8-K

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, 2003

PINNACLE WEST CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Arizona	1-8962	86-0512431
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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)

TABLE OF CONTENTS

	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
	Item 9. Regulation FD Disclosure
	Item 12. Results of Operations and Financial Condition
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1
EXHIBIT 99.2
EXHIBIT 99.3
EXHIBIT 99.4
EXHIBIT 99.5
EXHIBIT 99.6
EXHIBIT 99.7
EXHIBIT 99.8
EXHIBIT 99.9
EXHIBIT 99.10

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, 2003 and 2002.
99.3	Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
99.4	Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
99.5	Pinnacle West Capital Corporation consolidated statistics by quarter for 2001.
99.6	Pinnacle West Capital Corporation consolidated statistics by quarter for 2000.
99.7	Pinnacle West Capital Corporation consolidated statistics by quarter for 1999.
99.8	Pinnacle West Capital Corporation earnings variance explanations for periods ended December 31, 2003 and 2002 and condensed consolidated statements of income for the three months and twelve months ended December 31, 2003 and 2002.
99.9	Glossary of Terms.
99.10	Earnings News Release issued on January 29, 2004.

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.

Item 12.  Results of Operations and Financial Condition

     Certain of the Information relates to the Company’s results of operations for its fiscal quarter and fiscal year ended December 31, 2003. This Information is attached hereto as Exhibits 99.2, 99.3, and 99.8.

     On January 29, 2004, the Company issued a press release regarding its financial results for its fiscal quarter and fiscal year ended December 31, 2003. A copy of the press release is attached hereto as Exhibit 99.10.

     The information in Exhibits 99.2, 99.3, 99.8 and 99.10 of this report relating to the Company’s financial results for its fiscal quarter and fiscal year ended December 31, 2003 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

     Exhibit 99.10 to this report contains certain “non-GAAP financial measures,” as defined in Item 10(e) of Regulation S-K of the Exchange Act. The non-GAAP financial measures, which we describe as “on-going earnings” and “on-going earnings per share,” exclude from net income: income tax credits related to prior years and recorded in 2003; previously disclosed, non-recurring charges in 2002; and a 2002 charge for the cumulative effect of an accounting change. Exhibit 99.10 reconciles each of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”). We believe on-going earnings provide investors with a useful indicator of our results that is comparable among periods because it excludes the effects of unusual items that may occur on an irregular basis. Investors should note that these non-GAAP financial measures involve judgments by management, including whether an item is classified as an unusual item. We use on-going earnings, or similar concepts, to internally measure performance in reports for management.

2

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: January 29, 2004	By:
		/s/ Barbara Gomez
		Barbara M. Gomez
		Treasurer

3

EXHIBIT INDEX

Exhibit
No.	Description
99.1	Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).
99.2	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended December 31, 2003 and 2002.
99.3	Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
99.4	Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
99.5	Pinnacle West Capital Corporation consolidated statistics by quarter for 2001.
99.6	Pinnacle West Capital Corporation consolidated statistics by quarter for 2000.
99.7	Pinnacle West Capital Corporation consolidated statistics by quarter for 1999.
99.8	Pinnacle West Capital Corporation earnings variance explanations for periods ended December 31, 2003 and 2002 and condensed consolidated statements of income for the three months and twelve months ended December 31, 2003 and 2002.
99.9	Glossary of Terms.
99.10	Earnings News Release issued on January 29, 2004.

EX-99.1 3 p68708pexv99w1.htm EXHIBIT 99.1

Exhibit 99.1

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

List of Contents

2003 Fourth-Quarter Summary

2003 Year-to-Date

2002 by Quarter

2001 by Quarter

2000 by Quarter

1999 by Quarter

Quarters may not sum to totals due to rounding.

The definitions of terms used in this statistical summary are contained
in the “Glossary of Terms” on the Pinnacle West website at:
http://www.pinnaclewest.com/files/investors/2003Q4QuarStatsGloss.pdf

This statistical data may be graphed in various quarterly or annual comparisons
using the “Interactive Charts” tool on the Pinnacle West website at:
http://www.pinnaclewest.com/main/pnw/investors/financials/quarterly/landing.html

EX-99.2 4 p68708pexv99w2.htm EXHIBIT 99.2

TABLE OF CONTENTS

EXHIBIT 99.1

EXHIBIT 99.2

EXHIBIT 99.3

EXHIBIT 99.4

EXHIBIT 99.5

EXHIBIT 99.6

EXHIBIT 99.7

EXHIBIT 99.8

EXHIBIT 99.9

EXHIBIT 99.10

Exhibit 99.2

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

					3 Mo. Ended December 31									12 Mo. Ended December 31
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)
	1		Arizona Public Service		$	21		$	16		$	5		$	181		$	199		$	(18	)
	2		Pinnacle West Energy			(12	)		(31	)		19			(1	)		(19	)		18
	3		APS Energy Services			3			8			(5	)		16			28			(12	)
	4		SunCor			36			8			28			46			10			36
	5		El Dorado			1			(37	)		38			7			(55	)		62
	6		Parent Company			(3	)		19			(22	)		(18	)		43			(61	)
	7			Income From Continuing Operations		46			(17	)		63			231			206			25
	8a		Income From Discontinued Operations - Net of Tax			3			2			1			10			9			1
	8b		Cumulative Effect of Change in Accounting - Net of Tax			—			(66	)		66			—			(66	)		66
	9			Net Income	$	49		$	(81	)	$	130		$	241		$	149		$	92
		EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
	10		Arizona Public Service		$	0.23		$	0.19		$	0.04		$	1.98		$	2.35		$	(0.37	)
	11		Pinnacle West Energy			(0.14	)		(0.37	)		0.23			(0.01	)		(0.23	)		0.22
	12		APS Energy Services			0.03			0.09			(0.06	)		0.18			0.33			(0.15	)
	13		SunCor			0.39			0.09			0.30			0.50			0.13			0.37
	14		El Dorado			0.02			(0.43	)		0.45			0.08			(0.65	)		0.73
	15		Parent Company			(0.03	)		0.24			(0.27	)		(0.21	)		0.50			(0.71	)
	16			Income From Continuing Operations		0.50			(0.19	)		0.69			2.52			2.43			0.09
	17a		Income From Discontinued Operations - Net of Tax			0.04			0.01			0.03			0.11			0.10			0.01
	17b		Cumulative Effect of Change in Accounting - Net of Tax			—			(0.77	)		0.77			—			(0.77	)		0.77
	18			Net Income	$	0.54		$	(0.95	)	$	1.49		$	2.63		$	1.76		$	0.87
	19	BOOK VALUE PER SHARE(a)			$	31.00		$	29.40		$	1.60		$	31.00		$	29.40		$	1.60
		COMMON SHARES OUTSTANDING - DILUTED (Thousands)
	20		Average			91,403			85,302			6,101			91,405			84,964			6,441
	21		End of Period			91,288			91,255			33			91,288			91,255			33
	(a)		Book value reflects an estimate for 2003.

See Glossary of Terms. Page 1 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

						3 Mo. Ended December 31									12 Mo. Ended December 31
Line						2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		ELECTRIC OPERATING REVENUES (Dollars in Millions)
		REGULATED ELECTRICITY SEGMENT
			Retail
	22			Residential		$	193		$	172		$	21		$	957		$	906		$	51
	23			Business			222			212			10			953			928			25
	24				Total retail		415			384			31			1,910			1,834			76
			Wholesale revenue on delivered electricity
	25			Traditional contracts			3			3			—			15			9			6
	26			Retail load hedge management			—			—			—			—			—			—
	27		Transmission for others				7			12			(5	)		27			30			(3	)
	28		Other miscellaneous services				7			7			—			26			17			9
	29				Total regulated electricity		432			406			26			1,978			1,890			88
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			16			32			(16	)		88			50			38
	31			Realized margins on electricity trading			6			1			5			22			50			(28	)
	32			Other delivered electricity (a)			74			71			3			308			168			140
	33			Total delivered marketing and trading			96			104			(8	)		418			268			150
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				1			6			(5	)		(8	)		8			(16	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				(1	)		(8	)		7			(11	)		(41	)		30
	36		Change in mark-to-market for future-period deliveries				(5	)		(1	)		(4	)		(7	)		52			(59	)
	37		Total other marketing and trading				(5	)		(3	)		(2	)		(26	)		19			(45	)
	38	Total marketing and trading					91			101			(10	)		392			287			105
	39	Total operating electric revenues				$	523		$	507		$	16		$	2,370		$	2,177		$	193

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $1 million was transferred to “realized” for the fourth quarter of 2003. Lines 31 and 34 include amounts totaling $1 million of realized gains for the fourth quarter of 2003.

