-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dz/kwhZe5TyAYGM5DWOPqsG6gIHuiDEV6MdO7+fr2tkt+EzNPiMts4vG6QTr6Ajd gNtdcg7fBmM171Ur0m+1Ew== 0000950153-05-001757.txt : 20050727 0000950153-05-001757.hdr.sgml : 20050727 20050727080409 ACCESSION NUMBER: 0000950153-05-001757 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20050630 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050727 DATE AS OF CHANGE: 20050727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PINNACLE WEST CAPITAL CORP CENTRAL INDEX KEY: 0000764622 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 860512431 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08962 FILM NUMBER: 05975532 BUSINESS ADDRESS: STREET 1: 400 NORTH FIFTH STREET STREET 2: . CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6023792500 MAIL ADDRESS: STREET 1: 400 NORTH FIFTH STREET STREET 2: . CITY: PHOENIX STATE: AZ ZIP: 85004 FORMER COMPANY: FORMER CONFORMED NAME: AZP GROUP INC DATE OF NAME CHANGE: 19870506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARIZONA PUBLIC SERVICE CO CENTRAL INDEX KEY: 0000007286 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 860011170 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04473 FILM NUMBER: 05975533 BUSINESS ADDRESS: STREET 1: 400 N FIFTH ST STREET 2: P O BOX 53999 CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6022501000 8-K 1 p70961e8vk.htm 8-K e8vk
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 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 (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

     This combined Form 8-K is separately filed by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing on its own behalf all of the information contained in this Form 8-K that relates to such registrant. Neither registrant is filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
 
 

 

 

 

Item 2.02. Results of Operations and Financial Condition
     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 June 30, 2005. This Information is attached hereto as Exhibits 99.2, 99.3, and 99.7.
     On June 27, 2005, the Company issued a press release regarding its financial results for its fiscal quarter year ended June 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 June 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

 

PINNACLE WEST CAPITAL CORPORATION
NON-GAAP MEASURE RECONCILIATION — NET INCOME (GAAP MEASURE)
TO ON-GOING EARNINGS (NON-GAAP MEASURE)
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

 

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 June 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 June 30, 2005 and 2004 and condensed consolidated statements of income for the three and six months ended June 30, 2005 and 2004.
99.8
  Pinnacle West
APS 		  Glossary of Terms.
99.9
  Pinnacle West
APS 		  Earnings News Release issued on July 27, 2005.
99.10
  Pinnacle West
APS 		  Reconciliation of Operating Income to Gross Margin (Non-GAAP Measure).

4

 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  PINNACLE WEST CAPITAL CORPORATION
(Registrant)
 		  
Dated: July 27, 2005  By:   /s/ Barbara M. Gomez    
    Barbara M. Gomez   
    Vice President and Treasurer   
 
         
  ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
 		  
Dated: July 27, 2005  By:   /s/ Barbara M. Gomez    
    Barbara M. Gomez   
    Vice President and Treasurer   
 

5

 

Exhibit Index
     
Exhibit    
No.   Description
99.1
  Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).
 
    
99.2
  Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended June 30, 2005 and 2004.
 
    
99.3
  Pinnacle West Capital Corporation consolidated statistics by quarter for 2005.
 
    
99.4
  Pinnacle West Capital Corporation consolidated statistics by quarter for 2004.
 
    
99.5
  Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
 
    
99.6
  Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
 
    
99.7
  Pinnacle West Capital Corporation earnings variance explanations for periods ended June 30, 2005 and 2004 and condensed consolidated statements of income for the three and six months ended June 30, 2005 and 2004.
 
