. Ended September	 	9 Mo. Ended September	
Line	 	 	 	2005	 	2004	 	Incr (Decr)	 	2005	 	2004	 	Incr (Decr)	
 	 	 	 	AVERAGE ELECTRIC CUSTOMERS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Retail customers	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	56	 	 	Residential	 	 	895,789	 	 	 	856,353	 	 	 	39,436	 	 	 	891,422	 	 	 	854,901	 	 	 	36,521	 	
 	57	 	 	Business	 	 	111,648	 	 	 	107,583	 	 	 	4,065	 	 	 	110,700	 	 	 	106,534	 	 	 	4,166	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	58	 	 	Total	 	 	1,007,437	 	 	 	963,936	 	 	 	43,501	 	 	 	1,002,122	 	 	 	961,435	 	 	 	40,687	 	
 	59	 	 	Wholesale customers	 	 	78	 	 	 	85	 	 	 	(7	)	 	 	78	 	 	 	83	 	 	 	(5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	60	 	 	Total customers	 	 	1,007,515	 	 	 	964,021	 	 	 	43,494	 	 	 	1,002,200	 	 	 	961,518	 	 	 	40,682	 	

 	61	 	 	Customer Growth (% over prior year)	 	 	4.5	%	 	 	3.9	%	 	 	0.6	%	 	 	4.2	%	 	 	3.7	%	 	 	0.5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	RETAIL SALES (GWH) — WEATHER NORMALIZED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	62	 	 	Residential	 	 	4,445	 	 	 	4,231	 	 	 	214	 	 	 	9,778	 	 	 	9,364	 	 	 	414	 	
 	63	 	 	Business	 	 	4,119	 	 	 	4,005	 	 	 	114	 	 	 	10,870	 	 	 	10,619	 	 	 	251	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	64	 	 	Total	 	 	8,564	 	 	 	8,236	 	 	 	328	 	 	 	20,648	 	 	 	19,983	 	 	 	665	 	

 	 	 	 	RETAIL USAGE (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	65	 	 	Residential	 	 	4,967	 	 	 	4,704	 	 	 	263	 	 	 	10,887	 	 	 	10,713	 	 	 	174	 	
 	66	 	 	Business	 	 	36,723	 	 	 	36,595	 	 	 	128	 	 	 	97,795	 	 	 	99,405	 	 	 	(1,610	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	67	 	 	Residential	 	 	4,963	 	 	 	4,941	 	 	 	22	 	 	 	10,969	 	 	 	10,953	 	 	 	16	 	
 	68	 	 	Business	 	 	36,897	 	 	 	37,227	 	 	 	(330	)	 	 	98,201	 	 	 	99,679	 	 	 	(1,478	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	ELECTRICITY DEMAND (MW)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	69	 	 	System peak demand	 	 	7,000	 	 	 	6,402	 	 	 	598	 	 	 	7,000	 	 	 	6,402	 	 	 	598	 	
 	 	 	
See Glossary of Terms.	 	Page 5 of 31	

 

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	3 Mo. Ended September	 	9 Mo. Ended September	
Line	 	 	 	2005	 	2004	 	Incr (Decr)	 	2005	 	2004	 	Incr (Decr)	
 	 	ENERGY SOURCES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
70	 	Nuclear	 	 	2,147	 	 	 	2,364	 	 	 	(217	)	 	 	6,013	 	 	 	6,372	 	 	 	(359	)	
71	 	Coal	 	 	3,574	 	 	 	3,417	 	 	 	157	 	 	 	9,602	 	 	 	9,339	 	 	 	263	 	
72	 	Gas, oil and other	 	 	3,018	 	 	 	2,547	 	 	 	471	 	 	 	6,219	 	 	 	4,253	 	 	 	1,966	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
73	 	Total	 	 	8,739	 	 	 	8,328	 	 	 	411	 	 	 	21,834	 	 	 	19,964	 	 	 	1,870	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Purchased power	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
74	 	Firm load	 	 	1,589	 	 	 	1,068	 	 	 	521	 	 	 	3,072	 	 	 	3,302	 	 	 	(230	)	
75	 	Marketing and trading	 	 	7,795	 	 	 	9,301	 	 	 	(1,506	)	 	 	19,611	 	 	 	21,978	 	 	 	(2,367	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
76	 	Total	 	 	9,384	 	 	 	10,369	 	 	 	(985	)	 	 	22,683	 	 	 	25,280	 	 	 	(2,597	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
77	 	Total energy sources	 	 	18,123	 	 	 	18,697	 	 	 	(574	)	 	 	44,517	 	 	 	45,244	 	 	 	(727	)	

 	 	POWER PLANT PERFORMANCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Capacity Factors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
78	 	Nuclear	 	 	88	%	 	 	96	%	 	 	(8	)%	 	 	83	%	 	 	87	%	 	 	(4	)%	
79	 	Coal	 	 	95	%	 	 	90	%	 	 	5	%	 	 	86	%	 	 	83	%	 	 	3	%	
80	 	Gas, oil and other	 	 	40	%	 	 	38	%	 	 	2	%	 	 	28	%	 	 	21	%	 	 	7	%	
81	 	System average	 	 	63	%	 	 	64	%	 	 	(1	)%	 	 	54	%	 	 	53	%	 	 	1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation Capacity Out of Service and Replaced for Native Load (average MW/day)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
82	 	Nuclear	 	 	107	 	 	 	13	 	 	 	94	 	 	 	488	 	 	 	380	 	 	 	108	 	
83	 	Coal	 	 	57	 	 	 	63	 	 	 	(6	)	 	 	496	 	 	 	364	 	 	 	132	 	
84	 	Gas	 	 	140	 	 	 	39	 	 	 	101	 	 	 	516	 	 	 	135	 	 	 	381	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
85	 	Total	 	 	304	 	 	 	115	 	 	 	189	 	 	 	1,500	 	 	 	879	 	 	 	621	 	
 	 	 	
See Glossary of Terms.	 	Page 6 of 31	

 

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended September 30, 2005 and 2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	3 Mo. Ended September	 	 	9 Mo. Ended September	 	
Line	 	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	 	2005	 	 	2004	 	 	Incr (Decr)	 	
 	 	ENERGY MARKET INDICATORS (a)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Electricity Average Daily Spot Prices ($/MWh)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	On-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
86	 	Palo Verde	 	$	78.94	 	 	$	51.86	 	 	$	27.08	 	 	$	60.67	 	 	$	48.65	 	 	$	12.02	 	
87	 	SP15	 	$	83.21	 	 	$	57.09	 	 	$	26.12	 	 	$	64.70	 	 	$	53.40	 	 	$	11.30	 	
 	 	Off-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
88	 	Palo Verde	 	$	52.35	 	 	$	33.37	 	 	$	18.98	 	 	$	40.81	 	 	$	33.59	 	 	$	7.22	 	
89	 	SP15	 	$	56.08	 	 	$	37.18	 	 	$	18.90	 	 	$	43.92	 	 	$	37.13	 	 	$	6.79	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	WEATHER INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Actual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
90	 	Cooling degree-days	 	 	2,583	 	 	 	2,471	 	 	 	112	 	 	 	4,155	 	 	 	4,342	 	 	 	(187	)	
91	 	Heating degree-days	 	 	—	 	 	 	—	 	 	 	—	 	 	 	458	 	 	 	563	 	 	 	(105	)	
92	 	Average humidity	 	 	29	%	 	 	26	%	 	 	3	%	 	 	35	%	 	 	28	%	 	 	7	%	
 	 	10-Year Averages	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
93	 	Cooling degree-days	 	 	2,540	 	 	 	2,540	 	 	 	—	 	 	 	4,111	 	 	 	4,111	 	 	 	—	 	
94	 	Heating degree-days	 	 	—	 	 	 	—	 	 	 	—	 	 	 	557	 	 	 	557	 	 	 	—	 	
95	 	Average humidity	 	 	33	%	 	 	33	%	 	 	0	%	 	 	33	%	 	 	33	%	 	 	0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ECONOMIC INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Building Permits — Metro Phoenix (b) (d)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
96	 	Single-family	 	 	7,982	 	 	 	9,783	 	 	 	(1,801	)	 	 	30,351	 	 	 	33,464	 	 	 	(3,113	)	
97	 	Multi-family	 	 	2,038	 	 	 	1,517	 	 	 	521	 	 	 	5,424	 	 	 	4,598	 	 	 	826	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
98	 	Total	 	 	10,020	 	 	 	11,300	 	 	 	(1,280	)	 	 	35,775	 	 	 	38,062	 	 	 	(2,287	)	

 	 	Arizona Job Growth (c) (d)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
99	 	Payroll job growth (% over prior year)	 	 	4.2	%	 	 	3.6	%	 	 	0.6	%	 	 	4.0	%	 	 	3.1	%	 	 	0.9	%	
100	 	Unemployment rate (%, seasonally adjusted)	 	 	4.8	%	 	 	5.0	%	 	 	(0.2	)%	 	 	4.6	%	 	 	5.1	%	 	 	(0.5	)%	

Sources :	
 		
(a)	 	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.	
 		
(b)	 	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business	
 		
(c)	 	Arizona Department of Economic Security	
 		
(d)	 	The economic indicators reflect latest available data through periods ending August 2005.	
 	 	 	
See Glossary of Terms.	 	Page 7 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1	 	Arizona Public Service	 	$	27	 	 	$	64	 	 	$	61	 	 	 	 	 	 	$	152	 	 	$	(33	)	
2	 	Pinnacle West Energy	 	 	(21	)	 	 	12	 	 	 	(71	)	 	 	 	 	 	 	(80	)	 	 	(45	)	
3	 	APS Energy Services	 	 	(3	)	 	 	1	 	 	 	—	 	 	 	 	 	 	 	(3	)	 	 	(7	)	
4	 	SunCor	 	 	9	 	 	 	11	 	 	 	6	 	 	 	 	 	 	 	26	 	 	 	16	 	
5	 	El Dorado	 	 	(1	)	 	 	—	 	 	 	—	 	 	 	 	 	 	 	(1	)	 	 	(34	)	
6	 	Parent Company	 	 	19	 	 	 	(3	)	 	 	89	 	 	 	 	 	 	 	105	 	 	 	93	 	

7	 	Income From Continuing Operations	 	 	30	 	 	 	85	 	 	 	85	 	 	 	—	 	 	 	199	 	 	 	(10	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
8	 	Loss From Discontinued Operations — Net of Tax	 	 	(6	)	 	 	(58	)	 	 	19	 	 	 	 	 	 	 	(44	)	 	 	(44	)	
9	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	 	 	 	 	—	 	 	 	—	 	

10	 	Net Income	 	$	24	 	 	$	27	 	 	$	104	 	 	$	—	 	 	$	155	 	 	$	(54	)	

 	 	EARNINGS PER SHARE BY SUBSIDIARY — DILUTED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
11	 	Arizona Public Service	 	$	0.30	 	 	$	0.66	 	 	$	0.62	 	 	 	 	 	 	$	1.59	 	 	$	(0.43	)	
12	 	Pinnacle West Energy	 	 	(0.23	)	 	 	0.13	 	 	 	(0.72	)	 	 	 	 	 	 	(0.83	)	 	 	(0.44	)	
13	 	APS Energy Services	 	 	(0.04	)	 	 	0.01	 	 	 	—	 	 	 	 	 	 	 	(0.03	)	 	 	(0.08	)	
14	 	SunCor	 	 	0.09	 	 	 	0.11	 	 	 	0.07	 	 	 	 	 	 	 	0.27	 	 	 	0.16	 	
15	 	El Dorado	 	 	(0.01	)	 	 	—	 	 	 	(0.01	)	 	 	 	 	 	 	(0.01	)	 	 	(0.37	)	
16	 	Parent Company	 	 	0.21	 	 	 	(0.03	)	 	 	0.90	 	 	 	 	 	 	 	1.09	 	 	 	0.96	 	

17	 	Income From Continuing Operations	 	 	0.32	 	 	 	0.88	 	 	 	0.86	 	 	 	—	 	 	 	2.08	 	 	 	(0.20	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
18	 	Loss From Discontinued Operations — Net of Tax	 	 	(0.05	)	 	 	(0.60	)	 	 	0.19	 	 	 	 	 	 	 	(0.46	)	 	 	(0.47	)	
19	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	 	 	 	 	—	 	 	 	—	 	

20	 	Net Income	 	$	0.27	 	 	$	0.28	 	 	$	1.05	 	 	$	—	 	 	$	1.62	 	 	$	(0.67	)	

21	 	BOOK VALUE PER SHARE	 	$	32.50	 	 	$	32.89	 	 	$	35.82	 	 	 	 	 	 	$	35.82	 	 	$	3.27	 	
 	 	COMMON SHARES OUTSTANDING - DILUTED (Thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
22	 	Average	 	 	92,045	 	 	 	96,299	 	 	 	98,816	 	 	 	 	 	 	 	95,755	 	 	 	4,325	 	
23	 	End of Period	 	 	92,103	 	 	 	98,442	 	 	 	98,881	 	 	 	 	 	 	 	98,881	 	 	 	7,438	 	
 	 	 	
See Glossary of Terms.	 	Page 8 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ELECTRIC OPERATING REVENUES (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
24	 	Residential	 	$	190	 	 	$	268	 	 	$	414	 	 	 	 	 	 	$	872	 	 	$	78	 	
25	 	Business	 	 	209	 	 	 	281	 	 	 	308	 	 	 	 	 	 	 	798	 	 	 	41	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
26	 	Total retail	 	 	399	 	 	 	549	 	 	 	722	 	 	 	—	 	 	 	1,670	 	 	 	119	 	
 	 	Wholesale revenue on delivered electricity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
27	 	Traditional contracts	 	 	3	 	 	 	5	 	 	 	9	 	 	 	 	 	 	 	17	 	 	 	4	 	
28	 	Off-system sales	 	 	—	 	 	 	12	 	 	 	8	 	 	 	 	 	 	 	20	 	 	 	20	 	
29	 	Transmission for others	 	 	7	 	 	 	7	 	 	 	7	 	 	 	 	 	 	 	21	 	 	 	(3	)	
30	 	Other miscellaneous services	 	 	7	 	 	 	7	 	 	 	7	 	 	 	 	 	 	 	21	 	 	 	3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31	 	Total regulated electricity	 	 	416	 	 	 	580	 	 	 	753	 	 	 	—	 	 	 	1,749	 	 	 	143	 	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
32	 	Electricity and other commodity sales	 	 	89	 	 	 	71	 	 	 	107	 	 	 	 	 	 	 	267	 	 	 	(23	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
33	 	Total operating electric revenues	 	$	505	 	 	$	651	 	 	$	860	 	 	$	—	 	 	$	2,016	 	 	$	120	 	

 	 	ELECTRIC SALES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
34	 	Residential	 	 	2,367	 	 	 	2,889	 	 	 	4,449	 	 	 	 	 	 	 	9,705	 	 	 	545	 	
35	 	Business	 	 	3,042	 	 	 	3,684	 	 	 	4,100	 	 	 	 	 	 	 	10,826	 	 	 	236	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
36	 	Total retail	 	 	5,409	 	 	 	6,573	 	 	 	8,549	 	 	 	—	 	 	 	20,531	 	 	 	781	 	
 	 	Wholesale electricity delivered	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
37	 	Traditional contracts	 	 	155	 	 	 	200	 	 	 	269	 	 	 	 	 	 	 	624	 	 	 	81	 	
38	 	Off-system sales	 	 	—	 	 	 	598	 	 	 	212	 	 	 	 	 	 	 	810	 	 	 	810	 	
39	 	Retail load hedge management	 	 	750	 	 	 	702	 	 	 	1,026	 	 	 	 	 	 	 	2,478	 	 	 	635	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
40	 	Total regulated electricity	 	 	6,314	 	 	 	8,073	 	 	 	10,056	 	 	 	—	 	 	 	24,443	 	 	 	2,307	 	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
41	 	Wholesale sales of electricity	 	 	5,777	 	 	 	4,901	 	 	 	7,228	 	 	 	 	 	 	 	17,906	 	 	 	(3,928	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
42	 	Total electric sales	 	 	12,091	 	 	 	12,974	 	 	 	17,284	 	 	 	—	 	 	 	42,349	 	 	 	(1,621	)	

