-----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, Ec0vEr8EFkzYzjpg6f1WDhiWsNZFe8nmDkgJnXFoUSB1W67tGW06csn4o5kf8v5c tXJtWNTNp327Hhfxssdf6g== 0000950147-03-000093.txt : 20030204 0000950147-03-000093.hdr.sgml : 20030204 20030203205304 ACCESSION NUMBER: 0000950147-03-000093 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20021231 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20030204 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: 03537305 BUSINESS ADDRESS: STREET 1: 400 E VAN BUREN ST PO BOX 52132 STREET 2: P O BOX 52132 CITY: PHOENIX STATE: AZ ZIP: 85072-2132 BUSINESS PHONE: 6022501000 MAIL ADDRESS: STREET 1: 400 E VAN BUREN ST STREET 2: PO BOX 52132 CITY: PHOENIX STATE: AZ ZIP: 85072-2132 FORMER COMPANY: FORMER CONFORMED NAME: AZP GROUP INC DATE OF NAME CHANGE: 19870506 8-K 1 e-9475.txt CURRENT REPORT DATED 12/31/2002 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): December 31, 2002 PINNACLE WEST CAPITAL CORPORATION (Exact name of registrant as specified in its charter) Arizona 1-8962 86-0512431 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona 85072-3999 (Address of principal executive offices) (Zip Code) (602) 250-1000 (Registrant's telephone number, including area code) NONE (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS TRACK B As previously reported, on September 10, 2002, the Arizona Corporation Commission (the "ACC") issued an order that, among other things, established a requirement that Arizona Public Service Company ("APS") competitively procure, at a minimum, any required power that it cannot produce from its existing assets in accordance with the ultimate outcome of the pending "Track B" ACC proceedings. See "Track A Order" in Note 5 of Notes to Condensed Consolidated Financial Statements of the Pinnacle West Capital Corporation Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002. On October 25, 2002, the ACC Staff issued its report in the Track B proceeding proposing a process by which APS would procure power not supplied by its own resources. This report was subsequently modified at the November hearing on Track B. Under the ACC Staff's modified proposal, we believe APS would be required to competitively bid for about 2,500 MW of capacity on peak during 2003, increasing to about 3,000 MW in 2006 based on projections of increasing customer loads. On January 30, 2003, an ACC administrative law judge ("ALJ") issued a recommended order on Track B. The ALJ's recommendation generally adopts the ACC Staff's position. The parties must file comments on the recommended order no later than February 10, 2003. APS expects to file comments. The ACC has scheduled a special open meeting on February 21, 2003 to consider this matter. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) EXHIBITS. 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 December 31, 2002 and 2001. 99.3 Pinnacle West Capital Corporation consolidated statistics by quarter for 2002. 99.4 Pinnacle West Capital Corporation consolidated statistics by quarter for 2001. 99.5 Pinnacle West Capital Corporation consolidated statistics by quarter for 2000. 2 99.6 Pinnacle West Capital Corporation consolidated statistics by quarter for 1999. 99.7 Pinnacle West Capital Corporation earnings variance explanations for the periods ended December 31, 2002 and 2001 and condensed consolidated statements of income for the three months, nine months and twelve months ended December 31, 2002 and 2001. 99.8 Glossary of Terms. ITEM 9. REGULATION FD DISCLOSURE 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. 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 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PINNACLE WEST CAPITAL CORPORATION (Registrant) Dated: February 3, 2003 By: Barbara M. Gomez ------------------------------------ Barbara M. Gomez Treasurer 4 EX-99.1 3 ex99-1.txt QTRLY STAT. SUMMARY COVER PAGE & LIST OF CONTENTS Exhibit 99.1 Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001 LIST OF CONTENTS 2002 FOURTH-QUARTER SUMMARY 2002 YEAR-TO-DATE 2001 BY QUARTER 2000 BY QUARTER 1999 BY QUARTER See the Glossary of Terms on this website for definitions of terms used in this summary. Quarters may not sum to totals due to rounding. EX-99.2 4 ex99-2.txt QTRLY STAT. SUMMARY FOR 12/31/2002 AND 2001 Exhibit 99.2 Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ---------------------------------- ---------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) -------- -------- ----------- -------- -------- ----------- EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS) 1 Arizona Public Service $ 16 $ 39 $ (23) $ 199 $ 281 $ (82) 2 Pinnacle West Energy (31) 4 (35) (19) 18 (37) 3 APS Energy Services 8 -- 8 28 (10) 38 4 SunCor 10 -- 10 19 3 16 5 El Dorado (37) -- (37) (55) -- (55) 6 Parent Company 19 (7) 26 43 35 8 -------- -------- -------- -------- -------- -------- 7 Income Before Accounting Change (15) 36 (51) 215 327 (112) 8 Cumulative Effect of Change in Accounting - Net of Tax (66) -- (66) (66) (15) (51) -------- -------- -------- -------- -------- -------- 9 Net Income $ (81) $ 36 $ (117) $ 149 $ 312 $ (163) ======== ======== ======== ======== ======== ======== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 10 Arizona Public Service $ 0.19 $ 0.46 $ (0.27) $ 2.35 $ 3.30 $ (0.95) 11 Pinnacle West Energy (0.37) 0.04 (0.41) (0.23) 0.21 (0.44) 12 APS Energy Services 0.09 -- 0.09 0.33 (0.12) 0.45 13 SunCor 0.11 0.01 0.10 0.22 0.04 0.18 14 El Dorado (0.43) -- (0.43) (0.65) -- (0.65) 15 Parent Company 0.24 (0.09) 0.33 0.51 0.42 0.09 -------- -------- -------- -------- -------- -------- 16 Income Before Accounting Change (0.17) 0.42 (0.59) 2.53 3.85 (1.32) 17 Cumulative Effect of Change in Accounting - Net of Tax (0.78) -- (0.78) (0.77) (0.17) (0.60) -------- -------- -------- -------- -------- -------- 18 Net Income $ (0.95) $ 0.42 $ (1.37) $ 1.76 $ 3.68 $ (1.92) ======== ======== ======== ======== ======== ======== 19 BOOK VALUE PER SHARE $ 29.40 $ 29.46 $ (0.06) $ 29.40 $ 29.46 $ (0.06) COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 20 Average 85,302 84,824 478 84,964 84,930 34 21 End of Period 91,255 84,724 6,531 91,255 84,724 6,531
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ---------------------------------- ---------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) -------- -------- ----------- -------- -------- ----------- ELECTRIC OPERATING REVENUES (DOLLARS IN MILLIONS) Retail 22 Residential $ 172 $ 180 $ (8) $ 906 $ 915 $ (9) 23 Business 212 219 (7) 928 952 (24) -------- -------- -------- -------- -------- -------- 24 Total retail 384 399 (15) 1,834 1,867 (33) -------- -------- -------- -------- -------- -------- Wholesale revenue on delivered electricity 25 Traditional contracts 3 2 1 9 73 (64) 26 Retail load hedge management 11 27 (16) 123 578 (455) Marketing and trading -- delivered -- 27 Generation sales other than native load 32 6 26 50 148 (98) 28 Realized margins on electricity trading 3 38 (35) 49 62 (13) 29 Other delivered electricity (a) 81 29 52 207 329 (122) -------- -------- -------- -------- -------- -------- 30 Total delivered marketing and trading 116 73 43 306 539 (233) -------- -------- -------- -------- -------- -------- 31 Total delivered wholesale electricity 130 102 28 438 1,190 (752) -------- -------- -------- -------- -------- -------- Other marketing and trading 32 Realized margins on delivered commodities other than electricity (a) 6 4 2 8 (14) 22 33 Prior period mark-to-market (gains) losses on contracts delivered during current period (a) (8) (51) 43 (40) (1) (39) 34 Change in mark-to-market for future-period deliveries (1) (9) 8 52 127 (75) -------- -------- -------- -------- -------- -------- 35 Total other marketing and trading (3) (56) 53 20 112 (92) -------- -------- -------- -------- -------- -------- 36 Transmission for others 12 8 4 30 26 4 37 Other miscellaneous services 7 1 6 17 18 (1) -------- -------- -------- -------- -------- -------- 38 Total electric operating revenues $ 530 $ 454 $ 76 $ 2,339 $ 3,213 $ (874) ======== ======== ======== ======== ======== ======== ELECTRIC SALES (GWH) Retail sales 39 Residential 2,056 2,149 (93) 10,444 10,335 109 40 Business 3,036 3,071 (35) 12,917 13,064 (147) -------- -------- -------- -------- -------- -------- 41 Total retail 5,092 5,220 (128) 23,361 23,399 (38) -------- -------- -------- -------- -------- -------- Wholesale electricity delivered 42 Traditional contracts 140 83 57 474 1,213 (739) 43 Retail load hedge management 296 382 (86) 2,642 3,040 (398) Marketing and trading -- delivered 44 Generation sales other than native load 1,051 256 795 1,791 1,388 403 45 Electricity trading 4,312 3,828 484 16,925 12,031 4,894 46 Other delivered electricity 1,733 746 987 4,139 2,582 1,557 -------- -------- -------- -------- -------- -------- 47 Total delivered marketing and trading 7,096 4,830 2,266 22,855 16,001 6,854 -------- -------- -------- -------- -------- -------- 48 Total delivered wholesale electricity 7,532 5,295 2,237 25,971 20,254 5,717 -------- -------- -------- -------- -------- -------- 49 Total electric sales 12,624 10,515 2,109 49,332 43,653 5,679 ======== ======== ======== ======== ======== ========
- ---------- (a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 38 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition. The arithmetic opposites of amounts included in line 33 are included in lines 28 and 32. For example, line 33 shows that a prior-period mark-to-market gain of $8 million was transferred to "realized" for the fourth quarter of 2002. Lines 28 and 32 include amounts totaling $9 million of realized revenues for the fourth quarter of 2002. See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ------------------------------- ------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) ------- ------- ----------- ------- ------- ----------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS Current Period Effects Realized margin on delivered commodities Electricity 50 Generation sales other than native load $ 9 $ 3 $ 6 $ 14 $ 80 $ (66) 51 Other electricity marketing and trading (a) 23 56 (33) 99 117 (18) ------- ------- ------- ------- ------- ------- 52 Total electricity 32 59 (27) 113 197 (84) 53 Other commodities (a) 6 4 2 8 (14) 22 ------- ------- ------- ------- ------- ------- 54 Total realized margin 38 63 (25) 121 183 (62) ------- ------- ------- ------- ------- ------- Prior-period mark-to-market (gains) losses on contracts delivered during current period 55 Electricity (a) (4) (38) 34 (30) (11) (19) 56 Other commodities (a) (4) (4) -- (11) 25 (36) Charge related to trading activities with Enron 57 and its affiliates -- (8) 8 -- (8) 8 ------- ------- ------- ------- ------- ------- 58 Subtotal (8) (50) 42 (41) 6 (47) ------- ------- ------- ------- ------- ------- 59 Total current period effects (b) 30 13 17 80 189 (109) ------- ------- ------- ------- ------- ------- Change in mark-to-market gains (losses) for future period deliveries (b) 61 Electricity 6 (2) 8 63 146 (83) 62 Other commodities (7) (7) -- (11) (18) 7 ------- ------- ------- ------- ------- ------- 63 Subtotal (1) (9) 8 52 128 (76) ------- ------- ------- ------- ------- ------- 64 Total gross margin $ 29 $ 4 $ 25 $ 132 $ 317 $ (185) ======= ======= ======= ======= ======= =======
FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION As of December 31, 2002, Pinnacle West had accumulated mark-to-market net gains of $41 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: 2003, $4 million; 2004, $10 million; 2005 and thereafter, $27 million. ---------- (a) The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 59 and in line 64 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 55 are included in line 51. The opposites of amounts included in line 56 are included in line 53. For example, line 55 shows that a prior-period mark-to-market gain of $4 million was transferred to "realized" for the fourth quarter of 2002. A $4 million realized gain is included in the $23 million on line 51 for the fourth quarter of 2002. (b) Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations. See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ---------------------------------- ---------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) -------- -------- ----------- -------- -------- ----------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (CONTINUED) (DOLLARS IN MILLIONS) BY COMMODITY SOLD OR TRADED 65 Electricity $ 34 $ 15 $ 19 $ 147 $ 328 $ (181) 66 Natural gas (5) (3) (2) (6) (8) 2 67 Coal -- (6) 6 (2) 7 (9) 68 Emission allowances -- (2) 2 (7) (10) 3 69 Other -- -- -- -- -- -- -------- -------- -------- -------- -------- -------- 70 Total Gross Margin $ 29 $ 4 $ 25 $ 132 $ 317 $ (185) ======== ======== ======== ======== ======== ======== BY PINNACLE WEST ENTITY Parent company marketing and trading division 71 Generation sales other than native load $ 5 $ -- $ 5 $ 8 $ -- $ 8 72 Other marketing and trading 9 (6) 15 82 78 4 APS 73 Generation sales other than native load -- 3 (3) 2 79 (77) 74 Other marketing and trading -- 3 (3) -- 156 (156) Pinnacle West Energy 75 Generation sales other than native load 4 -- 4 4 -- 4 76 Other marketing and trading -- -- -- -- -- -- APS ES 77 Other marketing and trading 11 4 7 36 4 32 -------- -------- -------- -------- -------- -------- 78 Total gross margin before income taxes $ 29 $ 4 $ 25 $ 132 $ 317 $ (185) -------- -------- -------- -------- -------- --------
