8-K

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):   May 2, 2014

Commission File Number	Exact Name of Registrant as Specified in Charter; State of Incorporation; Address and Telephone Number	IRS Employer 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 or furnished by Pinnacle West Capital Corporation and Arizona Public Service Company.  Each registrant is filing or furnishing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries.  Except as stated in the preceding sentence, neither registrant is filing or furnishing 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.

Item 7.01.  Regulation FD Disclosure.

The following information is furnished pursuant to both Item 2.02 and 7.01.

On May 2, 2014, Pinnacle West Capital Corporation (the “Company” or “Pinnacle West”) issued a press release regarding its financial results for the fiscal quarter ended March 31, 2014 and its earnings outlook for 2014.  A copy of the press release is attached hereto as Exhibit 99.1.

The Company is providing a quarterly consolidated statistical summary and a copy of the slide presentation made in connection with the quarterly earnings conference call on May 2, 2014.  This information contains Company operating results for the fiscal quarter ended March 31, 2014 and is attached hereto as Exhibits 99.2 and 99.3.  The summary and slide presentation are concurrently being posted to the Company’s website at www.pinnaclewest.com, which also contains a glossary of relevant terms.

Item 9.01.	Financial Statements and Exhibits.
(d)	Exhibits.

Exhibit No.	Registrant(s)	Description
99.1	Pinnacle West APS	Earnings News Release issued on May 2, 2014.
99.2	Pinnacle West APS	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the three-month periods ended March 31, 2014 and 2013.
99.3	Pinnacle West APS	Pinnacle West Capital Corporation 1st Quarter 2014 Results slide presentation accompanying May 2, 2014 conference call.

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: May 2, 2014	By:	/s/ James R. Hatfield
			James R. Hatfield
			Executive Vice President and
			Chief Financial Officer
	ARIZONA PUBLIC SERVICE COMPANY
	(Registrant)
Dated: May 2, 2014	By:	/s/ James R. Hatfield
			James R. Hatfield
			Executive Vice President and
			Chief Financial Officer

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Exhibit Index

Exhibit No.	Registrant(s)	Description
99.1	Pinnacle West APS	Earnings News Release issued on May 2, 2014.
99.2	Pinnacle West APS	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the three-month periods ended March 31, 2014 and 2013.
99.3	Pinnacle West APS	Pinnacle West Capital Corporation 1st Quarter 2014 Results slide presentation accompanying May 2, 2014 conference call.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE
Media Contact:	Alan Bunnell, (602) 250-3376
Analyst Contact:	Paul Mountain, (602) 250-4952
Website:	pinnaclewest.com

PINNACLE WEST REPORTS 2014 FIRST-QUARTER RESULTS

·Unfavorable weather main driver in quarter-over-quarter earnings decrease

·Company benefits from operational excellence and cost management execution

·Company affirms full-year 2014 earnings guidance

PHOENIX — Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income attributable to common shareholders of $15.8 million, or $0.14 per diluted share of common stock, for the quarter ended March 31, 2014. This result compares with $24.4 million, or $0.22 per diluted share, for the same period in 2013. For both the 2014 and 2013 first-quarter periods, net income is the same as on-going earnings.

“The story for the first quarter was weather,” said Pinnacle West Chairman, President and Chief Executive Officer Don Brandt. “Above-normal winter temperatures — combined with winter temperatures below historical averages a year ago — negatively impacted our financial results. However, because of our employees’ continued attention to operational excellence and cost-management execution, we remain optimistic that we will achieve our annual targets, especially with the summer heat and our two largest revenue quarters still ahead of us.”

The first-quarter results comparison was adversely impacted by the following major items:

·Milder-than-normal weather decreased the Company’s earnings by $0.13 per share compared to the 2013 first quarter, which was colder than normal. As a result, in the 2014 first quarter there were 239 heating degree-days (a measure of the effects of weather) — 51 percent fewer than normal and 61 percent less than the year-ago first quarter. Weather positively impacted 2013 first-quarter earnings by $0.06 per share.

·Lower transmission revenue reduced earnings by $0.03 per share due to a prior period true-up reflected in 2013’s first-quarter results.

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These factors were offset in part by the following positive factors:

·Lower operating expenses impacted earnings by $0.04 per share compared with the prior-year quarter. The decrease largely was the result of lower employee benefit costs, partially offset by higher depreciation and amortization resulting from increased plant in service, as well as increased property taxes.