See Glossary of Terms.	 	Page 9 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
43	 	Deferred fuel and purchased power regulatory asset — beginning balance	 	$	—	 	 	$	—	 	 	$	38	 	 	 	 	 	 	$	—	 	 	$	—	 	
44	 	Deferred fuel and purchased power costs — current period	 	 	—	 	 	 	38	 	 	 	105	 	 	 	 	 	 	 	143	 	 	 	143	 	
45	 	Amounts recovered through revenues	 	 	—	 	 	 	—	 	 	 	—	 	 	 	 	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
46	 	Deferred fuel and purchased power regulatory asset — end of period	 	$	—	 	 	$	38	 	 	$	143	 	 	$	—	 	 	$	143	 	 	$	143	 	

  	 	MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Realized and Mark-To-Market Components	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
47	 	Electricity and other commodity sales, realized (a)	 	$	12	 	 	$	18	 	 	$	3	 	 	 	 	 	 	$	33	 	 	$	(14	)	
48	 	Mark-to-market reversals on realized sales (b)	 	 	(3	)	 	 	(8	)	 	 	3	 	 	 	 	 	 	 	(5	)	 	 	(1	)	
49	 	Change in mark-to-market value of forward sales	 	 	10	 	 	 	3	 	 	 	14	 	 	 	 	 	 	 	24	 	 	 	9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
50	 	Total gross margin	 	$	19	 	 	$	13	 	 	$	20	 	 	$	—	 	 	$	52	 	 	$	(6	)	

 	 	By Pinnacle West Entity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
51	 	Parent company marketing and trading division	 	$	21	 	 	$	6	 	 	$	26	 	 	 	 	 	 	$	53	 	 	$	21	 	
52	 	APS	 	 	(4	)	 	 	3	 	 	 	(8	)	 	 	 	 	 	 	(9	)	 	 	(6	)	
53	 	Pinnacle West Energy	 	 	5	 	 	 	—	 	 	 	—	 	 	 	 	 	 	 	5	 	 	 	(12	)	
54	 	APS Energy Services	 	 	(3	)	 	 	4	 	 	 	2	 	 	 	 	 	 	 	3	 	 	 	(9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
55	 	Total gross margin	 	$	19	 	 	$	13	 	 	$	20	 	 	$	—	 	 	$	52	 	 	$	(6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Future Marketing and Trading Mark-to-Market Realization
As of September 30, 2005, Pinnacle West had accumulated net mark-to-market gains of $58 million related to our power marketing and trading activities. We estimate that these gains will be reclassified to realized gains as the underlying commodities are delivered, as follows: 2005, $17 million; 2006, $10 million; 2007, $21 million; and thereafter, $10 million.

(a)	 	The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 47 and in line 48 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The arithmetic opposites of amounts included in line 47 are included in line 48. For example, line 48 shows that a prior-period mark-to-market loss of $3 million was transferred to “realized” for the third quarter of 2005. A $3 million realized loss is included in the $3 million on line 47 for the third quarter of 2005.	
 		
(b)	 	Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.	
 	 	 	
See Glossary of Terms.	 	Page 10 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	
Line	 	 	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year-To-Date	 	vs Prior YTD	
 	 	AVERAGE ELECTRIC CUSTOMERS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail customers	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
56	 	Residential	 	 	889,967	 	 	 	888,509	 	 	 	895,789	 	 	 	 	 	 	 	891,422	 	 	 	36,521	 	
57	 	Business	 	 	109,772	 	 	 	110,658	 	 	 	111,648	 	 	 	 	 	 	 	110,700	 	 	 	4,166	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
58	 	Total	 	 	999,739	 	 	 	999,167	 	 	 	1,007,437	 	 	 	—	 	 	 	1,002,122	 	 	 	40,687	 	
59	 	Wholesale customers	 	 	81	 	 	 	76	 	 	 	78	 	 	 	 	 	 	 	78	 	 	 	(5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
60	 	Total customers	 	 	999,820	 	 	 	999,243	 	 	 	1,007,515	 	 	 	—	 	 	 	1,002,200	 	 	 	40,682	 	

61	 	Customer Growth (% over prior year)	 	 	4.0	%	 	 	4.2	%	 	 	4.5	%	 	 	 	 	 	 	4.2	%	 	 	0.5	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL SALES (GWH) — WEATHER NORMALIZED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
62	 	Residential	 	 	2,430	 	 	 	2,903	 	 	 	4,445	 	 	 	 	 	 	 	9,778	 	 	 	414	 	
63	 	Business	 	 	3,058	 	 	 	3,693	 	 	 	4,119	 	 	 	 	 	 	 	10,870	 	 	 	251	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
64	 	Total	 	 	5,488	 	 	 	6,596	 	 	 	8,564	 	 	 	—	 	 	 	20,648	 	 	 	665	 	

 	 	RETAIL USAGE (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
65	 	Residential	 	 	2,660	 	 	 	3,252	 	 	 	4,967	 	 	 	 	 	 	 	10,887	 	 	 	174	 	
66	 	Business	 	 	27,712	 	 	 	33,292	 	 	 	36,723	 	 	 	 	 	 	 	97,795	 	 	 	(1,610	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
67	 	Residential	 	 	2,730	 	 	 	3,268	 	 	 	4,963	 	 	 	 	 	 	 	10,969	 	 	 	16	 	
68	 	Business	 	 	27,860	 	 	 	33,374	 	 	 	36,897	 	 	 	 	 	 	 	98,201	 	 	 	(1,478	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRICITY DEMAND (MW)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
69	 	System peak demand	 	 	3,997	 	 	 	6,458	 	 	 	7,000	 	 	 	 	 	 	 	7,000	 	 	 	598	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 11 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	
Line	 	 	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year-To-Date	 	vs Prior YTD	
 	 	ENERGY SOURCES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
70	 	Nuclear	 	 	2,247	 	 	 	1,619	 	 	 	2,147	 	 	 	 	 	 	 	6,013	 	 	 	(359	)	
71	 	Coal	 	 	2,940	 	 	 	3,088	 	 	 	3,574	 	 	 	 	 	 	 	9,602	 	 	 	263	 	
72	 	Gas, oil and other	 	 	1,127	 	 	 	2,074	 	 	 	3,018	 	 	 	 	 	 	 	6,219	 	 	 	1,966	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
73	 	Total	 	 	6,314	 	 	 	6,781	 	 	 	8,739	 	 	 	—	 	 	 	21,834	 	 	 	1,870	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Purchased power	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
74	 	Firm load	 	 	586	 	 	 	880	 	 	 	1,589	 	 	 	 	 	 	 	3,072	 	 	 	(230	)	
75	 	Marketing and trading	 	 	5,832	 	 	 	5,984	 	 	 	7,795	 	 	 	 	 	 	 	19,611	 	 	 	(2,367	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
76	 	Total	 	 	6,418	 	 	 	6,864	 	 	 	9,384	 	 	 	—	 	 	 	22,683	 	 	 	(2,597	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
77	 	Total energy sources	 	 	12,732	 	 	 	13,645	 	 	 	18,123	 	 	 	—	 	 	 	44,517	 	 	 	(727	)	

 	 	POWER PLANT PERFORMANCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Capacity Factors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
78	 	Nuclear	 	 	94	%	 	 	67	%	 	 	88	%	 	 	 	 	 	 	83	%	 	 	(4	)%	
79	 	Coal	 	 	80	%	 	 	83	%	 	 	95	%	 	 	 	 	 	 	86	%	 	 	3	%	
80	 	Gas, oil and other	 	 	17	%	 	 	27	%	 	 	40	%	 	 	 	 	 	 	28	%	 	 	7	%	
81	 	System average	 	 	49	%	 	 	49	%	 	 	63	%	 	 	 	 	 	 	54	%	 	 	1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation Capacity Out of Service and Replaced for Native Load (average MW/day)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
82	 	Nuclear	 	 	52	 	 	 	329	 	 	 	107	 	 	 	 	 	 	 	488	 	 	 	108	 	
83	 	Coal	 	 	195	 	 	 	244	 	 	 	57	 	 	 	 	 	 	 	496	 	 	 	132	 	
84	 	Gas	 	 	212	 	 	 	164	 	 	 	140	 	 	 	 	 	 	 	516	 	 	 	381	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
85	 	Total	 	 	459	 	 	 	737	 	 	 	304	 	 	 	—	 	 	 	1,500	 	 	 	621	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 12 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ENERGY MARKET INDICATORS (a)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Electricity Average Daily Spot Prices ($/MWh)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	On-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
86	 	Palo Verde	 	$	49.74	 	 	$	53.33	 	 	$	78.94	 	 	 	 	 	 	$	60.67	 	 	$	12.02	 	
87	 	SP15	 	$	55.70	 	 	$	55.19	 	 	$	83.21	 	 	 	 	 	 	$	64.70	 	 	$	11.30	 	
 	 	Off-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
88	 	Palo Verde	 	$	37.04	 	 	$	33.03	 	 	$	52.35	 	 	 	 	 	 	$	40.81	 	 	$	7.22	 	
89	 	SP15	 	$	40.96	 	 	$	34.73	 	 	$	56.08	 	 	 	 	 	 	$	43.92	 	 	$	6.79	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	WEATHER INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Actual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
90	 	Cooling degree-days	 	 	34	 	 	 	1,538	 	 	 	2,583	 	 	 	 	 	 	 	4,155	 	 	 	(187	)	
91	 	Heating degree-days	 	 	457	 	 	 	1	 	 	 	—	 	 	 	 	 	 	 	458	 	 	 	(105	)	
92	 	Average humidity	 	 	56	%	 	 	20	%	 	 	29	%	 	 	 	 	 	 	35	%	 	 	7	%	
 	 	10-Year Averages	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
93	 	Cooling degree-days	 	 	80	 	 	 	1,491	 	 	 	2,540	 	 	 	 	 	 	 	4,111	 	 	 	—	 	
94	 	Heating degree-days	 	 	521	 	 	 	36	 	 	 	—	 	 	 	 	 	 	 	557	 	 	 	—	 	
95	 	Average humidity	 	 	43	%	 	 	24	%	 	 	33	%	 	 	 	 	 	 	33	%	 	 	0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ECONOMIC INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Building Permits — Metro Phoenix (b) (d)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
96	 	Single-family	 	 	10,356	 	 	 	12,013	 	 	 	7,982	 	 	 	 	 	 	 	30,351	 	 	 	(3,113	)	
97	 	Multi-family	 	 	1,741	 	 	 	1,645	 	 	 	2,038	 	 	 	 	 	 	 	5,424	 	 	 	826	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
98	 	Total	 	 	12,097	 	 	 	13,658	 	 	 	10,020	 	 	 	—	 	 	 	35,775	 	 	 	(2,287	)	

 	 	Arizona Job Growth (c) (d)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
99	 	Payroll job growth (% over prior year)	 	 	4.1	%	 	 	3.9	%	 	 	4.2	%	 	 	 	 	 	 	4.0	%	 	 	0.9	%	
100	 	Unemployment rate (%, seasonally adjusted)	 	 	4.4	%	 	 	4.7	%	 	 	4.8	%	 	 	 	 	 	 	4.6	%	 	 	(0.5	)%	

Sources :		
 		
(a)	 	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.		
 		
(b)	 	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business.		
 		
(c)	 	Arizona Department of Economic Security.		
 		
(d)	 	The economic indicators reflect latest available data through periods ending August 2005.		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 13 of 31	

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1	 	Arizona Public Service	 	$	34	 	 	$	55	 	 	$	95	 	 	$	15	 	 	$	200	 	 	$	19	 	
2	 	Pinnacle West Energy	 	 	(22	)	 	 	(14	)	 	 	1	 	 	 	(23	)	 	 	(58	)	 	 	(50	)	
3	 	APS Energy Services	 	 	2	 	 	 	1	 	 	 	1	 	 	 	(1	)	 	 	3	 	 	 	(13	)	
4	 	SunCor	 	 	2	 	 	 	4	 	 	 	4	 	 	 	31	 	 	 	41	 	 	 	(5	)	
5	 	El Dorado	 	 	—	 	 	 	34	 	 	 	—	 	 	 	—	 	 	 	33	 	 	 	34	 	
6	 	Parent Company	 	 	15	 	 	 	(6	)	 	 	3	 	 	 	16	 	 	 	28	 	 	 	37	 	

7	 	Income From Continuing Operations	 	 	31	 	 	 	74	 	 	 	104	 	 	 	38	 	 	 	247	 	 	 	22	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
8	 	Income (Loss) From Discontinued Operations — Net of Tax	 	 	—	 	 	 	(1	)	 	 	1	 	 	 	(4	)	 	 	(4	)	 	 	(20	)	
9	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
10	 	Net Income	 	$	31	 	 	$	73	 	 	$	105	 	 	$	34	 	 	$	243	 	 	$	2	 	

 	 	EARNINGS PER SHARE BY SUBSIDIARY — DILUTED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
11	 	Arizona Public Service	 	$	0.38	 	 	$	0.60	 	 	$	1.04	 	 	$	0.16	 	 	$	2.18	 	 	$	0.20	 	
12	 	Pinnacle West Energy	 	 	(0.24	)	 	 	(0.15	)	 	 	0.01	 	 	 	(0.25	)	 	 	(0.63	)	 	 	(0.55	)	
13	 	APS Energy Services	 	 	0.02	 	 	 	0.01	 	 	 	0.01	 	 	 	(0.01	)	 	 	0.03	 	 	 	(0.15	)	
14	 	SunCor	 	 	0.02	 	 	 	0.04	 	 	 	0.05	 	 	 	0.34	 	 	 	0.45	 	 	 	(0.05	)	
15	 	El Dorado	 	 	—	 	 	 	0.37	 	 	 	—	 	 	 	—	 	 	 	0.36	 	 	 	0.37	 	
16	 	Parent Company	 	 	0.15	 	 	 	(0.06	)	 	 	0.03	 	 	 	0.17	 	 	 	0.30	 	 	 	0.40	 	

17	 	Income From Continuing Operations	 	 	0.33	 	 	 	0.81	 	 	 	1.14	 	 	 	0.41	 	 	 	2.69	 	 	 	0.22	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
18	 	Income (Loss) From Discontinued Operations — Net of Tax	 	 	0.01	 	 	 	(0.02	)	 	 	0.01	 	 	 	(0.04	)	 	 	(0.03	)	 	 	(0.19	)	
19	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
20	 	Net Income	 	$	0.34	 	 	$	0.79	 	 	$	1.15	 	 	$	0.37	 	 	$	2.66	 	 	$	0.03	 	

21	 	BOOK VALUE PER SHARE	 	$	31.19	 	 	$	31.68	 	 	$	32.55	 	 	$	32.14	 	 	$	32.14	 	 	$	1.17	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	COMMON SHARES OUTSTANDING - DILUTED (Thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
22	 	Average	 	 	91,376	 	 	 	91,400	 	 	 	91,491	 	 	 	91,779	 	 	 	91,532	 	 	 	127	 	
23	 	End of Period	 	 	91,310	 	 	 	91,309	 	 	 	91,443	 	 	 	91,793	 	 	 	91,793	 	 	 	505	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 14 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRIC OPERATING REVENUES (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
24	 	Residential	 	$	189	 	 	$	245	 	 	$	360	 	 	$	190	 	 	$	984	 	 	$	27	 	
25	 	Business	 	 	211	 	 	 	257	 	 	 	289	 	 	 	222	 	 	 	979	 	 	 	26	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
26	 	Total retail	 	 	400	 	 	 	502	 	 	 	649	 	 	 	412	 	 	 	1,963	 	 	 	53	 	
 	 	Wholesale revenue on delivered electricity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
27	 	Traditional contracts	 	 	3	 	 	 	4	 	 	 	6	 	 	 	3	 	 	 	16	 	 	 	1	 	
28	 	Off-system sales	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
29	 	Transmission for others	 	 	8	 	 	 	8	 	 	 	8	 	 	 	8	 	 	 	32	 	 	 	5	 	
30	 	Other miscellaneous services	 	 	4	 	 	 	6	 	 	 	8	 	 	 	6	 	 	 	24	 	 	 	(2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31	 	Total regulated electricity	 	 	415	 	 	 	520	 	 	 	671	 	 	 	429	 	 	 	2,035	 	 	 	57	 	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
32	 	Electricity and other commodity sales	 	 	89	 	 	 	110	 	 	 	91	 	 	 	111	 	 	 	401	 	 	 	9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
33	 	Total operating electric revenues	 	$	504	 	 	$	630	 	 	$	762	 	 	$	540	 	 	$	2,436	 	 	$	66	 	