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ---------------------------------- ---------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) -------- -------- ----------- -------- -------- ----------- AVERAGE ELECTRIC CUSTOMERS Retail customers 79 Residential 811,930 786,382 25,548 801,801 776,339 25,462 80 Business 101,177 98,631 2,546 100,228 98,198 2,030 -------- -------- -------- -------- -------- -------- 81 Total 913,107 885,013 28,094 902,029 874,537 27,492 82 Wholesale customers 67 66 1 67 66 1 -------- -------- -------- -------- -------- -------- 83 Total customers 913,174 885,079 28,095 902,096 874,603 27,493 ======== ======== ======== ======== ======== ======== 84 Customer Growth (% over prior year) 3.2% 3.2% 0.0% 3.1% 3.7% (0.5)% RETAIL SALES (GWH) - WEATHER NORMALIZED 85 Residential 2,123 2,129 (6) 10,276 9,677 599 86 Business 3,015 3,013 2 12,856 12,777 79 -------- -------- -------- -------- -------- -------- 87 Total 5,138 5,142 (4) 23,132 22,454 678 ======== ======== ======== ======== ======== ======== RETAIL USAGE (KWH/AVERAGE CUSTOMER) 88 Residential 2,532 2,733 (201) 13,025 13,312 (287) 89 Business 30,011 31,136 (1,125) 128,885 133,037 (4,152) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 90 Residential 2,615 2,707 (92) 12,817 12,465 352 91 Business 29,797 30,548 (751) 128,269 130,115 (1,846) ELECTRICITY DEMAND (MW) 92 System peak demand 3,828 3,898 (70) 5,803 5,687 116
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ----------------------------------- ---------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) -------- -------- ----------- -------- -------- ----------- ENERGY SOURCES (GWH) Generation production 93 Nuclear 2,094 1,818 276 8,980 8,384 596 94 Coal 3,183 3,203 (20) 12,056 12,572 (516) 95 Gas, oil and other 1,455 583 872 4,003 4,003 -- -------- -------- -------- -------- -------- -------- 96 Total 6,732 5,604 1,128 25,039 24,959 80 -------- -------- -------- -------- -------- -------- Purchased power 97 Firm load (157) 212 (369) 1,619 2,961 (1,342) 98 Marketing and trading 6,340 4,955 1,385 23,704 17,653 6,051 -------- -------- -------- -------- -------- -------- 99 Total 6,183 5,167 1,016 25,323 20,614 4,709 -------- -------- -------- -------- -------- -------- 100 Total energy sources 12,915 10,771 2,144 50,362 45,573 4,789 ======== ======== ======== ======== ======== ======== POWER PLANT PERFORMANCE Capacity Factors 101 Nuclear 87% 76% 11% 94% 88% 6% 102 Coal 84% 85% (1)% 80% 84% (4)% 103 Gas, oil and other 29% 20% 9% 27% 37% (10)% 104 System average 60% 62% (2)% 63% 70% (7)% Generation Capacity Out of Service and Replaced for Native Load (average MW/day) 105 Nuclear 129 246 (117) 67 127 (60) 106 Coal 116 90 26 167 167 -- 107 Gas 54 16 38 48 32 16 108 Total 299 352 (53) 282 326 (44) 109 Generation Fuel Cost ($/MWh) $ 13.05 $ 12.51 $ 0.54 $ 13.01 $ 16.22 $ (3.21)
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION QUARTERLY CONSOLIDATED STATISTICAL SUMMARY PERIODS ENDED DECEMBER 31, 2002 AND 2001
3 MO. ENDED DECEMBER 31 12 MO. ENDED DECEMBER 31 ------------------------------------ ----------------------------------- Line 2002 2001 INCR (DECR) 2002 2001 INCR (DECR) -------- -------- ----------- -------- -------- ----------- ENERGY MARKET INDICATORS (a) Electricity Average Daily Spot Prices ($/MWh) On-Peak 110 Palo Verde $ 36.18 $ 26.89 $ 9.29 $ 32.28 $ 118.41 $ (86.13) 111 SP15 $ 41.35 $ 28.38 $ 12.97 $ 34.22 $ 119.99 $ (85.77) Off-Peak 112 Palo Verde $ 25.09 $ 18.33 $ 6.76 $ 19.89 $ 61.57 $ (41.68) 113 SP15 $ 28.52 $ 20.41 $ 8.11 $ 21.69 $ 73.48 $ (51.79) WEATHER INDICATORS Actual 114 Cooling degree-days 398 620 (222) 4,875 5,122 (247) 115 Heating degree-days 328 460 (132) 800 1,160 (360) 116 Average humidity 38% 39% (1) % 27% 36% (9)% 10-Year Averages 117 Cooling degree-days 398 398 -- 4,381 4,381 -- 118 Heating degree-days 435 435 -- 1,026 1,026 -- 119 Average humidity 40% 40% 0% 36% 36% 0% ECONOMIC INDICATORS Building Permits -- Metro Phoenix (b) 120 Single-family 8,250 6,240 2,010 33,955 32,455 1,500 121 Multi-family 1,327 717 610 6,577 8,969 (2,392) -------- -------- -------- -------- -------- -------- 122 Total 9,577 6,957 2,620 40,532 41,424 (892) ======== ======== ======== ======== ======== ======== Arizona Job Growth (c) 123 Payroll job growth (% over prior year) 0.0% (0.9)% 0.9% (0.8)% 0.9% (1.7)% 124 Unemployment rate (%, seasonally adjusted) 5.7% 5.4% 0.3% 5.8% 4.5% 1.3%
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 College of Business (c) Arizona Department of Economic Security See Glossary of Terms. EX-99.3 5 ex99-3.txt CONSOLIDATED STATS BY QTR FOR 2002 Exhibit 99.3 Last Updated 2/3/2003 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 2 8 (1) 10 19 16 5 El Dorado -- (3) (15) (37) (55) (55) 6 Parent Company 17 (6) 13 19 43 8 -------- -------- -------- -------- -------- -------- 7 Income Before Accounting Change 54 75 101 (15) 215 (112) 8 Cumulative Effect of Change in Accounting - Net of Tax -- -- -- (66) (66) (51) -------- -------- -------- -------- -------- -------- 9 Net Income $ 54 $ 75 $ 101 $ (81) $ 149 $ (163) ======== ======== ======== ======== ======== ======== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 10 Arizona Public Service $ 0.37 $ 0.76 $ 1.02 $ 0.19 $ 2.35 $ (0.95) 11 Pinnacle West Energy 0.01 0.01 0.12 (0.37) (0.23) (0.44) 12 APS Energy Services 0.03 0.13 0.08 0.09 0.33 0.45 13 SunCor 0.02 0.10 (0.01) 0.11 0.22 0.18 14 El Dorado -- (0.04) (0.18) (0.43) (0.65) (0.65) 15 Parent Company 0.20 (0.07) 0.16 0.24 0.51 0.09 -------- -------- -------- -------- -------- -------- 16 Income Before Accounting Change 0.63 0.89 1.19 (0.17) 2.53 (1.32) 17 Cumulative Effect of Change in Accounting - Net of Tax -- -- -- (0.78) (0.77) (0.60) -------- -------- -------- -------- -------- -------- 18 Net Income $ 0.63 $ 0.89 $ 1.19 $ (0.95) $ 1.76 $ (1.92) ======== ======== ======== ======== ======== ======== 19 BOOK VALUE PER SHARE $ 30.06 $ 30.54 $ 31.39 $ 29.40 $ 29.40 $ (0.06) COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 20 Average 84,884 84,926 84,797 85,302 84,964 34 21 End of Period 84,789 84,768 84,756 91,255 91,255 6,531
See Glossary of Terms. Last Updated 2/3/2003 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) Retail 22 Residential $ 171 $ 226 $ 337 $ 172 $ 906 $ (9) 23 Business 195 251 270 212 928 (24) -------- -------- -------- -------- -------- -------- 24 Total retail 366 477 607 384 1,834 (33) -------- -------- -------- -------- -------- -------- Wholesale revenue on delivered electricity 25 Traditional contracts 2 1 3 3 9 (64) 26 Retail load hedge management 2 11 99 11 123 (455) Marketing and trading -- delivered 27 Generation sales other than native load 8 2 8 32 50 (98) 28 Realized margins on electricity trading 27 14 5 3 49 (13) 29 Other delivered electricity (a) 34 39 53 81 207 (122) -------- -------- -------- -------- -------- -------- 30 Total delivered marketing and trading 69 55 65 116 306 (233) -------- -------- -------- -------- -------- -------- 31 Total delivered wholesale electricity 73 67 167 130 438 (752) -------- -------- -------- -------- -------- -------- Other marketing and trading 32 Realized margins on delivered commodities other than electricity (a) 4 1 (3) 6 8 22 33 Prior period mark-to-market (gains) losses on contracts delivered during current period (a) (22) (8) 3 (8) (40) (39) 34 Change in mark-to-market for future-period deliveries 25 1 22 (1) 52 (75) -------- -------- -------- -------- -------- -------- 35 Total other marketing and trading 7 (6) 22 (3) 20 (92) -------- -------- -------- -------- -------- -------- 36 Transmission for others 6 6 6 12 30 4 37 Other miscellaneous services 4 2 4 7 17 (1) -------- -------- -------- -------- -------- -------- 38 Total electric operating revenues $ 456 $ 546 $ 806 $ 530 $ 2,339 $ (874) ======== ======== ======== ======== ======== ======== ELECTRIC SALES (GWH) Retail sales 39 Residential 2,141 2,441 3,806 2,056 10,444 109 40 Business 2,771 3,429 3,681 3,036 12,917 (147) -------- -------- -------- -------- -------- -------- 41 Total retail 4,912 5,870 7,487 5,092 23,361 (38) -------- -------- -------- -------- -------- -------- Wholesale electricity delivered 42 Traditional contracts 71 121 142 140 474 (739) 43 Retail load hedge management 158 230 1,958 296 2,642 (398) Marketing and trading -- delivered 44 Generation sales other than native load 376 73 291 1,051 1,791 403 45 Electricity trading 3,109 3,596 5,908 4,312 16,925 4,894 46 Other delivered electricity 727 774 905 1,733 4,139 1,557 -------- -------- -------- -------- -------- -------- 47 Total delivered marketing and trading 4,212 4,443 7,104 7,096 22,855 6,854 -------- -------- -------- -------- -------- -------- 48 Total delivered wholesale electricity 4,441 4,794 9,204 7,532 25,971 5,717 -------- -------- -------- -------- -------- -------- 49 Total electric sales 9,353 10,664 16,691 12,624 49,332 5,679 ======== ======== ======== ======== ======== ========
---------- (a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 38 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition. The arithmetic opposites of amounts included in line 33 are included in lines 28 and 32. For example, line 33 shows that a prior-period mark-to-market gain of $8 million was transferred to "realized" for the fourth quarter of 2002. Lines 28 and 32 include amounts totaling $9 million of realized revenues for the fourth quarter of 2002. See Glossary of Terms. Last Updated 2/3/2003 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 Current Period Effects Realized margin on delivered commodities Electricity 50 Generation sales other than native load $ 2 $ -- $ 3 $ 9 $ 14 $ (66) 51 Other electricity marketing and trading (a) 33 24 19 23 99 (18) ------- ------- ------- ------- ------- ------- 52 Total electricity 35 24 22 32 113 (84) 53 Other commodities (a) 4 1 (3) 6 8 22 ------- ------- ------- ------- ------- ------- 54 Total realized margin 39 25 19 38 121 (62) ------- ------- ------- ------- ------- ------- Prior-period mark-to-market (gains) losses on contracts delivered during current period 55 Electricity (a) (26) (9) (4) (4) (30) (19) 56 Other commodities (a) (6) -- 6 (4) (11) (36) 57 Charge related to trading activities with Enron and its affiliates -- -- -- -- -- 8 ------- ------- ------- ------- ------- ------- 58 Subtotal (32) (9) 2 (8) (41) (47) ------- ------- ------- ------- ------- ------- 59 Total current period effects (b) 7 16 21 30 80 (109) ------- ------- ------- ------- ------- ------- Change in mark-to-market gains (losses) for future period deliveries (b) 61 Electricity 34 10 25 6 63 (83) 62 Other commodities (2) (7) (2) (7) (11) 7 ------- ------- ------- ------- ------- ------- 63 Total future period effects 32 3 23 (1) 52 (76) ------- ------- ------- ------- ------- ------- 64 Total gross margin $ 40 $ 19 $ 44 $ 29 $ 132 $ (185) ======= ======= ======= ======= ======= =======
FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION As of December 31, 2002, Pinnacle West had accumulated mark-to-market net gains of $41 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: 2003, $4 million; 2004, $10 million; 2005 and thereafter, $27 million. ---------- (a) The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 59 and in line 64 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 55 are included in line 51. The opposites of amounts included in line 56 are included in line 53. For example, line 55 shows that a prior-period mark-to-market gain of $4 million was transferred to "realized" for the fourth quarter of 2002. A $4 million realized gain is included in the $23 million on line 51 for the fourth quarter of 2002. (b) Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations. See Glosssary of Terms. Last Updated 2/3/2003 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 (CONTINUED) (DOLLARS IN MILLIONS) BY COMMODITY SOLD OR TRADED 65 Electricity $ 45 $ 25 $ 43 $ 34 $ 147 $ (181) 66 Natural gas (5) 1 3 (5) (6) 2 67 Coal (1) (2) 1 -- (2) (9) 68 Emission allowances 1 (5) (3) -- (7) 3 69 Other -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- 70 Total gross margin $ 40 $ 19 $ 44 $ 29 $ 132 $ (185) ======= ======= ======= ======= ======= ======= BY PINNACLE WEST ENTITY Parent company marketing and trading division 71 Generation sales other than native load $ 1 $ -- $ 2 $ 5 $ 8 $ 8 72 Other marketing and trading 34 9 30 9 82 4 APS 73 Generation sales other than native load 1 -- 1 -- 2 (77) 74 Other marketing and trading -- -- -- -- -- (156) Pinnacle West Energy 75 Generation sales other than native load -- -- -- 4 4 4 76 Other marketing and trading -- -- -- -- -- -- APS ES 77 Other marketing and trading 4 10 11 11 36 32 ------- ------- ------- ------- ------- ------- 78 Total gross margin before income taxes $ 40 $ 19 $ 44 $ 29 $ 132 $ (185) ======= ======= ======= ======= ======= =======
See Glossary of Terms. Last Updated 2/3/2003 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 79 Residential 801,000 795,681 798,590 811,930 801,801 25,462 80 Business 99,335 100,096 100,318 101,177 100,228 2,030 -------- -------- -------- -------- -------- -------- 81 Total 900,335 895,777 898,908 913,107 902,029 27,492 82 Wholesale customers 67 67 67 67 67 1 -------- -------- -------- -------- -------- -------- 83 Total customers 900,402 895,844 898,975 913,174 902,096 27,493 ======== ======== ======== ======== ======== ======== 84 Customer Growth (% over prior year) 3.2% 3.2% 3.1% 3.2% 3.1% (0.5)% RETAIL SALES (GWH) - WEATHER NORMALIZED 85 Residential 2,164 2,387 3,602 2,123 10,276 599 86 Business 2,774 3,392 3,675 3,015 12,856 79 -------- -------- -------- -------- -------- -------- 87 Total 4,938 5,779 7,277 5,138 23,132 678 ======== ======== ======== ======== ======== ======== RETAIL USAGE (KWH/AVERAGE CUSTOMER) 88 Residential 2,673 3,068 4,766 2,532 13,025 (287) 89 Business 27,896 34,258 36,691 30,011 128,885 (4,152) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 90 Residential 2,702 3,000 4,510 2,615 12,817 352 91 Business 27,926 33,886 36,638 29,797 128,269 (1,846) ELECTRICITY DEMAND (MW) 92 System peak demand 3,921 5,425 5,803 3,828 5,803 116
See Glossary of Terms. Last Updated 2/3/2003 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 93 Nuclear 2,257 2,242 2,387 2,094 8,980 596 94 Coal 2,890 2,703 3,280 3,183 12,056 (516) 95 Gas, oil and other 337 564 1,647 1,455 4,003 -- ------- ------- ------- ------- ------- ------- 96 Total 5,484 5,509 7,314 6,732 25,039 80 ------- ------- ------- ------- ------- ------- Purchased power 97 Firm load 429 846 859 (157) 1,619 (1,342) 98 Marketing and trading 3,993 4,599 8,771 6,340 23,704 6,051 ------- ------- ------- ------- ------- ------- 99 Total 4,422 5,445 9,630 6,183 25,323 4,709 ------- ------- ------- ------- ------- ------- 100 Total energy sources 9,906 10,954 16,944 12,915 50,362 4,789 ======= ======= ======= ======= ======= ======= POWER PLANT PERFORMANCE Capacity Factors 101 Nuclear 96% 95% 100% 87% 94% 6% 102 Coal 78% 72% 87% 84% 80% (4)% 103 Gas, oil and other 12% 20% 38% 29% 27% (10)% 104 System average 62% 62% 69% 60% 63% (7)% Generation Capacity Out of Service and Replaced for Native Load (average MW/day) 105 Nuclear 62 66 12 129 67 (60) 106 Coal 184 279 88 116 167 -- 107 Gas 12 18 106 54 48 16 108 Total 258 363 206 299 282 (44) 109 Generation Fuel Cost ($/MWh) $ 11.57 $ 11.89 $ 14.84 $ 13.05 $ 13.01 $ (3.21)
See Glossary of Terms. Last Updated 2/3/2003 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 110 Palo Verde $ 26.86 $ 30.65 $ 35.45 $ 36.18 $ 32.28 $ (86.13) 111 SP15 $ 28.46 $ 31.51 $ 35.55 $ 41.35 $ 34.22 $ (85.77) Off-Peak 112 Palo Verde $ 22.17 $ 14.10 $ 18.21 $ 25.09 $ 19.89 $ (41.68) 113 SP15 $ 22.76 $ 15.95 $ 19.54 $ 28.52 $ 21.69 $ (51.79) WEATHER INDICATORS Actual 114 Cooling degree-days 89 1,741 2,647 398 4,875 (247) 115 Heating degree-days 472 -- -- 328 800 (360) 116 Average humidity 28% 16% 27% 38% 27% (9)% 10-Year Averages 117 Cooling degree-days 71 1,458 2,454 398 4,381 -- 118 Heating degree-days 556 35 -- 435 1,026 -- 119 Average humidity 45% 25% 34% 40% 36% 0% ECONOMIC INDICATORS Building Permits -- Metro Phoenix (b) 120 Single-family 7,514 6,456 6,062 8,250 33,955 1,500 121 Multi-family 985 662 1,045 1,327 6,577 (2,392) -------- -------- -------- -------- -------- -------- 122 Total 8,499 7,118 7,107 9,577 40,532 (892) ======== ======== ======== ======== ======== ======== Arizona Job Growth (c) 123 Payroll job growth (% over prior year) (1.7)% (1.1)% (1.0)% 0.0% (0.8)% (1.7)% 124 Unemployment rate (%, seasonally adjusted) 5.9% 5.7% 5.9% 5.7% 5.8% 1.3%
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 College of Business (c) Arizona Department of Economic Security See Glossary of Terms. EX-99.4 6 ex99-4.txt CONSOLIDATED STATS BY QTR FOR 2001 Exhibit 99.4 Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR -------- -------- -------- -------- ---------- ------------- EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS) 1 Arizona Public Service $ 65 $ 70 $ 108 $ 39 $ 281 $ (26) 2 Pinnacle West Energy -- 1 13 4 18 20 3 APS Energy Services (8) -- (3) -- (10) 3 4 SunCor -- -- 2 -- 3 (8) 5 El Dorado 1 -- -- -- -- (2) 6 Parent Company 4 (4) 42 (7) 35 38 -------- -------- -------- -------- -------- -------- 7 Income Before Accounting Change 62 67 162 36 327 25 8 Cumulative Effect of Change in Accounting - Net of Tax (3) -- (12) -- (15) (15) -------- -------- -------- -------- -------- -------- 9 Net Income $ 59 $ 67 $ 150 $ 36 $ 312 $ 10 ======== ======== ======== ======== ======== ======== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 10 Arizona Public Service $ 0.76 $ 0.82 $ 1.27 $ 0.46 $ 3.30 $ (0.31) 11 Pinnacle West Energy -- 0.02 0.16 0.04 0.21 0.24 12 APS Energy Services (0.10) -- (0.03) -- (0.12) 0.04 13 SunCor 0.01 -- 0.03 0.01 0.04 (0.10) 14 El Dorado 0.01 -- -- -- -- (0.02) 15 Parent Company 0.05 (0.05) 0.49 (0.09) 0.42 0.44 -------- -------- -------- -------- -------- -------- 16 Income Before Accounting Change 0.73 0.79 1.92 0.42 3.85 0.29 17 Cumulative Effect of Change in Accounting - Net of Tax (0.03) -- (0.15) -- (0.17) (0.17) -------- -------- -------- -------- -------- -------- 18 Net Income $ 0.70 $ 0.79 $ 1.77 $ 0.42 $ 3.68 $ 0.12 ======== ======== ======== ======== ======== ======== 19 BOOK VALUE PER SHARE $ 28.83 $ 28.17 $ 29.37 $ 29.46 $ 29.46 $ 1.37 COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 20 Average 84,966 85,042 84,909 84,824 84,930 (5) 21 End of Period 84,718 84,713 84,663 84,724 84,724 9
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR -------- -------- -------- -------- ---------- ------------- ELECTRIC OPERATING REVENUES (DOLLARS IN MILLIONS) Retail 22 Residential $ 173 $ 234 $ 328 $ 180 $ 915 $ 34 23 Business 199 258 276 219 952 17 -------- -------- -------- -------- -------- -------- 24 Total retail 372 492 604 399 1,867 51 -------- -------- -------- -------- -------- -------- Wholesale revenue on delivered electricity 25 Traditional contracts 26 55 (10) 2 73 (48) 26 Retail load hedge management 5 182 364 27 578 17 Marketing and trading -- delivered 27 Generation sales other than native load 87 51 4 6 148 32 28 Realized margin on electricity trading 12 17 (5) 38 62 6 29 Other delivered electricity (a) 111 138 51 29 329 87 -------- -------- -------- -------- -------- -------- 30 Total delivered marketing and trading 210 206 50 73 539 125 -------- -------- -------- -------- -------- -------- 31 Total delivered wholesale electricity 241 443 404 102 1,190 94 -------- -------- -------- -------- -------- -------- Other marketing and trading 32 Realized margins on delivered commodities other than electricity (a) (5) (12) (1) 4 (14) (5) 33 Prior period mark-to-market (gains) losses on contracts delivered during current period (a) 6 5 (37) (51) (1) 1 34 Change in mark-to-market for future-period deliveries 47 35 130 (9) 127 113 -------- -------- -------- -------- -------- -------- 35 Total other marketing and trading 48 28 92 (56) 112 109 -------- -------- -------- -------- -------- -------- 36 Transmission for others 4 5 9 8 26 11 37 Other miscellaneous services 6 5 6 1 18 (9) -------- -------- -------- -------- -------- -------- 38 Total electric operating revenues $ 671 $ 973 $ 1,115 $ 454 $ 3,213 $ 256 ======== ======== ======== ======== ======== ======== ELECTRIC SALES (GWH) Retail sales 39 Residential 2,121 2,467 3,597 2,149 10,335 554 40 Business 2,824 3,445 3,724 3,071 13,064 310 -------- -------- -------- -------- -------- -------- 41 Total retail 4,945 5,912 7,321 5,220 23,399 864 -------- -------- -------- -------- -------- -------- Wholesale electricity delivered 42 Traditional contracts 569 598 (37) 83 1,213 (397) 43 Retail load hedge management 75 736 1,847 382 3,040 (3,634) Marketing and trading -- delivered 44 Generation sales other than native load 623 436 73 256 1,388 (106) 45 Electricity trading 2,291 2,359 3,553 3,828 12,031 2,772 46 Other delivered electricity 759 810 267 746 2,582 (378) -------- -------- -------- -------- -------- -------- 47 Total delivered marketing and trading 3,673 3,605 3,893 4,830 16,001 2,288 -------- -------- -------- -------- -------- -------- 48 Total delivered wholesale electricity 4,318 4,939 5,703 5,295 20,254 (1,743) -------- -------- -------- -------- -------- -------- 49 Total electric sales 9,263 10,851 13,024 10,515 43,653 (879) ======== ======== ======== ======== ======== ========
---------- (a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 38 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition. The arithmetic opposites of amounts included in line 33 are included in lines 29 and 32. For example, line 33 shows that a prior-period mark-to-market gain of $1 million was transferred to "realized" for the total year 2001. Lines 29 and 32 include amounts totaling $1 million of realized revenues for the year 2001. See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR ------- ------- ------- ------- ---------- ------------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS Current Period Effects Realized margin on delivered commodities Electricity 50 Generation sales other than native load $ 48 $ 26 $ 3 $ 3 $ 80 $ 26 51 Other electricity marketing and trading (a) 4 43 14 56 117 48 ------- ------- ------- ------- ------- ------- 52 Total electricity 52 69 17 59 197 74 53 Other commodities (a) (5) (12) (1) 4 (14) (5) ------- ------- ------- ------- ------- ------- 54 Total realized margin 47 57 16 63 183 69 ------- ------- ------- ------- ------- ------- Prior-period mark-to-market (gains) losses on contracts delivered during current period 55 Electricity (a) 1 -- (38) (38) (11) (9) 56 Other commodities (a) 12 5 1 (4) 25 25 57 Charge related to trading activities with Enron and its affiliates -- -- -- (8) (8) (8) ------- ------- ------- ------- ------- ------- 58 Subtotal 13 5 (37) (50) 6 8 ------- ------- ------- ------- ------- ------- 59 Total current period effects (b) 60 62 (21) 13 189 77 ------- ------- ------- ------- ------- ------- Change in mark-to-market gains (losses) for future period deliveries (b) 61 Electricity 45 42 126 (2) 146 139 62 Other commodities 2 (6) 3 (7) (18) (25) ------- ------- ------- ------- ------- ------- 63 Total future period effects 47 36 129 (9) 128 114 ------- ------- ------- ------- ------- ------- 64 Total gross margin $ 107 $ 98 $ 108 $ 4 $ 317 $ 191 ======= ======= ======= ======= ======= =======
FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION As of December 31, 2001, Pinnacle West had accumulated mark-to-market net gains of $138.0 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: 2002, $43.0 million; 2003, $22.6 million; 2004, $23.6 million; 2005 and thereafter, $48.8 million. ---------- (a) The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 59 and in line 63 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 55 are included in line 51. The opposites of amounts included in line 56 are included in line 53. For example, line 55 shows that a prior-period mark-to-market gain of $11 million was transferred to "realized" for the total year 2001. A $11 million realized gain is included in the $117 million on line 51 for the total year 2001. (b) Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations. See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR ------- ------- ------- ------- ---------- ------------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (CONTINUED) (DOLLARS IN MILLIONS) BY COMMODITY SOLD OR TRADED 65 Electricity $ 98 $ 111 $ 105 $ 15 $ 328 $ 201 66 Natural gas (3) (12) 9 (3) (8) (15) 67 Coal 14 2 (2) (6) 7 10 68 Emission allowances (2) (3) (4) (2) (10) (5) 69 Other -- -- -- -- -- -- ------- ------- ------- ------- ------- ------- 70 Total gross margin $ 107 $ 98 $ 108 $ 4 $ 317 $ 191 ======= ======= ======= ======= ======= ======= BY PINNACLE WEST ENTITY Parent company marketing and trading division 71 Generation sales other than native load $ -- $ -- $ -- $ -- $ -- $ -- 72 Other marketing and trading 7 3 74 (6) 78 80 APS 73 Generation sales other than native load 48 26 2 3 79 25 74 Other marketing and trading 53 68 32 3 156 82 Pinnacle West Energy 75 Generation sales other than native load -- -- -- -- -- -- 76 Other marketing and trading -- -- -- -- -- -- APS ES 77 Other marketing and trading (1) 1 -- 4 4 4 ------- ------- ------- ------- ------- ------- 78 Total gross margin before income taxes $ 107 $ 98 $ 108 $ 4 $ 317 $ 191 ======= ======= ======= ======= ======= =======
See Glossary of Terms. Page 19 of 36 Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR -------- -------- -------- -------- ---------- ------------- AVERAGE ELECTRIC CUSTOMERS Retail customers 79 Residential 775,317 770,335 773,321 786,382 776,339 27,054 80 Business 97,222 98,065 98,874 98,631 98,198 4,070 -------- -------- -------- -------- -------- -------- 81 Total 872,539 868,400 872,195 885,013 874,537 31,124 82 Wholesale customers 68 66 66 66 66 (1) -------- -------- -------- -------- -------- -------- 83 Total customers 872,607 868,466 872,261 885,079 874,603 31,123 ======== ======== ======== ======== ======== ======== 84 Customer Growth (% over prior year) 4.0% 3.9% 3.7% 3.2% 3.7% (0.4)% RETAIL SALES (GWH) - WEATHER NORMALIZED 85 Residential 2,037 2,204 3,307 2,129 9,677 207 86 Business 2,825 3,321 3,618 3,013 12,777 134 -------- -------- -------- -------- -------- -------- 87 Total 4,862 5,525 6,925 5,142 22,454 341 ======== ======== ======== ======== ======== ======== RETAIL USAGE (KWH/AVERAGE CUSTOMER) 88 Residential 2,737 3,203 4,651 2,733 13,312 259 89 Business 29,047 35,130 37,666 31,136 133,037 (2,459) RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 90 Residential 2,627 2,861 4,276 2,707 12,465 (174) 91 Business 29,057 33,865 36,595 30,548 130,115 (4,202) ELECTRICITY DEMAND (MW) 92 System peak demand 3,661 5,358 5,687 3,898 5,687 209
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR ------- ------- ------- ------- ---------- ------------- ENERGY SOURCES (GWH) Generation production 93 Nuclear 2,261 1,985 2,320 1,818 8,384 (457) 94 Coal 2,901 3,245 3,223 3,203 12,572 63 95 Gas, oil and other 1,007 1,256 1,157 583 4,003 1,219 ------- ------- ------- ------- ------- ------- 96 Total 6,169 6,486 6,700 5,604 24,959 825 ------- ------- ------- ------- ------- ------- Purchased power 97 Firm load 170 845 1,734 212 2,961 446 98 Marketing and trading 3,126 3,905 5,667 4,955 17,653 (1,240) ------- ------- ------- ------- ------- ------- 99 Total 3,296 4,750 7,401 5,167 20,614 (794) ------- ------- ------- ------- ------- ------- 100 Total energy sources 9,465 11,236 14,101 10,771 45,573 31 ======= ======= ======= ======= ======= ======= POWER PLANT PERFORMANCE Capacity Factors 101 Nuclear 96% 84% 97% 76% 88% (5)% 102 Coal 78% 87% 85% 85% 84% 1% 103 Gas, oil and other 39% 46% 38% 20% 37% 10% 104 System average 71% 73% 73% 62% 70% 1% Generation Capacity Out of Service and Replaced for Native Load (average MW/day) 105 Nuclear 57 180 26 246 127 47 106 Coal 284 166 129 90 167 13 107 Gas 36 52 24 16 32 10 108 Total 376 398 179 352 326 70 109 Generation Fuel Cost ($/MWh) $19.64 $19.28 $13.21 $12.51 $16.22 $ 2.50
See Glossary of Terms. Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2001
INCREASE (DECREASE) Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR VS PRIOR YEAR ------- ------- ------- ------- ---------- ------------- ENERGY MARKET INDICATORS (a) Electricity Average Daily Spot Prices ($/MWh) On-Peak 110 Palo Verde $214.21 $182.71 $49.80 $26.89 $118.41 $ 6.98 111 SP15 $219.66 $186.30 $45.61 $28.38 $119.99 $12.64 Off-Peak 112 Palo Verde $130.40 $70.32 $27.22 $18.33 $61.57 $ 8.55 113 SP15 $159.80 $84.78 $28.92 $20.41 $73.48 $12.74 WEATHER INDICATORS Actual 114 Cooling degree-days 106 1,733 2,663 620 5,122 539 115 Heating degree-days 657 43 -- 460 1,160 192 116 Average humidity 50% 25% 31% 39% 36% 2% 10-Year Averages 117 Cooling degree-days 71 1,458 2,454 398 4,381 -- 118 Heating degree-days 556 35 -- 435 1,026 -- 119 Average humidity 45% 25% 34% 40% 36% 0% ECONOMIC INDICATORS Building Permits -- Metro Phoenix (b) 120 Single-family 8,681 9,270 8,264 6,240 32,455 (54) 121 Multi-family 3,918 1,820 2,514 717 8,969 (1,259) ------- ------- ------- ------- ------- ------- 122 Total 12,599 11,090 10,778 6,957 41,424 (1,313) ======= ======= ======= ======= ======= ======= Arizona Job Growth (c) 123 Payroll job growth (% over prior year) 2.9% 1.4% 0.2% (0.9)% 0.9% (3.0)% 124 Unemployment rate (%, seasonally adjusted) 4.1% 4.3% 4.2% 5.4% 4.5% 0.6%
SOURCES: -------- (a) This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc. (b) Arizona Real Estate Center, Arizona State University College of Business (c) Arizona Department of Economic Security See Glossary of Terms. EX-99.5 7 ex99-5.txt CONSOLIDATED STATS BY QTR FOR 2000 Exhibit 99.5 Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS) 1 Arizona Public Service $ 33 $ 96 $ 124 $ 54 $ 307 2 Pinnacle West Energy -- (1) -- (1) (2) 3 APS Energy Services (2) (2) -- (9) (13) 4 SunCor 5 1 2 3 11 5 El Dorado 19 (3) (9) (5) 2 6 Parent Company (1) (1) (1) -- (3) -------- -------- ---------- -------- -------- 7 Income Before Accounting Change 54 90 116 42 302 8 Cumulative Effect of Change in Accounting - Net of Tax -- -- -- -- -- -------- -------- ---------- -------- -------- 9 Net Income $ 54 $ 90 $ 116 $ 42 $ 302 ======== ======== ========== ======== ======== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 10 Arizona Public Service $ 0.39 $ 1.13 $ 1.46 $ 0.63 $ 3.61 11 Pinnacle West Energy -- (0.01) (0.01) (0.01) (0.03) 12 APS Energy Services (0.02) (0.03) -- (0.11) (0.16) 13 SunCor 0.06 0.01 0.03 0.04 0.14 14 El Dorado 0.22 (0.04) (0.10) (0.06) 0.02 15 Parent Company (0.01) -- (0.01) -- (0.02) -------- -------- ---------- -------- -------- 16 Income Before Accounting Change 0.64 1.06 1.37 0.49 3.56 17 Cumulative Effect of Change in Accounting - Net of Tax -- -- -- -- -- -------- -------- ---------- -------- -------- 18 Net Income $ 0.64 $ 1.06 $ 1.37 $ 0.49 $ 3.56 ======== ======== ========== ======== ======== 19 BOOK VALUE PER SHARE $ 26.29 $ 27.00 $ 28.01 $ 28.09 $ 28.09 COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 20 Average 84,834 84,891 85,012 85,015 84,935 21 End of Period 84,723 84,727 84,779 84,715 84,715
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- -------- -------- -------- -------- ---------- ELECTRIC OPERATING REVENUES (DOLLARS IN MILLIONS) Retail 22 Residential $ 157 $ 228 $ 324 $ 172 $ 881 23 Business 196 253 275 211 935 -------- -------- -------- -------- -------- 24 Total retail 353 481 599 383 1,816 -------- -------- -------- -------- -------- Wholesale revenue on delivered electricity 25 Traditional contracts 12 18 75 16 121 26 Retail load hedge management 7 36 472 46 561 Marketing and trading -- delivered 27 Generation sales other than native load 9 13 14 80 116 28 Realized margins on electricity trading 3 11 32 10 56 29 Other delivered electricity (a) 22 55 59 106 242 -------- -------- -------- -------- -------- 30 Total delivered marketing and trading 34 79 105 196 414 -------- -------- -------- -------- -------- 31 Total delivered wholesale electricity 53 133 652 258 1,096 -------- -------- -------- -------- -------- Other marketing and trading 32 Realized margins on delivered commodities other than electricity (a) (5) 1 (4) (1) (9) 33 Prior period mark-to-market (gains) losses on contracts delivered during current period (a) -- -- (17) (2) (2) 34 Change in mark-to-market for future-period deliveries 7 25 10 (11) 14 -------- -------- -------- -------- -------- 35 Total other marketing and trading 2 26 (11) (14) 3 -------- -------- -------- -------- -------- 36 Transmission for others 3 4 4 4 15 37 Other miscellaneous services 4 8 8 7 27 -------- -------- -------- -------- -------- 38 Total electric operating revenues $ 415 $ 652 $ 1,252 $ 638 $ 2,957 ======== ======== ======== ======== ======== ELECTRIC SALES (GWH) Retail sales 39 Residential 1,877 2,370 3,506 2,028 9,781 40 Business 2,736 3,379 3,674 2,965 12,754 -------- -------- -------- -------- -------- 41 Total retail 4,613 5,749 7,180 4,993 22,535 -------- -------- -------- -------- -------- Wholesale electricity delivered 42 Traditional contracts 331 391 537 351 1,610 43 Retail load hedge management 232 585 5,155 702 6,674 Marketing and trading -- delivered 44 Generation sales other than native load 396 215 163 720 1,494 45 Electricity trading 1,294 1,803 4,073 2,089 9,259 46 Other delivered electricity 735 601 665 960 2,960 -------- -------- -------- -------- -------- 47 Total delivered marketing and trading 2,425 2,619 4,901 3,769 13,713 -------- -------- -------- -------- -------- 48 Total delivered wholesale electricity 2,988 3,595 10,593 4,822 21,997 -------- -------- -------- -------- -------- 49 Total electric sales 7,601 9,344 17,773 9,815 44,532 ======== ======== ======== ======== ========
- ---------- (a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 38 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition. The arithmetic opposites of amounts included in line 33 are included in lines 29 and 32. For example, line 33 shows that a prior-period mark-to-market gain of $2 million was transferred to "realized" for the total year 2000. Lines 29 and 32 include amounts totaling $2 million of realized revenues for the year 2000. See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS Current Period Effects Realized margin on delivered commodities Electricity 50 Generation sales other than native load $ 2 $ 6 $ 7 $ 39 $ 54 51 Other electricity marketing and trading (a) 3 28 33 5 69 ----- ----- ----- ----- ----- 52 Total electricity 5 34 40 44 123 53 Other commodities (a) (5) 1 (4) (1) (9) ----- ----- ----- ----- ----- 54 Total realized margin -- 35 36 43 114 ----- ----- ----- ----- ----- Prior-period mark-to-market (gains) losses on contracts delivered during current period (b) 55 Electricity (a) -- -- (18) (2) (2) 56 Other commodities (a) -- -- 1 -- -- Charge related to trading activities with Enron 57 and its affiliates -- -- -- -- -- ----- ----- ----- ----- ----- 58 Subtotal -- -- (17) (2) (2) ----- ----- ----- ----- ----- 59 Total current period effects (b) -- 35 19 41 112 ----- ----- ----- ----- ----- Change in mark-to-market gains (losses) for future period deliveries (b) 61 Electricity 2 27 6 (10) 7 62 Other commodities 5 (2) 4 (1) 7 ----- ----- ----- ----- ----- 63 Total future period effects 7 25 10 (11) 14 ----- ----- ----- ----- ----- 64 Total gross margin $ 7 $ 60 $ 29 $ 30 $ 126 ===== ===== ===== ===== =====
- ---------- (a) The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 59 and in line 63 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 55 are included in line 51. The opposites of amounts included in line 56 are included in line 53. For example, line 55 shows that a prior-period mark-to-market gain of $2 million was transferred to "realized" for the total year 2000. A $2 million realized gain is included in the $69 million on line 51 for the total year 2000. (b) Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations. See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (CONTINUED) (DOLLARS IN MILLIONS) BY COMMODITY SOLD OR TRADED 65 Electricity 7 61 28 31 127 66 Natural gas -- (1) 3 4 6 67 Coal -- -- (2) -- (2) 68 Emission allowances -- -- -- (5) (5) 69 Other -- -- -- -- -- ----- ----- ----- ----- ----- 70 Total gross margin $ 7 $ 60 $ 29 $ 30 $ 126 ===== ===== ===== ===== ===== BY PINNACLE WEST ENTITY Parent company marketing and trading division 71 Generation sales other than native load $ -- $ -- $ -- $ -- $ -- 72 Other marketing and trading -- -- -- (2) (2) APS 73 Generation sales other than native load 2 6 7 39 54 74 Other marketing and trading 5 54 22 (7) 74 Pinnacle West Energy 75 Generation sales other than native load -- -- -- -- -- 76 Other marketing and trading -- -- -- -- -- APS ES 77 Other marketing and trading -- -- -- -- -- ----- ----- ----- ----- ----- 78 Total gross margin before income taxes $ 7 $ 60 $ 29 $ 30 $ 126 ===== ===== ===== ===== =====