See Glossary of Terms. Page 2 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

						3 Mo. Ended December 31							12 Mo. Ended December 31
Line						2003		2002		Incr (Decr)			2003		2002		Incr (Decr)
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail
	40			Residential			2,374		2,056		318			11,147		10,444		703
	41			Business			3,226		3,036		190			13,416		12,917		499
	42				Total retail		5,600		5,092		508			24,563		23,361		1,202
			Wholesale electricity delivered
	43			Traditional contracts			112		140		(28	)		500		474		26
	44			Retail load hedge management			333		296		37			1,093		2,642		(1,549	)
	45				Total regulated electricity		6,045		5,528		517			26,156		26,477		(321	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			475		1,051		(576	)		2,146		1,791		355
	47			Electricity trading			5,655		4,655		1,000			21,305		18,037		3,268
	48			Other delivered electricity			1,247		1,390		(143	)		5,351		3,027		2,324
	49			Total delivered marketing and trading			7,377		7,096		281			28,802		22,855		5,947
	50	Total electric sales					13,422		12,624		798			54,958		49,332		5,626

See Glossary of Terms. Page 3 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

						3 Mo. Ended December 31									12 Mo. Ended December 31
Line						2003			2002			Incr (Decr)			2003			2002			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
	51				Generation sales other than native load	$	3		$	9		$	(6	)	$	7		$	14		$	(7	)
	52				Other electricity marketing and trading (a)		12			23			(11	)		66			99			(33	)
	53				Total electricity		15			32			(17	)		73			113			(40	)
	54			Other commodities (a)			1			6			(5	)		(8	)		8			(16	)
	55			Total realized margin			16			38			(22	)		65			121			(56	)
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			(2	)		(4	)		2			(14	)		(30	)		16
	57			Other commodities (a)			1			(4	)		5			3			(11	)		14
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—			—
	59			Subtotal			(1	)		(8	)		7			(11	)		(41	)		30
	60		Total current period effects (b)				15			30			(15	)		54			80			(26	)
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				(5	)		6			(11	)		(8	)		63			(71	)
	62		Other commodities				—			(7	)		7			1			(11	)		12
	63		Subtotal				(5	)		(1	)		(4	)		(7	)		52			(59	)
	64	Total gross margin				$	10		$	29		$	(19	)	$	47		$	132		$	(85	)

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of December 31, 2003, Pinnacle West had accumulated mark-to-market net gains of $23 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: 2004, $5 million; 2005, $5 million; 2006, $3 million and thereafter, $10 million.

(a)

The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 60 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the fourth quarter of 2003. A $2 million realized gain is included in the $12 million on line 52 for the fourth quarter of 2003.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms. Page 4 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

				3 Mo. Ended December 31									12 Mo. Ended December 31
Line				2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (continued)    (Dollars in Millions)
		By Commodity Sold or Traded
	65	Electricity		$	8		$	34		$	(26	)	$	52		$	147		$	(95	)
	66	Natural gas			3			(5	)		8			3			(6	)		9
	67	Coal			—			—			—			(2	)		(2	)		—
	68	Emission allowances			(1	)		—			(1	)		(7	)		(7	)		—
	69	Other			—			—			—			1			—			1
	70		Total Gross Margin	$	10		$	29		$	(19	)	$	47		$	132		$	(85	)
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	—		$	5		$	(5	)	$	(2	)	$	8		$	(10	)
	72		Other marketing and trading		(9	)		9			(18	)		(3	)		82			(85	)
		APS
	73		Generation sales other than native load		4			—			4			11			2			9
	74		Other marketing and trading		—			—			—			(3	)		—			(3	)
		Pinnacle West Energy
	75		Generation sales other than native load		(1	)		4			(5	)		(2	)		4			(6	)
	76		Other marketing and trading		10			—			10			10			—			10
		APS ES
	77		Other marketing and trading		6			11			(5	)		36			36			—
	78	Total gross margin before income taxes		$	10		$	29		$	(19	)	$	47		$	132		$	(85	)

See Glossary of Terms. Page 5 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

					3 Mo. Ended December 31									12 Mo. Ended December 31
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			839,539			811,930			27,609			828,366			801,801			26,565
	80		Business			104,521			101,177			3,344			103,096			100,228			2,868
	81			Total		944,060			913,107			30,953			931,462			902,029			29,433
	82	Wholesale customers				66			67			(1	)		66			67			(1	)
	83			Total customers		944,126			913,174			30,952			931,528			902,096			29,432
	84	Customer Growth (% over prior year)				3.4	%		3.2	%		0.2	%		3.3	%		3.1	%		0.2	%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				2,262			2,130			132			10,884			10,382			502
	86	Business				3,162			3,023			139			13,368			12,899			469
	87			Total		5,424			5,153			271			24,252			23,281			971
		RETAIL USAGE
			(KWh/Average Customer)
	88	Residential				2,828			2,532			296			13,457			13,025			432
	89	Business				30,865			30,011			854			130,131			128,885			1,246
		RETAIL USAGE - WEATHER NORMALIZED    (KWh/Average Customer)
	90	Residential				2,695			2,623			72			13,139			12,947			192
	91	Business				30,252			29,878			374			129,665			128,698			967
		ELECTRICITY DEMAND (MW)
	92	System peak demand				5,124			3,828			1,296			6,332			5,803			529

See Glossary of Terms. Page 6 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

					3 Mo. Ended December 31									12 Mo. Ended December 31
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			1,739			2,095			(356	)		8,322			8,981			(659	)
	94		Coal			2,799			3,183			(384	)		11,362			12,056			(694	)
	95		Gas, oil and other			535			1,455			(920	)		6,091			4,369			1,722
	96			Total		5,073			6,733			(1,660	)		25,775			25,406			369
		Purchased power
	97		Firm load			1,418			(157	)		1,575			3,108			1,619			1,489
	98		Marketing and trading			7,236			6,340			896			27,329			23,704			3,625
	99			Total		8,654			6,183			2,471			30,437			25,323			5,114
	100			Total energy sources		13,727			12,916			811			56,212			50,729			5,483
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			72	%		87	%		(15	)%		87	%		94	%		(7	)%
	102		Coal			74	%		84	%		(10	)%		76	%		80	%		(4	)%
	103		Gas, oil and other			9	%		29	%		(20	)%		28	%		27	%		1	%
	104		System average			41	%		60	%		(19	)%		55	%		63	%		(8	)%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			297			129			168			131			67			64
	106		Coal			253			116			137			269			167			102
	107		Gas			338			54			284			205			48			157
	108			Total		888			299			589			606			282			323
	109	Generation Fuel Cost ($/MWh)			$	15.40		$	13.05		$	2.35		$	17.36		$	13.01		$	4.35

See Glossary of Terms. Page 7 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2003 and 2002

					3 Mo. Ended December 31									12 Mo. Ended December 31
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	42.98		$	36.18		$	6.80		$	48.60		$	32.28		$	16.32
	111			SP15	$	46.88		$	41.35		$	5.53		$	51.38		$	34.22		$	17.16
			Off-Peak
	112			Palo Verde	$	30.48		$	25.09		$	5.39		$	32.03		$	19.89		$	12.14
	113			SP15	$	32.85		$	28.52		$	4.33		$	34.66		$	21.69		$	12.97
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			572			398			174			4,899			4,875			24
	115		Heating degree-days			370			328			42			736			800			(64	)
	116		Average humidity			34	%		38	%		(4	)%		31	%		27	%		4	%
		10-Year Averages
	117		Cooling degree-days			395			395			—			4,439			4,439			—
	118		Heating degree-days			433			433			—			1,013			1,013			—
	119		Average humidity			40	%		40	%		0	%		36	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits — Metro Phoenix (b) (d)
	120		Single-family			5,929			5,997			(68	)		35,763			32,034			3,729
	121		Multi-family			2,623			492			2,131			6,770			6,408			362
	122			Total		8,552			6,489			2,063			42,533			38,442			4,091
		Arizona Job Growth (c) (d)
	123		Payroll job growth (% over prior year)			1.4	%		1.0	%		0.4	%		0.9	%		(0.1	)%		1.0	%
	124		Unemployment rate (%, seasonally adjusted)			4.9	%		6.1	%		(1.2	)%		5.7	%		6.2	%		(0.5	)%

Sources:
(a)	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.
(b)	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business
(c)	Arizona Department of Economic Security
(d)	The economic indicators reflect three month and twelve month ended November 2002 and November 2003.