 	 	ELECTRIC SALES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
34	 	Residential	 	 	2,410	 	 	 	2,722	 	 	 	4,028	 	 	 	2,368	 	 	 	11,528	 	 	 	381	 	
35	 	Business	 	 	3,051	 	 	 	3,602	 	 	 	3,937	 	 	 	3,236	 	 	 	13,826	 	 	 	410	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
36	 	Total retail	 	 	5,461	 	 	 	6,324	 	 	 	7,965	 	 	 	5,604	 	 	 	25,354	 	 	 	791	 	
 	 	Wholesale electricity delivered	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
37	 	Traditional contracts	 	 	138	 	 	 	195	 	 	 	210	 	 	 	167	 	 	 	710	 	 	 	210	 	
38	 	Off-system sales	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
39	 	Retail load hedge management	 	 	169	 	 	 	731	 	 	 	943	 	 	 	889	 	 	 	2,732	 	 	 	1,639	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
40	 	Total regulated electricity	 	 	5,768	 	 	 	7,250	 	 	 	9,118	 	 	 	6,660	 	 	 	28,796	 	 	 	2,640	 	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
41	 	Wholesale sales of electricity	 	 	5,696	 	 	 	7,143	 	 	 	8,995	 	 	 	8,348	 	 	 	30,182	 	 	 	1,380	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
42	 	Total electric sales	 	 	11,464	 	 	 	14,393	 	 	 	18,113	 	 	 	15,008	 	 	 	58,978	 	 	 	4,020	 	

See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 15 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
  	 	POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
43	 	Deferred fuel and purchased power regulatory asset — beginning balance	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	
44	 	Deferred fuel and purchased power costs — current period	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
45	 	Amounts recovered through revenues	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
46	 	Deferred fuel and purchased power regulatory asset — end of period	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	

 	 	MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Realized and Mark-To-Market Components	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
47	 	Electricity and other commodity sales, realized (a)	 	$	12	 	 	$	22	 	 	$	13	 	 	$	16	 	 	$	63	 	 	$	(2	)	
48	 	Mark-to-market reversals on realized sales (b)	 	 	1	 	 	 	(4	)	 	 	(3	)	 	 	—	 	 	 	(6	)	 	 	—	 	
49	 	Change in mark-to-market value of forward sales	 	 	8	 	 	 	4	 	 	 	5	 	 	 	6	 	 	 	23	 	 	 	35	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
50	 	Total gross margin	 	$	21	 	 	$	22	 	 	$	15	 	 	$	22	 	 	$	80	 	 	$	33	 	

 	 	By Pinnacle West Entity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

51	 	Parent company marketing and trading division	 	$	12	 	 	$	11	 	 	$	9	 	 	$	12	 	 	$	44	 	 	$	49	 	
52	 	APS	 	 	(5	)	 	 	—	 	 	 	2	 	 	 	(2	)	 	 	(5	)	 	 	(13	)	
53	 	Pinnacle West Energy	 	 	10	 	 	 	7	 	 	 	—	 	 	 	10	 	 	 	27	 	 	 	19	 	
54	 	APS Energy Services	 	 	4	 	 	 	4	 	 	 	4	 	 	 	2	 	 	 	14	 	 	 	(22	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
55	 	Total gross margin	 	$	21	 	 	$	22	 	 	$	15	 	 	$	22	 	 	$	80	 	 	$	33	 	

			
(a)	 	The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 47 and in line 48 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 47 are included in line 48. For example, line 48 shows that a prior-period mark-to-market gain of $6 million was transferred to “realized” for the total year 2004. A $6 million realized gain is included in the $63 million on line 47 for the total year 2004.	
 		
(b)	 	Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.	
 	 	 	
See Glossary of Terms.	 	Page 16 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	AVERAGE ELECTRIC CUSTOMERS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail customers	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
56	 	Residential	 	 	855,754	 	 	 	852,594	 	 	 	856,353	 	 	 	871,575	 	 	 	859,069	 	 	 	30,703	 	
57	 	Business	 	 	105,502	 	 	 	106,517	 	 	 	107,583	 	 	 	108,860	 	 	 	107,115	 	 	 	4,019	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
58	 	Total	 	 	961,256	 	 	 	959,111	 	 	 	963,936	 	 	 	980,435	 	 	 	966,184	 	 	 	34,722	 	
59	 	Wholesale customers	 	 	81	 	 	 	82	 	 	 	85	 	 	 	77	 	 	 	81	 	 	 	15	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
60	 	Total customers	 	 	961,337	 	 	 	959,193	 	 	 	964,021	 	 	 	980,512	 	 	 	966,265	 	 	 	34,737	 	

61	 	Customer Growth (% over prior year)	 	 	3.4	%	 	 	3.8	%	 	 	3.9	%	 	 	3.9	%	 	 	3.7	%	 	 	0.4	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL SALES (GWH) — WEATHER NORMALIZED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
62	 	Residential	 	 	2,371	 	 	 	2,762	 	 	 	4,231	 	 	 	2,340	 	 	 	11,704	 	 	 	825	 	
63	 	Business	 	 	2,998	 	 	 	3,616	 	 	 	4,005	 	 	 	3,252	 	 	 	13,870	 	 	 	467	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
64	 	Total	 	 	5,369	 	 	 	6,378	 	 	 	8,236	 	 	 	5,592	 	 	 	25,574	 	 	 	1,292	 	

 	 	RETAIL USAGE (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
65	 	Residential	 	 	2,816	 	 	 	3,193	 	 	 	4,704	 	 	 	2,717	 	 	 	13,418	 	 	 	(39	)	
66	 	Business	 	 	28,919	 	 	 	33,816	 	 	 	36,595	 	 	 	29,726	 	 	 	129,392	 	 	 	(1,137	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
67	 	Residential	 	 	2,770	 	 	 	3,240	 	 	 	4,941	 	 	 	2,686	 	 	 	13,624	 	 	 	491	 	
68	 	Business	 	 	28,422	 	 	 	33,944	 	 	 	37,227	 	 	 	29,871	 	 	 	129,495	 	 	 	(511	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRICITY DEMAND (MW)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
69	 	System peak demand	 	 	3,979	 	 	 	5,632	 	 	 	6,402	 	 	 	4,432	 	 	 	6,402	 	 	 	70	 	
 	 	 	
See Glossary of Terms.	 	Page 17 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ENERGY SOURCES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
70	 	Nuclear	 	 	2,148	 	 	 	1,860	 	 	 	2,364	 	 	 	1,812	 	 	 	8,184	 	 	 	(131	)	
71	 	Coal	 	 	2,887	 	 	 	3,035	 	 	 	3,417	 	 	 	3,327	 	 	 	12,666	 	 	 	1,300	 	
72	 	Gas, oil and other	 	 	367	 	 	 	1,339	 	 	 	2,547	 	 	 	1,074	 	 	 	5,327	 	 	 	(764	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
73	 	Total	 	 	5,402	 	 	 	6,234	 	 	 	8,328	 	 	 	6,213	 	 	 	26,177	 	 	 	405	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Purchased power	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
74	 	Firm load	 	 	701	 	 	 	1,532	 	 	 	1,068	 	 	 	1,024	 	 	 	4,325	 	 	 	1,214	 	
75	 	Marketing and trading	 	 	5,506	 	 	 	7,167	 	 	 	9,301	 	 	 	8,218	 	 	 	30,192	 	 	 	2,443	 	
76	 	Total	 	 	6,207	 	 	 	8,699	 	 	 	10,369	 	 	 	9,242	 	 	 	34,517	 	 	 	3,657	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
77	 	Total energy sources	 	 	11,609	 	 	 	14,933	 	 	 	18,697	 	 	 	15,455	 	 	 	60,694	 	 	 	4,062	 	

 	 	POWER PLANT PERFORMANCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Capacity Factors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
78	 	Nuclear	 	 	88	%	 	 	77	%	 	 	96	%	 	 	74	%	 	 	84	%	 	 	(3	)%	
79	 	Coal	 	 	77	%	 	 	81	%	 	 	90	%	 	 	88	%	 	 	84	%	 	 	8	%	
80	 	Gas, oil and other	 	 	5	%	 	 	20	%	 	 	38	%	 	 	12	%	 	 	18	%	 	 	(10	)%	
81	 	System average	 	 	44	%	 	 	50	%	 	 	64	%	 	 	48	%	 	 	51	%	 	 	(4	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation Capacity Out of Service and Replaced for Native Load (average MW/day)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
82	 	Nuclear	 	 	135	 	 	 	233	 	 	 	13	 	 	 	261	 	 	 	161	 	 	 	29	 	
83	 	Coal	 	 	149	 	 	 	153	 	 	 	63	 	 	 	61	 	 	 	107	 	 	 	(163	)	
84	 	Gas	 	 	49	 	 	 	47	 	 	 	39	 	 	 	34	 	 	 	42	 	 	 	(163	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
85	 	Total	 	 	333	 	 	 	433	 	 	 	115	 	 	 	356	 	 	 	310	 	 	 	(296	)	
 	 	 	
See Glossary of Terms.	 	Page 18 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ENERGY MARKET INDICATORS (a)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Electricity Average Daily Spot Prices ($/MWh)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	On-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
86	 	Palo Verde	 	$	43.73	 	 	$	50.36	 	 	$	51.86	 	 	$	51.23	 	 	$	49.30	 	 	$	0.70	 	
87	 	SP15	 	$	48.37	 	 	$	54.73	 	 	$	57.09	 	 	$	60.62	 	 	$	55.20	 	 	$	3.82	 	
 	 	Off-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
88	 	Palo Verde	 	$	33.66	 	 	$	33.74	 	 	$	33.37	 	 	$	38.21	 	 	$	34.75	 	 	$	2.72	 	
89	 	SP15	 	$	36.90	 	 	$	37.32	 	 	$	37.18	 	 	$	43.07	 	 	$	38.62	 	 	$	3.96	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	WEATHER INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Actual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
90	 	Cooling degree-days	 	 	273	 	 	 	1,598	 	 	 	2,471	 	 	 	352	 	 	 	4,694	 	 	 	(205	)	
91	 	Heating degree-days	 	 	552	 	 	 	11	 	 	 	—	 	 	 	422	 	 	 	985	 	 	 	249	 	
92	 	Average humidity	 	 	39	%	 	 	19	%	 	 	26	%	 	 	45	%	 	 	32	%	 	 	1	%	
 	 	10-Year Averages	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
93	 	Cooling degree-days	 	 	80	 	 	 	1,491	 	 	 	2,540	 	 	 	420	 	 	 	4,531	 	 	 	420	 	
94	 	Heating degree-days	 	 	521	 	 	 	36	 	 	 	—	 	 	 	415	 	 	 	972	 	 	 	415	 	
95	 	Average humidity	 	 	43	%	 	 	24	%	 	 	33	%	 	 	40	%	 	 	35	%	 	 	0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ECONOMIC INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Building Permits — Metro Phoenix (b)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
96	 	Single-family	 	 	10,045	 	 	 	13,636	 	 	 	14,111	 	 	 	10,325	 	 	 	48,117	 	 	 	8,466	 	
97	 	Multi-family	 	 	1,757	 	 	 	1,324	 	 	 	2,149	 	 	 	2,356	 	 	 	7,586	 	 	 	859	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
98	 	Total	 	 	11,802	 	 	 	14,960	 	 	 	16,260	 	 	 	12,681	 	 	 	55,703	 	 	 	9,325	 	

 	 	Arizona Job Growth (c)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
99	 	Payroll job growth (% over prior year)	 	 	2.7	%	 	 	3.3	%	 	 	3.6	%	 	 	3.9	%	 	 	3.4	%	 	 	2.0	%	
100	 	Unemployment rate (%, seasonally adjusted)	 	 	5.2	%	 	 	5.1	%	 	 	4.9	%	 	 	4.6	%	 	 	5.0	%	 	 	(0.7	)%	

Sources :	
 		
(a)	 	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.	
 		
(b)	 	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business	
 		
(c)	 	Arizona Department of Economic Security	
 	 	 	
See Glossary of Terms.	 	Page 19 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2003
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1	 	Arizona Public Service	 	$	16	 	 	$	43	 	 	$	100	 	 	$	21	 	 	$	181	 	 	$	(18	)	
2	 	Pinnacle West Energy	 	 	4	 	 	 	1	 	 	 	2	 	 	 	(15	)	 	 	(8	)	 	 	11	 	
3	 	APS Energy Services	 	 	8	 	 	 	5	 	 	 	1	 	 	 	3	 	 	 	16	 	 	 	(12	)	
4	 	SunCor	 	 	1	 	 	 	2	 	 	 	6	 	 	 	36	 	 	 	46	 	 	 	36	 	
5	 	El Dorado	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(1	)	 	 	4	 	
6	 	Parent Company	 	 	(11	)	 	 	3	 	 	 	—	 	 	 	—	 	 	 	(9	)	 	 	(32	)	

7	 	Income From Continuing Operations	 	 	18	 	 	 	54	 	 	 	109	 	 	 	45	 	 	 	225	 	 	 	(11	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
8	 	Income From Discontinued Operations — Net of Tax	 	 	7	 	 	 	2	 	 	 	1	 	 	 	4	 	 	 	16	 	 	 	37	 	
9	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	66	 	

10	 	Net Income	 	$	25	 	 	$	56	 	 	$	110	 	 	$	49	 	 	$	241	 	 	$	92	 	

 	 	EARNINGS PER SHARE BY SUBSIDIARY — DILUTED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
11	 	Arizona Public Service	 	$	0.17	 	 	$	0.47	 	 	$	1.10	 	 	$	0.24	 	 	$	1.98	 	 	$	(0.37	)	
12	 	Pinnacle West Energy	 	 	0.05	 	 	 	0.01	 	 	 	0.02	 	 	 	(0.16	)	 	 	(0.08	)	 	 	0.15	 	
13	 	APS Energy Services	 	 	0.08	 	 	 	0.06	 	 	 	0.01	 	 	 	0.03	 	 	 	0.18	 	 	 	(0.15	)	
14	 	SunCor	 	 	0.01	 	 	 	0.03	 	 	 	0.07	 	 	 	0.39	 	 	 	0.50	 	 	 	0.37	 	
15	 	El Dorado	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.01	)	 	 	0.05	 	
16	 	Parent Company	 	 	(0.11	)	 	 	0.02	 	 	 	(0.01	)	 	 	(0.01	)	 	 	(0.10	)	 	 	(0.36	)	

17	 	Income From Continuing Operations	 	 	0.20	 	 	 	0.59	 	 	 	1.19	 	 	 	0.49	 	 	 	2.47	 	 	 	(0.31	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
18	 	Income From Discontinued Operations — Net of Tax	 	 	0.08	 	 	 	0.02	 	 	 	0.01	 	 	 	0.05	 	 	 	0.16	 	 	 	0.41	 	
19	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	0.77	 	

20	 	Net Income	 	$	0.28	 	 	$	0.61	 	 	$	1.20	 	 	$	0.54	 	 	$	2.63	 	 	$	0.87	 	

21	 	BOOK VALUE PER SHARE	 	$	29.39	 	 	$	29.95	 	 	$	30.68	 	 	$	30.97	 	 	$	30.97	 	 	$	1.57	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	COMMON SHARES OUTSTANDING - DILUTED (Thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
22	 	Average	 	 	91,359	 	 	 	91,450	 	 	 	91,467	 	 	 	91,403	 	 	 	91,405	 	 	 	6,441	 	
23	 	End of Period	 	 	91,257	 	 	 	91,262	 	 	 	91,271	 	 	 	91,288	 	 	 	91,288	 	 	 	33	 	
 	 	 	