    
99.8
  Glossary of Terms.
 
    
99.9
  Earnings News Release issued on July 27, 2005.
 
    
99.10
  Reconciliation of Operating Income to Gross Margin (Non-GAAP Measure).

6

EX-99.1 2 p70961exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004 LIST OF CONTENTS 2005 SECOND 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/2005Q2QuarStatsGloss.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 EX-99.2 3 p70961exv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004
3 MO. ENDED JUNE 6 MO. ENDED JUNE ---------------------------------- ---------------------------------- Line 2005 2004 INCR (DECR) 2005 2004 INCR (DECR) -------- -------- ----------- -------- -------- ----------- EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS) 1 Arizona Public Service $ 64 $ 55 $ 9 $ 91 $ 89 $ 2 2 Pinnacle West Energy 12 (14) 26 (8) (36) 28 3 APS Energy Services 1 1 - (2) 3 (5) 4 SunCor 11 4 7 19 6 13 5 El Dorado - 34 (34) (1) 34 (35) 6 Parent Company (3) (6) 3 16 9 7 -------- -------- -------- -------- -------- -------- 7 Income From Continuing Operations 85 74 11 115 105 10 8 Loss From Discontinued Operations - Net of Tax (58) (1) (57) (64) (1) (63) 9 Cumulative Effect of Change in Accounting - Net of Tax - - - - - - -------- -------- -------- -------- -------- -------- 10 Net Income $ 27 $ 73 $ (46) $ 51 $ 104 $ (53) ======== ======== ======== ======== ======== ======== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 11 Arizona Public Service $ 0.66 $ 0.60 $ 0.06 $ 0.97 $ 0.98 $ (0.01) 12 Pinnacle West Energy 0.13 (0.15) 0.28 (0.09) (0.40) 0.31 13 APS Energy Services 0.01 0.01 - (0.03) 0.03 (0.06) 14 SunCor 0.11 0.04 0.07 0.21 0.06 0.15 15 El Dorado - 0.37 (0.37) (0.01) 0.38 (0.39) 16 Parent Company (0.03) (0.06) 0.03 0.17 0.10 0.07 -------- -------- -------- -------- -------- -------- 17 Income From Continuing Operations 0.88 0.81 0.07 1.22 1.15 0.07 18 Loss From Discontinued Operations - Net of Tax (0.60) (0.02) (0.58) (0.68) (0.01) (0.67) 19 Cumulative Effect of Change in Accounting - Net of Tax - - - - - - -------- -------- -------- -------- -------- -------- 20 Net Income $ 0.28 $ 0.79 $ (0.51) $ 0.54 $ 1.14 $ (0.60) ======== ======== ======== ======== ======== ======== 21 BOOK VALUE PER SHARE $ 32.89 $ 31.68 $ 1.21 $ 32.89 $ 31.68 $ 1.21 COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 22 Average 96,299 91,400 4,899 94,189 91,391 2,798 23 End of Period 98,442 91,309 7,133 98,442 91,309 7,133
See Glossary of Terms. Page 2 of 31 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004
3 MO. ENDED JUNE 6 MO. ENDED JUNE --------------------------------- --------------------------------- Line 2005 2004 INCR (DECR) 2005 2004 INCR (DECR) ------- ------- ----------- ------- ------- ----------- ELECTRIC OPERATING REVENUES (DOLLARS IN MILLIONS) REGULATED ELECTRICITY SEGMENT RETAIL 24 Residential $ 268 $ 245 $ 23 $ 458 $ 434 $ 24 25 Business 281 257 24 490 468 22 ------- ------- ------- ------- ------- ------- 26 Total retail 549 502 47 948 902 46 WHOLESALE REVENUE ON DELIVERED ELECTRICITY 27 Traditional contracts 5 4 1 8 7 1 28 Off-system sales 12 - 12 12 - 12 29 Transmission for others 7 8 (1) 14 16 (2) 30 Other miscellaneous services 7 6 1 14 10 4 ------- ------- ------- ------- ------- ------- 31 Total regulated electricity 580 520 60 996 935 61 MARKETING AND TRADING SEGMENT 32 Electricity and other commodity sales 71 110 (39) 160 199 (39) ------- ------- ------- ------- ------- ------- 33 Total operating electric revenues $ 651 $ 630 $ 21 $ 1,156 $ 1,134 $ 22 ======= ======= ======= ======= ======= ======= ELECTRIC SALES (GWH) REGULATED ELECTRICITY SEGMENT RETAIL SALES 34 Residential 2,889 2,722 167 5,256 5,132 124 35 Business 3,684 3,602 82 6,726 6,653 73 ------- ------- ------- ------- ------- ------- 36 Total retail 6,573 6,324 249 11,982 11,785 197 WHOLESALE ELECTRICITY DELIVERED 37 Traditional contracts 200 195 5 355 333 22 38 Off-system sales 598 - 598 598 - 598 39 Retail load hedge management 702 731 (29) 1,452 900 552 ------- ------- ------- ------- ------- ------- 40 Total regulated electricity 8,073 7,250 823 14,387 13,018 1,369 MARKETING AND TRADING SEGMENT 41 Wholesale sales of electricity 4,901 7,143 (2,242) 10,678 12,839 (2,161) ------- ------- ------- ------- ------- ------- 42 Total electric sales 12,974 14,393 (1,419) 25,065 25,857 (792) ======= ======= ======= ======= ======= =======
See Glossary of Terms. Page 3 of 31 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004
3 MO. ENDED JUNE 6 MO. ENDED JUNE --------------------------------- --------------------------------- Line 2005 2004 INCR (DECR) 2005 2004 INCR (DECR) ---- ---- ----------- ---- ---- ----------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS 43 Electricity and other commodity sales, realized (a) $ 18 $ 22 $ (4) $ 30 $ 34 $ (4) 44 Mark-to-market reversals on realized sales (b) (8) (4) (4) (8) 1 (9) 45 Change in mark-to-market value of forward sales 3 4 (1) 10 8 2 ---- ---- ---- ---- ---- ---- 46 Total gross margin $ 13 $ 22 $ (9) $ 32 $ 43 $(11) ==== ==== ==== ==== ==== ==== BY PINNACLE WEST ENTITY 47 Parent company marketing and trading division $ 6 $ 11 $ (5) $ 27 $ 23 $ 4 48 APS 3 - 3 (1) (5) 4 49 Pinnacle West Energy - 7 (7) 5 17 (12) 50 APS Energy Services 4 4 - 1 8 (7) ---- ---- ---- ---- ---- ---- 51 Total gross margin $ 13 $ 22 $ (9) $ 32 $ 43 $(11) ==== ==== ==== ==== ==== ====
FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION As of June 30, 2005, Pinnacle West had accumulated net mark-to-market gains of $43 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, $9 million; 2006, $7 million; 2007, $17 million; and thereafter, $10 million. - --------------------- (a) The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 43 and in line 44 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 43 are included in line 44. For example, line 44 shows that a prior-period mark-to-market gain of $8 million was transferred to "realized" for the second quarter of 2005. A $8 million realized gain is included in the $18 million on line 43 for the second 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 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004
3 MO. ENDED JUNE 6 MO. ENDED JUNE ----------------------------------- ----------------------------------- Line 2005 2004 INCR (DECR) 2005 2004 INCR (DECR) ------- ------- ----------- ------- ------- ----------- AVERAGE ELECTRIC CUSTOMERS RETAIL CUSTOMERS 52 Residential 888,509 852,594 35,915 889,238 854,174 35,064 53 Business 110,658 106,517 4,141 110,227 106,009 4,218 ------- ------- ------- ------- ------- ------- 54 Total 999,167 959,111 40,056 999,465 960,183 39,282 55 Wholesale customers 76 82 (6) 79 82 (3) ------- ------- ------- ------- ------- ------- 56 Total customers 999,243 959,193 40,050 999,544 960,265 39,279 ======= ======= ======= ======= ======= ======= 57 Customer Growth (% over prior year) 4.2% 3.8% 0.4% 4.1% 3.6% 0.5% RETAIL SALES (GWH) - WEATHER NORMALIZED 58 Residential 2,903 2,762 141 5,333 5,133 200 59 Business 3,693 3,616 77 6,751 6,614 137 ------- ------- ------- ------- ------- ------- 60 Total 6,596 6,378 218 12,084 11,747 337 ======= ======= ======= ======= ======= ======= RETAIL USAGE (KWH/AVERAGE CUSTOMER) 61 Residential 3,252 3,193 59 5,911 6,008 (97) 62 Business 33,292 33,816 (524) 61,020 62,759 (1,739) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 63 Residential 3,268 3,240 28 5,997 6,009 (12) 64 Business 33,374 33,944 (570) 61,250 62,393 (1,143) ELECTRICITY DEMAND (MW) 65 System peak demand 6,458 5,632 826 6,458 5,632 826
See Glossary of Terms. Page 5 of 31 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004
3 MO. ENDED JUNE 6 MO. ENDED JUNE -------------------------------- -------------------------------- Line 2005 2004 INCR (DECR) 2005 2004 INCR (DECR) ------ ------ ---------- ------ ------ ----------- ENERGY SOURCES (GWH) GENERATION PRODUCTION 66 Nuclear 1,619 1,860 (241) 3,866 4,008 (142) 67 Coal 3,088 3,035 53 6,028 5,922 106 68 Gas, oil and other 2,074 1,339 735 3,201 1,706 1,495 ------ ------ ------ ------ ------ ------ 69 Total 6,781 6,234 547 13,095 11,636 1,459 ------ ------ ------ ------ ------ ------ PURCHASED POWER 70 Firm load 880 1,532 (652) 1,466 2,233 (767) 71 Marketing and trading 5,984 7,167 (1,183) 11,816 12,673 (857) ------ ------ ------ ------ ------ ------ 72 Total 6,864 8,699 (1,835) 13,282 14,906 (1,624) ------ ------ ------ ------ ------ ------ 73 Total energy sources 13,645 14,933 (1,288) 26,377 26,542 (165) ====== ====== ====== ====== ====== ====== POWER PLANT PERFORMANCE CAPACITY FACTORS 74 Nuclear 67% 77% (10)% 80% 83% (3)% 75 Coal 83% 81% 2% 81% 79% 2% 76 Gas, oil and other 27% 20% 7% 22% 13% 9% 77 System average 49% 50% (1)% 48% 47% 1% GENERATION CAPACITY OUT OF SERVICE AND REPLACED FOR NATIVE LOAD (AVERAGE MW/DAY) 78 Nuclear 329 233 96 381 368 13 79 Coal 244 153 91 440 301 139 80 Gas 164 47 117 376 96 280 ------ ------ ------ ------ ------ ------ 81 Total 737 433 304 1,197 765 432 82 Generation Fuel Cost ($/MWh) $22.86 $18.59 $ 4.27 $19.31 $15.16 $ 4.15
See Glossary of Terms. Page 6 of 31 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED JUNE 30, 2005 AND 2004