The operating expense variance excludes costs associated with renewable energy, energy efficiency and similar regulatory programs, which are largely offset by comparable amounts of operating revenues.

·The Lost Fixed Cost Recovery (LFCR) mechanism improved earnings by $0.02 per share.

·Slightly higher retail electricity sales — excluding the effects of weather variations, but including the effects of customer conservation, energy efficiency programs and distributed renewable generation — improved earnings $0.01 per share. Compared to the same quarter a year ago, weather-normalized sales increased 0.6 percent, while total customer growth was 1.3 percent quarter-over-quarter.

·Other miscellaneous items contributed $0.01 to the bottom line.

APS, the Company’s principal subsidiary, recorded 2014 first-quarter net income attributable to common shareholder of $19.5 million versus net income of $26.0 million for the comparable 2013 quarter.

Financial Outlook

For 2014, the Company continues to expect its on-going consolidated earnings will be in the range of $3.60 to $3.75 per diluted share. Longer-term, the Company’s goal is to achieve a consolidated earned return on average common equity of at least 9.5 percent annually through 2015.

Key factors and assumptions underlying the 2014 outlook can be found in the first-quarter 2014 earnings presentation slides on the Company’s website at pinnaclewest.com/investors.

Conference Call and Webcast

Pinnacle West invites interested parties to listen to the live webcast of management’s conference call to discuss the Company’s 2014 first-quarter results, as well as recent developments, at 12 noon ET (9 a.m. AZ time) today, May 2. The webcast can be accessed at pinnaclewest.com/presentations and will be available for replay on the website for 30 days. To access the live conference call by telephone, dial (877) 407-8035 or (201) 689-8035 for international callers. A replay of the call also will be available until 11:59 p.m. (ET), Friday, May 9, 2014, by calling (877) 660-6853 in the U.S. and Canada or (201) 612-7415 internationally and entering conference ID number 13579568.

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General Information

Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of about $13.5 billion, nearly 6,400 megawatts of generating capacity and about 6,400 employees in Arizona and New Mexico. Through its principal subsidiary, Arizona Public Service, the Company provides retail electricity service to nearly 1.2 million Arizona homes and businesses. For more information about Pinnacle West, visit the Company’s website at pinnaclewest.com.

Dollar amounts in this news release are after income taxes.  Earnings per share amounts are based on average diluted common shares outstanding.  For more information on Pinnacle West’s operating statistics and earnings, please visit pinnaclewest.com/investors.

NON-GAAP FINANCIAL INFORMATION

In this press release, we refer to “on-going earnings.” On-going earnings is a “non-GAAP financial measure,” as defined in accordance with SEC rules. 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.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements based on our current expectations, including statements regarding our earnings guidance and financial outlook and goals. These forward-looking statements are often identified by words such as “estimate,” “predict,” “may,” “believe,” “plan,” “expect,” “require,” “intend,” “assume” and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to:

·our ability to manage capital expenditures and operations and maintenance costs while maintaining reliability and customer service levels;

·variations in demand for electricity, including those due to weather, the general economy, customer and sales growth (or decline), and the effects of energy conservation measures and distributed generation;

·power plant and transmission system performance and outages;

·competition in retail and wholesale power markets;

·regulatory and judicial decisions, developments and proceedings;

·new legislation or regulation including those relating to environmental requirements, nuclear plant operations and potential deregulation of retail electric markets;

·fuel and water supply availability;

·our ability to achieve timely and adequate rate recovery of our costs, including returns on debt and equity capital;

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·our ability to meet renewable energy and energy efficiency mandates and recover related costs;

·risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty;

·current and future economic conditions in Arizona, particularly in real estate markets;

·the cost of debt and equity capital and the ability to access capital markets when required;

·environmental and other concerns surrounding coal-fired generation;

·volatile fuel and purchased power costs;

·the investment performance of the assets of our nuclear decommissioning trust, pension, and other postretirement benefit plans and the resulting impact on future funding requirements;

·the liquidity of wholesale power markets and the use of derivative contracts in our business;

·potential shortfalls in insurance coverage;

·new accounting requirements or new interpretations of existing requirements;

·generation, transmission and distribution facility and system conditions and operating costs;

·the ability to meet the anticipated future need for additional baseload generation and associated transmission facilities in our region;

·the willingness or ability of our counterparties, power plant participants and power plant land owners to meet contractual or other obligations or extend the rights for continued power plant operations;

·technological developments affecting the electric industry; and

·restrictions on dividends or other provisions in our credit agreements and ACC orders.