See Glossary of Terms.	 	Page 20 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2003
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ELECTRIC OPERATING REVENUES (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
24	 	Residential	 	$	168	 	 	$	233	 	 	$	363	 	 	$	193	 	 	$	957	 	 	$	51	 	
25	 	Business	 	 	196	 	 	 	251	 	 	 	284	 	 	 	222	 	 	 	953	 	 	 	25	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
26	 	Total retail	 	 	364	 	 	 	484	 	 	 	647	 	 	 	415	 	 	 	1,910	 	 	 	76	 	
 	 	Wholesale revenue on delivered electricity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
27	 	Traditional contracts	 	 	3	 	 	 	4	 	 	 	5	 	 	 	3	 	 	 	15	 	 	 	6	 	
28	 	Off-system sales	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
29	 	Transmission for others	 	 	6	 	 	 	5	 	 	 	9	 	 	 	7	 	 	 	27	 	 	 	(3	)	
30	 	Other miscellaneous services	 	 	7	 	 	 	6	 	 	 	6	 	 	 	7	 	 	 	26	 	 	 	9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31	 	Total regulated electricity	 	 	380	 	 	 	499	 	 	 	667	 	 	 	432	 	 	 	1,978	 	 	 	88	 	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
32	 	Electricity and other commodity sales	 	 	117	 	 	 	101	 	 	 	83	 	 	 	91	 	 	 	392	 	 	 	105	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
33	 	Total operating electric revenues	 	$	497	 	 	$	600	 	 	$	750	 	 	$	523	 	 	$	2,370	 	 	$	193	 	

 	 	ELECTRIC SALES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
34	 	Residential	 	 	2,104	 	 	 	2,543	 	 	 	4,126	 	 	 	2,374	 	 	 	11,147	 	 	 	703	 	
35	 	Business	 	 	2,849	 	 	 	3,450	 	 	 	3,891	 	 	 	3,226	 	 	 	13,416	 	 	 	499	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
36	 	Total retail	 	 	4,953	 	 	 	5,993	 	 	 	8,017	 	 	 	5,600	 	 	 	24,563	 	 	 	1,202	 	
 	 	Wholesale electricity delivered	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
37	 	Traditional contracts	 	 	130	 	 	 	131	 	 	 	127	 	 	 	112	 	 	 	500	 	 	 	26	 	
38	 	Off-system sales	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
39	 	Retail load hedge management	 	 	109	 	 	 	205	 	 	 	446	 	 	 	333	 	 	 	1,093	 	 	 	(1,549	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
40	 	Total regulated electricity	 	 	5,192	 	 	 	6,329	 	 	 	8,590	 	 	 	6,045	 	 	 	26,156	 	 	 	(321	)	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
41	 	Wholesale sales of electricity	 	 	7,372	 	 	 	6,798	 	 	 	7,255	 	 	 	7,377	 	 	 	28,802	 	 	 	5,947	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
42	 	Total electric sales	 	 	12,564	 	 	 	13,127	 	 	 	15,845	 	 	 	13,422	 	 	 	54,958	 	 	 	5,626	 	

See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 21 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2003
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	POWER SUPPLY ADJUSTOR (“PSA”) - REGULATED ELECTRICITY SEGMENT (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
43	 	Deferred fuel and purchased power regulatory asset — beginning balance	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	
44	 	Deferred fuel and purchased power costs — current period	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
45	 	Amounts recovered through revenues	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
46	 	Deferred fuel and purchased power regulatory asset — end of period	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	

 	 	MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Realized and Mark-To-Market Components	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
47	 	Electricity and other commodity sales, realized (a)	 	$	25	 	 	$	20	 	 	$	4	 	 	$	16	 	 	$	65	 	 	$	(56	)	
48	 	Mark-to-market reversals on realized sales (b)	 	 	(3	)	 	 	1	 	 	 	(3	)	 	 	(1	)	 	 	(6	)	 	 	35	 	
49	 	Change in mark-to-market value of forward sales	 	 	(3	)	 	 	(1	)	 	 	(3	)	 	 	(5	)	 	 	(12	)	 	 	(64	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
50	 	Total gross margin	 	$	19	 	 	$	20	 	 	$	(2	)	 	$	10	 	 	$	47	 	 	$	(85	)	

 	 	By Pinnacle West Entity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
51	 	Parent company marketing and trading division	 	$	2	 	 	$	4	 	 	$	(2	)	 	$	(9	)	 	$	(5	)	 	$	(95	)	
52	 	APS	 	 	6	 	 	 	4	 	 	 	(6	)	 	 	4	 	 	 	8	 	 	$	6	 	
53	 	Pinnacle West Energy	 	 	(1	)	 	 	—	 	 	 	—	 	 	 	9	 	 	 	8	 	 	$	4	 	
54	 	APS Energy Services	 	 	12	 	 	 	12	 	 	 	6	 	 	 	6	 	 	 	36	 	 	$	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
55	 	Total gross margin	 	$	19	 	 	$	20	 	 	$	(2	)	 	$	10	 	 	$	47	 	 	$	(85	)	

				
(a)	 	The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 47 and in line 48 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 47 are included in line 48. For example, line 48 shows that a prior-period mark-to-market gain of $6 million was transferred to “realized” for the total year 2003. A $6 million realized gain is included in the $65 million on line 47 for the total year 2003.		
 		
(b)	 	Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 22 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2003
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	
Line	 	 	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year-To-Date	 	vs Prior YTD	
 	 	AVERAGE ELECTRIC CUSTOMERS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail customers	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
56	 	Residential	 	 	827,937	 	 	 	821,331	 	 	 	824,655	 	 	 	839,539	 	 	 	828,366	 	 	 	26,565	 	
57	 	Business	 	 	101,999	 	 	 	102,601	 	 	 	103,262	 	 	 	104,521	 	 	 	103,096	 	 	 	2,868	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
58	 	Total	 	 	929,936	 	 	 	923,932	 	 	 	927,917	 	 	 	944,060	 	 	 	931,462	 	 	 	29,432	 	
59	 	Wholesale customers	 	 	65	 	 	 	66	 	 	 	66	 	 	 	66	 	 	 	66	 	 	 	(1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
60	 	Total customers	 	 	930,001	 	 	 	923,998	 	 	 	927,983	 	 	 	944,126	 	 	 	931,528	 	 	 	29,431	 	

61	 	Customer Growth (% over prior year)	 	 	3.3	%	 	 	3.1	%	 	 	3.2	%	 	 	3.4	%	 	 	3.3	%	 	 	0.2	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL SALES (GWH) — WEATHER NORMALIZED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
62	 	Residential	 	 	2,223	 	 	 	2,520	 	 	 	3,872	 	 	 	2,264	 	 	 	10,879	 	 	 	389	 	
63	 	Business	 	 	2,886	 	 	 	3,485	 	 	 	3,858	 	 	 	3,174	 	 	 	13,403	 	 	 	498	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
64	 	Total	 	 	5,109	 	 	 	6,005	 	 	 	7,730	 	 	 	5,438	 	 	 	24,282	 	 	 	887	 	

 	 	RETAIL USAGE (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
65	 	Residential	 	 	2,541	 	 	 	3,096	 	 	 	5,004	 	 	 	2,828	 	 	 	13,457	 	 	 	432	 	
66	 	Business	 	 	27,927	 	 	 	33,625	 	 	 	37,677	 	 	 	30,865	 	 	 	130,529	 	 	 	1,288	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
67	 	Residential	 	 	2,685	 	 	 	3,067	 	 	 	4,695	 	 	 	2,697	 	 	 	13,133	 	 	 	50	 	
68	 	Business	 	 	28,290	 	 	 	33,969	 	 	 	37,360	 	 	 	30,371	 	 	 	130,006	 	 	 	1,251	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRICITY DEMAND (MW)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
69	 	System peak demand	 	 	3,569	 	 	 	5,571	 	 	 	6,332	 	 	 	5,124	 	 	 	6,332	 	 	 	529	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 23 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2003
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	
Line	 	 	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year-To-Date	 	vs Prior YTD	
 	 	ENERGY SOURCES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
70	 	Nuclear	 	 	2,306	 	 	 	2,047	 	 	 	2,230	 	 	 	1,732	 	 	 	8,315	 	 	 	(666	)	
71	 	Coal	 	 	2,770	 	 	 	2,824	 	 	 	2,972	 	 	 	2,800	 	 	 	11,366	 	 	 	(690	)	
72	 	Gas, oil and other	 	 	1,288	 	 	 	1,572	 	 	 	2,696	 	 	 	535	 	 	 	6,091	 	 	 	1,722	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
73	 	Total	 	 	6,364	 	 	 	6,443	 	 	 	7,898	 	 	 	5,067	 	 	 	25,772	 	 	 	366	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Purchased power	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
74	 	Firm load	 	 	(12	)	 	 	606	 	 	 	1,099	 	 	 	1,418	 	 	 	3,111	 	 	 	1,492	 	
75	 	Marketing and trading	 	 	6,489	 	 	 	6,527	 	 	 	7,498	 	 	 	7,235	 	 	 	27,749	 	 	 	4,045	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
76	 	Total	 	 	6,477	 	 	 	7,133	 	 	 	8,597	 	 	 	8,653	 	 	 	30,860	 	 	 	5,537	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
77	 	Total energy sources	 	 	12,841	 	 	 	13,576	 	 	 	16,495	 	 	 	13,720	 	 	 	56,632	 	 	 	5,903	 	

 	 	POWER PLANT PERFORMANCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Capacity Factors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
78	 	Nuclear	 	 	98	%	 	 	86	%	 	 	93	%	 	 	72	%	 	 	87	%	 	 	(7	)%	
79	 	Coal	 	 	75	%	 	 	75	%	 	 	79	%	 	 	74	%	 	 	76	%	 	 	(4	)%	
80	 	Gas, oil and other	 	 	26	%	 	 	31	%	 	 	44	%	 	 	9	%	 	 	28	%	 	 	1	%	
81	 	System average	 	 	58	%	 	 	59	%	 	 	64	%	 	 	41	%	 	 	55	%	 	 	(8	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation Capacity Out of Service and Replaced for Native Load (average MW/day)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
82	 	Nuclear	 	 	31	 	 	 	136	 	 	 	61	 	 	 	297	 	 	 	131	 	 	 	64	 	
83	 	Coal	 	 	292	 	 	 	254	 	 	 	277	 	 	 	253	 	 	 	269	 	 	 	102	 	
84	 	Gas	 	 	189	 	 	 	148	 	 	 	154	 	 	 	338	 	 	 	205	 	 	 	157	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
85	 	Total	 	 	512	 	 	 	538	 	 	 	492	 	 	 	888	 	 	 	605	 	 	 	323	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
See Glossary of Terms.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	page 24 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2003
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ENERGY MARKET INDICATORS (a)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Electricity Average Daily Spot Prices ($/MWh)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	On-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
86	 	Palo Verde	 	$	49.66	 	 	$	48.88	 	 	$	52.88	 	 	$	42.98	 	 	$	48.60	 	 	$	16.32	 	
87	 	SP15	 	$	54.35	 	 	$	50.73	 	 	$	53.54	 	 	$	46.88	 	 	$	51.38	 	 	$	17.16	 	
 	 	Off-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
88	 	Palo Verde	 	$	36.09	 	 	$	25.48	 	 	$	36.08	 	 	$	30.48	 	 	$	32.03	 	 	$	12.14	 	
89	 	SP15	 	$	39.70	 	 	$	28.27	 	 	$	37.81	 	 	$	32.85	 	 	$	34.66	 	 	$	12.97	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	WEATHER INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Actual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
90	 	Cooling degree-days	 	 	76	 	 	 	1,550	 	 	 	2,701	 	 	 	572	 	 	 	4,899	 	 	 	24	 	
91	 	Heating degree-days	 	 	349	 	 	 	17	 	 	 	—	 	 	 	370	 	 	 	736	 	 	 	(64	)	
92	 	Average humidity	 	 	44	%	 	 	18	%	 	 	30	%	 	 	34	%	 	 	31	%	 	 	4	%	
 	 	10-Year Averages	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
93	 	Cooling degree-days	 	 	80	 	 	 	1,491	 	 	 	2,540	 	 	 	420	 	 	 	4,531	 	 	 	—	 	
94	 	Heating degree-days	 	 	521	 	 	 	36	 	 	 	—	 	 	 	415	 	 	 	972	 	 	 	—	 	
95	 	Average humidity	 	 	43	%	 	 	24	%	 	 	33	%	 	 	40	%	 	 	35	%	 	 	0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ECONOMIC INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Building Permits — Metro Phoenix (b)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
96	 	Single-family	 	 	8,030	 	 	 	10,613	 	 	 	11,191	 	 	 	9,817	 	 	 	39,651	 	 	 	5,339	 	
97	 	Multi-family	 	 	863	 	 	 	2,053	 	 	 	1,231	 	 	 	2,580	 	 	 	6,727	 	 	 	(347	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
98	 	Total	 	 	8,893	 	 	 	12,666	 	 	 	12,422	 	 	 	12,397	 	 	 	46,378	 	 	 	4,992	 	

 	 	Arizona Job Growth (c)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
99	 	Payroll job growth (% over prior year)	 	 	1.1	%	 	 	0.9	%	 	 	1.5	%	 	 	2.0	%	 	 	1.4	%	 	 	1.4	%	
100	 	Unemployment rate (%, seasonally adjusted)	 	 	5.8	%	 	 	5.9	%	 	 	5.7	%	 	 	5.3	%	 	 	5.7	%	 	 	(0.5	)%	

Sources:	
 		
(a)	 	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.	
 		
(b)	 	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business	
 		
(c)	 	Arizona Department of Economic Security	

			
See Glossary of Terms.	 	page 25 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2002
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1	 	Arizona Public Service	 	$	32	 	 	$	64	 	 	$	87	 	 	$	16	 	 	$	199	 	 	$	(82	)	
2	 	Pinnacle West Energy	 	 	1	 	 	 	1	 	 	 	10	 	 	 	(31	)	 	 	(19	)	 	 	(37	)	
3	 	APS Energy Services	 	 	2	 	 	 	11	 	 	 	7	 	 	 	8	 	 	 	28	 	 	 	38	 	
4	 	SunCor	 	 	1	 	 	 	2	 	 	 	(1	)	 	 	8	 	 	 	10	 	 	 	7	 	
5	 	El Dorado	 	 	—	 	 	 	(3	)	 	 	(2	)	 	 	—	 	 	 	(5	)	 	 	(5	)	
6	 	Parent Company	 	 	17	 	 	 	(6	)	 	 	8	 	 	 	4	 	 	 	23	 	 	 	(12	)	

7	 	Income From Continuing Operations	 	 	53	 	 	 	69	 	 	 	109	 	 	 	5	 	 	 	236	 	 	 	(91	)	
 		
8	 	Income (Loss) From Discontinued Operations — Net of Tax	 	 	1	 	 	 	6	 	 	 	(8	)	 	 	(20	)	 	 	(21	)	 	 	(21	)	
9	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(66	)	 	 	(66	)	 	 	(51	)	

10	 	Net Income	 	$	54	 	 	$	75	 	 	$	101	 	 	$	(81	)	 	$	149	 	 	$	(163	)	

 	 	EARNINGS PER SHARE BY SUBSIDIARY — DILUTED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
11	 	Arizona Public Service	 	$	0.37	 	 	$	0.76	 	 	$	1.02	 	 	$	0.19	 	 	$	2.35	 	 	$	(0.95	)	
12	 	Pinnacle West Energy	 	 	0.01	 	 	 	0.01	 	 	 	0.12	 	 	 	(0.37	)	 	 	(0.23	)	 	 	(0.44	)	
13	 	APS Energy Services	 	 	0.03	 	 	 	0.13	 	 	 	0.08	 	 	 	0.09	 	 	 	0.33	 	 	 	0.45	 	
14	 	SunCor	 	 	0.02	 	 	 	0.02	 	 	 	(0.01	)	 	 	0.09	 	 	 	0.13	 	 	 	0.09	 	
15	 	El Dorado	 	 	—	 	 	 	(0.04	)	 	 	(0.02	)	 	 	—	 	 	 	(0.06	)	 	 	(0.06	)	
16	 	Parent Company	 	 	0.20	 	 	 	(0.07	)	 	 	0.10	 	 	 	0.07	 	 	 	0.26	 	 	 	(0.16	)	

17	 	Income From Continuing Operations	 	 	0.63	 	 	 	0.81	 	 	 	1.29	 	 	 	0.07	 	 	 	2.78	 	 	 	(1.07	)	
 		
18	 	Income (Loss) From Discontinued Operations — Net of Tax	 	 	—	 	 	 	0.08	 	 	 	(0.10	)	 	 	(0.24	)	 	 	(0.25	)	 	 	(0.25	)	
19	 	Cumulative Effect of Change in Accounting — Net of Tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(0.77	)	 	 	(0.77	)	 	 	(0.60	)	