3 MO. ENDED JUNE 6 MO. ENDED JUNE --------------------------------- --------------------------------- Line 2005 2004 INCR (DECR) 2005 2004 INCR (DECR) ------ ------ ----------- ------ ------ ----------- ENERGY MARKET INDICATORS (a) ELECTRICITY AVERAGE DAILY SPOT PRICES ($/MWH) ON-PEAK 83 Palo Verde $53.33 $50.36 $ 2.97 $51.54 $47.05 $ 4.49 84 SP15 $55.19 $54.73 $ 0.46 $55.45 $51.55 $ 3.90 OFF-PEAK 85 Palo Verde $33.03 $33.74 $(0.71) $35.04 $33.70 $ 1.34 86 SP15 $34.73 $37.32 $(2.59) $37.85 $37.11 $ 0.74 WEATHER INDICATORS ACTUAL 87 Cooling degree-days 1,538 1,598 (60) 1,572 1,871 (299) 88 Heating degree-days 1 11 (10) 458 563 (105) 89 Average humidity 20% 19% 1% 38% 29% 9% 10-YEAR AVERAGES 90 Cooling degree-days 1,491 1,491 - 1,571 1,571 - 91 Heating degree-days 36 36 - 557 557 - 92 Average humidity 24% 24% 0% 33% 33% 0% ECONOMIC INDICATORS BUILDING PERMITS - METRO PHOENIX (b) (d) 93 Single-family 7,837 8,903 (1,066) 18,193 18,948 (755) 94 Multi-family 621 915 (294) 2,362 2,673 (311) ------ ------ ------ ------ ------ ------ 95 Total 8,458 9,818 (1,360) 20,555 21,621 (1,066) ====== ====== ====== ====== ====== ====== ARIZONA JOB GROWTH (c) (d) 96 Payroll job growth (% over prior year) 3.9% 3.2% 0.7% 4.0% 2.9% 1.1% 97 Unemployment rate (%, seasonally adjusted) 4.9% 5.2% (0.3)% 4.7% 5.2% (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 May 2005. See Glossary of Terms. Page 7 of 31 EX-99.3 4 p70961exv99w3.txt EXHIBIT 99.3 EXHIBIT 99.3 Last Updated 7/27/2005 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 $ 91 $ 2 2 Pinnacle West Energy (21) 12 (8) 28 3 APS Energy Services (3) 1 (2) (5) 4 SunCor 9 11 19 13 5 El Dorado (1) - (1) (35) 6 Parent Company 19 (3) 16 7 ------- ------- ------- ------- ---------- ----------- 7 Income From Continuing Operations 30 85 - - 115 10 8 Loss From Discontinued Operations - Net of Tax (6) (58) (64) (63) 9 Cumulative Effect of Change in Accounting - Net of Tax - - - - ------- ------- ------- ------- ---------- ----------- 10 Net Income $ 24 $ 27 $ - $ - $ 51 $ (53) ======= ======= ======= ======= ========== =========== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 11 Arizona Public Service $ 0.30 $ 0.66 $ 0.97 $ (0.01) 12 Pinnacle West Energy (0.23) 0.13 (0.09) 0.31 13 APS Energy Services (0.04) 0.01 (0.03) (0.06) 14 SunCor 0.09 0.11 0.21 0.15 15 El Dorado (0.01) - (0.01) (0.39) 16 Parent Company 0.21 (0.03) 0.17 0.07 ------- ------- ------- ------- ---------- ----------- 17 Income From Continuing Operations 0.32 0.88 - - 1.22 0.07 18 Loss From Discontinued Operations - Net of Tax (0.05) (0.60) (0.68) (0.67) 19 Cumulative Effect of Change in Accounting - Net of Tax - - - - ------- ------- ------- ------- ---------- ----------- 20 Net Income $ 0.27 $ 0.28 $ - $ - $ 0.54 $ (0.60) ======= ======= ======= ======= ========== =========== 21 BOOK VALUE PER SHARE $ 32.50 $ 32.89 $ 32.89 $ 1.21 COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 22 Average 92,045 96,299 94,189 2,798 23 End of Period 92,103 98,442 98,442 7,133
See Glossary of Terms. Page 8 of 31 Last Updated 7/27/2005 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 $ 458 $ 24 25 Business 209 281 490 22 ------------ ----------- ----------- --------- ------------ ------------ 26 Total retail 399 549 - - 948 46 WHOLESALE REVENUE ON DELIVERED ELECTRICITY 27 Traditional contracts 3 5 8 1 28 Off-system sales - 12 12 12 29 Transmission for others 7 7 14 (2) 30 Other miscellaneous services 7 7 14 4 ------------ ----------- ----------- --------- ------------ ------------ 31 Total regulated electricity 416 580 - - 996 61 MARKETING AND TRADING SEGMENT 32 Electricity and other commodity sales 89 71 160 (39) ------------ ----------- ----------- --------- ------------ ------------ 33 Total operating electric revenues $ 505 $ 651 $ - $ - $ 1,156 $ 22 ============ =========== =========== ========= ============ ============ ELECTRIC SALES (GWH) REGULATED ELECTRICITY SEGMENT RETAIL SALES 34 Residential 2,367 2,889 5,256 124 35 Business 3,042 3,684 6,726 73 ------------ ----------- ----------- --------- ------------ ------------ 36 Total retail 5,409 6,573 - - 11,982 197 WHOLESALE ELECTRICITY DELIVERED 37 Traditional contracts 155 200 355 22 38 Off-system sales - 598 598 598 39 Retail load hedge management 750 702 1,452 552 ------------ ----------- ----------- --------- ------------ ------------ 40 Total regulated electricity 6,314 8,073 - - 14,387 1,369 MARKETING AND TRADING SEGMENT 41 Wholesale sales of electricity 5,777 4,901 10,678 (2,161) ------------ ----------- ----------- --------- ------------ ------------ 42 Total electric sales 12,091 12,974 - - 25,065 (792) ============ =========== =========== ========= ============ ============
See Glossary of Terms. Page 9 of 31 Last Updated 7/27/2005 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 ------------ --------- -------- -------- ------------ ------------ MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS 43 Electricity and other commodity sales, realized (a) $ 12 $ 18 $ 30 $ (4) 44 Mark-to-market reversals on realized sales (b) (3) (8) (8) (9) 45 Change in mark-to-market value of forward sales 10 3 10 2 ------------ --------- -------- -------- -------- ------------ 46 Total gross margin $ 19 $ 13 $ - $ - $ 32 $ (11) ============ ========= ======== ======== ======== ============ BY PINNACLE WEST ENTITY 47 Parent company marketing and trading division $ 21 $ 6 $ 27 $ 4 48 APS (4) 3 (1) 4 49 Pinnacle West Energy 5 - 5 (12) 50 APS Energy Services (3) 4 1 (7) ------------ --------- -------- -------- -------- ------------ 51 Total gross margin $ 19 $ 13 $ - $ - $ 32 $ (11) ============ ========= ======== ======== ======== ============
FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION As of June 30, 2005, Pinnacle West had accumulated net mark-to-market gains of $43 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, $9 million; 2006, $7 million; 2007, $17 million; and thereafter, $10 million. - ----------------- (a) The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 43 and in line 44 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 43 are included in line 44. For example, line 44 shows that a prior-period mark-to-market gain of $8 million was transferred to "realized" for the second quarter of 2005. A $8 million realized gain is included in the $18 million on line 43 for the second 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 Last Updated 7/27/2005 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 52 Residential 889,967 888,509 889,238 35,064 53 Business 109,772 110,658 110,227 4,218 ------- ------- ------- ------- ------------ ------------ 54 Total 999,739 999,167 - - 999,465 39,282 55 Wholesale customers 81 76 79 (3) ------- ------- ------- ------- ------------ ------------ 56 Total customers 999,820 999,243 - - 999,544 39,279 ======= ======= ======= ======= ============ ============ 57 Customer Growth (% over prior year) 4.0% 4.2% 4.1% 0.5% RETAIL SALES (GWH) - WEATHER NORMALIZED 58 Residential 2,430 2,903 5,333 200 59 Business 3,058 3,693 6,751 137 ------- ------- ------- ------- ------------ ------------ 60 Total 5,488 6,596 - - 12,084 337 ======= ======= ======= ======= ============ ============ RETAIL USAGE (KWH/AVERAGE CUSTOMER) 61 Residential 2,660 3,252 5,911 (97) 62 Business 27,712 33,292 61,020 (1,739) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 63 Residential 2,730 3,268 5,997 (12) 64 Business 27,860 33,374 61,250 (1,143) ELECTRICITY DEMAND (MW) 65 System peak demand 3,997 6,458 6,458 826
See Glossary of Terms. Page 11 of 31 Last Updated 7/27/2005 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 66 Nuclear 2,247 1,619 3,866 (142) 67 Coal 2,940 3,088 6,028 106 68 Gas, oil and other 1,127 2,074 3,201 1,495 ------------ ----------- ---------- ---------- ------------ ------------ 69 Total 6,314 6,781 - - 13,095 1,459 ------------ ----------- ---------- ---------- ------------ ------------ PURCHASED POWER 70 Firm load 586 880 1,466 (767) 71 Marketing and trading 5,832 5,984 11,816 (857) ------------ ----------- ---------- ---------- ------------ ------------ 72 Total 6,418 6,864 - - 13,282 (1,624) ------------ ----------- ---------- ---------- ------------ ------------ 73 Total energy sources 12,732 13,645 - - 26,377 (165) ============ =========== ========== ========== ============ ============ POWER PLANT PERFORMANCE CAPACITY FACTORS 74 Nuclear 94% 67% 80% (3)% 75 Coal 80% 83% 81% 2% 76 Gas, oil and other 17% 27% 22% 9% 77 System average 49% 49% 48% 1% GENERATION CAPACITY OUT OF SERVICE AND REPLACED FOR NATIVE LOAD (AVERAGE MW/DAY) 78 Nuclear 52 329 381 13 79 Coal 195 244 440 139 80 Gas 212 164 376 280 ------------ ----------- ---------- ---------- ------------ ------------ 81 Total 459 737 - - 1,197 432 82 Generation Fuel Cost ($/MWh) $ 15.50 $ 22.86 $ 19.31 $ 4.15