These and other factors are discussed in Risk Factors described in Part 1, Item 1A of the Pinnacle West/APS Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which readers should review carefully before placing any reliance on our financial statements or disclosures. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law.

#  #  #

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PINNACLE WEST CAPITAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(dollars and shares in thousands, except per share amounts)

	THREE MONTHS ENDED
	MARCH 31,
	2014			2013
Operating Revenues	$	686,251		$	686,652
Operating Expenses
Fuel and purchased power	249,786			230,679
Operations and maintenance	212,882			223,250
Depreciation and amortization	101,772			103,730
Taxes other than income taxes	45,845			40,021
Other expenses	796			2,049
Total	611,081			599,729
Operating Income	75,170			86,923
Other Income (Deductions)
Allowance for equity funds used during construction	7,442			6,864
Other income	2,367			758
Other expense	(4,684		)	(3,752		)
Total	5,125			3,870
Interest Expense
Interest charges	52,969			49,478
Allowance for borrowed funds used during construction	(3,770		)	(3,990		)
Total	49,199			45,488
Income Before Income Taxes	31,096			45,305
Income Taxes	6,405			12,469
Net Income	24,691			32,836
Less: Net income attributable to noncontrolling interests	8,925			8,392
Net Income Attributable To Common Shareholders	$	15,766		$	24,444
Weighted-Average Common Shares Outstanding - Basic	110,257			109,832
Weighted-Average Common Shares Outstanding - Diluted	110,888			110,835
Earnings Per Weighted-Average Common Share Outstanding
Net income attributable to common shareholders - basic	$	0.14		$	0.22
Net income attributable to common shareholders - diluted	$	0.14		$	0.22

EX-99.2

Exhibit 99.2

Last Updated 5/2/2014

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary

Periods Ended March 31, 2014 and 2013

		3 Months Ended March 31,
Line		2014		2013		Incr (Decr)
	EARNINGS CONTRIBUTION BY SUBSIDIARY (Dollars in Millions)
1	Arizona Public Service	$	28	$	33	$	(5	)
2	Parent Company	(3)		(1)		(2		)
3	Net Income	25		32		(7		)
4	Less: Net Income Attributable to Noncontrolling Interests	9		8		1
5	Net Income Attributable to Common Shareholders	$	16	$	24	$	(8	)
	EARNINGS PER SHARE BY SUBSIDIARY - DILUTED
6	Arizona Public Service	$	0.26	$	0.31	$	(0.05	)
7	Parent Company	(0.04)		(0.01)		(0.03		)
8	Net Income	0.22		0.30		(0.08		)
9	Less: Net Income Attributable to Noncontrolling Interests	0.08		0.08		-
10	Net Income Attributable to Common Shareholders	$	0.14	$	0.22	$	(0.08	)
11	BOOK VALUE PER SHARE	$	38.27	$	36.51	$	1.76
	COMMON SHARES OUTSTANDING (Thousands)
12	Average - Diluted	110,888		110,835		53
13	End of Period	110,354		109,946		408

See Glossary of Terms Page 1 of 4

Last Updated 5/2/2014

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary

Periods Ended March 31, 2014 and 2013

		3 Months Ended March 31,
Line		2014		2013		Incr (Decr)
	ELECTRIC OPERATING REVENUES (Dollars in Millions)
	Retail
14	Residential	$	282	$	307	$	(25	)
15	Business	329		329		-
16	Total retail	611		636		(25		)
	Wholesale revenue on delivered electricity
17	Traditional contracts	11		11		-
18	Off-system sales	49		23		26
19	Native load hedge liquidation	-		1		(1		)
20	Total wholesale	60		35		25
21	Transmission for others	8		7		1
22	Other miscellaneous services	7		8		(1		)
23	Total electric operating revenues	$	686	$	686	$	-
	ELECTRIC SALES (GWH)
	Retail sales
24	Residential	2,383		2,730		(347		)
25	Business	3,229		3,271		(42		)
26	Total retail	5,612		6,001		(389		)
	Wholesale electricity delivered
27	Traditional contracts	144		130		14
28	Off-system sales	1,106		816		290
29	Retail load hedge management	-		31		(31		)
30	Total wholesale	1,250		977		273
31	Total electric sales	6,862		6,978		(116		)