See Glossary of Terms. Page 8 of 8

EX-99.3 5 p68708pexv99w3.htm EXHIBIT 99.3

Exhibit 99.3

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																				Increase
																				(Decrease)
Line						1st Qtr			2nd Qtr		3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)
	1		Arizona Public Service			$	16		$	43	$	100		$	21		$	181		$	(18	)
	2		Pinnacle West Energy				5			2		3			(12	)		(1	)		18
	3		APS Energy Services				8			5		1			3			16			(12	)
	4		SunCor				1			2		6			36			46			36
	5		El Dorado				3			2		1			1			7			62
	6		Parent Company				(13	)		1		(1	)		(3	)		(18	)		(61	)
	7				Income From Continuing Operations		20			55		110			46			231			25
			Income From Discontinued Operations -
	8a			Net of Tax			5			1		—			3			10			1
			Cumulative Effect of Change in Accounting -
	8b			Net of Tax			—			—		—			—			—			66
	9				Net Income	$	25		$	56	$	110		$	49		$	241		$	92
		EARNINGS PER SHARE BY SUBSIDIARY - DILUTED
	10		Arizona Public Service			$	0.17		$	0.47	$	1.10		$	0.23		$	1.98		$	(0.37	)
	11		Pinnacle West Energy				0.06			0.02		0.04			(0.14	)		(0.01	)		0.22
	12		APS Energy Services				0.08			0.06		0.01			0.03			0.18			(0.15	)
	13		SunCor				0.01			0.02		0.07			0.39			0.50			0.37
	14		El Dorado				0.03			0.02		0.01			0.02			0.08			0.73
	15		Parent Company				(0.13	)		0.01		(0.03	)		(0.03	)		(0.21	)		(0.71	)
	16				Income From Continuing Operations		0.22			0.60		1.20			0.50			2.52			0.09
			Income From Discontinued Operations -
	17a			Net of Tax			0.06			0.01		—			0.04			0.11			0.01
			Cumulative Effect of Change in Accounting -
	17b			Net of Tax			—			—		—			—			—			0.77
	18				Net Income	$	0.28		$	0.61	$	1.20		$	0.54		$	2.63		$	0.87
	19	BOOK VALUE PER SHARE(a)				$	29.39		$	29.95	$	30.68		$	31.00		$	31.00		$	1.60
		COMMON SHARES OUTSTANDING - DILUTED (Thousands)
	20		Average				91,359			91,450		91,467			91,403			91,405			6,441
	21		End of Period				91,257			91,262		91,271			91,288			91,288			33
	(a)		Book value reflects an estimate for 2003.

See Glossary of Terms. Page 1 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		ELECTRIC OPERATING REVENUES     (Dollars in Millions)
		REGULATED ELECTRICITY SEGMENT
			Retail
	22			Residential		$	168		$	233		$	363		$	193		$	957		$	51
	23			Business			196			251			284			222			953			25
	24				Total retail		364			484			647			415			1,910			76
			Wholesale revenue on delivered electricity
	25			Traditional contracts			3			4			5			3			15			6
	26			Retail load hedge management			—			—			—			—			—			—
	27		Transmission for others				6			5			9			7			27			(3	)
	28		Other miscellaneous services				7			6			6			7			26			9
	29				Total regulated electricity		380			499			667			432			1,978			88
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			44			20			8			16			88			38
	31			Realized margins on electricity trading			9			5			2			6			22			(28	)
	32			Other delivered electricity (a)			72			78			84			74			308			140
	33			Total delivered marketing and trading			125			103			94			96			418			150
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(2	)		(2	)		(5	)		1			(8	)		(16	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				(3	)		1			(3	)		(1	)		(11	)		30
	36		Change in mark-to-market for future-period deliveries				(3	)		(1	)		(3	)		(5	)		(7	)		(59	)
	37		Total other marketing and trading				(8	)		(2	)		(11	)		(5	)		(26	)		(45	)
	38	Total marketing and trading					117			101			83			91			392			105
	39	Total electric operating revenues				$	497		$	600		$	750		$	523		$	2,370		$	193

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $1 million was transferred to “realized” for the fourth quarter of 2003. Lines 31 and 34 include amounts totaling $1 million of realized gains for the fourth quarter of 2003.

See Glossary of Terms. Page 2 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																Increase
																(Decrease)
Line						1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Year-To-Date		vs Prior YTD
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			2,104		2,543		4,126		2,374		11,147		703
	41			Business			2,849		3,450		3,891		3,226		13,416		499
	42				Total retail		4,953		5,993		8,017		5,600		24,563		1,202
			Wholesale electricity delivered
	43			Traditional contracts			130		131		127		112		500		26
	44			Retail load hedge management			109		205		446		333		1,093		(1,549	)
	45				Total regulated electricity		5,192		6,329		8,590		6,045		26,156		(321	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			992		476		203		475		2,146		355
	47			Electricity trading			5,074		4,936		5,640		5,655		21,305		3,268
	48			Other delivered electricity			1,306		1,386		1,412		1,247		5,351		2,324
	49			Total delivered marketing and trading			7,372		6,798		7,255		7,377		28,802		5,947
	50	Total electric sales					12,564		13,127		15,845		13,422		54,958		5,626

See Glossary of Terms. Page 3 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)
		Realized and Mark-To-Market Components
		Current Period Effects
			Realized margin on delivered commodities
				Electricity
	51				Generation sales other than native load	$	3		$	1		$	—		$	3		$	7		$	(7	)
	52				Other electricity marketing and trading (a)		24			21			9			12			66			(33	)
	53				Total electricity		27			22			9			15			73			(40	)
	54			Other commodities (a)			(2	)		(2	)		(5	)		1			(8	)		(16	)
	55			Total realized margin			25			20			4			16			65			(56	)
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			(5	)		(2	)		(3	)		(2	)		(14	)		16
	57			Other commodities (a)			2			3			—			1			3			14
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—			—
	59			Subtotal			(3	)		1			(3	)		(1	)		(11	)		30
	60		Total current period effects (b)				22			21			1			15			54			(26	)
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				(6	)		1			—			(5	)		(8	)		(71	)
	62		Other commodities				3			(2	)		(3	)		—			1			12
	63		Total future period effects				(3	)		(1	)		(3	)		(5	)		(7	)		(59	)
	64	Total gross margin				$	19		$	20		$	(2	)	$	10		$	47		$	(85	)

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of December 31, 2003, Pinnacle West had accumulated mark-to-market net gains of $23 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: 2004, $5 million; 2005, $5 million; 2006, $3 million and thereafter, $10 million.

(a)

The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 60 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the fourth quarter of 2003. A $2 million realized gain is included in the $12 million on line 52 for the fourth quarter of 2003.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms. Page 4 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																			Increase
																			(Decrease)
Line				1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (continued) (Dollars in Millions)
		By Commodity Sold or Traded
	65	Electricity		$	17		$	21		$	6		$	8		$	52		$	(95	)
	66	Natural gas			2			3			(5	)		3			3			9
	67	Coal			(1	)		(1	)		—			—			(2	)		—
	68	Emission allowances			—			(3	)		(3	)		(1	)		(7	)		—
	69	Other			1			—			—			—			1			1
	70		Total gross margin	$	19		$	20		$	(2	)	$	10		$	47		$	(85	)
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	(2	)	$	—		$	—		$	—		$	(2	)	$	(10	)
	72		Other marketing and trading		4			4			(2	)		(9	)		(3	)		(85	)
		APS
	73		Generation sales other than native load		6			1			—			4			11			9
	74		Other marketing and trading		—			3			(6	)		—			(3	)		(3	)
		Pinnacle West Energy
	75		Generation sales other than native load		(1	)		—			—			(1	)		(2	)		(6	)
	76		Other marketing and trading		—			—			—			10			10			10
		APS ES
	77		Other marketing and trading		12			12			6			6			36			—
	78	Total gross margin before income taxes		$	19		$	20		$	(2	)	$	10		$	47		$	(85	)

See Glossary of Terms. Page 5 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																				Increase
																				(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			827,937			821,331			824,655			839,539			828,366			26,565
	80		Business			101,999			102,601			103,262			104,521			103,096			2,868
	81			Total		929,936			923,932			927,917			944,060			931,462			29,432
	82	Wholesale customers				65			66			66			66			66			(1	)
	83			Total customers		930,001			923,998			927,983			944,126			931,528			29,431
	84	Customer Growth (% over prior year)				3.3	%		3.1	%		3.2	%		3.4	%		3.3	%		0.2	%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				2,235			2,516			3,871			2,262			10,884			502
	86	Business				2,880			3,494			3,832			3,162			13,368			469
	87			Total		5,115			6,010			7,703			5,424			24,252			971
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				2,541			3,096			5,004			2,828			13,457			432
	89	Business				27,927			33,625			37,677			30,865			130,131			1,246
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				2,700			3,063			4,694			2,695			13,139			192
	91	Business				28,236			34,058			37,113			30,252			129,665			967
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,569			5,571			6,332			5,124			6,332			529

See Glossary of Terms. Page 6 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																				Increase
																				(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			2,306			2,047			2,230			1,739			8,322			(659	)
	94		Coal			2,770			2,823			2,970			2,799			11,362			(694	)
	95		Gas, oil and other			1,288			1,572			2,696			535			6,091			1,722
	96			Total		6,364			6,442			7,896			5,073			25,775			369
		Purchased power
	97		Firm load			(15	)		606			1,099			1,418			3,108			1,489
	98		Marketing and trading			6,489			6,349			7,255			7,236			27,329			3,625
	99			Total		6,474			6,955			8,354			8,654			30,437			5,114
	100			Total energy sources		12,838			13,397			16,250			13,727			56,212			5,483
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			98	%		86	%		93	%		72	%		87	%		(7	)%
	102		Coal			75	%		75	%		79	%		74	%		76	%		(4	)%
	103		Gas, oil and other			26	%		31	%		44	%		9	%		28	%		1	%
	104		System average			58	%		59	%		64	%		41	%		55	%		(8	)%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			31			136			61			297			131			64
	106		Coal			292			254			277			253			269			102
	107		Gas			189			148			154			338			205			157
	108			Total		512			538			492			888			606			323
	109	Generation Fuel Cost ($/MWh)			$	15.89		$	16.80		$	19.52		$	15.40		$	17.36		$	4.35