20	 	Net Income	 	$	0.63	 	 	$	0.89	 	 	$	1.19	 	 	$	(0.94	)	 	$	1.76	 	 	$	(1.92	)	

21	 	BOOK VALUE PER SHARE	 	$	30.06	 	 	$	30.54	 	 	$	31.39	 	 	$	29.40	 	 	$	29.40	 	 	$	(0.06	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	COMMON SHARES OUTSTANDING — DILUTED (Thousands)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
22	 	Average	 	 	84,884	 	 	 	84,926	 	 	 	84,797	 	 	 	85,302	 	 	 	84,964	 	 	 	34	 	
23	 	End of Period	 	 	84,789	 	 	 	84,768	 	 	 	84,756	 	 	 	91,255	 	 	 	91,255	 	 	 	6,531	 	
 	 	 	
See Glossary of Terms.	 	Page 26 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2002
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ELECTRIC OPERATING REVENUES (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
24	 	Residential	 	$	171	 	 	$	226	 	 	$	337	 	 	$	172	 	 	$	906	 	 	$	(9	)	
25	 	Business	 	 	195	 	 	 	251	 	 	 	270	 	 	 	212	 	 	 	928	 	 	 	(24	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
26	 	Total retail	 	 	366	 	 	 	477	 	 	 	607	 	 	 	384	 	 	 	1,834	 	 	 	(33	)	
 	 	Wholesale revenue on delivered electricity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
27	 	Traditional contracts	 	 	2	 	 	 	1	 	 	 	3	 	 	 	3	 	 	 	9	 	 	 	(64	)	
28	 	Off-system sales	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
29	 	Transmission for others	 	 	6	 	 	 	6	 	 	 	6	 	 	 	12	 	 	 	30	 	 	 	4	 	
30	 	Other miscellaneous services	 	 	4	 	 	 	2	 	 	 	4	 	 	 	7	 	 	 	17	 	 	 	(1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
31	 	Total regulated electricity	 	 	378	 	 	 	486	 	 	 	620	 	 	 	406	 	 	 	1,890	 	 	 	(94	)	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
32	 	Electricity and other commodity sales	 	 	62	 	 	 	41	 	 	 	83	 	 	 	101	 	 	 	287	 	 	 	(183	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
33	 	Total operating electric revenues	 	$	440	 	 	$	527	 	 	$	703	 	 	$	507	 	 	$	2,177	 	 	$	(277	)	

 	 	ELECTRIC SALES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	REGULATED ELECTRICITY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
34	 	Residential	 	 	2,141	 	 	 	2,441	 	 	 	3,806	 	 	 	2,056	 	 	 	10,444	 	 	 	109	 	
35	 	Business	 	 	2,771	 	 	 	3,429	 	 	 	3,681	 	 	 	3,036	 	 	 	12,917	 	 	 	(147	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
36	 	Total retail	 	 	4,912	 	 	 	5,870	 	 	 	7,487	 	 	 	5,092	 	 	 	23,361	 	 	 	(38	)	
 	 	Wholesale electricity delivered	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
37	 	Traditional contracts	 	 	71	 	 	 	121	 	 	 	142	 	 	 	140	 	 	 	474	 	 	 	(739	)	
38	 	Off-system sales	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
39	 	Retail load hedge management	 	 	158	 	 	 	230	 	 	 	1,958	 	 	 	296	 	 	 	2,642	 	 	 	(398	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
40	 	Total regulated electricity	 	 	5,141	 	 	 	6,221	 	 	 	9,587	 	 	 	5,528	 	 	 	26,477	 	 	 	(1,175	)	
 	 	MARKETING AND TRADING SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
41	 	Wholesale sales of electricity	 	 	4,212	 	 	 	4,443	 	 	 	7,104	 	 	 	7,096	 	 	 	22,855	 	 	 	6,854	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
42	 	Total electric sales	 	 	9,353	 	 	 	10,664	 	 	 	16,691	 	 	 	12,624	 	 	 	49,332	 	 	 	5,679	 	

See Glossary of Terms.	 	Page 27 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2002
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
43	 	Deferred fuel and purchased power regulatory asset — beginning balance	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	
44	 	Deferred fuel and purchased power costs — current period	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
45	 	Amounts recovered through revenues	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
46	 	Deferred fuel and purchased power regulatory asset — end of period	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	

 	 	MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Realized and Mark-To-Market Components	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
47	 	Electricity and other commodity sales, realized (a)	 	$	39	 	 	$	25	 	 	$	19	 	 	$	38	 	 	$	121	 	 	$	(62	)	
48	 	Mark-to-market reversals on realized sales (b)	 	 	(22	)	 	 	(9	)	 	 	2	 	 	 	(8	)	 	 	(41	)	 	 	(47	)	
49	 	Change in mark-to-market value of forward sales	 	 	23	 	 	 	3	 	 	 	23	 	 	 	(1	)	 	 	52	 	 	 	(76	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
50	 	Total gross margin	 	$	40	 	 	$	19	 	 	$	44	 	 	$	29	 	 	$	132	 	 	$	(185	)	

 	 	By Pinnacle West Entity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
51	 	Parent company marketing and trading division	 	$	35	 	 	$	9	 	 	$	32	 	 	$	14	 	 	$	90	 	 	$	12	 	
52	 	APS	 	 	1	 	 	 	—	 	 	 	1	 	 	 	—	 	 	 	2	 	 	 	(233	)	
53	 	Pinnacle West Energy	 	 	—	 	 	 	—	 	 	 	—	 	 	 	4	 	 	 	4	 	 	 	4	 	
54	 	APS Energy Services	 	 	4	 	 	 	10	 	 	 	11	 	 	 	11	 	 	 	36	 	 	 	32	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
55	 	Total gross margin	 	$	40	 	 	$	19	 	 	$	44	 	 	$	29	 	 	$	132	 	 	$	(185	)	

			
(a)	 	The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 47 and in line 48 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 47 are included in line 48. For example, line 48 shows that a prior-period mark-to-market gain of $41 million was transferred to “realized” for the total year 2002. A $41 million realized gain is included in the $121 million on line 47 for total year 2002.	
 		
(b)	 	Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.	
 	 	 	
See Glossary of Terms.	 	Page 28 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2002
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	
Line	 	 	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year-To-Date	 	vs Prior YTD	
 	 	AVERAGE ELECTRIC CUSTOMERS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Retail customers	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
56	 	Residential	 	 	801,000	 	 	 	795,681	 	 	 	798,590	 	 	 	811,930	 	 	 	801,801	 	 	 	25,462	 	
57	 	Business	 	 	99,335	 	 	 	100,096	 	 	 	100,318	 	 	 	101,177	 	 	 	100,228	 	 	 	2,030	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
58	 	Total	 	 	900,335	 	 	 	895,777	 	 	 	898,908	 	 	 	913,107	 	 	 	902,029	 	 	 	27,492	 	
59	 	Wholesale customers	 	 	67	 	 	 	67	 	 	 	67	 	 	 	67	 	 	 	67	 	 	 	1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
60	 	Total customers	 	 	900,402	 	 	 	895,844	 	 	 	898,975	 	 	 	913,174	 	 	 	902,096	 	 	 	27,493	 	

61	 	Customer Growth (% over prior year)	 	 	3.2	%	 	 	3.2	%	 	 	3.1	%	 	 	3.2	%	 	 	3.1	%	 	 	(0.5	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL SALES (GWH) — WEATHER NORMALIZED	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
62	 	Residential	 	 	2,148	 	 	 	2,461	 	 	 	3,746	 	 	 	2,135	 	 	 	10,490	 	 	 	641	 	
63	 	Business	 	 	2,776	 	 	 	3,410	 	 	 	3,696	 	 	 	3,024	 	 	 	12,905	 	 	 	86	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
64	 	Total	 	 	4,924	 	 	 	5,871	 	 	 	7,441	 	 	 	5,159	 	 	 	23,395	 	 	 	727	 	

 	 	RETAIL USAGE (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
65	 	Residential	 	 	2,673	 	 	 	3,068	 	 	 	4,766	 	 	 	2,532	 	 	 	13,025	 	 	 	(287	)	
66	 	Business	 	 	27,896	 	 	 	34,258	 	 	 	36,691	 	 	 	30,011	 	 	 	129,241	 	 	 	(4,384	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
67	 	Residential	 	 	2,681	 	 	 	3,093	 	 	 	4,690	 	 	 	2,630	 	 	 	13,083	 	 	 	396	 	
68	 	Business	 	 	27,943	 	 	 	34,065	 	 	 	36,839	 	 	 	29,885	 	 	 	128,754	 	 	 	(1,788	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ELECTRICITY DEMAND (MW)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
69	 	System peak demand	 	 	3,921	 	 	 	5,425	 	 	 	5,803	 	 	 	3,828	 	 	 	5,803	 	 	 	116	 	
 	 	 	
See Glossary of Terms.	 	Page 29 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2002
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	
Line	 	 	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year-To-Date	 	vs Prior YTD	
 	 	ENERGY SOURCES (GWH)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
70	 	Nuclear	 	 	2,257	 	 	 	2,242	 	 	 	2,387	 	 	 	2,095	 	 	 	8,981	 	 	 	596	 	
71	 	Coal	 	 	2,890	 	 	 	2,703	 	 	 	3,280	 	 	 	3,183	 	 	 	12,056	 	 	 	(516	)	
72	 	Gas, oil and other	 	 	337	 	 	 	659	 	 	 	1,918	 	 	 	1,455	 	 	 	4,369	 	 	 	375	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
73	 	Total	 	 	5,484	 	 	 	5,604	 	 	 	7,585	 	 	 	6,733	 	 	 	25,406	 	 	 	455	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Purchased power	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
74	 	Firm load	 	 	70	 	 	 	846	 	 	 	859	 	 	 	(157	)	 	 	1,619	 	 	 	(1,342	)	
75	 	Marketing and trading	 	 	3,993	 	 	 	4,599	 	 	 	8,771	 	 	 	6,340	 	 	 	23,704	 	 	 	6,051	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
76	 	Total	 	 	4,063	 	 	 	5,445	 	 	 	9,630	 	 	 	6,183	 	 	 	25,323	 	 	 	4,709	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
77	 	Total energy sources	 	 	9,547	 	 	 	11,049	 	 	 	17,215	 	 	 	12,916	 	 	 	50,729	 	 	 	5,164	 	

 	 	POWER PLANT PERFORMANCE	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Capacity Factors	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
78	 	Nuclear	 	 	96	%	 	 	95	%	 	 	100	%	 	 	87	%	 	 	94	%	 	 	6	%	
79	 	Coal	 	 	78	%	 	 	72	%	 	 	87	%	 	 	84	%	 	 	80	%	 	 	(4	)%	
80	 	Gas, oil and other	 	 	12	%	 	 	20	%	 	 	38	%	 	 	29	%	 	 	27	%	 	 	(10	)%	
81	 	System average	 	 	62	%	 	 	62	%	 	 	69	%	 	 	60	%	 	 	63	%	 	 	(7	)%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Generation Capacity Out of Service and Replaced for Native Load (average MW/day)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
82	 	Nuclear	 	 	62	 	 	 	66	 	 	 	12	 	 	 	129	 	 	 	67	 	 	 	(60	)	
83	 	Coal	 	 	184	 	 	 	279	 	 	 	88	 	 	 	116	 	 	 	167	 	 	 	—	 	
84	 	Gas	 	 	12	 	 	 	18	 	 	 	106	 	 	 	54	 	 	 	48	 	 	 	16	 	
85	 	Total	 	 	258	 	 	 	363	 	 	 	206	 	 	 	299	 	 	 	282	 	 	 	(44	)	
 	 	 	
See Glossary of Terms.	 	Page 30 of 31	

 

Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2002
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Increase	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(Decrease)	 	
Line	 	 	 	1st Qtr	 	 	2nd Qtr	 	 	3rd Qtr	 	 	4th Qtr	 	 	Year-To-Date	 	 	vs Prior YTD	 	
 	 	ENERGY MARKET INDICATORS (a)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Electricity Average Daily Spot Prices ($/MWh)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	On-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
86	 	Palo Verde	 	$	26.86	 	 	$	30.65	 	 	$	35.45	 	 	$	36.18	 	 	$	32.28	 	 	$	(86.13	)	
87	 	SP15	 	$	28.46	 	 	$	31.51	 	 	$	35.55	 	 	$	41.35	 	 	$	34.22	 	 	$	(85.77	)	
 	 	Off-Peak	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
88	 	Palo Verde	 	$	22.17	 	 	$	14.10	 	 	$	18.21	 	 	$	25.09	 	 	$	19.89	 	 	$	(41.68	)	
89	 	SP15	 	$	22.76	 	 	$	15.95	 	 	$	19.54	 	 	$	28.52	 	 	$	21.69	 	 	$	(51.79	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	WEATHER INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Actual	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
90	 	Cooling degree-days	 	 	89	 	 	 	1,741	 	 	 	2,647	 	 	 	398	 	 	 	4,875	 	 	 	(247	)	
91	 	Heating degree-days	 	 	472	 	 	 	—	 	 	 	—	 	 	 	328	 	 	 	800	 	 	 	(360	)	
92	 	Average humidity	 	 	28	%	 	 	16	%	 	 	27	%	 	 	38	%	 	 	27	%	 	 	(9	)%	
 	 	10-Year Averages	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
93	 	Cooling degree-days	 	 	80	 	 	 	1,491	 	 	 	2,540	 	 	 	420	 	 	 	4,531	 	 	 	—	 	
94	 	Heating degree-days	 	 	521	 	 	 	36	 	 	 	—	 	 	 	415	 	 	 	972	 	 	 	—	 	
95	 	Average humidity	 	 	43	%	 	 	24	%	 	 	33	%	 	 	40	%	 	 	35	%	 	 	0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	ECONOMIC INDICATORS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Building Permits — Metro Phoenix (b)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
96	 	Single-family	 	 	7,682	 	 	 	9,666	 	 	 	8,689	 	 	 	8,275	 	 	 	34,312	 	 	 	1,447	 	
97	 	Multi-family	 	 	1,249	 	 	 	2,005	 	 	 	2,662	 	 	 	1,158	 	 	 	7,074	 	 	 	(1,930	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
98	 	Total	 	 	8,931	 	 	 	11,671	 	 	 	11,351	 	 	 	9,433	 	 	 	41,386	 	 	 	(483	)	

 	 	Arizona Job Growth (c)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
99	 	Payroll job growth (% over prior year)	 	 	(0.8	)%	 	 	(0.2	)%	 	 	(0.1	)%	 	 	1.1	%	 	 	0.0	%	 	 	(1.0	)%	
100	 	Unemployment rate (%, seasonally adjusted)	 	 	6.3	%	 	 	6.2	%	 	 	6.1	%	 	 	6.0	%	 	 	6.2	%	 	 	1.5	%	

Sources :	
 		
(a)	 	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.	
 		
(b)	 	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business	
 		
(c)	 	Arizona Department of Economic Security	
 	 	 	
See Glossary of Terms.	 	Page 31 of 31	

 

LAST UPDATED: 10/27/05
Exhibit 99.7
Pinnacle West Capital Corporation
Earnings Variance Explanations
for the Periods Ended September 30, 2005 and 2004
     This discussion explains the changes in our consolidated earnings for the three-month and nine-month periods ended September 30, 2005 and 2004. Condensed Consolidated Statements of Income for the three months and nine months ended September 30, 2005 and 2004 follow this discussion. We will file our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005 on or before November 9, 2005. We suggest that this discussion be read in connection with the Pinnacle West Capital Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and the Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2005 and June 30, 2005. Additional operating and financial statistics and a glossary of terms are available on our website (www.pinnaclewest.com).
EARNINGS CONTRIBUTION BY BUSINESS SEGMENT
     We have three principal business segments (determined by products, services and the regulatory environment):

 	•	 	our regulated electricity segment, which consists of traditional regulated retail and wholesale electricity businesses (primarily electric service to Native Load customers) and related activities and includes electricity generation, transmission and distribution;	
 		
 	•	 	our marketing and trading segment, which consists of our competitive energy business activities, including wholesale marketing and trading and APS Energy Services’ commodity-related energy services; and	
 		
 	•	 	our real estate segment, which consists of SunCor’s real estate development and investment activities.	