See Glossary of Terms Page 2 of 4

Last Updated 5/2/2014

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary

Periods Ended March 31, 2014 and 2013

		3 Months Ended March 31,
Line		2014	2013	Incr (Decr)
	AVERAGE ELECTRIC CUSTOMERS
	Retail customers
32	Residential	1,036,013	1,021,817	14,196
33	Business	128,833	127,895	938
34	Total retail	1,164,846	1,149,712	15,134
35	Wholesale customers	57	53	4
36	Total customers	1,164,903	1,149,765	15,138
37	Total customer growth (% over prior year)	1.3%	1.4%	(0.1)%
	RETAIL SALES (GWH) - WEATHER NORMALIZED
38	Residential	2,610	2,566	44
39	Business	3,219	3,227	(8)
40	Total	5,829	5,793	36
41	Retail Sales (GWH) (% over prior year)	0.6%	0.4%	0.2%
	RETAIL USAGE (KWh/Average Customer)
42	Residential	2,300	2,672	(372)
43	Business	25,064	25,577	(513)
	RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
44	Residential	2,519	2,511	8
45	Business	24,986	25,236	(250)
	ELECTRICITY DEMAND (MW)
46	Native load peak demand	3,917	4,825	(908)
	WEATHER INDICATORS - RESIDENTIAL
	Actual
47	Cooling degree-days	-	-	-
48	Heating degree-days	239	613	(374)
49	Average humidity	-	-	-
	10-Year Averages
50	Cooling degree-days	-	-	-
51	Heating degree-days	489	489	-
52	Average humidity	-	-	-

See Glossary of Terms Page 3 of 4

Last Updated 5/2/2014

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary

Periods Ended March 31, 2014 and 2013

		3 Months Ended March 31,
Line		2014	2013	Incr (Decr)
	ENERGY SOURCES (GWH)
	Generation production
53	Nuclear	2,511	2,456	55
54	Coal	2,796	2,753	43
55	Gas, oil and other	1,055	1,250	(195)
56	Total generation production	6,362	6,459	(97)
	Purchased power
57	Firm load	857	692	165
58	Marketing and trading	113	113	-
59	Total purchased power	969	805	164
60	Total energy sources	7,331	7,264	67
	POWER PLANT PERFORMANCE
	Capacity Factors
61	Nuclear	101%	99%	2%
62	Coal	74%	73%	1%
63	Gas, oil and other	14%	16%	(2)%
64	System average	46%	47%	(1)%
	ECONOMIC INDICATORS
	Building Permits (a)
65	Metro Phoenix	5,413	3,276	2,137
	Arizona Job Growth (b)
66	Payroll job growth (% over prior year)	2.0%	2.2%	(0.2)%
67	Unemployment rate (%, seasonally adjusted)	7.4%	8.0%	(0.6)%

Sources:

(a)   U.S. Census Bureau

(b)   Arizona Department of Economic Security

See Glossary of Terms Page 4 of 4

EX-99.3

Exhibit 99.3

FIRST QUARTER 2014 RESULTS May 2, 2014

FORWARD LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES This presentation contains forward-looking statements based on current expectations, including statements regarding our earnings guidance and financial outlook and goals. These forward-looking statements are often identified by words such as “estimate,” “predict,” “may,” “believe,” “plan,” “expect,” “require,” “intend,” “assume” and similar words. Because actual results may differ materially from expectations, we caution you not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to: our ability to manage capital expenditures and operations and maintenance costs while maintaining reliability and customer service levels; variations in demand for electricity, including those due to weather, the general economy, customer and sales growth (or decline), and the effects of energy conservation measures and distributed generation; power plant and transmission system performance and outages; competition in retail and wholesale power markets; regulatory and judicial decisions, developments and proceedings; new legislation or regulation, including those relating to environmental requirements, nuclear plant operations and potential deregulation of retail electric markets; fuel and water supply availability; our ability to achieve timely and adequate rate recovery of our costs, including returns on debt and equity capital; our ability to meet renewable energy and energy efficiency mandates and recover related costs; risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty; current and future economic conditions in Arizona, particularly in real estate markets; the cost of debt and equity capital and the ability to access capital markets when required; environmental and other concerns surrounding coal-fired generation; volatile fuel and purchased power costs; the investment performance of the assets of our nuclear decommissioning trust, pension, and other postretirement benefit plans and the resulting impact on future funding requirements; the liquidity of wholesale power markets and the use of derivative contracts in our business; potential shortfalls in insurance coverage; new accounting requirements or new interpretations of existing requirements; generation, transmission and distribution facility and system conditions and operating costs; the ability to meet the anticipated future need for additional baseload generation and associated transmission facilities in our region; the willingness or ability of our counterparties, power plant participants and power plant land owners to meet contractual or other obligations or extend the rights for continued power plant operations; technological developments affecting the electric industry; and restrictions on dividends or other provisions in our credit agreements and ACC orders. These and other factors are discussed in Risk Factors described in Part I, Item 1A of the Pinnacle West/APS Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which you should review carefully before placing any reliance on our financial statements, disclosures or earnings outlook. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law. In this presentation, references to net income and earnings per share (EPS) refer to amounts attributable to common shareholders. We present “gross margin” per diluted share of common stock. Gross margin refers to operating revenues less fuel and purchased power expenses. Gross margin is a “non-GAAP financial measure,” as defined in accordance with SEC rules. The appendix contains a reconciliation of this non-GAAP financial measure to the referenced revenue and expense line items on our Consolidated Statements of Income, which are the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States of America (GAAP). We view gross margin as an important performance measure of the core profitability of our operations. We refer to “on-going earnings” in this presentation, which is also a non-GAAP financial measure. 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 may involve judgments by management, including whether an item is classified as an unusual item. These measures are key components of our internal financial reporting and are used by our management in analyzing the operations of our business. We believe that investors benefit from having access to the same financial measures that management uses.

Resource Planning Operational Excellence Regulatory Update CEO AGENDA

1st Quarter 2014 Results Arizona Economic Outlook Financial Outlook CFO AGENDA

CONSOLIDATED EPS COMPARISON 2014 VS. 2013 1st Quarter GAAP Net Income $0.14 $0.22 1st Quarter On-Going Earnings Excluding Weather

Higher D&A(2) $(0.03) Lower Gross Margin(4) $(0.09) = Net Decrease $(0.08) ON-GOING EPS VARIANCES 1ST QUARTER 2014 VS. 1ST QUARTER 2013 Excludes $5.6M of O&M associated with Four Corners transaction deferred for regulatory recovery in D&A. Excludes deferrals of $7.3M in D&A associated with Four Corners transaction. Excludes $1.7M of other taxes associated with Four Corners transaction deferred for regulatory recovery in D&A. Excludes costs, and offsetting operating revenues, associated with renewable energy (excluding AZ Sun), demand side management and similar regulatory programs. See non-GAAP reconciliation for gross margin in appendix. Lower O&M(1)(4) $0.09 Higher Other Taxes(3) $(0.02) Other, Net $(0.03)

GROSS MARGIN EPS DRIVERS 1ST QUARTER 2014 VS. 1ST QUARTER 2013 Lost Fixed Cost Recovery Mechanism $0.02 Other, Net (including AZ Sun) $0.04 Higher Retail kWh Sales $0.01 Retail Transmission Revenue $(0.03) = Net Decrease $(0.09) Weather $(0.13) See non-GAAP reconciliation for gross margin in appendix.

ARIZONA ECONOMIC INDICATORS Nonresidential Building Vacancy – Metro Phoenix New Home Sales & Single Family Permits Home Prices – Metro Phoenix Value Relative to Jan ‘05 Vacancy Rate Office Retail Job Growth (Total Nonfarm) - Arizona YoY Change Forecast Q1 Q1 Jan

CUSTOMER GROWTH Annual Growth Customer growth drives 85% of retail sales (excluding impacts of customer conservation, energy efficiency and distributed renewable generation initiatives) Retail customer growth to average about 2.5% annually 2014-2016