See Glossary of Terms. Page 12 of 31 Last Updated 7/27/2005 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 83 Palo Verde $ 49.74 $ 53.33 $ 51.54 $ 4.49 84 SP15 $ 55.70 $ 55.19 $ 55.45 $ 3.90 OFF-PEAK 85 Palo Verde $ 37.04 $ 33.03 $ 35.04 $ 1.34 86 SP15 $ 40.96 $ 34.73 $ 37.85 $ 0.74 WEATHER INDICATORS ACTUAL 87 Cooling degree-days 34 1,538 1,572 (299) 88 Heating degree-days 457 1 458 (105) 89 Average humidity 56% 20% 38% 9% 10-YEAR AVERAGES 90 Cooling degree-days 80 1,491 1,571 - 91 Heating degree-days 521 36 557 - 92 Average humidity 43% 24% 33% 0% ECONOMIC INDICATORS BUILDING PERMITS -- METRO PHOENIX (b) (d) 93 Single-family 10,356 7,837 18,193 (5,488) 94 Multi-family 1,741 621 2,362 (719) ------------ ---------- ------- ------- ------------ ------------ 95 Total 12,097 8,458 - - 20,555 (6,207) ============ ========== ======= ======= ============ ============ ARIZONA JOB GROWTH (c) (d) 96 Payroll job growth (% over prior year) 4.1% 3.9% 4.0% 1.1% 97 Unemployment rate (%, seasonally adjusted) 4.4% 4.9% 4.7% (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 (d) The economic indicators reflect latest available data through periods ending May 2005. See Glossary of Terms. Page 13 of 31 EX-99.4 5 p70961exv99w4.txt EXHIBIT 99.4 EXHIBIT 99.4 Last Updated 7/27/2005 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 36 -------- -------- -------- -------- -------- -------- 7 Income From Continuing Operations 31 74 104 38 247 21 8 Income (Loss) From Discontinued Operations - Net of Tax - (1) 1 (4) (4) (18) 9 Cumulative Effect of Change in Accounting - Net of Tax - - - - - - -------- -------- -------- -------- -------- -------- 10 Net Income $ 31 $ 73 $ 105 $ 34 $ 243 $ 3 ======== ======== ======== ======== ======== ======== 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 0.16 (0.06) 0.03 0.17 0.30 0.40 -------- -------- -------- -------- -------- -------- 17 Income From Continuing Operations 0.34 0.81 1.14 0.41 2.69 0.22 18 Income (Loss) From Discontinued Operations - Net of Tax - (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 $ 32.24 $ 32.24 $ 1.27 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 Last Updated 7/27/2005 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 Last Updated 7/27/2005 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 ------- ------- ------- ------- ------------ ------------ MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS 43 Electricity and other commodity sales, realized (a) $ 12 $ 22 $ 13 $ 16 $ 63 $ (2) 44 Mark-to-market reversals on realized sales (b) 1 (4) (3) - (6) - 45 Change in mark-to-market value of forward sales 8 4 5 6 23 35 ---- ---- ---- ---- ---- ---- 46 Total gross margin $ 21 $ 22 $ 15 $ 22 $ 80 $ 33 ==== ==== ==== ==== ==== ==== BY PINNACLE WEST ENTITY 47 Parent company marketing and trading division $ 12 $ 11 $ 9 $ 12 $ 44 $ 49 48 APS (5) - 2 (2) (5) (13) 49 Pinnacle West Energy 10 7 - 10 27 19 50 APS Energy Services 4 4 4 2 14 (22) ---- ---- ---- ---- ---- ---- 51 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 43 and in line 44 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 43 are included in line 44. For example, line 44 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 43 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 Last Updated 7/27/2005 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 52 Residential 855,754 852,594 856,353 871,575 859,069 30,703 53 Business 105,502 106,517 107,583 108,860 107,115 4,019 ------- ------- ------- ------- ------- ------- 54 Total 961,256 959,111 963,936 980,435 966,184 34,722 55 Wholesale customers 81 82 85 77 81 15 ------- ------- ------- ------- ------- ------- 56 Total customers 961,337 959,193 964,021 980,512 966,265 34,737 ======= ======= ======= ======= ======= ======= 57 Customer Growth (% over prior year) 3.4% 3.8% 3.9% 3.9% 3.7% 0.4% RETAIL SALES (GWH) - WEATHER NORMALIZED 58 Residential 2,371 2,762 4,231 2,340 11,704 825 59 Business 2,998 3,616 4,005 3,252 13,870 467 ------- ------- ------- ------- ------- ------- 60 Total 5,369 6,378 8,236 5,592 25,574 1,292 ======= ======= ======= ======= ======= ======= RETAIL USAGE (KWH/AVERAGE CUSTOMER) 61 Residential 2,816 3,193 4,704 2,717 13,418 (39) 62 Business 28,919 33,816 36,595 29,726 129,392 (1,137) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 63 Residential 2,770 3,240 4,941 2,686 13,624 491 64 Business 28,422 33,944 37,227 29,871 129,495 (511) ELECTRICITY DEMAND (MW) 65 System peak demand 3,979 5,632 6,402 4,432 6,402 70
See Glossary of Terms. Page 17 of 31 Last Updated 7/27/2005 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 66 Nuclear 2,148 1,860 2,364 1,812 8,184 (131) 67 Coal 2,887 3,035 3,417 3,327 12,666 1,300 68 Gas, oil and other 367 1,339 2,547 1,074 5,327 (764) ------ ------ ------ ------ ------ ------ 69 Total 5,402 6,234 8,328 6,213 26,177 405 ------ ------ ------ ------ ------ ------ PURCHASED POWER 70 Firm load 701 1,532 1,068 1,024 4,325 1,214 71 Marketing and trading 5,506 7,167 9,301 8,218 30,192 2,443 ------ ------ ------ ------ ------ ------ 72 Total 6,207 8,699 10,369 9,242 34,517 3,657 ------ ------ ------ ------ ------ ------ 73 Total energy sources 11,609 14,933 18,697 15,455 60,694 4,062 ====== ====== ====== ====== ====== ====== POWER PLANT PERFORMANCE CAPACITY FACTORS 74 Nuclear 88% 77% 96% 74% 84% (3)% 75 Coal 77% 81% 90% 88% 84% 8% 76 Gas, oil and other 5% 20% 38% 12% 18% (10)% 77 System average 44% 50% 64% 48% 51% (4)% GENERATION CAPACITY OUT OF SERVICE AND REPLACED FOR NATIVE LOAD (AVERAGE MW/DAY) 78 Nuclear 135 233 13 261 161 29 79 Coal 149 153 63 61 107 (163) 80 Gas 49 47 39 34 42 (163) ------ ------ ------ ------ ------ ------ 81 Total 333 433 115 356 310 (296) 82 Generation Fuel Cost ($/MWh) $11.17 $18.59 $20.73 $20.90 $18.31 $ 0.95
See Glossary of Terms. Page 18 of 31 Last Updated 7/27/2005 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 83 Palo Verde $43.73 $50.36 $51.86 $51.23 $49.30 $ 0.70 84 SP15 $48.37 $54.73 $57.09 $60.62 $55.20 $ 3.82 OFF-PEAK 85 Palo Verde $33.66 $33.74 $33.37 $38.21 $34.75 $ 2.72 86 SP15 $36.90 $37.32 $37.18 $43.07 $38.62 $ 3.96 WEATHER INDICATORS ACTUAL 87 Cooling degree-days 273 1,598 2,471 352 4,694 (205) 88 Heating degree-days 552 11 - 422 985 249 89 Average humidity 39% 19% 26% 45% 32% 1% 10-YEAR AVERAGES 90 Cooling degree-days 80 1,491 2,540 420 4,531 420 91 Heating degree-days 521 36 - 415 972 415 92 Average humidity 43% 24% 33% 40% 35% 0% ECONOMIC INDICATORS BUILDING PERMITS -- METRO PHOENIX (b) 93 Single-family 10,045 13,636 14,111 10,325 48,117 8,466 94 Multi-family 1,757 1,324 2,149 2,356 7,586 859 ------ ------ ------ ------ ------ ------ 95 Total 11,802 14,960 16,260 12,681 55,703 9,325 ====== ====== ====== ====== ====== ====== ARIZONA JOB GROWTH (c) 96 Payroll job growth (% over prior year) 2.7% 3.3% 3.6% 3.9% 3.4% 2.0% 97 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 EX-99.5 6 p70961exv99w5.txt EXHIBIT 99.5 EXHIBIT 99.5 Last Updated 7/27/2005 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 - - - - - (4) 6 Parent Company (11) 3 - - (10) (30) -------- -------- ---------- ---------- ---------- -------- 7 Income From Continuing Operations 18 54 109 45 225 (17) 8 Income From Discontinued Operations - Net of Tax 7 2 1 4 16 43 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) (0.33) -------- -------- ---------- ---------- ---------- -------- 17 Income From Continuing Operations 0.20 0.59 1.19 0.49 2.47 (0.38) 18 Income From Discontinued Operations - Net of Tax 0.08 0.02 0.01 0.05 0.16 0.48 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 Last Updated 7/27/2005 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 Last Updated 7/27/2005 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 ------- ------- ------- ------- ------------ ------------ MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS 43 Electricity and other commodity sales, realized (a) $ 25 $ 20 $ 4 $ 16 $ 65 $(56) 44 Mark-to-market reversals on realized sales (b) (3) 1 (3) (1) (6) 35 45 Change in mark-to-market value of forward sales (3) (1) (3) (5) (12) (64) ---- ---- ---- ---- ---- ---- 46 Total gross margin $ 19 $ 20 $ (2) $ 10 $ 47 $(85) ---- ---- ---- ---- ---- ---- BY PINNACLE WEST ENTITY 47 Parent company marketing and trading division $ 2 $ 4 $ (2) $ (9) $ (5) $(95) 48 APS 6 4 (6) 4 8 $ 6 49 Pinnacle West Energy (1) - - 9 8 $ 4 50 APS Energy Services 12 12 6 6 36 $ - ---- ---- ---- ---- ---- ---- 51 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 43 and in line 44 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 43 are included in line 44. For example, line 44 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 43 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 Last Updated 7/27/2005 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 52 Residential 827,937 821,331 824,655 839,539 828,366 26,565 53 Business 101,999 102,601 103,262 104,521 103,096 2,868 ------- ------- ------- ------- ------- ------- 54 Total 929,936 923,932 927,917 944,060 931,462 29,432 55 Wholesale customers 65 66 66 66 66 (1) ------- ------- ------- ------- ------- ------- 56 Total customers 930,001 923,998 927,983 944,126 931,528 29,431 ======= ======= ======= ======= ======= ======= 57 Customer Growth (% over prior year) 3.3% 3.1% 3.2% 3.4% 3.3% 0.2% RETAIL SALES (GWH) - WEATHER NORMALIZED 58 Residential 2,223 2,520 3,872 2,264 10,879 389 59 Business 2,886 3,485 3,858 3,174 13,403 498 ------- ------- ------- ------- ------- ------- 60 Total 5,109 6,005 7,730 5,438 24,282 887 ======= ======= ======= ======= ======= ======= RETAIL USAGE (KWH/AVERAGE CUSTOMER) 61 Residential 2,541 3,096 5,004 2,828 13,457 432 62 Business 27,927 33,625 37,677 30,865 130,529 1,288 RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 63 Residential 2,685 3,067 4,695 2,697 13,133 50 64 Business 28,290 33,969 37,360 30,371 130,006 1,251 ELECTRICITY DEMAND (MW) 65 System peak demand 3,569 5,571 6,332 5,124 6,332 529