 

     The following table summarizes net income for the three months and nine months ended September 30, 2005 and 2004 (dollars in millions):
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2005	 	 	2004	 	 	2005	 	 	2004	 	
Regulated electricity	 	$	70	 	 	$	94	 	 	$	152	 	 	$	152	 	
Marketing and trading	 	 	7	 	 	 	4	 	 	 	18	 	 	 	22	 	
Real estate	 	 	7	 	 	 	4	 	 	 	26	 	 	 	10	 	
Other (a)	 	 	1	 	 	 	2	 	 	 	3	 	 	 	25	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	 	 	85	 	 	 	104	 	 	 	199	 	 	 	209	 	
Discontinued operations — net of tax:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing and trading (b)	 	 	1	 	 	 	—	 	 	 	(64	)	 	 	(3	)	
Real estate (c)	 	 	14	 	 	 	1	 	 	 	16	 	 	 	2	 	
Other (d)	 	 	4	 	 	 	—	 	 	 	4	 	 	 	1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	104	 	 	$	105	 	 	$	155	 	 	$	209	 	

			
(a)	 	The nine months ended September 30, 2004 includes a $21 million (after-tax) gain related to the sale of a limited partnership interest in the Phoenix Suns.	
 		
(b)	 	See “Pending Sale of Silverhawk” below.	
 		
(c)	 	Primarily relates to the sale of commercial properties.	
 		
(d)	 	Primarily relates to additional gain from the sale of NAC.	
General
     Throughout the following explanations of our results of operations, we refer to “gross margin.” With respect to our regulated electricity segment and our marketing and trading segment, gross margin refers to electric operating revenues less purchased power and fuel costs. “Gross margin” is a “non-GAAP financial measure,” as defined in accordance with SEC rules. Exhibit 99.10 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 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 our business segments. We believe that investors benefit from having access to the same financial measures that our management uses. In addition, we have reclassified certain prior-period amounts to conform to our current-period presentation.
Pending Sale of Silverhawk
     In June 2005, we entered into an agreement to sell our 75% interest in Silverhawk to Nevada Power Company. The Nevada Public Utilities Commission approved the sale in September 2005. Closing of the sale is subject to additional regulatory approvals, including approval by the FERC and clearance by the Federal Trade Commission, which are expected to be received in the fourth quarter of 2005. As a result of this pending sale, we recorded an
2

 

after-tax loss from discontinued operations of approximately $55 million in the second quarter of 2005. The marketing and trading segment discontinued operations amounts in the chart above also include the revenues and expenses related to the operations of Silverhawk.
Deferred Fuel and Purchased Power Costs
     APS’ retail rate settlement became effective April 1, 2005. As part of the settlement, the ACC approved a 4.2% annual retail rate increase and a power supply adjustor (“PSA”) that provides mechanisms for adjusting rates to reflect variations in fuel and purchased power costs. In accordance with the PSA, APS defers for future rate recovery 90% of the difference between actual fuel and purchased power costs and the amount for such costs currently included in base rates. Actual fuel and purchased power costs are higher than prior periods primarily due to higher fuel prices. The current base rate for fuel and purchased power costs is based on 2003 price levels and spot prices for natural gas and wholesale power have increased over 25% since then. Fuel costs were also higher because all of our latest generation plant additions needed to serve customer growth are higher-cost natural gas fired plants. Finally, fuel and purchased power costs were higher because plant outage days were higher in the three-months and nine-months ended September 30, 2005 compared to the prior year periods. The amount of APS’ pretax PSA deferrals at September 30, 2005 was $143 million, including $80 million of PSA deferrals that are the subject of a pending surcharge application before the ACC. Although APS defers actual fuel and purchased power costs on a current basis, APS’ recovery of the deferrals from its ratepayers is subject to annual PSA adjustments and ACC approval of periodic surcharge applications.
Operating Results — Three-month period ended September 30, 2005 compared with three-month period ended September 30, 2004
     Our consolidated net income for the three months ended September 30, 2005 was $104 million compared with $105 million for the prior-year period. The current quarter net income included $19 million (after-tax) from discontinued operations, which is primarily related to sales of commercial properties at SunCor. Income from continuing operations decreased $19 million in the period-to-period comparison, reflecting the following changes in earnings by segment:

 	•	 	Regulated Electricity Segment — Income from continuing operations decreased approximately $24 million primarily due to the regulatory disallowance of plant costs in accordance with the retail rate settlement. This negative factor was partially offset by a retail price increase effective April 1, 2005; PSA deferrals, net of higher fuel and purchased power costs; higher retail sales volumes due to customer growth; effects of weather on retail sales; and lower depreciation due to lower depreciation rates.	
 		
 	•	 	Marketing and Trading Segment — Income from continuing operations increased approximately $3 million primarily due to higher mark-to-market gains on contracts for future delivery resulting from higher forward prices for wholesale electricity.	

3

 

 	•	 	Real Estate Segment — Income from continuing operations increased approximately $3 million primarily due to increased parcel and commercial property sales.	
4

 

Additional details on the major factors that increased (decreased) net income are contained in the following table (dollars in millions).
 	 	 	 	 	 	 	 	 	
 	 	Increase (Decrease)	 	
 	 	Pretax	 	 	After Tax	 	
Regulated electricity segment gross margin:	 	 	 	 	 	 	 	 	
Retail price increase effective April 1, 2005	 	$	27	 	 	$	16	 	
PSA deferrals, net of higher fuel and purchased power costs	 	 	22	 	 	 	13	 	
Higher retail sales volumes due to customer growth, excluding weather effects	 	 	21	 	 	 	13	 	
Effects of weather on retail sales	 	 	16	 	 	 	10	 	
Miscellaneous items, net	 	 	(5	)	 	 	(3	)	
 	 	 	 	 	 	 	
Net increase in regulated electricity segment gross margin	 	 	81	 	 	 	49	 	
 	 	 	 	 	 	 	
Marketing and trading segment gross margin:	 	 	 	 	 	 	 	 	
Higher mark-to-market gains on contracts for future delivery due to higher forward prices for wholesale electricity	 	 	9	 	 	 	5	 	
Miscellaneous items, net	 	 	(4	)	 	 	(2	)	
 	 	 	 	 	 	 	
Net increase in marketing and trading segment gross margin	 	 	5	 	 	 	3	 	
 	 	 	 	 	 	 	
Net increase in gross margin for regulated electricity and marketing and trading segments	 	 	86	 	 	 	52	 	
Regulatory disallowance of plant costs, in accordance with the	 	 	 	 	 	 	 	 	
APS retail rate settlement	 	 	(143	)	 	 	(87	)	
Higher real estate segment contribution primarily related to increased parcel and commercial property sales	 	 	5	 	 	 	3	 	
Higher other income primarily due to increased interest income	 	 	6	 	 	 	4	 	
Lower depreciation and amortization due to lower depreciation rates partially offset by higher depreciable assets	 	 	6	 	 	 	4	 	
Miscellaneous items, net	 	 	1	 	 	 	5	 	
 	 	 	 	 	 	 	
Net decrease in income from continuing operations	 	$	(39	)	 	 	(19	)	
 	 	 	 	 	 	 		
Discontinued operations primarily related to real estate asset sales	 	 	 	 	 	 	18	 	
 	 	 	 	 	 	 	 	
Net decrease in net income	 	 	 	 	 	$	(1	)	
 	 	 	 	 	 	 	 	
Regulated Electricity Segment Revenues
     Regulated electricity segment revenues were $82 million higher for the three months ended September 30, 2005 compared with the prior-year period primarily as a result of:

 	•	 	a $29 million increase in retail revenues related to customer growth, excluding weather effects;	
 		
 	•	 	a $27 million increase in retail revenues due to a price increase effective April 1, 2005;	
 		
 	•	 	a $21 million increase due to the effects of weather on retail sales;	

5

 

 	•	 	an $8 million increase in Off-System Sales primarily due to sales previously reported in the marketing and trading segment classified as of April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate settlement; and	
 		
 	•	 	a $3 million decrease due to miscellaneous factors.	
Marketing and Trading Segment Revenues
     Marketing and trading segment revenues were $16 million higher for the three months ended September 30, 2005 compared with the prior-year period primarily as a result of:

 	•	 	a $9 million increase in mark-to-market gains on forward contracts resulting from higher prices for wholesale electricity;	
 		
 	•	 	a $7 million increase from higher prices for competitive retail sales in California;	
 		
 	•	 	a $6 million increase in energy trading revenues on realized sales of electricity primarily due to higher delivered electricity prices; and	
 		
 	•	 	a $6 million decrease from generation sales other than Native Load due to lower sales volumes and the elimination of sales previously reported in the marketing and trading segment classified as of April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate settlement.	
Real Estate Revenues
     Real estate revenues were $6 million higher for the three months ended September 30, 2005 compared with the prior-year period primarily due to increased parcel sales at SunCor.
Operating Results — Nine-month period ended September 30, 2005 compared with nine-month period ended September 30, 2004
     Our consolidated net income for the nine months ended September 30, 2005 was $155 million compared with $209 million for the prior-year period. The current year period net income included a loss from discontinued operations of $44 million (after-tax), which is primarily related to the pending sale and revenue and expenses related to Silverhawk (see discussion above), partially offset by sales of commercial properties at SunCor. Income from continuing operations decreased $10 million in the period-to-period comparison, reflecting the following changes in earnings by segment:

 	•	 	Regulated Electricity Segment — Income from continuing operations remained the same as the prior year period. The current period includes the regulatory disallowance of plant costs in accordance with the APS retail rate settlement; higher operations and maintenance costs primarily related to	
6

 

 	 	 	customer service, generation and benefit costs; and higher property taxes due to increased plant in service. These negative factors were offset by a retail price increase effective April 1, 2005; higher retail sales volumes due to customer growth; PSA deferrals, net of higher fuel and purchased power costs; the absence of regulatory asset amortization; effects of weather on retail sales and lower depreciation due to lower depreciation rates.	
 		
 	•	 	Marketing and Trading Segment — Income from continuing operations decreased approximately $4 million primarily due to lower realized margins on wholesale sales and competitive retail sales in California, partially offset by higher mark-to-market gains on contracts for future delivery due to higher forward prices for wholesale electricity.	
 		
 	•	 	Real Estate Segment — Income from continuing operations increased approximately $16 million primarily due to increased parcel sales.	
 		
 	•	 	Other Segment — Income from continuing operations decreased approximately $22 million primarily due to an after-tax gain related to the sale of a limited partnership interest in the Phoenix Suns recorded in the prior-year period.	
7

 

Additional details on the major factors that increased (decreased) net income are contained in the following table (dollars in millions).
 	 	 	 	 	 	 	 	 	
 	 	Increase (Decrease)	 	
 	 	Pretax	 	 	After Tax	 	
Regulated electricity segment gross margin:	 	 	 	 	 	 	 	 	
Retail price increase effective April 1, 2005	 	$	54	 	 	$	32	 	
Higher retail sales volumes due to customer growth, excluding weather effects	 	 	41	 	 	 	25	 	
PSA deferrals, net of higher fuel and purchased power costs	 	 	39	 	 	 	23	 	
Effects of weather on retail sales	 	 	14	 	 	 	8	 	
Miscellaneous items, net	 	 	(4	)	 	 	(2	)	
 	 	 	 	 	 	 	
Net increase in regulated electricity segment gross margin	 	 	144	 	 	 	86	 	
 	 	 	 	 	 	 	
Marketing and trading segment gross margin:	 	 	 	 	 	 	 	 	
Higher mark-to-market gains on contracts for future delivery due to higher forward prices for wholesale electricity	 	 	9	 	 	 	5	 	
Lower unit margins on competitive retail sales in California	 	 	(7	)	 	 	(4	)	
Lower realized margins on wholesale sales primarily due to lower sales volumes and higher prices	 	 	(7	)	 	 	(4	)	
Miscellaneous items, net	 	 	(1	)	 	 	—	 	
 	 	 	 	 	 	 	
Net decrease in marketing and trading segment gross margin	 	 	(6	)	 	 	(3	)	
 	 	 	 	 	 	 	
Net increase in gross margin for regulated electricity and marketing and trading segments	 	 	138	 	 	 	83	 	
Regulatory disallowance of plant costs, in accordance with the APS retail rate settlement	 	 	(143	)	 	 	(87	)	
Higher real estate segment contribution primarily related to increased parcel sales	 	 	27	 	 	 	16	 	
Lower other income primarily due to sale of limited partnership interest in Phoenix Suns recorded in the prior-year period partially offset by higher interest income	 	 	(32	)	 	 	(19	)	
Operations and maintenance increases primarily due to:	 	 	 	 	 	 	 	 	
Customer service costs, including planned maintenance and demand side management costs	 	 	(17	)	 	 	(10	)	
Generation costs, including planned maintenance	 	 	(14	)	 	 	(8	)	
Benefit costs	 	 	(2	)	 	 	(1	)	
Depreciation and amortization decreases primarily due to:	 	 	 	 	 	 	 	 	
Absence of regulatory asset amortization	 	 	20	 	 	 	12	 	
Lower depreciation rates partially offset by higher depreciable assets	 	 	13	 	 	 	8	 	
Higher property taxes primarily due to increased plant in service	 	 	(10	)	 	 	(6	)	
Miscellaneous items, net	 	 	5	 	 	 	2	 	
 	 	 	 	 	 	 	
Net decrease in income from continuing operations	 	$	(15	)	 	 	(10	)	
 	 	 	 	 	 	 	 	
Discontinued operations primarily related to the pending sale of Silverhawk (see discussion above) and real estate assets sales	 	 	 	 	 	 	(44	)	
 	 	 	 	 	 	 	 	
Net decrease in net income	 	 	 	 	 	$	(54	)	
 	 	 	 	 	 	 	 	
8

 

Regulated Electricity Segment Revenues
     Regulated electricity segment revenues were $143 million higher for the nine months ended September 30, 2005 compared with the prior-year period primarily as a result of:

 	•	 	a $56 million increase in retail revenues related to customer growth, excluding weather effects;	
 		
 	•	 	a $54 million increase in retail revenues due to a price increase effective April 1, 2005;	
 		
 	•	 	a $20 million increase in Off-System Sales primarily due to sales previously reported in the marketing and trading segment classified as of April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate settlement;	
 		
 	•	 	a $12 million increase in retail revenues related to weather; and	
 		
 	•	 	a $1 million increase due to miscellaneous factors.	
Marketing and Trading Segment Revenues
     Marketing and trading segment revenues were $23 million lower for the nine months ended September 30, 2005 compared with the prior-year period primarily as a result of:

 	•	 	a $25 million decrease from generation sales other than Native Load due to lower sales volumes and the elimination of sales previously reported in the marketing and trading segment classified as of April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate settlement;	
 		
 	•	 	a $10 million increase in mark-to-market gains on forward contracts resulting from higher prices for wholesale electricity;	
 		
 	•	 	a $6 million decrease from lower volumes on competitive retail sales in California; and	
 		
 	•	 	a $2 million decrease in energy trading revenues on realized sales of electricity primarily due to lower volumes.	
Real Estate Revenues
     Real estate revenues were $46 million higher for the nine months ended September 30, 2005 compared with the prior-year period primarily due to increased parcel sales at SunCor.
9

 

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	THREE MONTHS ENDED	 	 	 	 	 	 	 	 	
 	 	SEPTEMBER 30,	 	 	Increase (Decrease)	 	 	 	 	 	
 	 	2005	 	 	2004	 	 	Amount	 	 	Percent	 	 	 	 	 	
Operating Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment	 	$	753,428	 	 	$	670,559	 	 	$	82,869	 	 	 	12.4	%	 	B	 	
Marketing and trading segment	 	 	107,031	 	 	 	91,267	 	 	 	15,764	 	 	 	17.3	%	 	B	 	
Real estate segment	 	 	78,755	 	 	 	72,754	 	 	 	6,001	 	 	 	8.2	%	 	B	 	
Other revenues	 	 	16,369	 	 	 	12,585	 	 	 	3,784	 	 	 	30.1	%	 	B	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	955,583	 	 	 	847,165	 	 	 	108,418	 	 	 	12.8	%	 	B	 	

Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment purchased power and fuel	 	 	203,519	 	 	 	202,156	 	 	 	1,363	 	 	 	0.7	%	 	W	 	
Marketing and trading segment purchased power and fuel	 	 	86,945	 	 	 	76,684	 	 	 	10,261	 	 	 	13.4	%	 	W	 	
Operations and maintenance	 	 	158,940	 	 	 	158,607	 	 	 	333	 	 	 	0.2	%	 	W	 	
Real estate segment operations	 	 	65,880	 	 	 	66,414	 	 	 	(534	)	 	 	0.8	%	 	B	 	
Depreciation and amortization	 	 	87,123	 	 	 	93,360	 	 	 	(6,237	)	 	 	6.7	%	 	B	 	
Taxes other than income taxes	 	 	34,325	 	 	 	31,020	 	 	 	3,305	 	 	 	10.7	%	 	W	 	
Other expenses	 	 	13,521	 	 	 	9,568	 	 	 	3,953	 	 	 	41.3	%	 	W	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	100.0	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	793,470	 	 	 	637,809	 	 	 	155,661	 	 	 	24.4	%	 	W	 	