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- AVERAGE ELECTRIC CUSTOMERS Retail customers 79 Residential 746,528 742,485 746,742 761,386 749,285 80 Business 92,667 93,343 94,479 96,024 94,128 ------- ------- ------- ------- ------- 81 Total 839,195 835,828 841,221 857,410 843,413 82 Wholesale customers 67 67 67 67 67 ------- ------- ------- ------- ------- 83 Total customers 839,262 835,895 841,288 857,477 843,480 ======= ======= ======= ======= ======= 84 Customer Growth (% over prior year) 4.0% 4.1% 4.1% 4.2% 4.1% RETAIL SALES (GWH) - WEATHER NORMALIZED 85 Residential 1,933 2,218 3,393 1,926 9,470 86 Business 2,736 3,276 3,626 3,005 12,643 ------- ------- ------- ------- ------- 87 Total 4,669 5,494 7,019 4,931 22,113 ======= ======= ======= ======= ======= RETAIL USAGE (KWH/AVERAGE CUSTOMER) 88 Residential 2,514 3,192 4,695 2,664 13,054 89 Business 29,525 36,200 38,887 30,878 135,496 RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 90 Residential 2,589 2,987 4,544 2,530 12,639 91 Business 29,525 35,096 38,379 31,294 134,317 ELECTRICITY DEMAND (MW) 92 System peak demand 3,315 5,095 5,478 4,331 5,478
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- ENERGY SOURCES (GWH) Generation production 93 Nuclear 2,325 2,090 2,348 2,078 8,841 94 Coal 2,828 3,163 3,343 3,175 12,509 95 Gas, oil and other 323 526 1,046 889 2,784 ------ ------ ------ ------ ------ 96 Total 5,476 5,779 6,737 6,142 24,134 ------ ------ ------ ------ ------ Purchased power 97 Firm load 51 819 1,550 95 2,515 98 Marketing and trading 2,261 2,989 9,893 3,750 18,893 ------ ------ ------ ------ ------ 99 Total 2,312 3,808 11,443 3,845 21,408 ------ ------ ------ ------ ------ 100 Total energy sources 7,788 9,587 18,180 9,987 45,542 ====== ====== ====== ====== ====== POWER PLANT PERFORMANCE Capacity Factors 101 Nuclear 98% 88% 98% 87% 93% 102 Coal 76% 85% 88% 84% 83% 103 Gas, oil and other 13% 21% 40% 34% 27% 104 System average 63% 67% 77% 70% 69% Generation Capacity Out of Service and Replaced for Native Load (average MW/day) 105 Nuclear 27 129 21 143 80 106 Coal 223 124 85 187 155 107 Gas 8 43 16 20 22 108 Total 258 296 122 350 257 109 Generation Fuel Cost ($/MWh) $10.65 $12.69 $14.77 $16.28 $13.72
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 2000
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- ENERGY MARKET INDICATORS (a) Electricity Average Daily Spot Prices ($/MWh) On-Peak 110 Palo Verde $30.52 $90.49 $170.40 $154.33 $111.44 111 SP15 $31.40 $82.67 $152.74 $162.59 $107.35 Off-Peak 112 Palo Verde $22.97 $31.91 $61.48 $ 95.72 $ 53.02 113 SP15 $24.52 $32.45 $66.28 $119.72 $ 60.74 WEATHER INDICATORS Actual 114 Cooling degree-days 71 1,712 2,547 253 4,583 115 Heating degree-days 459 9 -- 500 968 116 Average humidity 37% 23% 29% 46% 34% 10-Year Averages 117 Cooling degree-days 71 1,458 2,454 398 4,381 118 Heating degree-days 556 35 -- 435 1,026 119 Average humidity 45% 25% 34% 40% 36% ECONOMIC INDICATORS Building Permits -- Metro Phoenix (b) 120 Single-family 8,163 9,605 8,331 6,410 32,509 121 Multi-family 3,208 2,651 2,417 1,952 10,228 ------ ------ ------ ------ ------ 122 Total 11,371 12,256 10,748 8,362 42,737 ====== ====== ====== ====== ====== Arizona Job Growth (c) 123 Payroll job growth (% over prior year) 4.4% 4.0% 3.9% 3.4% 3.9% 124 Unemployment rate (%, seasonally adjusted) 4.1% 3.9% 3.8% 3.7% 3.9%
- ---------- 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 College of Business (c) Arizona Department of Economic Security See Glossary of Terms EX-99.6 8 ex99-6.txt CONSOLIDATED STATS BY QTR FOR 1999 Exhibit 99.6 Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR -------- -------- ---------- -------- -------- EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS) 1 Arizona Public Service $ 33 $ 70 $ 130 $ 34 $ 267 2 Pinnacle West Energy -- -- -- -- -- 3 APS Energy Services (2) (2) (2) (3) (9) 4 SunCor 1 3 -- 2 6 5 El Dorado -- -- -- 11 11 6 Parent Company (1) (2) (2) -- (5) -------- -------- ---------- -------- -------- 7 Income From Continuing Operations 31 69 126 44 270 8a Income Tax Benefit From Discontinued Operations -- -- 38 -- 38 8b Extraordinary Charge - Net of Income Tax -- -- (140) -- (140) -------- -------- ---------- -------- -------- 9 Net Income $ 31 $ 69 $ 24 $ 44 $ 168 ======== ======== ========== ======== ======== EARNINGS PER SHARE BY SUBSIDIARY - DILUTED 10 Arizona Public Service $ 0.38 $ 0.82 $ 1.52 $ 0.42 $ 3.14 11 Pinnacle West Energy -- -- -- -- -- 12 APS Energy Services (0.02) (0.02) (0.02) (0.05) (0.11) 13 SunCor 0.01 0.03 (0.01) 0.03 0.07 14 El Dorado -- -- -- 0.13 0.14 15 Parent Company (0.01) (0.02) (0.01) -- (0.07) -------- -------- ---------- -------- -------- 16 Income From Continuing Operations 0.36 0.81 1.48 0.53 3.17 17a Income Tax Benefit From Discontinued Operations -- -- 0.45 -- 0.45 17b Extraordinary Charge - Net of Income Tax -- -- (1.65) -- (1.65) -------- -------- ---------- -------- -------- 18 Net Income $ 0.36 $ 0.81 $ 0.28 $ 0.53 $ 1.97 ======== ======== ========== ======== ======== 19 BOOK VALUE PER SHARE $ 25.49 $ 25.58 $ 25.84 $ 26.00 $ 26.00 COMMON SHARES OUTSTANDING - DILUTED (THOUSANDS) 20 Average 85,176 85,093 84,989 84,894 85,009 21 End of Period 84,645 84,771 84,735 84,750 84,750
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- ELECTRIC OPERATING REVENUES (DOLLARS IN MILLIONS) Retail 22 Residential $ 157 $ 189 $ 295 $ 164 $ 805 23 Business 190 237 269 216 912 -------- -------- -------- -------- -------- 24 Total retail 347 426 564 380 1,717 -------- -------- -------- -------- -------- Wholesale revenue on delivered electricity 25 Traditional contracts 11 16 21 13 61 26 Retail load hedge management -- -- 108 -- 108 Marketing and trading -- delivered 27 Generation sales other than native load 7 6 6 11 30 28 Realized margins on electricity trading 4 (2) 5 3 10 29 Other delivered electricity (a) 17 22 45 27 111 -------- -------- -------- -------- -------- 30 Total delivered marketing and trading 28 26 56 41 151 -------- -------- -------- -------- -------- 31 Total delivered wholesale electricity 39 42 185 53 320 -------- -------- -------- -------- -------- Other marketing and trading 32 Realized margins on delivered commodities other than electricity (a) (1) -- (2) 5 2 33 Prior period mark-to-market (gains) losses on contracts delivered during current period (a) -- -- -- -- -- 34 Change in mark-to-market for future-period deliveries -- 6 (1) (4) 1 -------- -------- -------- -------- -------- 35 Total other marketing and trading (1) 6 (3) 1 3 -------- -------- -------- -------- -------- 36 Transmission for others 3 3 3 3 11 37 Other miscellaneous services 3 4 6 5 18 -------- -------- -------- -------- -------- 38 Total electric operating revenues $ 391 $ 481 $ 755 $ 442 $ 2,069 ======== ======== ======== ======== ======== ELECTRIC SALES (GWH) Retail sales 39 Residential 1,796 1,939 3,160 1,880 8,775 40 Business 2,665 3,239 3,464 2,932 12,300 -------- -------- -------- -------- -------- 41 Total retail 4,461 5,178 6,624 4,812 21,075 -------- -------- -------- -------- -------- Wholesale electricity delivered 42 Traditional contracts 309 351 441 321 1,422 43 Retail load hedge management -- -- 631 -- 631 Marketing and trading -- delivered 44 Generation sales other than native load 348 254 171 494 1,267 45 Electricity trading 1,286 1,198 2,165 1,029 5,678 46 Other delivered electricity 902 1,192 2,937 1,664 6,695 -------- -------- -------- -------- -------- 47 Total delivered marketing and trading 2,536 2,644 5,273 3,187 13,640 -------- -------- -------- -------- -------- 48 Total delivered wholesale electricity 2,845 2,995 6,345 3,508 15,693 -------- -------- -------- -------- -------- 49 Total electric sales 7,306 8,173 12,969 8,320 36,768 ======== ======== ======== ======== ========
- ---------- (a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 38 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition. The arithmetic opposites of amounts included in line 33 are included in lines 29 and 32. For example, line 33 shows that a prior-period mark-to-market gain of $0 million was transferred to "realized" for the total year 1999. Lines 29 and 32 include amounts totaling $0 million of realized revenues for the year 1999. See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (DOLLARS IN MILLIONS) REALIZED AND MARK-TO-MARKET COMPONENTS Current Period Effects Realized margin on delivered commodities Electricity 50 Generation sales other than native load $ 2 $ 1 $ 2 $ 2 $ 7 51 Other electricity marketing and trading (a) 6 (2) 3 -- 7 ---- ---- ---- ---- ---- 52 Total electricity 8 (1) 5 2 14 53 Other commodities (a) (1) -- (2) 6 3 ---- ---- ---- ---- ---- 54 Total realized margin 7 (1) 3 8 17 ---- ---- ---- ---- ---- Prior-period mark-to-market (gains) losses on contracts delivered during current period (a) 55 Electricity -- -- -- -- -- 56 Other commodities -- -- -- -- -- 57 Charge related to trading activities with Enron and its affiliates -- -- -- -- -- ---- ---- ---- ---- ---- 58 Subtotal -- -- -- -- -- ---- ---- ---- ---- ---- 59 Total current period effects 7 (1) 3 8 17 ---- ---- ---- ---- ---- Change in mark-to-market gains (losses) for future period deliveries 61 Electricity (1) 4 (1) -- 2 62 Other commodities 1 2 -- (4) (1) ---- ---- ---- ---- ---- 63 Total future period effects -- 6 (1) (4) 1 ---- ---- ---- ---- ---- 64 Total gross margin $ 7 $ 5 $ 2 $ 4 $ 18 ==== ==== ==== ==== ====
- ---------- (a) Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations. See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (CONTINUED) (DOLLARS IN MILLIONS) BY COMMODITY SOLD OR TRADED 65 Electricity $ 7 $ 3 $ 4 $ 2 $ 16 66 Natural gas (1) -- -- 1 -- 67 Coal -- -- -- -- -- 68 Emission allowances 1 2 (2) 1 2 69 Other -- -- -- -- -- ---- ---- ---- ---- ---- 70 Total gross margin $ 7 $ 5 $ 2 $ 4 $ 18 ==== ==== ==== ==== ==== BY PINNACLE WEST ENTITY Parent company marketing and trading division 71 Generation sales other than native load $ -- $ -- $ -- $ -- $ -- 72 Other marketing and trading -- -- -- -- -- APS 73 Generation sales other than native load 2 1 2 2 7 74 Other marketing and trading 5 4 -- 2 11 Pinnacle West Energy 75 Generation sales other than native load -- -- -- -- -- 76 Other marketing and trading -- -- -- -- -- APS ES 77 Other marketing and trading -- -- -- -- -- ---- ---- ---- ---- ---- 78 Total gross margin before income taxes $ 7 $ 5 $ 2 $ 4 $ 18 ==== ==== ==== ==== ====
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- AVERAGE ELECTRIC CUSTOMERS Retail customers 79 Residential 717,540 713,259 717,204 731,092 719,774 80 Business 89,046 89,949 91,076 91,914 90,496 ------- ------- ------- ------- ------- 81 Total 806,586 803,208 808,280 823,006 810,270 82 Wholesale customers 67 67 71 73 70 ------- ------- ------- ------- ------- 83 Total customers 806,653 803,275 808,351 823,079 810,340 ======= ======= ======= ======= ======= 84 Customer Growth (% over prior year) 4.2% 4.3% 4.2% 4.0% 4.2% RETAIL SALES (GWH) - WEATHER NORMALIZED 85 Residential 1,859 1,952 3,124 1,916 8,851 86 Business 2,669 3,264 3,448 2,886 12,267 ------- ------- ------- ------- ------- 87 Total 4,528 5,216 6,572 4,802 21,118 ======= ======= ======= ======= ======= RETAIL USAGE (KWH/AVERAGE CUSTOMER) 88 Residential 2,503 2,719 4,406 2,571 12,191 89 Business 29,928 36,009 38,034 31,899 135,918 RETAIL USAGE - WEATHER NORMALIZED (KWH/AVERAGE CUSTOMER) 90 Residential 2,591 2,737 4,356 2,621 12,297 91 Business 29,973 36,287 37,858 31,399 135,553 ELECTRICITY DEMAND (MW) 92 System peak demand 3,343 4,885 4,935 3,881 4,935
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- ENERGY SOURCES (GWH) Generation production 93 Nuclear 2,295 2,080 2,397 2,077 8,849 94 Coal 2,677 2,764 3,230 3,204 11,875 95 Gas, oil and other 241 477 557 484 1,759 ------ ------ ------ ------ ------ 96 Total 5,213 5,321 6,184 5,765 22,483 ------ ------ ------ ------ ------ Purchased power 97 Firm load 170 753 1,470 87 2,480 98 Marketing and trading 2,189 2,390 5,734 2,693 13,006 ------ ------ ------ ------ ------ 99 Total 2,359 3,143 7,204 2,780 15,486 ------ ------ ------ ------ ------ 100 Total energy sources 7,572 8,464 13,388 8,545 37,969 ====== ====== ====== ====== ====== POWER PLANT PERFORMANCE Capacity Factors 101 Nuclear 98% 88% 100% 87% 93% 102 Coal 72% 74% 85% 85% 79% 103 Gas, oil and other 9% 18% 21% 18% 17% 104 System average 61% 61% 71% 66% 65% Generation Capacity Out of Service and Replaced for Native Load (average MW/day) 105 Nuclear 36 135 3 152 82 106 Coal 337 368 177 172 264 107 Gas -- -- -- -- -- 108 Total 373 503 180 324 345 109 Generation Fuel Cost ($/MWh) $10.00 $10.96 $11.02 $11.33 $10.85