See Glossary of Terms. Page 7 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																				Increase
																				(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	49.66		$	48.88		$	52.88		$	42.98		$	48.60		$	16.32
	111			SP15	$	54.35		$	50.73		$	53.54		$	46.88		$	51.38		$	17.16
			Off-Peak
	112			Palo Verde	$	36.09		$	25.48		$	36.08		$	30.48		$	32.03		$	12.14
	113			SP15	$	39.70		$	28.27		$	37.81		$	32.85		$	34.66		$	12.97
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			76			1,550			2,701			572			4,899			24
	115		Heating degree-days			349			17			—			370			736			(64	)
	116		Average humidity			44	%		18	%		30	%		34	%		31	%		4	%
		10-Year Averages
	117		Cooling degree-days			77			1,478			2,489			395			4,439			—
	118		Heating degree-days			546			34			—			433			1,013			—
	119		Average humidity			45	%		25	%		34	%		40	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits — Metro Phoenix (b) (d)
	120		Single-family			8,030			10,613			11,191			5,929			35,763			3,729
	121		Multi-family			863			2,053			1,231			2,623			6,770			362
	122			Total		8,893			12,666			12,422			8,552			42,533			4,091
		Arizona Job Growth (c) (d)
	123		Payroll job growth (% over prior year)			1.0	%		0.6	%		0.9	%		1.4	%		0.9	%		(0.1	)%
	124		Unemployment rate (%, seasonally adjusted)			5.7	%		5.9	%		6.1	%		4.9	%		5.7	%		6.2	%

Sources:

(a)	This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.
(b)	Arizona Real Estate Center, Arizona State University W.P. Carey College of Business
(c)	Arizona Department of Economic Security
(d)	The economic indicators reflect latest available data through periods ending November 2003.

See Glossary of Terms. Page 8 of 8

EX-99.4 6 p68708pexv99w4.htm EXHIBIT 99.4

Exhibit 99.4

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

																				Increase
																				(Decrease)
Line						1st Qtr		2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
			EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)
	1			Arizona Public Service		$	32	$	64		$	87		$	16		$	199		$	(82	)
	2			Pinnacle West Energy			1		1			10			(31	)		(19	)		(37	)
	3			APS Energy Services			2		11			7			8			28			38
	4			SunCor			1		2			(1	)		8			10			7
	5			El Dorado			—		(3	)		(15	)		(37	)		(55	)		(55	)
	6			Parent Company			17		(6	)		13			19			43			8
	7				Income From Continuing Operations		53		69			101			(17	)		206			(121	)
	8	a		Income From Discontinued Operations - Net of Tax			1		6			—			2			9			9
	8	b		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		0.02			(0.01	)		0.09			0.13			0.09
	14			El Dorado			—		(0.04	)		(0.18	)		(0.43	)		(0.65	)		(0.65	)
	15			Parent Company			0.20		(0.07	)		0.16			0.24			0.50			0.08
	16				Income From Continuing Operations		0.63		0.81			1.19			(0.19	)		2.43			(1.42	)
	17	a		Income From Discontinued Operations - Net of Tax			—		0.08			—			0.01			0.10			0.11
	17	a		Cumulative Effect of Change in Accounting - Net of Tax			—		—			—			(0.77	)		(0.77	)		(0.60	)
	18				Net Income	$	0.63	$	0.89		$	1.19		$	(0.95	)	$	1.76		$	(1.91	)
	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. Page 1 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		ELECTRIC OPERATING REVENUES (Dollars in Millions)
		REGULATED ELECTRICITY SEGMENT
			Retail
	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			—			—			—			—			—			—
	27		Transmission for others				6			6			6			12			30			4
	28		Other miscellaneous services				4			2			4			7			17			(1	)
	29				Total regulated electricity		378			486			620			406			1,890			(94	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			8			2			8			32			50			(98	)
	31			Realized margins on electricity trading			28			13			8			1			50			(20	)
	32			Other delivered electricity (a)			21			31			45			71			168			36
	33			Total delivered marketing and trading			57			46			61			104			268			(82	)
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				4			1			(3	)		6			8			22
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				(22	)		(9	)		2			(8	)		(41	)		(47	)
	36		Change in mark-to-market for future-period deliveries				23			3			23			(1	)		52			(76	)
	37		Total other marketing and trading				5			(5	)		22			(3	)		19			(101	)
	38	Total marketing and trading					62			41			83			101			287			(183	)
	39	Total electric operating revenues				$	440		$	527		$	703		$	507		$	2,177		$	(277	)

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $41 million was transferred to “realized” for the total year 2002. Lines 31 and 34 include amounts totaling $41 million of realized revenues for the total year 2002.

See Glossary of Terms. Page 2 of 8

Last Updated 1/29/2004

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 SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			2,141		2,441		3,806		2,056		10,444		109
	41			Business			2,771		3,429		3,681		3,036		12,917		(147	)
	42				Total retail		4,912		5,870		7,487		5,092		23,361		(38	)
			Wholesale electricity delivered
	43			Traditional contracts			71		121		142		140		474		(739	)
	44			Retail load hedge management			158		230		1,958		296		2,642		(398	)
	45				Total regulated electricity		5,141		6,221		9,587		5,528		26,477		(1,175	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			376		73		291		1,051		1,791		403
	47			Electricity trading			3,410		3,852		6,120		4,655		18,037		4,450
	48			Other delivered electricity			426		518		693		1,390		3,027		2,001
	49			Total delivered marketing and trading			4,212		4,443		7,104		7,096		22,855		6,854
	50	Total electric sales					9,353		10,664		16,691		12,624		49,332		5,679

See Glossary of Terms. Page 3 of 8

Last Updated 1/29/2004

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
	51				Generation sales other than native load	$	2		$	—		$	3		$	9		$	14		$	(66	)
	52				Other electricity marketing and trading (a)		33			24			19			23			99			(18	)
	53				Total electricity		35			24			22			32			113			(84	)
	54			Other commodities (a)			4			1			(3	)		6			8			22
	55			Total realized margin			39			25			19			38			121			(62	)
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			(16	)		(9	)		(4	)		(4	)		(30	)		(19	)
	57			Other commodities (a)			(6	)		—			6			(4	)		(11	)		(36	)
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—			8
	59			Subtotal			(22	)		(9	)		2			(8	)		(41	)		(47	)
	60		Total current period effects (b)				17			16			21			30			80			(109	)
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				25			10			25			6			63			(83	)
	62		Other commodities				(2	)		(7	)		(2	)		(7	)		(11	)		7
	63		Total future period effects				23			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 60 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $30 million was transferred to “realized” for the total year 2002. A $30 million realized gain is included in the $99 million on line 52 for total year 2002.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms. Page 4 of 8

Last Updated 1/29/2004

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. Page 5 of 8

Last Updated 1/29/2004

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				2,162			2,443			3,647			2,130			10,382			615
	86	Business				2,774			3,411			3,691			3,023			12,899			81
	87			Total		4,936			5,854			7,338			5,153			23,281			696
		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				2,699			3,071			4,566			2,623			12,947			366
	91	Business				27,926			34,075			36,795			29,878			128,698			(1,834	)
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,921			5,425			5,803			3,828			5,803			116

See Glossary of Terms. Page 6 of 8

Last Updated 1/29/2004

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			2,095			8,981			596
	94		Coal			2,890			2,703			3,280			3,183			12,056			(516	)
	95		Gas, oil and other			337			659			1,918			1,455			4,369			375
	96			Total		5,484			5,604			7,585			6,733			25,406			455
		Purchased power
	97		Firm load			70			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		4,063			5,445			9,630			6,183			25,323			4,709
	100			Total energy sources		9,547			11,049			17,215			12,916			50,729			5,164
		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. Page 7 of 8

Last Updated 1/29/2004

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			77			1,478			2,489			395			4,439			—
	118		Heating degree-days			546			34			—			433			1,013			—
	119		Average humidity			45	%		25	%		34	%		40	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b)
	120		Single-family			7,682			9,666			8,689			8,275			34,312			1,447
	121		Multi-family			1,249			2,005			2,662			1,158			7,074			(1,930	)
	122		Total			8,931			11,671			11,351			9,433			41,386			(483	)
		Arizona Job Growth (c)
	123		Payroll job growth (% over prior year)			(0.8	)%		(0.2	)%		0.1	%		0.9	%		0.0	%		(1.0	)%
	124		Unemployment rate (%, seasonally adjusted)			6.2	%		6.2	%		6.2	%		6.0	%		6.2	%		1.5	%

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

See Glossary of Terms. Page 8 of 8

EX-99.5 7 p68708pexv99w5.htm EXHIBIT 99.5

Exhibit 99.5

Last Updated 1/29/2004

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. Page 1 of 8

Last Updated 1/29/2004

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)
		REGULATED ELECTRICITY SEGMENT
			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			—			—			—			—			—			(561	)
	27		Transmission for others				4			5			9			8			26			11
	28		Other miscellaneous services				6			5			6			1			18			(9	)
	29				Total regulated electricity		408			557			609			410			1,984			(556	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			87			51			4			6			148			32
	31			Realized margin on electricity trading			(15	)		20			12			53			70			14
	32			Other delivered electricity (a)			45			16			54			17			132			(110	)
	33			Total delivered marketing and trading			117			87			70			76			350			(64	)
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(5	)		(12	)		(1	)		4			(14	)		(5	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				13			5			(37	)		(50	)		6			8
	36		Change in mark-to-market for future-period deliveries				47			36			129			(9	)		128			114
	37		Total other marketing and trading				55			29			91			(55	)		120			117
	38	Total marketing and trading					172			116			161			21			470			53
	39	Total electric operating revenues				$	580		$	673		$	770		$	431		$	2,454		$	(503	)

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market loss of $6 million was transferred to “realized” for the total year 2001. Lines 31 and 34 include a loss totaling $6 million of realized revenues for the total year 2001.