See Glossary of Terms. Page 23 of 31 Last Updated 7/27/2005 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 66 Nuclear 2,306 2,047 2,230 1,732 8,315 (666) 67 Coal 2,770 2,824 2,972 2,800 11,366 (690) 68 Gas, oil and other 1,288 1,572 2,696 535 6,091 1,722 ------- ------- ------- ------- ------- ------- 69 Total 6,364 6,443 7,898 5,067 25,772 366 ------- ------- ------- ------- ------- ------- PURCHASED POWER 70 Firm load (12) 606 1,099 1,418 3,111 1,492 71 Marketing and trading 6,489 6,527 7,498 7,235 27,749 4,045 ------- ------- ------- ------- ------- ------- 72 Total 6,477 7,133 8,597 8,653 30,860 5,537 ------- ------- ------- ------- ------- ------- 73 Total energy sources 12,841 13,576 16,495 13,720 56,632 5,903 ======= ======= ======= ======= ======= ======= POWER PLANT PERFORMANCE CAPACITY FACTORS 74 Nuclear 98% 86% 93% 72% 87% (7)% 75 Coal 75% 75% 79% 74% 76% (4)% 76 Gas, oil and other 26% 31% 44% 9% 28% 1% 77 System average 58% 59% 64% 41% 55% (8)% GENERATION CAPACITY OUT OF SERVICE AND REPLACED FOR NATIVE LOAD (AVERAGE MW/DAY) 78 Nuclear 31 136 61 297 131 64 79 Coal 292 254 277 253 269 102 80 Gas 189 148 154 338 205 157 ------- ------- ------- ------- ------- ------- 81 Total 512 538 492 888 605 323 82 Generation Fuel Cost ($/MWh) $ 15.89 $ 16.80 $ 19.52 $ 15.40 $ 17.36 $ 4.35
See Glossary of Terms. Page 24 of 31 Last Updated 7/27/2005 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 83 Palo Verde $49.66 $48.88 $52.88 $42.98 $48.60 $16.32 84 SP15 $54.35 $50.73 $53.54 $46.88 $51.38 $17.16 OFF-PEAK 85 Palo Verde $36.09 $25.48 $36.08 $30.48 $32.03 $12.14 86 SP15 $39.70 $28.27 $37.81 $32.85 $34.66 $12.97 WEATHER INDICATORS ACTUAL 87 Cooling degree-days 76 1,550 2,701 572 4,899 24 88 Heating degree-days 349 17 - 370 736 (64) 89 Average humidity 44% 18% 30% 34% 31% 4% 10-YEAR AVERAGES 90 Cooling degree-days 80 1,491 2,540 420 4,531 - 91 Heating degree-days 521 36 - 415 972 - 92 Average humidity 43% 24% 33% 40% 35% 0% ECONOMIC INDICATORS BUILDING PERMITS -- METRO PHOENIX (b) 93 Single-family 8,030 10,613 11,191 9,817 39,651 5,339 94 Multi-family 863 2,053 1,231 2,580 6,727 (347) ------ ------ ------ ------ ------ ------ 95 Total 8,893 12,666 12,422 12,397 46,378 4,992 ====== ====== ====== ====== ====== ====== ARIZONA JOB GROWTH (c) 96 Payroll job growth (% over prior year) 1.1% 0.9% 1.5% 2.0% 1.4% 1.4% 97 Unemployment rate (%, seasonally adjusted) 5.8% 5.9% 5.7% 5.3% 5.7% (0.5)%
- ------------------- Sources: (a) This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc. (b) Arizona Real Estate Center, Arizona State University W.P. Carey College of Business (c) Arizona Department of Economic Security See Glossary of Terms. Page 25 of 31 EX-99.6 7 p70961exv99w6.txt EXHIBIT 99.6 EXHIBIT 99.6 Last Updated 7/27/2005 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2002
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR YEAR-TO-DATE VS PRIOR YTD ------- ------- ------- ------- ------------ ------------ EARNINGS CONTRIBUTION BY SUBSIDIARY ($ 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) 9 4 4 6 Parent Company 17 (6) 8 1 20 (15) ------- ------- ------- ------- -------- -------- 7 Income From Continuing Operations 53 69 109 11 242 (85) 8 Income (Loss) From Discontinued Operations - Net of Tax 1 6 (8) (26) (27) (27) 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) 0.10 0.05 0.05 16 Parent Company 0.20 (0.07) 0.10 0.02 0.23 (0.19) ------- ------- ------- ------- -------- -------- 17 Income From Continuing Operations 0.63 0.81 1.29 0.12 2.86 (0.99) 18 Income (Loss) From Discontinued Operations - Net of Tax - 0.08 (0.10) (0.30) (0.32) (0.32) 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 $ (0.95) $ 1.77 $ (1.91) ======= ======= ======= ======= ======== ======== 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 Last Updated 7/27/2005 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 Last Updated 7/27/2005 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 ------- ------- ------- ------- ------------ ------------ MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS 43 Electricity and other commodity sales, realized (a) $ 39 $ 25 $ 19 $ 38 $ 121 $ (62) 44 Mark-to-market reversals on realized sales (b) (22) (9) 2 (8) (41) (47) 45 Change in mark-to-market value of forward sales 23 3 23 (1) 52 (76) ------- ------- ------- - ---- ------- ----- 46 Total gross margin $ 40 $ 19 $ 44 $ 29 $ 132 $(185) ======= ======= ======= ======= ======= ===== BY PINNACLE WEST ENTITY 47 Parent company marketing and trading division $ 35 $ 9 $ 32 $ 14 $ 90 $ 12 48 APS 1 - 1 - 2 (233) 49 Pinnacle West Energy - - - 4 4 4 50 APS Energy Services 4 10 11 11 36 32 ------- ------- ------- - ---- ------- ----- 51 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 43 and in line 44 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 43 are included in line 44. For example, line 44 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 43 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 Last Updated 7/27/2005 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 52 Residential 801,000 795,681 798,590 811,930 801,801 25,462 53 Business 99,335 100,096 100,318 101,177 100,228 2,030 ------- ------- ------- ------- ------- ------ 54 Total 900,335 895,777 898,908 913,107 902,029 27,492 55 Wholesale customers 67 67 67 67 67 1 ------- ------- ------- ------- ------- ------ 56 Total customers 900,402 895,844 898,975 913,174 902,096 27,493 ======= ======= ======= ======= ======= ====== 57 Customer Growth (% over prior year) 3.2% 3.2% 3.1% 3.2% 3.1% (0.5)% RETAIL SALES (GWH) - WEATHER NORMALIZED 58 Residential 2,148 2,461 3,746 2,135 10,490 641 59 Business 2,776 3,410 3,696 3,024 12,905 86 ------- ------- ------- ------- ------- ------ 60 Total 4,924 5,871 7,441 5,159 23,395 727 ======= ======= ======= ======= ======= ====== RETAIL USAGE (KWH/AVERAGE CUSTOMER) 61 Residential 2,673 3,068 4,766 2,532 13,025 (287) 62 Business 27,896 34,258 36,691 30,011 129,241 (4,384) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 63 Residential 2,681 3,093 4,690 2,630 13,083 396 64 Business 27,943 34,065 36,839 29,885 128,754 (1,788) ELECTRICITY DEMAND (MW) 65 System peak demand 3,921 5,425 5,803 3,828 5,803 116
See Glossary of Terms. Page 29 of 31 Last Updated 7/27/2005 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 66 Nuclear 2,257 2,242 2,387 2,095 8,981 596 67 Coal 2,890 2,703 3,280 3,183 12,056 (516) 68 Gas, oil and other 337 659 1,918 1,455 4,369 375 ------- ------- ------- ------- ------- ------- 69 Total 5,484 5,604 7,585 6,733 25,406 455 ------- ------- ------- ------- ------- ------- PURCHASED POWER 70 Firm load 70 846 859 (157) 1,619 (1,342) 71 Marketing and trading 3,993 4,599 8,771 6,340 23,704 6,051 ------- ------- ------- ------- ------- ------- 72 Total 4,063 5,445 9,630 6,183 25,323 4,709 ------- ------- ------- ------- ------- ------- 73 Total energy sources 9,547 11,049 17,215 12,916 50,729 5,164 ======= ======= ======= ======= ======= ======= POWER PLANT PERFORMANCE CAPACITY FACTORS 74 Nuclear 96% 95% 100% 87% 94% 6% 75 Coal 78% 72% 87% 84% 80% (4)% 76 Gas, oil and other 12% 20% 38% 29% 27% (10)% 77 System average 62% 62% 69% 60% 63% (7)% GENERATION CAPACITY OUT OF SERVICE AND REPLACED FOR NATIVE LOAD (AVERAGE MW/DAY) 78 Nuclear 62 66 12 129 67 (60) 79 Coal 184 279 88 116 167 - 80 Gas 12 18 106 54 48 16 81 Total 258 363 206 299 282 (44) 82 Generation Fuel Cost ($/MWh) $ 11.57 $ 11.89 $ 14.84 $ 13.05 $ 13.01 $ (3.21)
See Glossary of Terms. Page 30 of 31 Last Updated 7/27/2005 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 83 Palo Verde $ 26.86 $ 30.65 $ 35.45 $ 36.18 $ 32.28 $(86.13) 84 SP15 $ 28.46 $ 31.51 $ 35.55 $ 41.35 $ 34.22 $(85.77) OFF-PEAK 85 Palo Verde $ 22.17 $ 14.10 $ 18.21 $ 25.09 $ 19.89 $(41.68) 86 SP15 $ 22.76 $ 15.95 $ 19.54 $ 28.52 $ 21.69 $(51.79) WEATHER INDICATORS ACTUAL 87 Cooling degree-days 89 1,741 2,647 398 4,875 (247) 88 Heating degree-days 472 - - 328 800 (360) 89 Average humidity 28% 16% 27% 38% 27% (9)% 10-YEAR AVERAGES 90 Cooling degree-days 80 1,491 2,540 420 4,531 - 91 Heating degree-days 521 36 - 415 972 - 92 Average humidity 43% 24% 33% 40% 35% 0% ECONOMIC INDICATORS BUILDING PERMITS -- METRO PHOENIX (b) 93 Single-family 7,682 9,666 8,689 8,275 34,312 1,447 94 Multi-family 1,249 2,005 2,662 1,158 7,074 (1,930) ------- ------- ------- ------- ------- ------- 95 Total 8,931 11,671 11,351 9,433 41,386 (483) ======= ======= ======= ======= ======= ======= ARIZONA JOB GROWTH (C) 96 Payroll job growth (% over prior year) (0.8)% (0.2)% (0.1)% 1.1% 0.0% (1.0)% 97 Unemployment rate 6.3% 6.2% 6.1% 6.0% 6.2% 1.5% (%, seasonally adjusted)
- -------------------- 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 EX-99.7 8 p70961exv99w7.txt EXHIBIT 99.7 Exhibit 99.7 Last updated July 27, 2005 PINNACLE WEST CAPITAL CORPORATION EARNINGS VARIANCE EXPLANATIONS FOR THE PERIODS ENDED JUNE 30, 2005 AND 2004 This discussion explains the changes in our consolidated earnings for the three-month and six-month periods ended June 30, 2005 and 2004. Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2005 and 2004 follow this discussion. We will file our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2005 on or before August 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 Report on Form 10-Q for the quarter ended March 31, 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 six months ended June 30, 2005 and 2004 (dollars in millions):
Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 2005 2004 2005 2004 ------ ------ ------ ------ Regulated electricity $ 69 $ 40 $ 83 $ 55 Marketing and trading 4 8 11 22 Real estate 11 4 19 5 Other (a) 1 22 2 23 ------ ------ ------ ------ Income from continuing operations 85 74 115 105 Silverhawk discontinued operations - net of income taxes (see "Pending Sale of Silverhawk" below) (59) (2) (65) (3) Real estate discontinued operations - net of income taxes 1 - 1 1 Other segment discontinued operations- net of income taxes - 1 - 1 ------ ------ ------ ------ Net income $ 27 $ 73 $ 51 $ 104 ====== ====== ====== ======