ECONOMIC OUTLOOK “Arizona, Texas Head List of Best States for Expected Job Growth. Forbes/Moody’s Analytics, September 25, 2013. “America’s 20 Fastest Growing-Cities.” Forbes, February 14, 2014. Arizona is the #1 state for projected job growth by Forbes (1) #1 Phoenix ranked 3rd on Forbes’ 2014 list of America’s Fastest-Growing Cities (2) 3rd

RETAIL SALES GROWTH (WEATHER-NORMALIZED) YoY Retail Sales Before Customer Programs Energy Efficiency & Customer Conservation Distributed Energy Weather-normalized retail sales growth about 1% for 2014-2016 after impacts of energy efficiency, customer conservation and distributed renewable generation initiatives (excluding Lost Fixed Cost Recovery) Distributed Energy (DE) Impact DE makes up 0.5% (or less) of the negative impact to retail sales growth as shown in the chart; equates to approximately 60 GWh out of our total retail sales of over 28,000 GWh Average residential rooftop solar system produces 10,000 – 12,000 KWh per year (average metro-Phoenix customer’s usage is nearly 15,000 KWh)

FINANCING ($Millions) Debt Maturity Schedule 2014 Major Financing Activities $250 million 30-year 4.70% APS senior unsecured notes issued in January 2014 Currently expect about $550 million additional long-term debt issuance in 2014, including issuance to refinance $300 million of maturing debt In addition, there will be several tax-exempt series subject to remarketing 2015 Major Financing Activities Currently expect about $300 million of new long-term debt in 2015, in addition to refinancing maturing debt

2014 ON-GOING EPS GUIDANCE Key Factors & Assumptions as of May 2, 2014 2014 Electricity gross margin* (operating revenues, net of fuel and purchased power expenses) $2.22 – $2.27 billion Retail customer growth about 2% Weather-normalized retail electricity sales volume about +0.5% to prior year taking into account effects of customer conservation, energy efficiency and distributed renewable generation initiatives Actual weather through March; normal weather patterns remainder of the year Operating and maintenance* $790 – $810 million Other operating expenses (depreciation and amortization, Four Corners deferrals, and taxes other than income taxes) $595 - $615 million Interest expense, net of allowance for borrowed and equity funds used during construction $170 - $180 million Net income attributable to non-controlling interests ~$35 million Effective tax rate 34% Average diluted common shares outstanding ~111.0 million On-Going EPS Guidance $3.60 - $3.75 * Excludes O&M of $94 million, and offsetting revenues, associated with renewable energy and demand side management programs.

APPENDIX

RESOURCE PLANNING* Existing Owned Resources Existing Contracts Resource Planning Requirement Load Requirement Including Reserves MW Coal Nuclear RE + DE EE Composition of Energy Mix by Resource Note: RE = Renewable Energy; DE = Distributed Energy; EE = Energy Efficiency *Data shown is based on 2014 Integrated Resource Plan filed April 1, 2014.

Utility-scale photovoltaic solar plants to be owned by APS Constructive rate recovery through RES until included in base rates 118 MW in commercial operation to date; 150 MW by end of 2014 Commitments to date: 170 MW; $695 million estimated capital investment AZ SUN PROGRAM Owning solar resources makes sense for our customers and the environment and provides earnings growth potential Name Location Capacity Developer Actual or Target COD* Paloma Gila Bend, AZ 17 MW First Solar September 2011 Cotton Center Gila Bend, AZ 17 MW Solon October 2011 Hyder Phase 1 Hyder, AZ 11 MW SunEdison October 2011 Hyder Phase 2 Hyder, AZ 5 MW SunEdison February 2012 Chino Valley Chino Valley, AZ 19 MW SunEdison November 2012 Yuma Foothills Phase 1 Yuma, AZ 17 MW AMEC March 2013 Yuma Foothills Phase 2 Yuma, AZ 18 MW AMEC December 2013 Hyder II Hyder, AZ 14 MW McCarthy December 2013 Gila Bend Gila Bend, AZ 32 MW Black & Veatch 2Q 2014 City of Phoenix Buckeye, AZ 10 MW TBD 2015 Luke Air Force Base Glendale, AZ 10 MW TBD 2015 Total 170 MW As of March 31, 2014 * In-Service or Commercial Operation Date