See Glossary of Terms. Page 2 of 8

Last Updated        1/29/2004

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 SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			2,121		2,467		3,597			2,149		10,335		554
	41			Business			2,824		3,445		3,724			3,071		13,064		310
	42				Total retail		4,945		5,912		7,321			5,220		23,399		864
			Wholesale electricity delivered
	43			Traditional contracts			569		598		(37	)		83		1,213		(397	)
	44			Retail load hedge management			75		736		1,847			382		3,040		(3,634	)
	45				Total regulated electricity		5,589		7,246		9,131			5,685		27,652		(3,167	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			623		436		73			256		1,388		(106	)
	47			Electricity trading			2,751		2,975		3,725			4,136		13,587		4,328
	48			Other delivered electricity			299		194		95			438		1,026		(1,934	)
	49			Total delivered marketing and trading			3,673		3,605		3,893			4,830		16,001		2,288
	50	Total electric sales					9,263		10,851		13,024			10,515		43,653		(879	)

See Glossary of Terms. Page 3 of 8

Last Updated      1/29/2004

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
	51				Generation sales other than native load	$	48		$	26		$	3		$	3		$	80		$	26
	52				Other electricity marketing and trading (a)		4			43			14			56			117			48
	53				Total electricity		52			69			17			59			197			74
	54			Other commodities (a)			(5	)		(12	)		(1	)		4			(14	)		(5	)
	55			Total realized margin			47			57			16			63			183			69
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			1			—			(38	)		(38	)		(11	)		(9	)
	57			Other commodities (a)			12			5			1			(4	)		25			25
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			(8	)		(8	)		(8	)
	59			Subtotal			13			5			(37	)		(50	)		6			8
	60		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 60 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 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 52 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. Page 4 of 8

Last Updated      1/29/2004

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 5 of 8

Last Updated       1/29/2004

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			2,238			3,354			2,138			9,767			208
	86	Business				2,825			3,339			3,633			3,021			12,818			126
	87			Total		4,862			5,577			6,987			5,159			22,585			334
		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			2,905			4,337			2,719			12,581			(177	)
	91	Business				29,057			34,049			36,747			30,629			130,532			(4,305	)
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,661			5,358			5,687			3,898			5,687			209

See Glossary of Terms. Page 6 of 8

Last Updated       1/29/2004

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			1,819			8,385			(456	)
	94		Coal			2,901			3,245			3,223			3,203			12,572			63
	95		Gas, oil and other			1,007			1,256			1,157			574			3,994			1,210
	96			Total		6,169			6,486			6,700			5,596			24,951			817
		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			10,763			45,565			23
		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. Page 7 of 8

Last Updated 1/29/2004

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			77			1,478			2,489			395			4,439			—
	118		Heating degree-days			546			34			—			433			1,013			—
	119		Average humidity			45	%		25	%		34	%		40	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b)
	120		Single-family			8,783			9,394			8,384			6,304			32,865			356
	121		Multi-family			3,925			1,833			2,514			732			9,004			(1,224	)
	122			Total		12,708			11,227			10,898			7,036			41,869			(868	)
		Arizona Job Growth (c)
	123		Payroll job growth (% over prior year)			2.4	%		1.5	%		0.8	%		(0.7	)%		1.0	%		(2.7	)%
	124		Unemployment rate (%, seasonally adjusted)			3.9	%		4.4	%		4.9	%		5.7	%		4.7	%		0.8	%

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

See Glossary of Terms. Page 8 of 8

EX-99.6 8 p68708pexv99w6.htm EXHIBIT 99.6

Exhibit 99.6

Last Updated 1/29/2004

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. Page 1 of 8

Last Updated 1/29/2004

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)
		REGULATED ELECTRICITY SEGMENT
			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
	27		Transmission for others				3			4		4			4			15
	28		Other miscellaneous services				4			8		8			7			27
	29				Total regulated electricity		379			547		1,158			456			2,540
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			9			13		14			80			116
	31			Realized margins on electricity trading			3			11		32			10			56
	32			Other delivered electricity (a)			22			55		59			106			242
	33			Total delivered marketing and trading			34			79		105			196			414
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(5	)		1		(4	)		(1	)		(9	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				—			—		(17	)		(2	)		(2	)
	36		Change in mark-to-market for future-period deliveries				7			25		10			(11	)		14
	37		Total other marketing and trading				2			26		(11	)		(14	)		3
	38	Total marketing and trading					36			105		94			182			417
	39	Total electric operating revenues				$	415		$	652	$	1,252		$	638		$	2,957

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the total year 2000. Lines 31 and 34 include amounts totaling $2 million of realized revenues for the total year 2000.

See Glossary of Terms. Page 2 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2000

Line						1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Total Year
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			1,877		2,370		3,506		2,028		9,781
	41			Business			2,736		3,379		3,674		2,965		12,754
	42				Total retail		4,613		5,749		7,180		4,993		22,535
			Wholesale electricity delivered
	43			Traditional contracts			331		391		537		351		1,610
	44			Retail load hedge management			232		585		5,155		702		6,674
	45				Total regulated electricity		5,176		6,725		12,872		6,046		30,819
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			396		215		163		720		1,494
	47			Electricity trading			1,294		1,803		4,073		2,089		9,259
	48			Other delivered electricity			735		601		665		960		2,960
	49			Total delivered marketing and trading			2,425		2,619		4,901		3,769		13,713
	50	Total electric sales					7,601		9,344		17,773		9,815		44,532

See Glossary of Terms. Page 3 of 8

Last Updated 1/29/2004

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
	51				Generation sales other than native load	$	2		$	6		$	7		$	39		$	54
	52				Other electricity marketing and trading (a)		3			28			33			5			69
	53				Total electricity		5			34			40			44			123
	54			Other commodities (a)			(5	)		1			(4	)		(1	)		(9	)
	55			Total realized margin			—			35			36			43			114
			Prior-period mark-to-market (gains) losses on contracts delivered during current period (b)
	56			Electricity (a)			—			—			(18	)		(2	)		(2	)
	57			Other commodities (a)			—			—			1			—			—
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—
	59			Subtotal			—			—			(17	)		(2	)		(2	)
	60		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 60 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 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 52 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. Page 4 of 8

Last Updated 1/29/2004

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. Page 5 of 8

Last Updated    1/29/2004

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			2,253			3,439			1,934			9,559
	86	Business				2,737			3,297			3,644			3,014			12,692
	87			Total		4,670			5,550			7,083			4,948			22,251
		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			3,034			4,605			2,540			12,757
	91	Business				29,536			35,321			38,569			31,388			134,838
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,315			5,095			5,478			4,331			5,478

See Glossary of Terms. Page 6 of 8

Last Updated     1/29/2004

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. Page 7 of 8

Last Updated       1/29/2004

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			77			1,478			2,489			395			4,439
	118		Heating degree-days			546			34			—			433			1,013
	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	%		3.8	%		3.4	%		3.2	%		3.7	%
	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 W.P.Carey College of Business
(c)	Arizona Department of Economic Security

See Glossary of Terms. Page 8 of 8

EX-99.7 9 p68708pexv99w7.htm EXHIBIT 99.7

Exhibit 99.7

Last Updated     1/29/2004

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. Page 1 of 8

Last Updated 1/29/2004

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)
		REGULATED ELECTRICITY SEGMENT
			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
	27		Transmission for others				3			3			3			3			11
	28		Other miscellaneous services				3			4			6			5			18
	29				Total regulated electricity		364			449			702			401			1,915
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			7			6			6			11			30
	31			Realized margins on electricity trading			4			(2	)		5			3			10
	32			Other delivered electricity (a)			17			22			45			27			111
	33			Total delivered marketing and trading			28			26			56			41			151
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(1	)		—			(2	)		5			2
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				—			—			—			—			—
	36		Change in mark-to-market for future-period deliveries				—			6			(1	)		(4	)		1
	37		Total other marketing and trading				(1	)		6			(3	)		1			3
	38	Total marketing and trading					27			32			53			42			154
	39	Total electric operating revenues				$	391		$	481		$	755		$	442		$	2,069

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $0 million was transferred to “realized” for the total year 1999. Lines 31 and 34 include amounts totaling $0 million of realized revenues for the total year 1999.