(a) The 2004 periods include $21 million (after-tax) related to the sale of El Dorado's limited partnership interest in the Phoenix Suns. 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 POWER STATION In June 2005, we entered into an agreement to sell our 75% interest in the Silverhawk Power Station to Nevada Power Company. Closing of the sale is subject to regulatory approvals, including approval by the Nevada Public Utilities Commission and the Federal Energy Regulatory Commission, which are expected to occur by this fall. As a result of this pending sale, we recorded an after-tax loss from discontinued operations of approximately $55 million. We have also reclassified Silverhawk operations in the current and prior periods to discontinued operations. DEFERRED PURCHASED POWER AND FUEL COSTS APS' retail rate case 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 2 and purchased power costs. In accordance with the PSA, APS defers for future rate recovery 90% of the difference between actual purchased power and fuel costs and the amount for such costs currently included in base rates. As of June 30, 2005, APS had deferred $34 million of pretax purchased power and fuel costs. OPERATING RESULTS - THREE-MONTH PERIOD ENDED JUNE 30, 2005 COMPARED WITH THREE-MONTH PERIOD ENDED JUNE 30, 2004 Our consolidated net income for the three months ended June 30, 2005 was $27 million compared with $73 million for the prior-year period. The current-quarter net income included a loss from discontinued operations of $58 million which is primarily related to the pending sale and operations of Silverhawk (see discussion above). Income from continuing operations increased $11 million in the period-to-period comparison reflecting the following changes in earnings by segment: - Regulated Electricity Segment - Income from continuing operations increased approximately $29 million primarily due to a retail price increase effective April 1, 2005, higher retail sales volumes due to customer growth, the absence of regulatory asset amortization, deferred purchased power and fuel costs, net of higher costs, in accordance with the retail rate settlement, and lower depreciation due to lower depreciation rates. These positive factors were partially offset by higher operations and maintenance costs primarily related to generation, customer service, and benefit costs. - Marketing and Trading Segment - Income from continuing operations decreased approximately $4 million primarily due to lower realized margins on wholesale sales. - Real Estate Segment - Income from continuing operations increased approximately $7 million primarily due to increased parcel sales. - Other Segment - Income from continuing operations decreased approximately $21 million primarily due to an after-tax gain related to the sale of El Dorado's limited partnership interest in the Phoenix Suns recorded in the prior-year period. 3 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 $ 28 $ 17 Higher retail sales volumes due to customer growth, excluding weather effects 13 8 Deferred purchased power and fuel costs, net of higher costs, in accordance with the retail rate settlement 8 5 Miscellaneous items, net 2 1 ------ ----- Net increase in regulated electricity segment gross margin 51 31 ------ ----- Marketing and trading segment gross margin: Lower realized margins on wholesale sales primarily due to lower unit margins and lower sales volumes (6) (4) Miscellaneous items, net (3) (1) ------ ----- Net decrease in marketing and trading segment gross margin (9) (5) ------ ----- Net increase in gross margin for regulated electricity and marketing and trading segments 42 26 Higher real estate segment contribution primarily related to increased parcel sales 12 7 Lower other income due to sale of limited partnership interest in Phoenix Suns recorded in prior-year period (35) (21) Higher operation and maintenance expense due to generation, customer service and benefit costs (15) (9) Depreciation and amortization decreases primarily due to: Absence of regulatory asset amortization 10 6 Lower depreciation rates partially offset by higher depreciable assets 7 4 Higher interest expense, net of capitalized financing costs, primarily due to higher debt balances and interest rates (6) (4) Miscellaneous items, net 6 2 ------ ----- Net increase in income from continuing operations $ 21 11 ====== Discontinued operations primarily related to the pending sale of Silverhawk (see discussion above) (57) ----- Net decrease in net income $ (46) =====
REGULATED ELECTRICITY SEGMENT REVENUES Regulated electricity segment revenues were $60 million higher for the three months ended June 30, 2005 compared with the prior-year period primarily as a result of: - a $28 million increase in retail revenues due to a price increase effective April 1, 2005; 4 - an $18 million increase in retail revenues related to customer growth, excluding weather effects; - a $12 million increase in Off-System Sales primarily due to sales previously reported in the marketing and trading segment now classified as sales in the regulated electricity segment in accordance with the retail rate settlement; and - a $2 million increase due to miscellaneous factors. MARKETING AND TRADING SEGMENT REVENUES Marketing and trading segment revenues were $39 million lower for the three months ended June 30, 2005 compared with the prior-year period primarily as a result of: - a $25 million decrease in revenues from Off-System Sales primarily due to lower sales volumes and sales previously reported in the marketing and trading segment now classified as sales in the regulated electricity segment in accordance with the retail rate settlement; - a $7 million decrease in energy trading revenues on realized sales of electricity primarily due to lower delivered electricity prices and lower sales volumes; - a $5 million decrease from lower volumes and prices for competitive retail sales in California; and - a $2 million decrease on future mark-to-market gains due to higher price volatility. REAL ESTATE REVENUES Real estate revenues were $19 million higher for the three months ended June 30, 2005 compared with the prior-year period primarily due to increased parcel sales. OPERATING RESULTS - SIX-MONTH PERIOD ENDED JUNE 30, 2005 COMPARED WITH SIX-MONTH PERIOD ENDED JUNE 30, 2004 Our consolidated net income for the six months ended June 30, 2005 was $51 million compared with $104 million for the prior-year period. The current year period net income included a loss from discontinued operations of $64 million which is primarily related to the pending sale and operations of Silverhawk (see discussion above). Income from continuing operations increased $10 million in the period-to-period comparison reflecting the following changes in earnings by segment: - Regulated Electricity Segment - Income from continuing operations increased approximately $28 million primarily due to a retail price increase effective April 1, 2005, higher retail sales volumes due to customer growth, the absence of regulatory asset amortization, deferred purchased power and fuel costs, net of higher costs, in accordance with the retail rate settlement, and lower 5 depreciation due to lower depreciation rates. These positive factors were partially offset by higher operations and maintenance costs primarily related to generation, customer service, and benefit costs, and higher property taxes due to increased plant in service. - Marketing and Trading Segment - Income from continuing operations decreased approximately $11 million primarily due to lower realized margins on wholesale sales and competitive retail sales in California. - Real Estate Segment - Income from continuing operations increased approximately $14 million primarily due to increased parcel sales. - Other Segment - Income from continuing operations decreased approximately $21 million primarily due to an after-tax gain related to the sale of El Dorado's limited partnership interest in the Phoenix Suns recorded in the prior-year period. 6 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 $ 28 $ 17 Higher retail sales volumes due to customer growth, excluding weather effects 20 12 Deferred purchased power and fuel costs, net of higher costs, in accordance with the retail rate settlement 15 9 Miscellaneous items, net (1) (1) ------ ------- Net increase in regulated electricity segment gross margin 62 37 ------ ------- Marketing and trading segment gross margin: Lower unit margins on competitive retail sales in California (7) (4) Lower realized margins on wholesale sales primarily due to lower unit margins and lower sales volumes (5) (3) Miscellaneous items, net 1 - ------ ------- Net decrease in marketing and trading segment gross margin (11) (7) ------ ------- Net increase in gross margin for regulated electricity and marketing and trading segments 51 30 Higher real estate segment contribution primarily related to increased parcel sales 24 14 Lower other income due to sale of limited partnership interest in Phoenix Suns recorded in the prior-year period (35) (21) Operations and maintenance increases primarily due to: Generation costs, including planned maintenance (11) (7) Customer service costs, including planned maintenance (10) (6) Benefit costs (8) (5) Miscellaneous items, net (3) (2) Depreciation and amortization decreases primarily due to: Absence of regulatory asset amortization 19 11 Lower depreciation rates partially offset by higher depreciable assets 8 5 Higher property taxes due to increased plant in service (7) (4) Miscellaneous items, net (5) (5) ------ ------- Net increase in income from continuing operations $ 23 10 ====== Discontinued operations primarily related to the pending sale of Silverhawk (see discussion above) (63) ------- Net decrease in net income $ (53) =======