Operating Income	 	 	162,113	 	 	 	209,356	 	 	 	(47,243	)	 	 	22.6	%	 	W	 	

Other	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for equity funds used during construction	 	 	2,852	 	 	 	(1,327	)	 	 	4,179	 	 	 	314.9	%	 	B	 	
Other income	 	 	8,694	 	 	 	2,786	 	 	 	5,908	 	 	 	212.1	%	 	B	 	
Other expense	 	 	(4,915	)	 	 	(5,094	)	 	 	179	 	 	 	3.5	%	 	B	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	6,631	 	 	 	(3,635	)	 	 	10,266	 	 	 	282.4	%	 	B	 	

Interest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest charges	 	 	47,046	 	 	 	46,715	 	 	 	331	 	 	 	0.7	%	 	W	 	
Capitalized interest	 	 	(3,301	)	 	 	(4,506	)	 	 	1,205	 	 	 	26.7	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	43,745	 	 	 	42,209	 	 	 	1,536	 	 	 	3.6	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income From Continuing Operations Before Income Taxes	 	 	124,999	 	 	 	163,512	 	 	 	(38,513	)	 	 	23.6	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	40,305	 	 	 	59,183	 	 	 	(18,878	)	 	 	31.9	%	 	B	 	

Income From Continuing Operations	 	 	84,694	 	 	 	104,329	 	 	 	(19,635	)	 	 	18.8	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income From Discontinued Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net of Income Taxes	 	 	19,043	 	 	 	1,071	 	 	 	17,972	 	 	 	1678.1	%	 	B	 	

Net Income	 	$	103,737	 	 	$	105,400	 	 	$	(1,663	)	 	 	1.6	%	 	W	 	

Weighted-Average Common Shares Outstanding — Basic	 	 	98,697	 	 	 	91,357	 	 	 	7,340	 	 	 	8.0	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-Average Common Shares Outstanding — Diluted	 	 	98,816	 	 	 	91,491	 	 	 	7,325	 	 	 	8.0	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings Per Weighted-Average Common Share Outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income From Continuing Operations — Basic	 	$	0.86	 	 	$	1.14	 	 	$	(0.28	)	 	 	24.6	%	 	W	 	
Net Income — Basic	 	$	1.05	 	 	$	1.15	 	 	$	(0.10	)	 	 	8.7	%	 	W	 	
Income From Continuing Operations — Diluted	 	$	0.86	 	 	$	1.14	 	 	$	(0.28	)	 	 	24.6	%	 	W	 	
Net Income — Diluted	 	$	1.05	 	 	$	1.15	 	 	$	(0.10	)	 	 	8.7	%	 	W	 	
Certain prior-year amounts have been reclassified to conform to the 2005 presentation.
     B — Better
     W — Worse

 

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	NINE MONTHS ENDED	 	 	 	 	 	 	 	 	
 	 	SEPTEMBER 30,	 	 	Increase (Decrease)	 	 	 	 	 	
 	 	2005	 	 	2004	 	 	Amount	 	 	Percent	 	 	 	 	 	
Operating Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment	 	$	1,749,110	 	 	$	1,605,952	 	 	$	143,158	 	 	 	8.9	%	 	B	 	
Marketing and trading segment	 	 	267,460	 	 	 	290,107	 	 	 	(22,647	)	 	 	7.8	%	 	W	 	
Real estate segment	 	 	232,950	 	 	 	186,762	 	 	 	46,188	 	 	 	24.7	%	 	B	 	
Other revenues	 	 	46,763	 	 	 	32,904	 	 	 	13,859	 	 	 	42.1	%	 	B	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	2,296,283	 	 	 	2,115,725	 	 	 	180,558	 	 	 	8.5	%	 	B	 	

Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment purchased power and fuel	 	 	442,532	 	 	 	442,409	 	 	 	123	 	 	 	0.0	%	 	W	 	
Marketing and trading segment purchased power and fuel	 	 	215,347	 	 	 	232,516	 	 	 	(17,169	)	 	 	7.4	%	 	B	 	
Operations and maintenance	 	 	467,121	 	 	 	434,588	 	 	 	32,533	 	 	 	7.5	%	 	W	 	
Real estate segment operations	 	 	190,555	 	 	 	175,560	 	 	 	14,995	 	 	 	8.5	%	 	W	 	
Depreciation and amortization	 	 	262,030	 	 	 	294,942	 	 	 	(32,912	)	 	 	11.2	%	 	B	 	
Taxes other than income taxes	 	 	103,528	 	 	 	93,658	 	 	 	9,870	 	 	 	10.5	%	 	W	 	
Other expenses	 	 	39,451	 	 	 	25,893	 	 	 	13,558	 	 	 	52.4	%	 	W	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	100.0	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	1,863,781	 	 	 	1,699,566	 	 	 	164,215	 	 	 	9.7	%	 	W	 	

Operating Income	 	 	432,502	 	 	 	416,159	 	 	 	16,343	 	 	 	3.9	%	 	B	 	

Other	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for equity funds used during construction	 	 	8,407	 	 	 	2,859	 	 	 	5,548	 	 	 	194.1	%	 	B	 	
Other income	 	 	18,019	 	 	 	49,980	 	 	 	(31,961	)	 	 	63.9	%	 	W	 	
Other expense	 	 	(12,985	)	 	 	(14,274	)	 	 	1,289	 	 	 	9.0	%	 	B	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	13,441	 	 	 	38,565	 	 	 	(25,124	)	 	 	65.1	%	 	W	 	

Interest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest charges	 	 	142,820	 	 	 	135,064	 	 	 	7,756	 	 	 	5.7	%	 	W	 	
Capitalized interest	 	 	(10,134	)	 	 	(8,686	)	 	 	(1,448	)	 	 	16.7	%	 	B	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	132,686	 	 	 	126,378	 	 	 	6,308	 	 	 	5.0	%	 	W	 	

Income From Continuing Operations Before Income Taxes	 	 	313,257	 	 	 	328,346	 	 	 	(15,089	)	 	 	4.6	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	113,863	 	 	 	119,476	 	 	 	(5,613	)	 	 	4.7	%	 	B	 	

Income From Continuing Operations	 	 	199,394	 	 	 	208,870	 	 	 	(9,476	)	 	 	4.5	%	 	W	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) From Discontinued Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net of Income Taxes	 	 	(44,474	)	 	 	596	 	 	 	(45,070	)	 	 	7562.1	%	 	W	 	

Net Income	 	$	154,920	 	 	$	209,466	 	 	$	(54,546	)	 	 	26.0	%	 	W	 	

Weighted-Average Common Shares Outstanding — Basic	 	 	95,642	 	 	 	91,322	 	 	 	4,320	 	 	 	4.7	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-Average Common Shares Outstanding — Diluted	 	 	95,755	 	 	 	91,430	 	 	 	4,325	 	 	 	4.7	%	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings Per Weighted-Average Common Share Outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income From Continuing Operations — Basic	 	$	2.08	 	 	$	2.29	 	 	$	(0.21	)	 	 	9.2	%	 	W	 	
Net Income — Basic	 	$	1.62	 	 	$	2.29	 	 	$	(0.67	)	 	 	29.3	%	 	W	 	
Income From Continuing Operations — Diluted	 	$	2.08	 	 	$	2.28	 	 	$	(0.20	)	 	 	8.8	%	 	W	 	
Net Income — Diluted	 	$	1.62	 	 	$	2.29	 	 	$	(0.67	)	 	 	29.3	%	 	W	 	
Certain prior-year amounts have been reclassified to conform to the 2005 presentation.
     B — Better
     W — Worse

 
Exhibit 99.8
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Glossary of Terms
 	 	 	
Amounts Recovered Through Revenues	 	Amounts recovered from retail customers through the power supply adjustor in the current period.	
 	 	 	
Arizona Job Growth	 	Percentage growth over the prior year in total non-farm payroll employment for the state of Arizona, non-seasonally adjusted.	
 	 	 	
Building Permits — Metro Phoenix	 	The number of residential dwellings permitted to be built by authorized agencies in Maricopa County, Arizona. Single-family refers to detached buildings intended to be occupied by one family each. Multi-family permits represent the number of units authorized to be built in condominium, townhouse and apartment complexes.	
 	 	 	
Capacity Factor	 	The ratio of the average operating load of an electric power generating unit for a period of time to the capacity rating of the unit during that period.	
 	 	 	
Change in Mark-To-Market Value of Forward Sales	 	The gross margin related to the change in mark-to-market value in the current period of transactions which have been entered into during the current period or prior periods for which the commodities are scheduled for delivery in a future period.	
 	 	 	
Deferred Fuel and Purchased Power Costs — Current Period	 	Deferrals recorded in the period for recovery or refund to the extent actual retail fuel and purchased power costs vary from the amount included in base retail rates (currently $0.020743 per kWh).	
 	 	 	
Deferred Fuel and Purchased Power Regulatory Asset	 	Balance of accumulated deferrals, net of amounts recovered through revenues, recorded for recovery or refund to the extent actual retail fuel and purchased power costs vary from the amount included in base retail rates (currently $0.020743 per kWh).	
 	 	 	
Degree-Days — Cooling	 	A measure of temperatures designed to indicate the amount of electricity demand for cooling purposes. Cooling degree-days are calculated by summing the difference between each day’s actual average temperature and a base temperature of 65°F for the month. Average temperatures less than the base temperature are ignored.	

 

- 2 - 

 	 	 	
Degree-Days — Heating	 	A measure of temperatures designed to indicate the amount of electricity demand for heating purposes. Heating degree-days are calculated by summing the difference between each day’s actual average temperature and a base temperature of 65°F for the month. Average temperatures greater than the base temperature are ignored.	
 	 	 	
Electricity and Other Commodity Sales, Realized	 	Marketing and trading gross margin related to electricity and other commodities that were delivered in the then-current period.	
 	 	 	
Electricity Spot Prices —Palo Verde — Off-Peak	 	Electricity average daily spot prices at Palo Verde substation during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.	
 	 	 	
Electricity Spot Prices — Palo Verde — On-Peak	 	Electricity average daily spot prices at Palo Verde substation during on-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.	
 	 	 	
Electricity Spot Prices — SP15 — Off-Peak	 	Electricity average daily spot prices at SP15, a region of California substations, during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.	
 	 	 	
Electricity Spot Prices — SP15 — On-Peak	 	Electricity average daily spot prices at SP15, a region of California substations, during on-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.	
 	 	 	
Generation Capacity Out of Service and Replaced for Native Load	 	Total capacity required and economic, yet unavailable for retail customers and traditional wholesale contracts due to scheduled or unscheduled outages. Measured in megawatts per day.	
 	 	 	
Generation Production — Coal	 	Amount of net energy produced by coal-fueled generators. Measured in gigawatt-hours.	

 

- 3 - 

 	 	 	
Generation Production — Gas/Oil/Other	 	Amount of net energy predominately produced by natural gas and oil-fueled generators. A small amount of energy from hydroelectric and solar power plants is also included. Measured in gigawatt-hours.	
 	 	 	
Generation Production — Nuclear	 	Amount of net energy produced by nuclear-fueled generators. Measured in gigawatt-hours.	
 	 	 	
Gigawatt-hour (GWH)	 	A unit of energy equivalent to 1,000 megawatt-hours or 1,000,000 kilowatt-hours.	
 	 	 	
Marketing and Trading Gross Margin — Pretax	 	Revenues from marketing and trading activities (other than retail sales, traditional wholesale sales and retail load hedge management) less the costs of the related commodities, with mark-to-market gains or losses, before income taxes.	
 	 	 	
Mark-To-Market	 	Adjustments to revenues or costs to recognize value of sales and purchase contracts, for which the commodities are scheduled for delivery in a future period, at current forward wholesale prices.	
 	 	 	
Mark-To-Market Reversals on Realized Sales	 	The reversal of the gross margin related to mark-to-market transactions entered into in prior periods for which the commodities were delivered in the current period. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition or earnings recognition, because in accordance with mark-to-market accounting, the margin was already recorded in the prior period. A negative amount shown in this category represents the arithmetic opposite of a gain recognized in the period in which the commodities were delivered; an equal positive amount is reflected in the realized revenue or margin for delivered commodities. A positive amount shown in this category represents the arithmetic opposite of a loss recognized in the period in which the commodities were delivered; an equal negative amount is reflected in the realized revenue or margin for delivered commodities.	
 	 	 	
Megawatt (MW)	 	One million watts.	
 	 	 	
Megawatt-hour (MWh)	 	A unit of energy equivalent to 1,000 kilowatt-hours.	
 	 	 	
Native Load	 	Retail and wholesale sales supplied under traditional cost-based rate regulation.	
 	 	 	
Off-System Sales	 	Sales of electricity from generation owned or contracted by the company that is over and above the amount required to serve retail customers and traditional wholesale contracts.	

 

- 4 - 

 	 	 	
Power Supply Adjustor (“PSA”)	 	Power supply adjustor provides for recovery or refund of variations in actual fuel and purchased power costs compared with the amount included in base retail rates (currently $0.020743 per kWh) subject to certain specified parameters.	
 	 	 	
Purchased Power — Firm Load	 	Power purchased from wholesale market sources used to serve regulated retail demand and traditional wholesale contracts. Measured in gigawatt-hours.	
 	 	 	
Purchased Power — Marketing and Trading	 	Power purchased from wholesale market sources used to serve marketing and trading sales not served by company-owned generation. Measured in gigawatt-hours.	
 	 	 	
Realized and Mark-to-Market Components	 	Marketing and trading gross margin, before income taxes, for off-system sales and for sales and purchases of electricity and other commodities by the company in the wholesale market, summarized by the period of delivery and whether the margin is realized or mark-to-market. Realized margins relate to commodities that have been delivered. Mark-to-market margins relate to commodities that have delivery dates in future periods.	
 	 	 	
Retail Customer Growth	 	Percentage growth over the prior year in the number of retail customers.	
 	 	 	
Retail Electricity Usage	 	Total retail sales for a period divided by the average retail customers for the same period. Measured in kilowatt-hours per average customer.	
 	 	 	
Retail Load Hedge Management	 	Wholesale sales to liquidate electricity purchases originally intended to meet firm load during peak times, which purchases were not needed ultimately for firm load. These sales are made to other electric companies, power marketers, or public entities for the purpose of resale. Measured in gigawatt-hours.	
 	 	 	
Retail Sales	 	Sales of electricity made directly to retail customers or ultimate customers. Residential retail sales are sales to households. Business retail sales include commercial, industrial, irrigation, and streetlighting sales. Measured in gigawatt-hours.	
 	 	 	
System Peak Demand	 	The demand for electricity during the one hour of highest use each month. Measured in megawatts.	
 	 	 	
Traditional Contracts	 	Wholesale sales resulting from unique cost-based, long-term contracts held by the company with various entities for the supply of electricity at agreed-upon prices.	

 

- 5 - 

 	 	 	
Weather Normalized	 	Adjusted to exclude the effects of abnormal weather patterns.	
 	 	 	
Wholesale Sales of Electricity	 	All wholesale sales of electricity not accounted for in sales under traditional contracts or retail load hedge management. These sales are made to other electric companies, power marketers, or public entities for the purpose of resale. Measured in gigawatt-hours.	