See Glossary of Terms. Page 2 of 8

Last Updated 1/29/2004

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

Line						1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Total Year
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			1,796		1,939		3,160		1,880		8,775
	41			Business			2,665		3,239		3,464		2,932		12,300
	42				Total sales		4,461		5,178		6,624		4,812		21,075
			Wholesale electricity delivered
	43			Traditional contracts			309		351		441		321		1,422
	44			Retail load hedge management			—		—		631		—		631
	45				Total regulated electricity		4,770		5,529		7,696		5,133		23,128
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			348		254		171		494		1,267
	47			Electricity trading			1,286		1,198		2,165		1,029		5,678
	48			Other delivered electricity			902		1,192		2,937		1,664		6,695
	49			Total delivered marketing and trading			2,536		2,644		5,273		3,187		13,640
	50	Total electric sales					7,306		8,173		12,969		8,320		36,768

See Glossary of Terms. Page 3 of 8

Last Updated 1/29/2004

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
	51				Generation sales other than native load	$	2		$	1		$	2		$	2		$	7
	52				Other electricity marketing and trading (a)		6			(2	)		3			—			7
	53				Total electricity		8			(1	)		5			2			14
	54			Other commodities (a)			(1	)		—			(2	)		6			3
	55			Total realized margin			7			(1	)		3			8			17
			Prior-period mark-to-market (gains) losses on contracts delivered during current period (a)
	56			Electricity			—			—			—			—			—
	57			Other commodities			—			—			—			—			—
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—
	59			Subtotal			—			—			—			—			—
	60		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. Page 4 of 8

Last Updated 1/29/2004

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. Page 5 of 8

Last Updated 1/29/2004

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			1,984			3,166			1,924			8,933
	86	Business				2,669			3,280			3,461			2,893			12,303
	87			Total		4,528			5,264			6,627			4,817			21,236
		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			2,782			4,414			2,632			12,411
	91	Business				29,973			36,465			38,001			31,475			135,951
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,343			4,885			4,935			3,881			4,935

See Glossary of Terms. Page 6 of 8

Last Updated 1/29/2004

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. Page 7 of 8

Last Updated 1/29/2004

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				77			1,478			2,489			395			4,439
	118		Heating degree-days				546			34			—			433			1,013
	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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security

See Glossary of Terms. Page 8 of 8

EX-99.8 10 p68708pexv99w8.htm EXHIBIT 99.8

Exhibit 99.8

LAST UPDATED 1/29/04

Pinnacle West Capital Corporation
Earnings Variance Explanations
For Periods Ended December 31, 2003 and 2002

     This discussion explains the changes in our consolidated earnings for the three and twelve month periods ended December 31, 2003 and 2002. Condensed Consolidated Statements of Income for the three and twelve months ended December 31, 2003 and 2002 follow this discussion. We will file our Annual Report on Form 10-K for the fiscal year ended December 31, 2003 on or before March 15, 2004. We have reclassified certain prior period amounts to conform to our current period presentation, including netting of certain revenue and purchased power amounts as a result of the adoption of EITF 03-11, “Reporting Realized Gains and Losses on Derivative Instruments That Are Subject to FASB Statement No. 133 and Not ‘Held for Trading Purposes’ as Defined in in Issue No. 02-03.” 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 three principal business segments (determined by products, services and the regulatory environment):

• our regulated electricity segment, which consists of traditional regulated retail and wholesale electricity businesses and related activities and includes electricity generation, transmission and distribution;

• our marketing and trading segment, which consists of our competitive energy business activities, including wholesale marketing and trading and APS Energy Services’ commodity-related activities; and

• our real estate segment, which consists of SunCor’s real estate development and investment activities.

     The following tables summarize net income and segment details for the three and twelve months ended December 31, 2003 and the comparable prior-year periods for Pinnacle West and each of our subsidiaries (dollars in millions):

	Total						Regulated Electricity						Marketing and Trading						Real Estate (a)					Other (b)
Three months ended
December 31,	2003			2002			2003			2002			2003			2002			2003			2002		2003		2002
Arizona Public Service (APS) (c)	$	21		$	16		$	22		$	16		$	(1	)	$	—		$	—		$	—	$	—	$	—
Pinnacle West Energy (c)(d)		(12	)		(31	)		(12	)		(33	)					2			—			—		—		—
APS Energy Services (e)		3			8			—			—			2			5			—			—		1		3
SunCor		36			8			—			—			—			—			36			8		—		—
El Dorado (e)		1			(37	)		—			—			—			—			—			—		1		(37	)
Parent company (e)		(3	)		19			(2	)		2			—			2			(1	)		—		—		15
Income from continuing operations		46			(17	)		8			(15	)		1			9			35			8		2		(19	)
Income from discontinued operations – net of income taxes		3			2			—			—			—						3			2		—		—
Cumulative effect of a change in accounting for trading activities – net of income taxes (f)		—			(66	)		—			—			—			(66	)		—			—		—		—
Net income	$	49		$	(81	)	$	8		$	(15	)	$	1		$	(57	)	$	38		$	10	$	2	$	(19	)

	Total						Regulated Electricity						Marketing and Trading						Real Estate (a)					Other (b)
Twelve months ended
December 31,	2003			2002			2003			2002			2003			2002			2003			2002		2003			2002
Arizona Public Service (APS) (c)	$	181		$	199		$	184		$	198		$	(3	)	$	1		$	—		$	—	$	—		$	—
Pinnacle West Energy (c) (d)		(1	)		(19	)					(21	)		(1	)		2			—			—		—			—
APS Energy Services (e)		16			28			—			—			13			23			—			—		3			5
SunCor		46			10			—			—			—			—			46			10		—			—
El Dorado (e)		7			(55	)		—			—			—			—			—			—		7			(55	)
Parent company (e)		(18	)		43			(14	)		(7	)		—			32			(1	)		—		(3	)		18
Income from continuing operations		231			206			170			170			9			58			45			10		7			(32	)
Income from discontinued operations – net of taxes		10			9			—			—			—			—			10			9		—			—
Cumulative effect of a change in accounting for trading activities – net of income taxes (f)		—			(66	)		—			—			—			(66	)		—			—		—			—
Net income	$	241		$	149		$	170		$	170		$	9		$	(8	)	$	55		$	19	$	7		$	(32	)

(a) See “Real Estate Activities” discussion below.

(b) The “Other” segment primarily includes activities related to El Dorado in 2002, principally El Dorado’s investment in NAC International Inc. (“NAC”). We recorded pretax losses of $59 million in the twelve months ended December 31, 2002 related to NAC contracts with two customers.

(c) Consistent with APS’ October 2001 Arizona Corporation Commission (“ACC”) filing, APS entered into contracts with its affiliates to buy power through June 2003. The contracts reflected prices based on the fully-dispatchable dedication of the Pinnacle West Energy generating assets to APS’ native load customers (customers receiving power under traditional cost-based rate regulation). Under the ACC Track B Order, APS was required to solicit bids for certain estimated capacity and energy requirements beginning July 1, 2003. Pinnacle West Energy bid on and entered into a contract to supply most of these purchase power requirements in summer months through September 2006.

(d) In the fourth quarter of 2002, Pinnacle West Energy recorded a charge related to the cancellation of Redhawk Units 3 and 4 of approximately $30 million after income taxes ($49 million pretax).

(e) APS Energy Services’ net income prior to 2003 and El Dorado’s net income in 2003 and 2002 are primarily reported before income taxes. The income tax expense or benefit for these subsidiaries was recorded at the parent company.

(f) We recorded a $66 million after-tax charge as of October 1, 2002 for the cumulative effect of a change in accounting for trading activities in conjunction with the early adoption of EITF 02-3, “Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities.”

Results of Operations

     General

     Throughout the following explanations of our results of operations, we refer to “gross margin.” With respect to our regulated electricity segment and our marketing and trading segment, gross margin refers to electric operating revenues less purchased power and fuel costs. Our real estate segment 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 primarily includes El Dorado’s investment in NAC, which we began consolidating in our financial statements in July 2002. Other gross margin also includes amounts related to APS Energy Services’ energy consulting services.

2

Operating Results – Three-month period ended December 31, 2003 compared with three-month period ended December 31, 2002

     Our consolidated net income for the three months ended December 31, 2003 was $49 million compared with a net loss of $81 million for the prior-year quarter. The 2002 net loss includes a $66 million after-tax charge for the cumulative effect of a change in accounting for trading activities due to the adoption of EITF 02-3. Excluding the accounting change, the $64 million increase in the period-to-period comparison reflects the following changes in earnings by segment:

• Regulated Electricity Segment — Net income increased approximately $23 million primarily due to the absence of the 2002 write-off of Redhawk Units 3 and 4; higher retail sales related to favorable weather and customer growth effects; tax credits and favorable income tax adjustments related to prior years resolved in 2003; and lower operating costs primarily related to severance costs recorded in 2002. These favorable factors were partially offset by higher purchased power and fuel costs resulting from higher prices for hedged gas and purchased power; higher costs related to new power plants; higher replacement power costs from plant outages due to more unplanned outages and higher market prices; and a retail electricity price reduction that was effective July 1, 2003.

• Marketing and Trading Segment – Income from continuing operations decreased approximately $8 million primarily due to the effects on our marketing and trading activities of lower market liquidity and deteriorating counterparty credit in the wholesale power markets in the western United States.

• Real Estate Segment – Net income improved approximately $28 million because of increased asset and land sales.

• Other Segment – Net income increased approximately $21 million, primarily due to NAC losses recognized in 2002.