See Glossary of Terms Last Updated 2/3/2003 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATISTICS BY QUARTER 1999
Line 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL YEAR - ---- ------- ------- ------- ------- ---------- ENERGY MARKET INDICATORS (a) Electricity Average Daily Spot Prices ($/MWh) On-Peak 110 Palo Verde $21.57 $29.02 $38.46 $33.31 $30.59 111 SP15 $21.26 $27.17 $35.01 $33.84 $29.32 Off-Peak 112 Palo Verde $13.94 $15.33 $20.73 $22.26 $18.07 113 SP15 $13.68 $14.47 $20.60 $25.06 $18.45 WEATHER INDICATORS Actual 114 Cooling degree-days 71 1,312 2,353 589 4,325 115 Heating degree-days 459 112 -- 359 930 116 Average humidity 34% 27% 40% 28% 32% 10-Year Averages 117 Cooling degree-days 71 1,458 2,454 398 4,381 118 Heating degree-days 556 35 -- 435 1,026 119 Average humidity 45% 25% 34% 40% 36% ECONOMIC INDICATORS Building Permits -- Metro Phoenix (b) 120 Single-family 8,873 9,299 8,223 6,855 33,250 121 Multi-family 2,337 2,396 1,861 3,011 9,605 ------ ------ ------ ------ ------ 122 Total 11,210 11,695 10,084 9,866 42,855 ====== ====== ====== ====== ====== Arizona Job Growth (c) 123 Payroll job growth (% over prior year) 3.9% 4.4% 4.6% 4.2% 4.3% 124 Unemployment rate (%, seasonally adjusted) 4.4% 4.4% 4.3% 4.3% 4.4%
- ---------- 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 College of Business (c) Arizona Department of Economic Security See Glossary of Terms EX-99.7 9 ex99-7.txt EARNINGS VARIANCE EXPLANATIONS Exhibit 99.7 Last updated 02/03/03 PINNACLE WEST CAPITAL CORPORATION EARNINGS VARIANCE EXPLANATIONS FOR PERIODS ENDED DECEMBER 31, 2002 AND 2001 This discussion explains the changes in our earnings for the three and twelve month periods ended December 31, 2002 and 2001. Consolidated income statements for the three and twelve months ended December 31, 2002 and 2001 follow this discussion. We will file our 2002 Annual Report on Form 10-K on or before March 31, 2003. We suggest this section be read in connection with the Pinnacle West Capital Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2001, Form 8-K dated November 21, 2002 (which includes certain restated prior year numbers), and the Pinnacle West Capital Corporation Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2002, June 30, 2002 and September 30, 2002. We have reclassified certain prior period amounts to conform to our current period presentation. Additional operating and financial statistics and a glossary of terms are available on our website (www.pinnaclewest.com). EARNINGS CONTRIBUTIONS BY SUBSIDIARY AND BUSINESS SEGMENT We have two principal business segments (determined by products, services and the regulatory environment): * Our regulated electricity segment, which consists of regulated traditional retail and wholesale electricity businesses and related activities, and includes electricity transmission, distribution, and generation; and * Our marketing and trading segment, which consists of our competitive business activities, including wholesale marketing and trading and APS Energy Services' commodity-related energy services. The following tables summarize net income and segment details for the three and twelve months ended December 31, 2002 and the comparable prior year periods for Pinnacle West and each of our subsidiaries (dollars in millions):
REGULATED MARKETING AND TOTAL ELECTRICITY TRADING OTHER (d) THREE MONTHS ENDED ---------------- ---------------- ---------------- ---------------- DECEMBER 31, 2002 2001 2002 2001 2002 2001 2002 2001 - ------------ ------ ------ ------ ------ ------ ------ ------ ------ Arizona Public Service (a) $ 16 $ 39 $ 16 $ 37 $ -- $ 2 $ -- $ -- Pinnacle West Energy (a) (31) 4 (33) 4 2 -- -- -- APS Energy Services (e) 8 -- -- -- 5 -- 3 -- SunCor 10 -- -- -- -- -- 10 -- El Dorado (e) (37) -- -- -- -- -- (37) -- Parent company 19 (7) 2 -- 2 (7) 15 -- ------ ------ ------ ------ ------ ------ ------ ------ Income/(Loss) before accounting change (15) 36 (15) 41 9 (5) (9) -- Cumulative effect of a change in accounting - net of income taxes (c) (66) -- -- -- (66) -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ Net Income/(Loss) $ (81) $ 36 $ (15) $ 41 $ (57) $ (5) $ (9) $ -- ====== ====== ====== ====== ====== ====== ====== ======
Last updated 02/03/03
REGULATED MARKETING AND TOTAL ELECTRICITY TRADING OTHER (d) TWELVE MONTHS ENDED ---------------- ---------------- ---------------- ---------------- DECEMBER 31, 2002 2001 2002 2001 2002 2001 2002 2001 - ------------ ------ ------ ------ ------ ------ ------ ------ ------ Arizona Public Service (a) $ 199 $ 281 $ 198 $ 139 $ 1 $ 142 $ -- $ -- Pinnacle West Energy (a) (19) 18 (21) 18 2 -- -- -- APS Energy Services (e) 28 (10) -- -- 23 (11) 5 1 SunCor 19 3 -- -- -- -- 19 3 El Dorado (e) (55) -- -- -- -- -- (55) -- Parent company 43 35 (7) (5) 32 40 18 -- ------ ------ ------ ------ ------ ------ ------ ------ Income/(Loss) before accounting change 215 327 170 152 58 171 (13) 4 Cumulative effect of a change in accounting - net of income taxes (b)(c) (66) (15) -- (15) (66) -- -- -- ------ ------ ------ ------ ------ ------ ------ ------ Net Income/(Loss) $ 149 $ 312 $ 170 $ 137 $ (8) $ 171 $ (13) $ 4 ====== ====== ====== ====== ====== ====== ====== ======
(a) Consistent with APS' October 2001 ACC filing, APS entered into agreements with its affiliates to buy power. The agreements reflect a price based on the fully-dispatchable dedication of the Pinnacle West Energy generating assets to APS' native load customers. (b) APS recorded a $15 million after-tax loss in 2001 for the cumulative effect of a change in accounting for derivatives related to the adoption of Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." (c) We recorded a $66 million after-tax loss in 2002 for the cumulative effect of a change in accounting for trading activities, for the early adoption of Emerging Issues Task Force (EITF) Issue No. 02-3 "Accounting for Contracts Involved in Energy Trading and Risk Management Activities" as of October 1, 2002. (d) Primarily includes activities related to SunCor and El Dorado. (e) APS Energy Services and El Dorado's net income are primarily reported before income taxes, in accordance with generally accepted accounting principles. The income tax expense or benefit for these subsidiaries is recorded at the parent company. 2 Last updated 02/03/03 EARNINGS VARIANCE EXPLANATIONS Throughout these explanations, we refer to "gross margin." With respect to our regulated electricity segment and marketing and trading segment, gross margin refers to electric operating revenues less purchased power and fuel costs. Real estate gross margin refers to real estate revenues less real estate operations costs of SunCor. Other gross margin refers to other operating revenues less other operating expenses, which includes El Dorado's investment in NAC International Inc. (NAC), which we began consolidating in our financial statements in July 2002 (see further discussions in "NAC International Inc. Losses" below). Other gross margin also includes amounts related to APS Energy Services' energy consulting services. OPERATING RESULTS - THREE-MONTH PERIOD ENDED DECEMBER 31, 2002 COMPARED WITH THREE-MONTH PERIOD ENDED DECEMBER 31, 2001 Our consolidated net loss for the three months ended December 31, 2002 was $81 million compared with net income of $36 million for the same period in the prior year. We recognized a $66 million after-tax loss in the three months ended December 31, 2002 for the cumulative effect of a change in accounting for trading activities as a result of our adoption of EITF 02-3 as of October 1, 2002. Our consolidated loss before accounting change for the three months ended December 31, 2002 was $15 million compared with income before accounting change of $36 million for the same period in the prior year. The period-to-period decrease was primarily the result of a $49 million pretax write-off related to the cancellation of Pinnacle West Energy's Redhawk Units 3 and 4, of which $47 million was recorded in operations and maintenance expense and $2 million was recorded in capitalized interest, pretax losses of $38 million at El Dorado primarily related to its subsidiary, NAC, in the fourth quarter of 2002 (see further discussion in "NAC International Inc. Losses" below) and pretax severance costs of $11 million recorded in the fourth quarter of 2002 related to a voluntary workforce reduction. The regulated electricity comparison was negatively impacted by higher costs for purchased power and gas, weather impacts and a 1.5% electric retail price reduction that took effect July 1, 2002. These factors were offset by lower replacement power costs for power plant outages, higher earnings contributions from our marketing and trading activities and customer growth of 3.2% for the fourth quarter of 2002. 3 Last updated 02/03/03 The major factors that increased (decreased) income before accounting change were as follows (dollars in millions):
Increase (Decrease) ---------- Marketing and trading segment gross margin: Increase in generation sales other than native load due to higher sales volumes $ 6 Lower realized wholesale margins net of related mark-to-market reversals due to lower prices and volumes (12) Higher competitive retail sales in California by APS Energy Services 7 2001 write-off of prior period mark-to-market value related to trading with Enron and its affiliates 8 Lower mark-to-market reversals due to the adoption of EITF 02-3 8 Higher electricity mark-to-market gains for future delivery primarily as a result of increased activity 8 -------- Net increase in marketing and trading segment gross margin 25 -------- Regulated electricity segment gross margin: Increased purchased power and fuel costs due to higher hedged gas and power prices partially offset by improved hedge management, net of mark-to-market reversals (16) Effects of weather on retail sales (6) Retail price reduction effective July 1, 2002 (6) 2001 charges related to purchased power contracts with Enron and its affiliates 13 Lower replacement power costs from plant outages due to lower market prices and fewer unplanned outages 4 Higher retail sales volumes due to customer growth, partially offset by lower average usage, excluding weather effects 1 Miscellaneous factors, net 11 -------- Net increase in regulated electricity segment gross margin 1 -------- Net increase in regulated electricity and marketing and trading segments' gross margins 26 Higher real estate gross margin primary due to increased sales activities 5 Lower other gross margin primarily related to losses recorded on El Dorado's investment in NAC (32) Higher operations and maintenance expense related to a $47 million write-off of Redhawk Units 3 and 4, 2002 severance costs of $11 million and other costs (72) Higher depreciation and amortization primarily due to higher depreciation on higher plant balances, partially offset by lower regulatory asset amortization (5) Higher taxes other than income taxes (6) Lower other expenses 7 Higher net interest expense primarily due to lower capitalized interest (8) Miscellaneous items, net (3) -------- Decrease in income before income taxes (88) Lower income taxes primarily due to lower pretax income 37 -------- Decrease in income before accounting change $ (51) ========