2014 KEY DATES Docket # Q1 Q2 Q3 Q4 Key Regulatory Filings Lost Fixed Cost Recovery 11-0224 Jan 15 Transmission Cost Adjustor May 15 Renewable Energy Surcharge Jul 1 10-Year Transmission Plan (Annual) 13-0002 Jan 31 2014 Integrated Resource Plan (Biennial) 13-0070 Apr 1 Net Metering (Decision No. 74202) 13-0248 Quarterly Installation Filings 13-0248 Apr 15 Jul 15 Oct 15 Value and Cost of Distributed Generation 14-0023 May 7 Jun 20 TBD Innovations and Technology Development Docket Workshops – Substantive (a), Response (b) 13-0375 Mar 20 (1a) Apr 25 (1b) May 28 (2a) Jun TBD (2b) Jul 28 (3a) Aug 18 (3b) Four Corners Rate Rider 11-0224 Testimony Jun – Jul; Hearings being Aug ACC Open Meeting TBD Energy Efficiency workshops – (a) Cost effectiveness, (b) Cost recovery and (c) EE standards/rulemaking 13-0214 Mar 18 (a) Mar 31 (b) Apr 17 (c) ACC Open Meetings - ACC Open Meetings Held Monthly Elections - May 28: Nominations Aug 26: Primary Nov 4: General Arizona State Legislature - In Session Jan 13 – Apr 24 (Adjourned) Annual Shareholder Meeting - May 21

FERC Formula Rates adopted in 2008 Adjusted annually with 10.75% allowed ROE Based on FERC Form 1 and projected closings Update filed each April Annual rate true-up compares projected revenue requirement to actual, with variance incorporated into next annual update Retail portion flows through ACC Transmission Cost Adjustor (TCA) REGULATORY MECHANISMS (TCA) We have achieved constructive transmission rate treatment with annual adjustments 2013 2012 Annual Rate Increase Rate Effective Date Annual Rate Increase Rate Effective Date Retail Portion (TCA) $21 M 6/1/2013 $18 M 8/1/2012 Wholesale Portion $5 M 6/1/2013 $(2) M 6/1/2012 Total Increase (Decrease) $26 M $16 M Equity Ratio 57% 55% Rate Base (Year-End) $1.2 B $1.2 B Test Year 2012 2011

6/1 Rate Goes Into Effect REGULATORY MECHANISMS (TCA) We have achieved constructive transmission rate treatment with annual adjustments 2013 2014 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 6/1 Rate Goes Into Effect ~5/15 File/Post FERC Rate ~4/15 File FERC Form 1 ~5/15 File/Post FERC Rate ~4/15 File FERC Form 1 New accounting treatment began July 1, 2012, effective with 2012 Settlement Agreement Quarterly true-ups can occur throughout the year (2013 included adjustments of 2012 revenue) Although transmission rate base is growing, 2014 transmission revenue in line with 2013 in part because of the 2012 true-ups in 2013, and higher CWIP in 2014 due to large projects (i.e. HANG2) that come online beginning in 2015 2013 Revenue 2013 Rates (Including True-Up) 2014 Rates (Including True-Up) 2014 Revenue Quarterly True-Ups Quarterly True-Ups

On December 30, 2013, APS and Southern California Edison (“SCE”) completed previously announced transaction whereby APS agreed to purchase SCE’s 48% interest in Units 4 and 5 of Four Corners Final purchase price: $182 million Estimated environmental compliance: $350 million, primarily in 2016-2017 APS will continue to operate Four Corners and now has total interest of about 970 MW APS filed Four Corners-specific revenue requirement on docket 11-0224 APS notified EPA that the Four Corners participants selected the BART alternative requiring APS to retire Units 1-3 by January 1, 2014 and install and operate SCR control technology on Units 4-5 by July 31, 2018 Construction expected to begin by early 2016 after approval of final EPA permit Next Steps: ACC decision on revenue requirement (rates in effect immediately following decision) EPA permitting process FOUR CORNERS POWER PLANT ALJ Procedural Schedule Staff/Intervenor Direct Testimony June 19, 2014 APS Rebuttal Testimony July 3, 2014 Staff/Intervenor Surrebuttal Testimony July 21, 2014 APS Rejoinder Testimony July 28, 2014 Prehearing Conference July 30, 2014 Hearing Begins August 4, 2014