     Additional details on the major factors that increased (decreased) income from continuing operations before income taxes and net income for the three months ended December 31, 2003 compared with the three months ended December 31, 2002 are contained in the table below (dollars in millions).

3

				Increase (Decrease)
				Pretax			After Tax
Regulated electricity segment gross margin:
		Increased purchased power and fuel costs primarily due to higher prices for hedged gas and purchased power		$	(35	)	$	(21	)
		Higher replacement power costs from plant outages due to more unplanned outages and higher market prices			(12	)		(7	)
		Retail electricity price reduction effective July 1, 2003			(6	)		(3	)
		Effects of favorable weather on retail sales			14			8
		Higher retail sales primarily due to customer growth, excluding weather effects			7			4
			Net decrease in regulated electricity segment gross margin		(32	)		(19	)
Marketing and trading segment gross margin:
		Decrease in generation sales other than Native Load due to lower volumes and higher fuel prices			(6	)		(4	)
		Lower unit margins on competitive retail sales in California by APS Energy Services			(5	)		(3	)
		Lower mark-to-market gains for future delivery due to lower market liquidity and deteriorating counterparty credit			(4	)		(2	)
		Lower realized margins on wholesale sales primarily due to lower unit margins			(4	)		(2	)
			Net decrease in marketing and trading segment gross margin		(19	)		(11	)
Net decrease in regulated electricity and marketing and trading segments’ gross margins					(51	)		(30	)
Higher income primarily related to NAC losses recognized in 2002					38			23
Higher real estate segment contribution primarily due to the increase in asset and land sales (see “Real Estate Activities” below)					47			28
Operations and maintenance expense decreases (increases):
		Write-off of Redhawk Units 3 and 4 in 2002			47			28
		Severance costs recorded in 2002			11			7
		Costs for new power plants in service			(6	)		(4	)
		Net other items			3			2
Depreciation and amortization decreases (increases):
		New power plants in service			(3	)		(2	)
		Increased delivery and other assets			(5	)		(3	)
		Decreased regulatory asset amortization			7			4
APS’ return to the AFUDC method of capitalizing construction finance costs					2			3
Higher interest expense primarily related to new power plants in service					(6	)		(4	)
Miscellaneous items, net					(1	)		1
Tax credits and favorable income tax adjustments related to prior years resolved in 2003					—			11
	Net increase in income from continuing operations			$	83			64
Increase due to cumulative effect of a change in accounting for trading activities – net of income taxes in 2002								66
	Net increase in net income						$	130

4

     The increase in operating and interest costs related to new power plants placed in service by Pinnacle West Energy, net of purchased power savings and increased gross margin from generation sales other than Native Load, totaled approximately $13 million after income taxes in the three months ended December 31, 2003 compared with the prior year period.

Regulated Electricity Segment Revenues

     Regulated electricity segment revenues were $26 million higher in the three months ended December 31, 2003 compared with the same period in the prior year, primarily as a result of:

• a $21 million increase in retail revenues related to weather;

• a $16 million increase in retail revenues related to customer growth, excluding weather effects;

• a $6 million decrease in retail revenues related to a reduction in retail electricity prices; and

• a $5 million net decrease due to miscellaneous factors.

Marketing and Trading Segment Revenues

     Marketing and trading segment revenues were $10 million lower in the three months ended December 31, 2003 compared with the same period in the prior year, primarily as a result of:

• a $16 million decrease from generation sales other than Native Load primarily due to lower sales volumes;

• $4 million in lower mark-to-market gains for future-period deliveries primarily as a result of lower market liquidity and deteriorating counterparty credit;

• an $8 million increase from higher prices on retail sales in California by APS Energy Services; and

• $2 million of higher realized wholesale revenues primarily due to higher prices.

Real Estate Segment Revenues

     Real estate segment revenues were $115 million higher in the three months ended December 31, 2003 compared with the same period in the prior year primarily as a result of increased asset and land sales related to SunCor’s effort to accelerate asset sales.

5

Other Revenues

     Other revenues were $12 million lower in the three months ended December 31, 2003 compared with the same period in the prior year primarily due to decreased sales activity at NAC and decreased APS Energy Services non-commodity sales activity.

Operating Results – Twelve-month period ended December 31, 2003 compared with twelve-month period ended December 31, 2002

     Our consolidated net income for the twelve months ended December 31, 2003 was $241 million compared with $149 million for the prior year. The 2002 net income includes a $66 million after-tax charge for the cumulative effect of a change in accounting for trading activities due to the adoption of EITF 02-3. Excluding the accounting change, the $26 million increase in the period-to-period comparison reflects the following changes in earnings by segment:

• Regulated Electricity Segment – Net income was flat when comparing the two years, due to offsetting factors. Net income in 2003 was negatively impacted by higher purchased power and fuel costs resulting from higher prices for hedged gas and purchased power; higher costs related to new power plants, net of purchased power savings; higher replacement power costs from plant outages due to higher market prices and more unplanned outages; operations and maintenance costs related to increased pension and other benefits; two retail electricity price reductions; and higher depreciation expense related to increased delivery and other assets. These negative factors were offset by higher retail sales primarily due to customer growth and favorable weather; the absence of the 2002 write-off of Redhawk Units 3 and 4; lower operating costs primarily related to severance costs recorded in 2002; lower regulatory asset amortization; tax credits and favorable income tax adjustments related to prior years resolved in 2003; and higher income related to APS’ return to the AFUDC method of capitalizing construction finance costs.

• Marketing and Trading Segment – Income from continuing operations decreased approximately $49 million primarily due to lower market liquidity and deteriorating counterparty credit in the wholesale power markets in the western United States.

• Real Estate Segment — Net income improved approximately $36 million primarily due to increased asset, land and home sales.

• Other Segment – Net income increased approximately $39 million, primarily due to NAC losses recognized in 2002.

     Additional details on the major factors that increased (decreased) income from continuing operations before income taxes and net income for the twelve months ended December 31, 2003 compared with the twelve months ended December 31, 2002 are contained in the table below (dollars in millions).

6

				Increase (Decrease)
				Pretax			After Tax
Regulated electricity segment gross margin:
	Increased purchased power and fuel costs primarily due to higher prices for hedged gas and purchased power			$	(60	)	$	(36	)
	Higher replacement power costs from plant outages due to higher market prices and more unplanned outages				(47	)		(28	)
	Retail electricity price reductions effective July 1, 2002 and July 1, 2003				(27	)		(16	)
	Higher retail sales volumes due to customer growth, excluding weather effects				48			29
	Decreased purchased power costs due to new power plants in service				16			10
	Effects of weather on retail sales				13			8
	Miscellaneous factors, net				5			2
		Net decrease in regulated electricity segment gross margin			(52	)		(31	)
Marketing and trading segment gross margin:
	Lower mark-to-market gains for future delivery due to lower market liquidity and deteriorating counterparty credit				(59	)		(35	)
	Lower realized margins on wholesale sales primarily due to lower unit margins, partially offset by higher volumes				(32	)		(19	)
	Higher margin related to structured contracts originated in prior years				13			7
	Decrease in generation sales other than Native Load primarily due to lower unit margins partially offset by higher sales volumes, including sales from new power plants in service				(7	)		(4	)
			Net decrease in marketing and trading segment gross margin		(85	)		(51	)
	Net decrease in regulated electricity and marketing and trading segments’ gross margins				(137	)		(82	)
Higher income primarily related to NAC losses recognized in 2002					66			40
Higher real estate segment contribution primarily due to higher asset, land and home sales (See “Real Estate Activities” below)					58			36
Operations and maintenance expense decreases (increases):
	Write-off of Redhawk Units 3 and 4 in 2002				47			28
	Severance costs recorded in 2002				36			21
	Increased pension and other benefit costs				(28	)		(17	)
	Costs for new power plants in service				(20	)		(12	)
	Net other items				1			1
Higher interest expense and lower capitalized interest primarily related to new power plants in service					(26	)		(16	)
Depreciation and amortization decreases (increases):
	New power plants in service				(19	)		(11	)
	Increased delivery and other assets				(24	)		(14	)
	Decreased regulatory asset amortization				29			17
APS’ return to the AFUDC method of capitalizing construction finance costs					8			11
Miscellaneous items, net					7			7
Tax credits and favorable income tax adjustments related to prior years resolved in 2003					—			17
	Net (decrease)/increase in income from continuing operations			$	(2	)		26
Increase due to cumulative effect of a change in accounting for trading activities – net of income tax in 2002								66
	Net increase in net income						$	92

     The increase in operating and interest costs related to new power plants placed in service by Pinnacle West Energy, net of purchased power savings and increased gross margin from generation sales other than Native Load, totaled approximately $30 million after income taxes in the twelve months ended December 31, 2003 compared with the prior-year period.

Regulated Electricity Segment Revenues

     Regulated electricity segment revenues were $88 million higher in the twelve months ended December 31, 2003 compared with the prior year, primarily as a result of:

• an $85 million increase in retail revenues related to customer growth and higher average usage, excluding weather effects;

7

• a $21 million increase in retail revenues related to weather;

• a $6 million increase related to traditional wholesale sales as a result of higher prices and higher sales volumes;

• a $27 million decrease in retail revenues related to two reductions in retail electricity prices; and

• a $3 million net increase due to miscellaneous factors.