4 Last updated 02/03/03 MARKETING AND TRADING SEGMENT GROSS MARGIN Marketing and trading segment revenues were $96 million higher in the three-month period ended December 31, 2002, compared with the same period in the prior year as a result of: * increased revenues from generation sales other than native load due to higher sales volumes ($26 million); * higher realized wholesale revenues net of related mark-to-market reversals due to higher volumes ($20 million); * increased revenues from higher competitive retail sales in California by APS Energy Services ($26 million); * 2001 write-off of prior period mark-to-market value related to trading with Enron and its affiliates ($8 million increase); * higher revenues related to the adoption of EITF 02-3 ($8 million); and * higher electricity mark-to-market gains for future delivery primarily as a result of increased activity ($8 million). Marketing and trading segment purchased power and fuel costs were $71 million higher in the three-month period ended December 31, 2002, compared to the same period in the prior year as a result of: * increased fuel costs related to generation sales other than native load primarily because of higher natural gas prices and higher sales volumes ($20 million); * increased purchased power costs related to other realized marketing activities in the current period primarily due to higher purchased power prices and higher sales volumes, net of mark-to-market reversals ($32 million); * increased purchased power costs related to higher competitive retail sales in California by APS Energy Services ($19 million). REGULATED ELECTRICITY SEGMENT GROSS MARGIN Revenues related to our regulated retail and wholesale electricity businesses were $20 million lower in the three-month period ended December 31, 2002, compared with the same period in the prior year as a result of: * decreased revenues related to wholesale sales for retail native load hedge management, as a result of lower prices ($16 million); * decreased retail revenues related to milder weather ($9 million); * decreased retail revenues related to a reduction in retail electricity prices ($6 million); * increased retail revenues related to customer growth partially offset by lower average usage, excluding weather effects ($1 million); and * other miscellaneous factors ($10 million net increase). Regulated electricity segment purchased power and fuel costs were $21 million lower in the three-month period ended December 31, 2002, compared with the same period in the prior year as a result of: * increased costs related to higher hedged natural gas and purchased power prices, net of mark-to-market reversals ($26 million); 5 Last updated 02/03/03 * decreased purchased power costs related to wholesale sales for retail load hedge management as a result of lower prices ($26 million); * decreased costs related to the effects of milder weather on retail sales ($3 million); * 2001 charges related to purchased power contracts with Enron and its affiliates ($13 million decrease); * decreased replacement power costs for power plant outages due to lower market prices and fewer unplanned nuclear and coal plant outages ($4 million); and * other miscellaneous factors ($1 million net decrease). The increase in real estate gross margin of $5 million was primarily due to increased sales activities. The decrease in other gross margin of $32 million was primarily due to losses on El Dorado's investment in NAC (see further discussion in NAC International Inc. Losses below). The increase in operations and maintenance expense of $72 million was due to a $47 million write-off related to the cancellation of Redhawk Units 3 and 4, severance costs of $11 million related to a 2002 voluntary workforce reduction and other costs of $14 million. The increase in depreciation and amortization expenses of $5 million was primarily related to increased depreciation and amortization on higher property, plant and equipment balances partially offset by lower regulatory asset amortization, in accordance with APS' 1999 Regulatory Agreement. The increase in taxes other than income taxes of $6 million is primarily due to increased property taxes on higher property balances. Other expense decreased $7 million primarily due to lower miscellaneous non-operating costs. Interest expense, net of amounts capitalized, increased $8 million primarily due to decreased capitalized interest related to our generation expansion program. 6 Last updated 02/03/03 OPERATING RESULTS - TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2002 COMPARED WITH TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2001 Our consolidated net income for the twelve months ended December 31, 2002 was $149 million compared with $312 million for the same period in the prior year. We recognized a $66 million after-tax loss in the twelve months ended December 31, 2002 for the cumulative effect of a change in accounting for trading activities for the early adoption of EITF 02-3 as of October 1, 2002. We recognized a $15 million after-tax loss in the twelve months ended December 31, 2001 as a cumulative effect of a change in accounting for derivatives, as required by SFAS No. 133. Our income before accounting change for the twelve months ended December 31, 2002 was $215 million compared with $327 million for the same period a year earlier. The period-to-period comparison was lower due to lower earnings contributions from our marketing and trading activities, pretax losses of $59 million related to El Dorado's investment in NAC, a $49 million pretax write-off related to the cancellation of Redhawk Units 3 and 4, of which $47 million was recorded in operations and maintenance expense and $2 million was recorded in capitalized interest, and severance costs of approximately $36 million pretax recorded in the second half of 2002 relating to a voluntary workforce reduction, partially offset by increased earnings contributions from our regulated electricity and real estate operations. The regulated electricity comparison was favorably impacted by lower replacement power costs for power plant outages and customer growth and higher average usage per customer, partially offset by the effects of milder weather, retail electricity price decreases and higher costs for purchased power and gas due to higher hedged gas and power prices. The real estate results benefited primarily from more sales activities. The comparison for marketing and trading activities reflects lower liquidity and lower price volatility in the wholesale power markets in the western United States. 7 Last updated 02/03/03 The major factors that increased (decreased) income before accounting change were as follows (dollars in millions):
Increase (Decrease) ---------- Marketing and trading segment gross margin: Decrease in generation sales other than native load due to lower market prices partially offset by higher sales volumes $ (66) Lower realized wholesale margins net of related mark-to-market reversals due to lower prices and volumes (91) Higher competitive retail sales in California by APS Energy Services 32 2001 write-off of prior period mark-to-market value related to trading with Enron and its affiliates 8 Lower mark-to-market reversals due to the adoption of EITF 02-3 8 Lower mark-to-market gains for future delivery due to lower market liquidity and lower price volatility (76) -------- Net decrease in marketing and trading segment gross margin (185) -------- Regulated electricity segment gross margin: Lower replacement power costs for plant outages due to lower market prices and fewer unplanned outages 127 Increased purchased power and fuel costs due to higher hedged gas and power prices, partially offset by improved hedge management, net of mark-to-market reversals (9) Higher retail sales volumes due to customer growth and higher average usage, excluding weather effects 38 2001 charges related to purchased power contracts with Enron and its affiliates 13 Retail price reductions effective July 1, 2001 and July 1, 2002 (28) Effects of milder weather on retail sales (27) Miscellaneous factors, net (2) -------- Net increase in regulated electricity segment gross margin 112 -------- Net decrease in regulated electricity and marketing and trading segments' gross margins (73) Higher real estate gross margin primarily due to increased sales activities 16 Lower other gross margin primarily related to losses recorded on El Dorado's investment in NAC (44) Higher operations and maintenance expense related to a $47 million write-off of Redhawk Units 3 and 4, 2002 severance costs of approximately $36 million, partially offset by lower generation reliability costs (54) Higher taxes other than income taxes (7) Lower other income primarily due to a 2001 insurance recovery of environmental remediation costs (11) Higher net interest expense primarily due to higher debt balances and lower capitalized interest (16) Miscellaneous factors, net 2 -------- Decrease in income before income taxes (187) Lower income taxes primarily due to lower income 75 -------- Decrease in income before accounting change $ (112) ========
8 Last updated 02/03/03 MARKETING AND TRADING SEGMENT GROSS MARGIN Marketing and trading segment revenues were $325 million lower in the twelve-month period ended December 31, 2002, compared to the same period in the prior year as a result of: * decreased revenues from generation sales other than native load due to lower market prices partially offset by higher sales volumes ($98 million); * lower realized wholesale revenues net of related mark-to-market reversals due to lower prices partially offset by higher volumes ($273 million); * increased revenues from higher competitive retail sales in California by APS Energy Services ($105 million); * 2001 write-off of prior period mark-to-market value related to trading with Enron and its affiliates ($8 million increase); * higher revenues related to the adoption of EITF 02-3 ($8 million); and * lower mark-to-market gains for future delivery primarily as a result of lower market liquidity and lower price volatility, resulting in lower volumes ($75 million). Marketing and trading segment purchased power and fuel costs were $140 million lower in the twelve-month period ended December 31, 2002, compared to the same period in the prior year as a result of: * decreased fuel costs related to generation sales other than native load primarily because of lower natural gas prices partially offset by higher sales volumes ($32 million); * decreased purchased power costs related to other realized marketing activities in the current period primarily due to lower prices partially offset by higher volumes ($182 million); * increased purchased power costs related to higher competitive retail sales in California by APS Energy Services ($73 million); and * change in mark-to-market fuel costs for future delivery ($1 million increase). REGULATED ELECTRICITY SEGMENT GROSS MARGIN Revenues related to our regulated retail and wholesale electricity businesses were $549 million lower in the twelve-month period ended December 31, 2002, compared to the same period in the prior year as a result of: * decreased revenues related to traditional wholesale sales as a result of lower sales volumes and lower prices ($64 million); * decreased revenues related to retail load hedge management wholesale sales, as a result of lower prices and lower sales volumes ($455 million); * decreased retail revenues related to milder weather ($60 million); * increased retail revenues related to customer growth and higher average usage, excluding weather effects ($69 million); * decreased retail revenues related to reductions in retail electricity prices ($28 million); and * other miscellaneous factors ($11 million net decrease). 9 Last updated 02/03/03 Regulated electricity segment purchased power and fuel costs were $661 million lower in the twelve-month period ended December 31, 2002, compared with the same period in the prior year as a result of: * decreased costs related to traditional wholesale sales as a result of lower sales volumes and lower prices ($64 million); * decreased costs related to retail load hedge management wholesale sales, as a result of lower prices and lower sales volumes ($460 million); * increased costs related to higher prices for hedged natural gas and purchased power, net of mark-to-market reversals ($14 million); * decreased costs related to the effects of milder weather on retail sales ($33 million); * increased costs related to retail sales growth, excluding weather effects ($31 million); * charges in 2001 related to purchased power contracts with Enron and its affiliates ($13 million net decrease); * decreased replacement power costs for power plant outages due to lower market prices and fewer unplanned outages ($127 million); and * miscellaneous factors ($9 million net decrease). The increase in real estate gross margin of $16 million was primarily due to increased sales activities. The decrease in other gross margin of $44 million was primarily due to losses on El Dorado's investment in NAC (see further discussion in "NAC International Inc. Losses" below). The increase in operations and maintenance expense of $54 million was due to a $47 million write-off related to the cancellation of Redhawk Units 3 and 4, severance costs of $36 million related to a 2002 voluntary workforce reduction and other costs of $9 million, partially offset by lower costs related to generation reliability, plant outages and maintenance costs of $38 million. The increase in taxes other than income taxes of $7 million is primarily due to increased property taxes on higher property balances. Other income decreased $11 million primarily due to an insurance recovery recorded in 2001 related to environmental remediation costs and other costs. Other expense remained constant compared to the prior year primarily due to losses recorded related to El Dorado's investment in NAC of approximately $8 million (see further discussion in "NAC International Inc. Losses" below) offset by $8 million of lower miscellaneous non-operating costs. Net interest expense increased $16 million primarily because of higher debt balances related to our generation expansion program and lower capitalized interest on our generation expansion program. 