PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2013			2012			2011

Operating revenues	$	799		$	6,133		$	1,034
Operating expenses	24,930			12,125			8,811

Operating loss	(24,131		)	(5,992		)	(7,777		)

Other
Equity in earnings of subsidiaries	420,926			391,528			335,859
Other expense	(1,999		)	(2,001		)	(1,481		)
Total	418,927			389,527			334,378

Interest expense	3,226			4,868			8,053

Income from continuing operations	391,570			378,667			318,548
Income tax benefit	(14,504		)	(7,079		)	(8,938		)

Income from continuing operations — net of income taxes	406,074			385,746			327,486
Income (loss) from discontinued operations — net of income taxes	—			(4,204		)	11,987

Net income attributable to common shareholders	406,074			381,542			339,473

Other comprehensive income — attributable to common shareholders	35,955			38,155			7,605
Total comprehensive income — attributable to common shareholders	$	442,029		$	419,697		$	347,078

See Notes to Pinnacle West’s Consolidated Financial Statements.

PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEETS

(in thousands)

	December 31,
	2013			2012
ASSETS

Current assets
Cash and cash equivalents	$	5,798		$	22,679
Accounts receivable	80,108			92,906
Current deferred income taxes	93,185			77,771
Income tax receivable	1,853			3,350
Other current assets	242			25
Total current assets	181,186			196,731

Investments and other assets
Investments in subsidiaries	4,455,049			4,223,301
Other assets	13,789			13,833
Total investments and other assets	4,468,838			4,237,134

Total Assets	$	4,650,024		$	4,433,865

LIABILITIES AND EQUITY

Current liabilities
Accounts payable	$	3,279		$	5,735
Accrued taxes	8,538			8,239
Common dividends payable	62,528			59,789
Other current liabilities	31,295			41,000
Total current liabilities	105,640			114,763

Long-term debt less current maturities	125,000			125,000

Deferred credits and other
Deferred income taxes	4,158			17,395
Pension and other postretirement liabilities	37,611			41,199
Other	37,155			33,219
Total deferred credits and other	78,924			91,813

Common stock equity
Common stock	2,487,250			2,462,712
Accumulated other comprehensive loss	(78,053		)	(114,008		)
Retained earnings	1,785,273			1,624,102
Total Pinnacle West Shareholders’ equity	4,194,470			3,972,806
Noncontrolling interests	145,990			129,483
Total Equity	4,340,460			4,102,289
Total Liabilities and Equity	$	4,650,024		$	4,433,865

See Notes to Pinnacle West’s Consolidated Financial Statements.

PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2013			2012			2011

Cash flows from operating activities
Net income	$	406,074		$	381,542		$	339,473
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries — net	(420,926		)	(391,528		)	(335,859		)
Depreciation and amortization	95			94			97
Gain on sale of energy-related business	—			—			(10,404		)
Deferred income taxes	(28,806		)	(15,135		)	7,387
Accounts receivable	21,671			28,763			(24,201		)
Accounts payable	(2,449		)	879			(2,677		)
Accrued taxes and income tax receivables — net	1,402			(3,103		)	7,512
Dividends received from subsidiaries	242,100			222,200			228,900
Other	(15,065		)	(4,589		)	19,270
Net cash flow provided by operating activities	204,096			219,123			229,498

Cash flows from investing activities
Investments in subsidiaries	(3,400		)	—			—
Repayments of loans from subsidiaries	2,149			996			61,143
Proceeds from sale of energy-related products and services business	—			—			45,111
Advances of loans to subsidiaries	(2,099		)	(1,200		)	(64,970		)
Proceeds from sale of life insurance policies	—			—			9,357
Net cash flow provided by (used for) investing activities	(3,350		)	(204		)	50,641

Cash flows from financing activities
Issuance of long-term debt	—			125,000			175,000
Short-term borrowings and payments — net	—			—			(16,600		)
Dividends paid on common stock	(235,244		)	(225,075		)	(221,728		)
Repayment of long-term debt	—			(125,000		)	(225,000		)
Common stock equity issuance	17,319			15,955			15,841
Other	298			170			(2,667		)
Net cash flow used for financing activities	(217,627		)	(208,950		)	(275,154		)

Net increase (decrease) in cash and cash equivalents	(16,881		)	9,969			4,985

Cash and cash equivalents at beginning of year	22,679			12,710			7,725

Cash and cash equivalents at end of year	$	5,798		$	22,679		$	12,710

See Notes to Pinnacle West’s Consolidated Financial Statements.