REGULATED ELECTRICITY SEGMENT REVENUES Regulated electricity segment revenues were $60 million higher for the six months ended June 30, 2005 compared with the prior-year period primarily as a result of: - a $28 million increase in retail revenues related to customer growth, excluding weather effects; - a $28 million increase in retail revenues due to a price increase effective April 1, 2005; 7 - a $12 million increase in Off-System Sales primarily due to sales previously reported in the marketing and trading segment now classified as sales in the regulated electricity segment in accordance with the retail rate settlement; - a $9 million decrease in retail revenues related to milder weather; and - a $1 million increase due to miscellaneous factors. MARKETING AND TRADING SEGMENT REVENUES Marketing and trading segment revenues were $38 million lower for the six months ended June 30, 2005 compared with the prior-year period primarily as a result of: - a $19 million decrease in revenues from Off-System Sales primarily due to lower sales volumes, prices and sales previously reported in the marketing and trading segment now classified as sales in the regulated electricity segment in accordance with the retail rate settlement; - a $14 million decrease from lower volumes and prices on competitive retail sales in California; and - a $5 million decrease in energy trading revenues on realized sales of electricity primarily due to lower delivered electricity prices and lower volumes. REAL ESTATE REVENUES Real estate revenues were $40 million higher for the six months ended June 30, 2005 compared with the prior-year period primarily due to increased parcel sales. 8 PINNACLE WEST CAPITAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts)
THREE MONTHS ENDED JUNE 30, Increase (Decrease) 2005 2004 Amount Percent --------- --------- --------- --------- OPERATING REVENUES Regulated electricity segment $ 579,652 $ 519,929 $ 59,723 11.5% B Marketing and trading segment 71,172 110,156 (38,984) 35.4% W Real estate segment 84,753 66,084 18,669 28.3% B Other revenues 20,259 9,414 10,845 115.2% B --------- --------- --------- Total 755,836 705,583 50,253 7.1% B --------- --------- --------- OPERATING EXPENSES Regulated electricity segment purchased power and fuel 160,590 151,642 8,948 5.9% W Marketing and trading segment purchased power and fuel 57,593 88,067 (30,474) 34.6% B Operations and maintenance 153,097 138,595 14,502 10.5% W Real estate segment operations 68,593 62,217 6,376 10.2% W Depreciation and amortization 85,142 102,012 (16,870) 16.5% B Taxes other than income taxes 34,638 32,308 2,330 7.2% W Other expenses 17,556 7,575 9,981 131.8% W --------- --------- --------- Total 577,209 582,416 (5,207) 0.9% B --------- --------- --------- OPERATING INCOME 178,627 123,167 55,460 45.0% B --------- --------- --------- OTHER Allowance for equity funds used during construction 2,952 2,184 768 35.2% B Other income 8,684 36,496 (27,812) 76.2% W Other expense (3,846) (3,371) (475) 14.1% W --------- --------- --------- Total 7,790 35,309 (27,519) 77.9% W --------- --------- --------- INTEREST EXPENSE Interest charges 49,781 42,061 7,720 18.4% W Capitalized interest (3,544) (2,681) (863) 32.2% B --------- --------- --------- Total 46,237 39,380 6,857 17.4% W --------- --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 140,180 119,096 21,084 17.7% B INCOME TAXES 55,024 45,028 9,996 22.2% W --------- --------- --------- INCOME FROM CONTINUING OPERATIONS 85,156 74,068 11,088 15.0% B LOSS FROM DISCONTINUED OPERATIONS NET OF INCOME TAX BENEFIT (58,421) (1,428) (56,993) 3991.1% W --------- --------- --------- NET INCOME $ 26,735 $ 72,640 $ (45,905) 63.2% W ========= ========= ========= WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC 96,192 91,315 4,877 5.3% WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - DILUTED 96,299 91,400 4,899 5.4% EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING Income From Continuing Operations - Basic $ 0.89 $ 0.81 $ 0.08 9.9% B Net Income - Basic $ 0.28 $ 0.80 $ (0.52) 65.0% W Income From Continuing Operations - Diluted $ 0.88 $ 0.81 $ 0.07 8.6% B Net Income - Diluted $ 0.28 $ 0.79 $ (0.51) 64.6% 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)
SIX MONTHS ENDED JUNE 30, Increase (Decrease) 2005 2004 Amount Percent --------- --------- --------- ------- OPERATING REVENUES Regulated electricity segment $ 995,682 $ 935,393 $ 60,289 6.4% B Marketing and trading segment 160,429 198,840 (38,411) 19.3% W Real estate segment 156,809 116,547 40,262 34.5% B Other revenues 30,394 20,319 10,075 49.6% B --------- --------- --------- Total 1,343,314 1,271,099 72,215 5.7% B --------- --------- --------- OPERATING EXPENSES Regulated electricity segment purchased power and fuel 239,013 240,253 (1,240) 0.5% B Marketing and trading segment purchased power and fuel 128,402 155,832 (27,430) 17.6% B Operations and maintenance 308,181 275,981 32,200 11.7% W Real estate segment operations 125,069 109,510 15,559 14.2% W Depreciation and amortization 176,535 203,115 (26,580) 13.1% B Taxes other than income taxes 69,203 62,638 6,565 10.5% W Other expenses 25,930 16,325 9,605 58.8% W --------- --------- --------- Total 1,072,333 1,063,654 8,679 0.8% W --------- --------- --------- OPERATING INCOME 270,981 207,445 63,536 30.6% B --------- --------- --------- OTHER Allowance for equity funds used during construction 5,555 4,186 1,369 32.7% B Other income 9,487 47,330 (37,843) 80.0% W Other expense (8,232) (9,316) 1,084 11.6% B --------- --------- --------- Total 6,810 42,200 (35,390) 83.9% W --------- --------- --------- INTEREST EXPENSE Interest charges 96,042 88,617 7,425 8.4% W Capitalized interest (6,833) (4,180) (2,653) 63.5% B --------- --------- --------- Total 89,209 84,437 4,772 5.7% W --------- --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 188,582 165,208 23,374 14.1% B INCOME TAXES 73,685 60,439 13,246 21.9% W --------- --------- --------- INCOME FROM CONTINUING OPERATIONS 114,897 104,769 10,128 9.7% B LOSS FROM DISCONTINUED OPERATIONS NET OF INCOME TAX BENEFIT (63,714) (703) (63,011) 8963.2% W --------- --------- --------- NET INCOME $ 51,183 $ 104,066 $ (52,883) 50.8% W ========= ========= ========= WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC 94,089 91,304 2,785 3.1% WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - DILUTED 94,189 91,391 2,798 3.1% EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING Income From Continuing Operations - Basic $ 1.22 $ 1.15 $ 0.07 6.1% B Net Income - Basic $ 0.54 $ 1.14 $ (0.60) 52.6% W Income From Continuing Operations - Diluted $ 1.22 $ 1.15 $ 0.07 6.1% B Net Income - Diluted $ 0.54 $ 1.14 $ (0.60) 52.6% W
Certain prior-year amounts have been reclassified to conform to the 2005 presentation. B -- Better W -- Worse EX-99.8 9 p70961exv99w8.txt EXHIBIT 99.8 Exhibit 99.8 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY GLOSSARY OF TERMS 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. 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(degrees)F for the month. Average temperatures less than the base temperature are ignored. 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(degrees)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.
-2- 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 Total capacity required and economic, yet unavailable Replaced for Native Load 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. 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.
-3- 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. 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.
-4- 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. 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.