10 Last updated 02/03/03 NAC INTERNATIONAL INC. LOSSES We, through an unregulated wholly-owned subsidiary (El Dorado), own a majority interest in NAC, a company that develops, markets and contracts for the manufacture of cask designs for spent nuclear fuel storage and transportation. Prior to the third quarter of 2002, the Company's investment in NAC was accounted for under the equity method and the Company's share of NAC's earnings and losses were recorded in other income or expense in the consolidated income statement. Beginning in the third quarter of 2002, the Company fully consolidated NAC's financial statements after acquiring a controlling interest in NAC as a result of increased voting representation on NAC's board of directors. During the second and third quarters of 2002, the Company recorded cumulative losses of approximately $21 million before income taxes related to NAC, primarily as a result of expected losses under contracts with two customers, including a contract between NAC and Maine Yankee Atomic Power Company ("Maine Yankee"). See Note 14 of Notes to Condensed Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations in our Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2002 and September 30, 2002 for additional information about NAC. On January 15, 2003, Maine Yankee notified NAC of its intention to terminate its contract with NAC. The Company recorded additional NAC losses of $38 million before income taxes in the fourth quarter of 2002, the substantial majority of which relates to the termination of the Maine Yankee contract. 11 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands, Except Per Share Amounts) (Unaudited)
THREE MONTHS ENDED December 31, Increase (Decrease) ------------------------ ------------------------ 2002 2001 Amount Percent ---------- ---------- ---------- ---------- OPERATING REVENUES Regulated electricity segment $ 416,583 $ 436,567 $ (19,984) 4.6% W Marketing and trading segment 113,355 17,419 95,936 550.8% B Real estate 80,943 61,095 19,848 32.5% B Other revenues 33,555 5,893 27,662 469.4% B ---------- ---------- ---------- Total 644,436 520,974 123,462 23.7% B ---------- ---------- ---------- OPERATING EXPENSES Regulated electricity segment purchased power and fuel 75,932 96,625 (20,693) 21.4% B Marketing and trading segment purchased power and fuel 84,413 13,354 71,059 532.1% W Operations and maintenance 193,674 121,790 71,884 59.0% W Real estate operations 66,816 52,214 14,602 28.0% W Depreciation and amortization 114,074 109,061 5,013 4.6% W Taxes other than income taxes 26,805 20,967 5,838 27.8% W Other expenses 65,844 6,348 59,496 937.2% W ---------- ---------- ---------- Total 627,558 420,359 207,199 49.3% W ---------- ---------- ---------- OPERATING INCOME 16,878 100,615 (83,737) 83.2% W ---------- ---------- ---------- OTHER Other income 4,791 7,590 (2,799) 36.9% W Other expenses (6,873) (13,469) 6,596 49.0% B ---------- ---------- ---------- Total (2,082) (5,879) 3,797 64.6% B ---------- ---------- ---------- INTEREST EXPENSE Interest charges 47,204 46,719 485 1.0% W Capitalized interest (4,967) (12,458) 7,491 60.1% W ---------- ---------- ---------- Total 42,237 34,261 7,976 23.3% W ---------- ---------- ---------- INCOME/(LOSS) BEFORE INCOME TAXES (27,441) 60,475 (87,916) 145.4% W INCOME TAXES (12,556) 24,669 (37,225) 150.9% B ---------- ---------- ---------- INCOME/(LOSS) BEFORE ACCOUNTING CHANGE (14,885) 35,806 (50,691) 141.6% W CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING FOR TRADING ACTIVITIES - NET OF INCOME TAX (65,745) -- (65,745) 100.0% W ---------- ---------- ---------- NET INCOME/(LOSS) $ (80,630) $ 35,806 $ (116,436) 325.2% W ========== ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 85,302 84,679 623 0.7% WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 85,302 84,824 478 0.6% EARNINGS PER WEIGHTED AVERAGE COMMON SHARE OUTSTANDING Income Before Accounting Change - Basic $ (0.17) $ 0.42 $ (0.59) 140.5% W Net Income - Basic $ (0.95) $ 0.42 $ (1.37) 326.2% W Income Before Accounting Change - Diluted $ (0.17) $ 0.42 $ (0.59) 140.5% W Net Income - Diluted $ (0.95) $ 0.42 $ (1.37) 326.2% W Certain prior year amounts have been restated to conform to the 2002 presentation. B -- Better W -- Worse
12 PINNACLE WEST CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands, Except Per Share Amounts) (Unaudited)
TWELVE MONTHS ENDED December 31, Increase (Decrease) -------------------------- -------------------------- 2002 2001 Amount Percent ----------- ----------- ----------- ----------- OPERATING REVENUES Regulated electricity segment $ 2,013,023 $ 2,562,089 $ (549,066) 21.4% W Marketing and trading segment 325,931 651,230 (325,299) 50.0% W Real estate 236,388 168,908 67,480 40.0% B Other revenues 61,937 11,771 50,166 426.2% B ----------- ----------- ----------- Total 2,637,279 3,393,998 (756,719) 22.3% W ----------- ----------- ----------- OPERATING EXPENSES Regulated electricity segment purchased power and fuel 499,543 1,160,863 (661,320) 57.0% B Marketing and trading segment purchased power and fuel 194,039 334,209 (140,170) 41.9% B Operations and maintenance 584,538 530,095 54,443 10.3% W Real estate operations 205,315 153,462 51,853 33.8% W Depreciation and amortization 424,886 427,903 (3,017) 0.7% B Taxes other than income taxes 107,952 101,068 6,884 6.8% W Other expenses 104,959 10,375 94,584 911.7% W ----------- ----------- ----------- Total 2,121,232 2,717,975 (596,743) 22.0% B ----------- ----------- ----------- OPERATING INCOME 516,047 676,023 (159,976) 23.7% W ----------- ----------- ----------- OTHER Other income 15,104 26,416 (11,312) 42.8% W Other expenses (33,655) (33,577) (78) 0.2% W ----------- ----------- ----------- Total (18,551) (7,161) (11,390) 159.1% W ----------- ----------- ----------- INTEREST EXPENSE Interest charges 188,353 175,822 12,531 7.1% W Capitalized interest (44,110) (47,862) 3,752 7.8% W ----------- ----------- ----------- Total 144,243 127,960 16,283 12.7% W ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 353,253 540,902 (187,649) 34.7% W INCOME TAXES 138,100 213,535 (75,435) 35.3% B ----------- ----------- ----------- INCOME BEFORE ACCOUNTING CHANGE 215,153 327,367 (112,214) 34.3% W CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING FOR DERIVATIVES - NET OF INCOME TAX -- (15,201) 15,201 100.0% B CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING FOR TRADING ACTIVITIES - NET OF INCOME TAX (65,745) -- (65,745) 100.0% W ----------- ----------- ----------- NET INCOME $ 149,408 $ 312,166 $ (162,758) 52.1% W =========== =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 84,903 84,718 185 0.2% WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 84,964 84,930 34 0.0% EARNINGS PER WEIGHTED AVERAGE COMMON SHARE OUTSTANDING Income Before Accounting Change - Basic $ 2.53 $ 3.86 $ (1.33) 34.5% W Net Income - Basic $ 1.76 $ 3.68 $ (1.92) 52.2% W Income Before Accounting Change - Diluted $ 2.53 $ 3.85 $ (1.32) 34.3% W Net Income - Diluted $ 1.76 $ 3.68 $ (1.92) 52.2% W Certain prior year amounts have been restated to conform to the 2002 presentation. B -- Better W -- Worse
13 EX-99.8 10 ex99-8.txt GLOSSARY OF TERMS 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 Gains The gross margin related to the change (Losses) For Future-Period in mark-to-market value in the current Deliveries 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. Current Period Effects The net effect of the total revenue or gross margins realized on delivery of commodities in the period being measured, and the amount of prior-period mark-to-market (gains) losses on contracts delivered during period. The net effect of transferring prior-period mark-to-market to realized does not affect total revenues, gross margin or earnings. 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(degree)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(degree)F for the month. Average temperatures greater than the base temperature are ignored. -2- Electricity Marketing and Trading All wholesale sales of electricity not - - Delivered 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. Electricity Spot Prices -- Palo Verde Electricity average daily spot prices at - - Off-Peak Palo Verde substation during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour. Electricity Spot Prices -- Palo Verde Electricity average daily spot prices at - - On-Peak 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 Electricity average daily spot prices at - - Off-Peak 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 Electricity average daily spot prices at - - On-Peak 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 Total capacity required and economic, and Replaced for Native Load yet unavailable for retail customers and traditional wholesale contracts due to scheduled or unscheduled outages. Measured in megawatts per day. Generation Sales Other Than Native Sales of electricity from generation Load owned by the company that is over and above the amount required to serve retail customers and traditional wholesale contracts. Generation Production -- Coal Amount of net energy produced by coal-fueled generators. Measured in gigawatt-hours. -3- Generation Production Amount of net energy predominately - -- Gas/Oil/Other 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 Revenues from marketing and trading - - Pretax 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. Marketing and Trading Gross Margin Marketing and trading gross margin, by Commodity -- Pretax before income taxes, for generation sales other than native load and for sales and purchases of electricity and other commodities by the company in the wholesale market, summarized by the underlying commodities. Realized and Mark-to-Market Marketing and trading gross margin, Components before income taxes, for generation sales other than native load 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. 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. Megawatt (MW) One million watts. Megawatt-hour (MWh) A unit of energy equivalent to 1,000 kilowatt-hours. -4- Prior Period Mark-To-Market (Gains) The reversal of the gross margin related Losses on Contracts Delivered During to mark-to-market transactions entered Current Period 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. 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 Power purchased from wholesale market Trading sources used to serve marketing and trading sales not served by company-owned generation. Measured in gigawatt-hours. Realized Margin on Delivered Marketing and trading gross margin Commodities related to electricity and other commodities that were delivered in the then-current period. Retail Customer Growth Percentage growth over the prior year in the number of retail customers. Retail Electricity Usage Total retail sales for a period divided by the average retail customers for the same period. Measured in kilowatt-hours per average customer. Retail Load Hedge Management Wholesale sales to liquidate electricity purchases originally intended to meet firm load during peak times, which purchases were not needed ultimately for firm load. These sales are made to other electric companies, power marketers, or public entities for the purpose of resale. Measured in gigawatt-hours. Retail Sales Sales of electricity made directly to retail customers or ultimate customers. Residential retail sales are sales to households. Business retail sales include commercial, industrial, irrigation, and streetlighting sales. Measured in gigawatt-hours. -5- 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. -----END PRIVACY-ENHANCED MESSAGE-----