 

Exhibit 99.9
CONFIDENTIAL DRAFT 3b, 10/19/2005 1:21 PM

FOR IMMEDIATE RELEASE	 	October 27, 2005	
Media Contact:	 	Alan Bunnell, (602) 250-3376	 	Page 1 of 2	
Analyst Contacts:	 	Rebecca Hickman, (602) 250-5668	 	 	
 	 	Lisa Malagon, (602) 250-5671	 	 	
Web site:	 	www.pinnaclewest.com	 	 	
PINNACLE WEST REPORTS 2005 THIRD QUARTER EARNINGS
Net Income Lower due to Regulatory Disallowance
PHOENIX — Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income for the quarter ended September 30, 2005, of $103.7 million, or $1.05 per diluted share of common stock. This result compares with consolidated net income of $105.4 million, or $1.15 per diluted share, for the same period in 2004.
On-going consolidated earnings in the third quarter of 2005 were $186.4 million, or $1.89 per share, compared with $105.7 million, or $1.16 per share in the comparable 2004 quarter. On-going earnings for the 2005 third quarter exclude a regulatory disallowance of $87 million after income taxes, or $0.88 per share, resulting from the Company’s retail rate settlement approved by the Arizona Corporation Commission earlier this year and $4.3 million, or $0.04 per share, of income from discontinued operations related to the sales of the Company’s interests in NAC International and the Silverhawk Power Station. On-going earnings for the 2004 third quarter exclude a net loss from discontinued operations of $0.3 million, or $0.01 per share, related to Silverhawk and NAC.
“While our results reflect the rate decision from earlier this year, dramatic increases in natural gas prices and the state’s growing demand for electricity will require continuing cooperation from our Arizona regulators,” said Chairman Bill Post. “The ability to recover our costs — including higher fuel and purchased power — will be essential for the company to maintain the highest levels of reliability and to continue investing in critical infrastructure for Arizona’s economic growth.”
The quarter-to-quarter on-going results were favorably impacted by higher retail electricity revenues resulting from the Company’s first price increase in 14 years; higher retail sales volumes due to customer growth of 4.5 percent; deferred fuel and purchased power costs; improved results from the Company’s real estate operations; and warmer weather.
The Company expects earnings for 2005 to be within a reasonable range of $3.00 per share. This estimate does not reflect the effects of the regulatory disallowance or the Silverhawk sale.

 

			
Pinnacle West 2005 Third Quarter Earnings	 	October 27, 2005	
 	 	Page 2 of 2	
For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/financials .
Conference Call
Pinnacle West invites interested parties to listen to the live web cast of management’s conference call to discuss the Company’s 2005 third quarter earnings and recent developments at 11 a.m. (ET) today, October 27, 2005. 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 reservation number 1347027. A replay of the call also will be available until 11:55 p.m. (ET), Wednesday, November 2, 2005, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and the same reservation number.
Pinnacle West is a Phoenix-based company with consolidated assets of about $12 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. It also develops residential, commercial, and industrial real estate projects.
-30-
This press release contains a forward-looking statement about Pinnacle West’s 2005 earnings outlook. Pinnacle West does not assume any obligation to update this statement or to make any further statements on this issue, except as required by applicable law. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on this statement. 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. In addition to the “Risk Factors” described in Exhibit 99.1 to Pinnacle West’s Report on Form 10-Q for the fiscal quarter ended June 30, 2005, these factors include, but are not limited to: state and federal regulatory and legislative decisions and actions, including by the Arizona Corporation Commission and the Federal Energy Regulatory Commission; the ongoing restructuring of the electric industry, including the introduction of retail electric competition in Arizona and decisions impacting wholesale competition; the outcome of regulatory, legislative and judicial proceedings relating to the restructuring; the timely recovery of Power Supply Adjustor deferrals; market prices for electricity and natural gas; power plant performance and outages; transmission outages and constraints; weather variations affecting local and regional customer energy usage; customer growth and energy usage; regional economic and market conditions, including the results of litigation and other proceedings resulting from the California energy situation; volatile purchased power and fuel costs and the completion of generation and transmission construction in the region, which could affect customer growth and the cost of power supplies; the cost of debt and equity capital and access to capital markets; the uncertainty that current credit ratings will remain in effect for any given period of time; our ability to compete successfully outside traditional regulated markets (including the wholesale market); the performance of our marketing and trading activities due to volatile market liquidity and 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); changes in accounting principles generally accepted in the United States of America and the interpretation of those principles; the performance of the stock market and the changing interest rate environment, which affect the amount of required contributions to Pinnacle West’s pension plan and APS’ nuclear decommissioning trust funds, as well as the reported costs of providing pension and other postretirement benefits; technological developments in the electric industry; the strength of the real estate market 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.

 

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
( in thousands, except per share amounts)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	THREE MONTHS ENDED	 	 	NINE MONTHS ENDED	 	
 	 	SEPTEMBER 30,	 	 	SEPTEMBER 30,	 	
 	 	2005	 	 	2004	 	 	2005	 	 	2004	 	
Operating Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment	 	$	753,428	 	 	$	670,559	 	 	$	1,749,110	 	 	$	1,605,952	 	
Marketing and trading segment	 	 	107,031	 	 	 	91,267	 	 	 	267,460	 	 	 	290,107	 	
Real estate segment	 	 	78,755	 	 	 	72,754	 	 	 	232,950	 	 	 	186,762	 	
Other revenues	 	 	16,369	 	 	 	12,585	 	 	 	46,763	 	 	 	32,904	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	955,583	 	 	 	847,165	 	 	 	2,296,283	 	 	 	2,115,725	 	

Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulated electricity segment purchased power and fuel	 	 	203,519	 	 	 	202,156	 	 	 	442,532	 	 	 	442,409	 	
Marketing and trading segment purchased power and fuel	 	 	86,945	 	 	 	76,684	 	 	 	215,347	 	 	 	232,516	 	
Operations and maintenance	 	 	158,940	 	 	 	158,607	 	 	 	467,121	 	 	 	434,588	 	
Real estate segment operations	 	 	65,880	 	 	 	66,414	 	 	 	190,555	 	 	 	175,560	 	
Depreciation and amortization	 	 	87,123	 	 	 	93,360	 	 	 	262,030	 	 	 	294,942	 	
Taxes other than income taxes	 	 	34,325	 	 	 	31,020	 	 	 	103,528	 	 	 	93,658	 	
Other expenses	 	 	13,521	 	 	 	9,568	 	 	 	39,451	 	 	 	25,893	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	793,470	 	 	 	637,809	 	 	 	1,863,781	 	 	 	1,699,566	 	

Operating Income	 	 	162,113	 	 	 	209,356	 	 	 	432,502	 	 	 	416,159	 	

Other	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for equity funds used during construction	 	 	2,852	 	 	 	(1,327	)	 	 	8,407	 	 	 	2,859	 	
Other income	 	 	8,694	 	 	 	2,786	 	 	 	18,019	 	 	 	49,980	 	
Other expense	 	 	(4,915	)	 	 	(5,094	)	 	 	(12,985	)	 	 	(14,274	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	6,631	 	 	 	(3,635	)	 	 	13,441	 	 	 	38,565	 	

Interest Expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest charges	 	 	47,046	 	 	 	46,715	 	 	 	142,820	 	 	 	135,064	 	
Capitalized interest	 	 	(3,301	)	 	 	(4,506	)	 	 	(10,134	)	 	 	(8,686	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	43,745	 	 	 	42,209	 	 	 	132,686	 	 	 	126,378	 	

Income From Continuing Operations Before Income Taxes	 	 	124,999	 	 	 	163,512	 	 	 	313,257	 	 	 	328,346	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	40,305	 	 	 	59,183	 	 	 	113,863	 	 	 	119,476	 	

Income From Continuing Operations	 	 	84,694	 	 	 	104,329	 	 	 	199,394	 	 	 	208,870	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (Loss) From Discontinued Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net of Income Taxes	 	 	19,043	 	 	 	1,071	 	 	 	(44,474	)	 	 	596	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income	 	$	103,737	 	 	$	105,400	 	 	$	154,920	 	 	$	209,466	 	

Weighted-Average Common Shares Outstanding — Basic	 	 	98,697	 	 	 	91,357	 	 	 	95,642	 	 	 	91,322	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-Average Common Shares Outstanding — Diluted	 	 	98,816	 	 	 	91,491	 	 	 	95,755	 	 	 	91,430	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings Per Weighted-Average Common Share Outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income From Continuing Operations — Basic	 	$	0.86	 	 	$	1.14	 	 	$	2.08	 	 	$	2.29	 	
Net Income — Basic	 	$	1.05	 	 	$	1.15	 	 	$	1.62	 	 	$	2.29	 	
Income From Continuing Operations — Diluted	 	$	0.86	 	 	$	1.14	 	 	$	2.08	 	 	$	2.28	 	
Net Income — Diluted	 	$	1.05	 	 	$	1.15	 	 	$	1.62	 	 	$	2.29	 	
Certain prior-year amounts have been reclassified to conform to the 2005 presentation.

 
PINNACLE WEST CAPITAL CORPORATION
NON-GAAP FINANCIAL MEASURE RECONCILIATION — NET INCOME (GAAP MEASURE) TO ON-GOING EARNINGS (NON-GAAP FINANCIAL MEASURE)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Three Months Ended	 	
 	 	September 30, 2005	 	 	September 30, 2004	 	
 	 	Dollars in	 	 	Diluted	 	 	Dollars in	 	 	Diluted	 	
 	 	Millions	 	 	EPS	 	 	Millions	 	 	EPS	 	
Net Income	 	$	103.7	 	 	$	1.05	 	 	$	105.4	 	 	$	1.15	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Regulatory disallowance	 	$	87.0	 	 	 	0.88	 	 	$	—	 	 	 	—	 	
(Income) loss from discontinued operations — Silverhawk Power Station operations	 	$	(0.6	)	 	 	—	 	 	$	0.4	 	 	 	0.01	 	
Income from discontinued operations — NAC International	 	$	(3.7	)	 	 	(0.04	)	 	$	(0.1	)	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
On-going Earnings	 	$	186.4	 	 	$	1.89	 	 	$	105.7	 	 	$	1.16	 	

  

Exhibit 99.10
PINNACLE WEST CAPITAL CORPORATION
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME (GAAP MEASURE) TO GROSS MARGIN
(NON-GAAP FINANCIAL MEASURE)
(in thousands)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	THREE MONTHS ENDED	 	 	Pretax	 	 	After Tax	 	
 	 	SEPTEMBER 30,	 	 	Increase	 	 	Increase	 	
 	 	2005	 	 	2004	 	 	(Decrease)	 	 	(Decrease)	 	
RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Income (closest GAAP measure)	 	$	162,113	 	 	$	209,356	 	 	$	(47,243	)	 	$	(28,710	)	
Plus:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operations and maintenance	 	 	158,940	 	 	 	158,607	 	 	 	333	 	 	 	202	 	
Real estate segment operations	 	 	65,880	 	 	 	66,414	 	 	 	(534	)	 	 	(325	)	
Depreciation and amortization	 	 	87,123	 	 	 	93,360	 	 	 	(6,237	)	 	 	(3,790	)	
Taxes other than income taxes	 	 	34,325	 	 	 	31,020	 	 	 	3,305	 	 	 	2,008	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	87,033	 	
Other expenses	 	 	13,521	 	 	 	9,568	 	 	 	3,953	 	 	 	2,402	 	
Marketing and trading segment purchased power and fuel	 	 	86,945	 	 	 	76,684	 	 	 	10,261	 	 	 	6,236	 	
Less:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate segment revenues	 	 	78,755	 	 	 	72,754	 	 	 	6,001	 	 	 	3,647	 	
Other revenues	 	 	16,369	 	 	 	12,585	 	 	 	3,784	 	 	 	2,300	 	
Marketing and trading segment revenues	 	 	107,031	 	 	 	91,267	 	 	 	15,764	 	 	 	9,580	 	

Regulated electricity segment gross margin	 	$	549,909	 	 	$	468,403	 	 	$	81,506	 	 	$	49,529	 	

RECONCILIATION OF MARKETING AND TRADING SEGMENT GROSS MARGIN	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Income (closest GAAP measure)	 	$	162,113	 	 	$	209,356	 	 	$	(47,243	)	 	$	(28,710	)	
Plus:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operations and maintenance	 	 	158,940	 	 	 	158,607	 	 	 	333	 	 	 	202	 	
Real estate segment operations	 	 	65,880	 	 	 	66,414	 	 	 	(534	)	 	 	(325	)	
Depreciation and amortization	 	 	87,123	 	 	 	93,360	 	 	 	(6,237	)	 	 	(3,790	)	
Taxes other than income taxes	 	 	34,325	 	 	 	31,020	 	 	 	3,305	 	 	 	2,008	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	87,033	 	
Other expenses	 	 	13,521	 	 	 	9,568	 	 	 	3,953	 	 	 	2,402	 	
Regulated electricity segment purchased power and fuel	 	 	203,519	 	 	 	202,156	 	 	 	1,363	 	 	 	828	 	
Less:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate segment revenues	 	 	78,755	 	 	 	72,754	 	 	 	6,001	 	 	 	3,647	 	
Other revenues	 	 	16,369	 	 	 	12,585	 	 	 	3,784	 	 	 	2,300	 	
Regulated electricity segment revenues	 	 	753,428	 	 	 	670,559	 	 	 	82,869	 	 	 	50,359	 	

Marketing and trading segment gross margin	 	$	20,086	 	 	$	14,583	 	 	$	5,503	 	 	$	3,342	 	

 

PINNACLE WEST CAPITAL CORPORATION
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME (GAAP MEASURE) TO GROSS MARGIN (NON-GAAP FINANCIAL MEASURE)
(in thousands)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	NINE MONTHS ENDED	 	 	Pretax	 	 	After Tax	 	
 	 	SEPTEMBER 30,	 	 	Increase	 	 	Increase	 	
 	 	2005	 	 	2004	 	 	(Decrease)	 	 	(Decrease)	 	
RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Income (closest GAAP measure)	 	$	432,502	 	 	$	416,159	 	 	$	16,343	 	 	$	9,932	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operations and maintenance	 	 	467,121	 	 	 	434,588	 	 	 	32,533	 	 	 	19,770	 	
Real estate segment operations	 	 	190,555	 	 	 	175,560	 	 	 	14,995	 	 	 	9,112	 	
Depreciation and amortization	 	 	262,030	 	 	 	294,942	 	 	 	(32,912	)	 	 	(20,001	)	
Taxes other than income taxes	 	 	103,528	 	 	 	93,658	 	 	 	9,870	 	 	 	5,998	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	87,033	 	
Other expenses	 	 	39,451	 	 	 	25,893	 	 	 	13,558	 	 	 	8,239	 	
Marketing and trading segment purchased power and fuel	 	 	215,347	 	 	 	232,516	 	 	 	(17,169	)	 	 	(10,434	)	
Less:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate segment revenues	 	 	232,950	 	 	 	186,762	 	 	 	46,188	 	 	 	28,068	 	
Other revenues	 	 	46,763	 	 	 	32,904	 	 	 	13,859	 	 	 	8,422	 	
Marketing and trading segment revenues	 	 	267,460	 	 	 	290,107	 	 	 	(22,647	)	 	 	(13,763	)	

Regulated electricity segment gross margin	 	$	1,306,578	 	 	$	1,163,543	 	 	$	143,035	 	 	$	86,922	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
RECONCILIATION OF MARKETING AND TRADING SEGMENT GROSS MARGIN	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Income (closest GAAP measure)	 	$	432,502	 	 	$	416,159	 	 	$	16,343	 	 	$	9,932	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operations and maintenance	 	 	467,121	 	 	 	434,588	 	 	 	32,533	 	 	 	19,770	 	
Real estate segment operations	 	 	190,555	 	 	 	175,560	 	 	 	14,995	 	 	 	9,112	 	
Depreciation and amortization	 	 	262,030	 	 	 	294,942	 	 	 	(32,912	)	 	 	(20,001	)	
Taxes other than income taxes	 	 	103,528	 	 	 	93,658	 	 	 	9,870	 	 	 	5,998	 	
Regulatory disallowance	 	 	143,217	 	 	 	—	 	 	 	143,217	 	 	 	87,033	 	
Other expenses	 	 	39,451	 	 	 	25,893	 	 	 	13,558	 	 	 	8,239	 	
Regulated electricity segment purchased power and fuel	 	 	442,532	 	 	 	442,409	 	 	 	123	 	 	 	75	 	
Less:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate segment revenues	 	 	232,950	 	 	 	186,762	 	 	 	46,188	 	 	 	28,068	 	
Other revenues	 	 	46,763	 	 	 	32,904	 	 	 	13,859	 	 	 	8,422	 	
Regulated electricity segment revenues	 	 	1,749,110	 	 	 	1,605,952	 	 	 	143,158	 	 	 	86,997	 	

Marketing and trading segment gross margin	 	$	52,113	 	 	$	57,591	 	 	$	(5,478	)	 	$	(3,329	)