EX-99.9 10 p70961exv99w9.txt EXHIBIT 99.9 EXHIBIT 99.9 NEWS [PINNACLE WEST CAPITAL CORPORATION LOGO] FOR IMMEDIATE RELEASE JULY 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 SECOND QUARTER RESULTS On-Going Earnings Reflect Strong Growth PHOENIX - Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the quarter ended June 30, 2005, of $27 million, or $0.28 per diluted share of common stock. This result compares with net income of $73 million, or $0.79 per diluted share, for the same quarter a year ago. On-going consolidated earnings in the second quarter of 2005 were $86 million, or $0.89 per share, compared with $54 million, or $0.59 per share in the comparable 2004 quarter. On-going earnings for the second quarter of 2005 exclude an after-tax loss of $59 million, or $0.61 per share, related to the pending sale of the Silverhawk Power Station. On-going earnings for the 2004 second quarter exclude income after income taxes of $19 million, or $0.20 per share, related to the sale of the Company's interests in the Phoenix Suns, NAC International and Silverhawk. "Customer growth continues to be one of the underlying fundamentals of our company's success," said Pinnacle West Chairman Bill Post, citing a service territory that is growing about 4 percent a year and three times the national average. "That growth, however, will require significant planning and investment on our part and continuing cooperation from our regulators." Post added that, looking forward, "the Company's earnings outlook for the year remains unchanged and on target" excluding the effects of the Silverhawk sale. The quarter-to-quarter results were favorably affected by higher retail electricity revenues resulting from the company's first price increase in 14 years and higher retail sales volumes due to customer growth; lower depreciation expense; the absence of regulatory asset amortization; deferred fuel and purchased power costs; and improved results from the Company's real estate operations. These favorable factors were partially offset by an increase in operating costs primarily related to generation, customer service and benefits costs. For more information on Pinnacle West's operating statistics and earnings, please visit www.pinnaclewest.com/financials. PINNACLE WEST SECOND QUARTER EARNINGS JULY 27, 2005 PAGE 2 OF 2 CONFERENCE CALL Pinnacle West invites interested parties to listen to the live webcast of management's conference call to discuss the Company's 2005 second quarter earnings and recent developments at 12 noon (ET) today, July 27, 2005. The webcast 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 7452307. A replay of the call also will be available until 12 midnight (ET), Wednesday, August 3, 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 $10.7 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. Neither Pinnacle West nor APS assumes 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 or APS. In addition to the "Risk Factors" described in Exhibits 99.1 and 99.2 to Pinnacle West's and APS' Report on Form 10-Q for the fiscal quarter ended March 31, 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 Electric 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; 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 and APS. PINNACLE WEST CAPITAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 2005 2004 2005 2004 --------- --------- --------- --------- OPERATING REVENUES Regulated electricity segment $ 579,652 $ 519,929 $ 995,682 $ 935,393 Marketing and trading segment 71,172 110,156 160,429 198,840 Real estate segment 84,753 66,084 156,809 116,547 Other revenues 20,259 9,414 30,394 20,319 --------- --------- --------- --------- Total 755,836 705,583 1,343,314 1,271,099 --------- --------- --------- --------- OPERATING EXPENSES Regulated electricity segment purchased power and fuel 160,590 151,642 239,013 240,253 Marketing and trading segment purchased power and fuel 57,593 88,067 128,402 155,832 Operations and maintenance 153,097 138,595 308,181 275,981 Real estate segment operations 68,593 62,217 125,069 109,510 Depreciation and amortization 85,142 102,012 176,535 203,115 Taxes other than income taxes 34,638 32,308 69,203 62,638 Other expenses 17,556 7,575 25,930 16,325 --------- --------- --------- --------- Total 577,209 582,416 1,072,333 1,063,654 --------- --------- --------- --------- OPERATING INCOME 178,627 123,167 270,981 207,445 --------- --------- --------- --------- OTHER Allowance for equity funds used during construction 2,952 2,184 5,555 4,186 Other income 8,684 36,496 9,487 47,330 Other expense (3,846) (3,371) (8,232) (9,316) --------- --------- --------- --------- Total 7,790 35,309 6,810 42,200 --------- --------- --------- --------- INTEREST EXPENSE Interest charges 49,781 42,061 96,042 88,617 Capitalized interest (3,544) (2,681) (6,833) (4,180) --------- --------- --------- --------- Total 46,237 39,380 89,209 84,437 --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 140,180 119,096 188,582 165,208 INCOME TAXES 55,024 45,028 73,685 60,439 --------- --------- --------- --------- INCOME FROM CONTINUING OPERATIONS 85,156 74,068 114,897 104,769 LOSS FROM DISCONTINUED OPERATIONS NET OF INCOME TAX BENEFIT (58,421) (1,428) (63,714) (703) --------- --------- --------- --------- NET INCOME $ 26,735 $ 72,640 $ 51,183 $ 104,066 ========= ========= ========= ========= WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC 96,192 91,315 94,089 91,304 WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - DILUTED 96,299 91,400 94,189 91,391 EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING Income From Continuing Operations - Basic $ 0.89 $ 0.81 $ 1.22 $ 1.15 Net Income - Basic $ 0.28 $ 0.80 $ 0.54 $ 1.14 Income From Continuing Operations - Diluted $ 0.88 $ 0.81 $ 1.22 $ 1.15 Net Income - Diluted $ 0.28 $ 0.79 $ 0.54 $ 1.14
Certain prior-year amounts have been reclassified to conform to the 2005 presentation. PINNACLE WEST CAPITAL CORPORATION NON-GAAP MEASURE RECONCILIATION - NET INCOME (GAAP MEASURE) TO ON-GOING EARNINGS (NON-GAAP MEASURE)
THREE MONTHS ENDED THREE MONTHS ENDED June 30, 2005 June 30, 2004 ------------------------- ------------------------ Dollars Dollars in Millions Diluted EPS in Millions Diluted EPS ----------- ----------- ----------- ----------- Net Income $ 27 $ 0.28 $ 73 $ 0.79 Adjustments: Gain on sale of limited partnership interest in Phoenix Suns -- -- (21) (0.23) Income from discontinued operations - NAC International -- -- (1) (0.01) Loss from discontinued operations - Silverhawk Power Station write-down 55 0.57 -- -- Loss from discontinued operations - Silverhawk Power Station operations 4 0.04 3 0.04 ----- ------ ----- ------ On-going Earnings $ 86 $ 0.89 $ 54 $ 0.59 ===== ====== ===== ======
EX-99.10 11 p70961exv99w10.txt EXHIBIT 99.10 EXHIBIT 99.10 PINNACLE WEST CAPITAL CORPORATION NON-GAAP MEASURE RECONCILIATION - OPERATING INCOME (GAAP MEASURE) TO GROSS MARGIN (NON-GAAP MEASURE) (in thousands)
THREE MONTHS ENDED Pretax After Tax JUNE 30, Increase Increase 2005 2004 (Decrease) (Decrease) --------- --------- ---------- ---------- RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN Operating Income (closest GAAP measure) $ 178,627 $ 123,167 $ 55,460 $ 33,703 Plus: Operations and maintenance 153,097 138,595 14,502 8,813 Real estate segment operations 68,593 62,217 6,376 3,875 Depreciation and amortization 85,142 102,012 (16,870) (10,252) Taxes other than income taxes 34,638 32,308 2,330 1,416 Other expenses 17,556 7,575 9,981 6,065 Marketing and trading segment purchased power and fuel 57,593 88,067 (30,474) (18,519) Less: Real estate segment revenues 84,753 66,084 18,669 11,345 Other revenues 20,259 9,414 10,845 6,591 Marketing and trading segment revenues 71,172 110,156 (38,984) (23,691) --------- --------- -------- -------- REGULATED ELECTRICITY SEGMENT GROSS MARGIN $ 419,062 $ 368,287 $ 50,775 $ 30,856 ========= ========= ======== ======== RECONCILIATION OF MARKETING AND TRADING SEGMENT GROSS MARGIN Operating Income (closest GAAP measure) $ 178,627 $ 123,167 $ 55,460 $ 33,703 Plus: Operations and maintenance 153,097 138,595 14,502 8,813 Real estate segment operations 68,593 62,217 6,376 3,875 Depreciation and amortization 85,142 102,012 (16,870) (10,252) Taxes other than income taxes 34,638 32,308 2,330 1,416 Other expenses 17,556 7,575 9,981 6,065 Regulated electricity segment purchased power and fuel 160,590 151,642 8,948 5,438 Less: Real estate segment revenues 84,753 66,084 18,669 11,345 Other revenues 20,259 9,414 10,845 6,591 Regulated electricity segment revenues 579,652 519,929 59,723 36,294 --------- --------- -------- -------- MARKETING AND TRADING SEGMENT GROSS MARGIN $ 13,579 $ 22,089 $ (8,510) $ (5,172) ========= ========= ======== ========
PINNACLE WEST CAPITAL CORPORATION NON-GAAP MEASURE RECONCILIATION - OPERATING INCOME (GAAP MEASURE) TO GROSS MARGIN (NON-GAAP MEASURE) (in thousands)
SIX MONTHS ENDED Pretax After Tax JUNE 30, Increase Increase 2005 2004 (Decrease) (Decrease) --------- --------- ---------- ---------- RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN Operating Income (closest GAAP measure) $ 270,981 $ 207,445 $ 63,536 $ 38,611 Plus: Operations and maintenance 308,181 275,981 32,200 19,568 Real estate segment operations 125,069 109,510 15,559 9,455 Depreciation and amortization 176,535 203,115 (26,580) (16,153) Taxes other than income taxes 69,203 62,638 6,565 3,990 Other expenses 25,930 16,325 9,605 5,837 Marketing and trading segment purchased power and fuel 128,402 155,832 (27,430) (16,669) Less: Real estate segment revenues 156,809 116,547 40,262 24,467 Other revenues 30,394 20,319 10,075 6,123 Marketing and trading segment revenues 160,429 198,840 (38,411) (23,342) --------- --------- -------- -------- REGULATED ELECTRICITY SEGMENT GROSS MARGIN $ 756,669 $ 695,140 $ 61,529 $ 37,391 ========= ========= ======== ======== RECONCILIATION OF MARKETING AND TRADING SEGMENT GROSS MARGIN Operating Income (closest GAAP measure) $ 270,981 $ 207,445 $ 63,536 $ 38,611 Plus: Operations and maintenance 308,181 275,981 32,200 19,568 Real estate segment operations 125,069 109,510 15,559 9,455 Depreciation and amortization 176,535 203,115 (26,580) (16,153) Taxes other than income taxes 69,203 62,638 6,565 3,990 Other expenses 25,930 16,325 9,605 5,837 Regulated electricity segment purchased power and fuel 239,013 240,253 (1,240) (754) Less: Real estate segment revenues 156,809 116,547 40,262 24,467 Other revenues 30,394 20,319 10,075 6,123 Regulated electricity segment revenues 995,682 935,393 60,289 36,638 --------- --------- -------- -------- MARKETING AND TRADING SEGMENT GROSS MARGIN $ 32,027 $ 43,008 $(10,981) $ (6,674) ========= ========= ======== ========
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