OCOTILLO POWER PLANT (TEMPE, AZ) Ocotillo modernization project will maintain valley grid reliability and increase APS’s generating capacity by 290 MW Maintains system reliability through retirement of aging steam units Replacement units meet need for increased portfolio responsiveness Aids integration of renewables Estimated project cost of $600M - $700M Expected timeline: Early 2014: Stakeholder engagement and initiate permitting activities Q3 2014: ACC Certificate of Environmental Compatibility application filing Late 2014: ACC Siting Committee hearings 2016: Expect to begin construction Q2 2018: Expected project completion Site Capacity (MW) Current Future (2) Westinghouse 110 MW steam units - constructed 1960 220 Retire (2) Westinghouse 55 MW combustion turbines - constructed 1972/73 110 110 Install (5) GE 102 MW combustion turbines 0 510 Total 330 620 Net site capacity increased by 290 MW

CAPITAL EXPENDITURES 80% of capital expenditures are recovered through rate adjustors (40%) and depreciation cash flow (40%) ($ Millions) $973 $1,026 2014 – 2016 as disclosed in First Quarter 2014 Form 10-Q Distribution Transmission Renewable Generation Environmental Traditional Generation Projected $1,263

OPERATIONS & MAINTENANCE Our goal is to keep consolidated O&M growth at or below retail sales growth levels Note: Pinnacle West O&M for 2009-2014E: $10M, $9M, $8M, $11M, $27M and $10M, respectively. * 2013 includes $9M related to the closure of Four Corners Units 1, 2 and 3 deferred for regulatory recovery in depreciation. **Renewable energy and demand side management expenses are offset by revenue adjustors. $790 - $810 ($ Millions) $788*

2014 – 2016 FINANCIAL OUTLOOK Key Factors & Assumptions as of May 2, 2014 Assumption Impact Retail customer growth Expected to average about 2.5% annually (2014-2016) Modestly improving Arizona and U.S. economic conditions Weather-normalized retail electricity sales volume growth About 1% after customer conservation and energy efficiency and distributed renewable generation initiatives Weather Actual weather through March 2014; normal weather patterns thereafter Assumption Impact AZ Sun Program Additions to flow through RES until next base rate case First 50 MW of AZ Sun is recovered through base rates Lost Fixed Cost Recovery (LFCR) Offsets 30-40% of revenues lost due to ACC-mandated energy efficiency and distributed renewable generation initiatives Environmental Improvement Surcharge (EIS) Assumed to recover up to $5 million annually of carrying costs for government-mandated environmental capital expenditures Power Supply Adjustor (PSA) 100% recovery as of July 1, 2012 Transmission Cost Adjustor (TCA) TCA is filed each May and automatically goes into rates effective June 1 Beginning July 1, 2012 following conclusion of the regulatory settlement, transmission revenue is accrued each month as it is earned. Four Corners Acquisition Pending final ACC approval Potential Property Tax Deferrals (2012 retail rate settlement) – Assume 60% of property tax increases relate to tax rates, therefore, will be eligible for deferrals (Deferral rates: 50% in 2013; 75% in 2014 and thereafter) Gross Margin – Customer Growth and Weather Gross Margin – Related to 2012 Retail Rate Settlement

PNW Consolidated At least 9.5% Annually CONSOLIDATED FINANCIAL OUTLOOK Earned ROE * Continuing operations Projected Future dividends subject to declaration at Board of Director’s discretion Annual Dividend Growth Approx. 4% Goal

GROSS MARGIN EFFECTS OF WEATHER VARIANCES VS. NORMAL Pretax Millions All periods recalculated to confirm to current 10-year rolling average (2003 – 2012). $9 Million 2014 $(13) Million

RENEWABLE ENERGY AND DEMAND SIDE MANAGEMENT EXPENSES* * O&M expenses related to renewable energy, demand side management and similar regulatory programs are offset by comparable revenue amounts. Pretax Millions $124 Million 2014 $26 Million $137 Million

NON-GAAP MEASURE RECONCILIATION GROSS MARGIN $ millions pretax, except per share amounts 2014 2013 Operating revenues* 686 $ 687 $ Fuel and purchased power expenses* (250) (231) Gross margin 436 456 (0.11) $ Adjustments: Renewable energy (excluding AZ Sun), demand side management and similar regulatory programs (21) (24) 0.02 Gross margin - adjusted 415 $ 432 $ (0.09) $ * Line items from Consolidated Statements of Income Three Months Ended March 31, EPS Impact