Marketing and Trading Segment Revenues

     Marketing and trading segment revenues were $105 million higher in the twelve months ended December 31, 2003 compared with the prior year, primarily as a result of:

• $74 million of higher revenues related to the adoption of EITF 02-3 in the fourth quarter of 2002, primarily due to structured contracts that were reported gross in the current period and net in most of the prior period;

• a $69 million increase from higher competitive retail sales in California by APS Energy Services;

• a $38 million increase from generation sales other than Native Load primarily due to higher prices and sales volumes, including sales from new power plants in service;

• $59 million in lower mark-to-market gains for future-period deliveries primarily as a result of lower market liquidity and lower price volatility; and

• $17 million of lower realized wholesale revenues primarily due to lower unit margins on trading activities that are reported on a net basis.

Real Estate Segment Revenues

     Real estate segment revenues were $161 million higher in the twelve months ended December 31, 2003 compared with the prior year primarily as a result of increased asset, land and home sales related to SunCor’s effort to accelerate asset sales.

Other Revenues

     Other revenues were $24 million higher in the twelve months ended December 31, 2003 compared with the prior year primarily due to our consolidation of NAC’s financial statements beginning in the third quarter of 2002, partially offset by decreased sales activity at NAC.

8

Real Estate Activities

     Certain components of SunCor’s real estate sales activities, which are included in the real estate segment, are required to be reported as discontinued operations on our Condensed Consolidated Statements of Income in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Among other guidance, SFAS No. 144 prescribes accounting for discontinued operations and defines certain activities as discontinued operations. We adopted SFAS No. 144 effective January 1, 2002 and determined that activities that would have required discontinued operations reporting in 2002, 2001 and 2000 were immaterial.

     In the first quarter of 2003, SunCor sold its water utility company, which resulted in an after-tax gain of $5 million ($8 million pretax). The amounts of the gain on the sale and operating income of the water utility company in the current and prior periods are classified as discontinued operations on our Condensed Consolidated Statements of Income.

     In the second quarter of 2002, SunCor sold a retail center, but maintained a continuing involvement through a management contract. In the first quarter of 2003, this management contract was canceled. As a result, the after-tax gain of $6 million ($10 million pre-tax) recorded in operations in 2002 related to this property was reclassified as discontinued operations on our Condensed Consolidated Statements of Income. The income from discontinued operations in the three and twelve months ended December 31, 2002 primarily reflects this sale.

     In the fourth quarter of 2003, SunCor sold a retail center, which resulted in an after-tax gain of $3 million ($5 million pretax). The gain on the sale and the operating income related to this property in the current period are classified as discontinued operations on our Condensed Consolidated Statements of Income. There were no prior-year operations related to this retail center.

Forward-Looking Statements

     This document contains forward-looking statements based on current expectations, and we assume no obligation to update these statements or make any further statements on any of these issues, except as required by applicable law. These forward-looking statements are often identified by words such as “hope,” “may,” “believe,” “anticipate,” “plan,” “expect,” “require,” “intend,” “assume” and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by us. These factors include, but are not limited to:

• the ongoing restructuring of the electric industry, including the introduction of retail electric competition in Arizona and decisions impacting wholesale competition;

• the outcome of regulatory and legislative proceedings relating to the restructuring;

9

• state and federal regulatory and legislative decisions and actions, including the outcome of the rate case APS filed with the ACC on June 27, 2003 and the wholesale electric price mitigation plan adopted by the FERC;

• regional economic and market conditions, including the results of litigation and other proceedings resulting from the California energy situation, volatile purchased power and fuel costs and the completion of generation and transmission construction in the region, which could affect customer growth and the cost of power supplies;

• the cost of debt and equity capital and access to capital markets;

• energy usage;

• weather variations affecting local and regional customer energy usage;

• conservation programs;

• power plant performance and outages;

• market prices for electricity and natural gas;

• the successful completion of our generation construction program;

• regulatory issues associated with generation construction, such as permitting and licensing;

• changes in accounting principles generally accepted in the United States;

• our ability to compete successfully outside traditional regulated markets (including the wholesale market);

• our ability to manage our marketing and trading activities and the use of derivative contracts in our business (including the interpretation of the subjective and complex accounting rules related to these contracts);

• technological developments in the electric industry;

• the performance of the stock market and the changing interest rate environment, which affect the amount of our required contributions to our pension plan and nuclear decommissioning trust funds, as well as our reported costs of providing pension and other postretirement benefits;

• the strength of the real estate market in SunCor’s market areas, which include Arizona, Idaho, New Mexico and Utah; and

• other uncertainties, all of which are difficult to predict and many of which are beyond our control.

10

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)

		THREE MONTHS ENDED
		December 31,						Increase (Decrease)
		2003			2002			Amount			Percent
Operating Revenues
	Regulated electricity segment	$	432,246		$	405,915		$	26,331			6.5	%	B
	Marketing and trading segment		91,447			101,116			(9,669	)		9.6	%	W
	Real estate segment		188,718			73,729			114,989			156.0	%	B
	Other revenues		21,793			33,555			(11,762	)		35.1	%	W
	Total		734,204			614,315			119,889			19.5	%	B
Operating Expenses
	Regulated electricity segment purchased power and fuel		122,947			65,269			57,678			88.4	%	W
	Marketing and trading segment purchased power and fuel		81,661			72,175			9,486			13.1	%	W
	Operations and maintenance		140,244			193,674			(53,430	)		27.6	%	B
	Real estate segment operations		148,677			62,706			85,971			137.1	%	W
	Depreciation and amortization		114,672			113,968			704			0.6	%	W
	Taxes other than income taxes		25,419			26,805			(1,386	)		5.2	%	B
	Other expenses		19,118			65,843			(46,725	)		71.0	%	B
	Total		652,738			600,440			52,298			8.7	%	W
Operating Income			81,466			13,875			67,591			487.1	%	B
Other
	Allowance for equity funds used during construction		3,046			—			3,046			N/A		B
	Other income		21,967			4,771			17,196			360.4	%	B
	Other expense		(5,785	)		(6,868	)		1,083			15.8	%	B
	Total		19,228			(2,097	)		21,325			1016.9	%	B
Interest Expense
	Interest charges		53,051			46,974			6,077			12.9	%	W
	Capitalized interest		(5,383	)		(4,967	)		(416	)		8.4	%	B
	Total		47,668			42,007			5,661			13.5	%	W
Income From Continuing Operations Before Income Taxes			53,026			(30,229	)		83,255			275.4	%	B
Income Taxes			7,030			(13,660	)		20,690			151.5	%	W
Income From Continuing Operations			45,996			(16,569	)		62,565			377.6	%	B
Income from Discontinued Operations Net of Income Tax Expense			3,095			1,684			1,411			83.8	%	B
Cumulative Effect of a Change in Accounting for Trading Activities - Net of Income Tax Benefit			—			(65,745	)		65,745			100.0	%	B
Net Income		$	49,091		$	(80,630	)	$	129,721			160.9	%	B
Weighted-Average Common Shares Outstanding — Basic			91,273			85,302			5,971			7.0	%
Weighted-Average Common Shares Outstanding — Diluted			91,403			85,302			6,101			7.2	%
Earnings Per Weighted-Average Common Share Outstanding
	Income From Continuing Operations — Basic	$	0.50		$	(0.19	)	$	0.69			363.2	%	B
	Net Income — Basic	$	0.54		$	(0.95	)	$	1.49			156.8	%	B
	Income From Continuing Operations — Diluted	$	0.50		$	(0.19	)	$	0.69			363.2	%	B
	Net Income — Diluted	$	0.54		$	(0.95	)	$	1.49			156.8	%	B

Certain prior year amounts have been restated to conform to the 2002 presentation.

      B — Better

      W — Worse

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)

		TWELVE MONTHS ENDED
		December 31,						Increase (Decrease)
		2003			2002			Amount			Percent
Operating Revenues
	Regulated electricity segment	$	1,978,075		$	1,890,391		$	87,684			4.6	%	B
	Marketing and trading segment		391,886			286,879			105,007			36.6	%	B
	Real estate segment		361,604			201,081			160,523			79.8	%	B
	Other revenues		86,287			61,937			24,350			39.3	%	B
	Total		2,817,852			2,440,288			377,564			15.5	%	B
Operating Expenses
	Regulated electricity segment purchased power and fuel		517,320			376,911			140,409			37.3	%	W
	Marketing and trading segment purchased power and fuel		344,862			154,987			189,875			122.5	%	W
	Operations and maintenance		548,732			584,538			(35,806	)		6.1	%	B
	Real estate segment operations		305,974			185,925			120,049			64.6	%	W
	Depreciation and amortization		438,143			424,082			14,061			3.3	%	W
	Taxes other than income taxes		110,270			107,952			2,318			2.1	%	W
	Other expenses		70,498			104,959			(34,461	)		32.8	%	B
	Total		2,335,799			1,939,354			396,445			20.4	%	W
Operating Income			482,053			500,934			(18,881	)		3.8	%	W
Other
	Other income		35,563			14,910			20,653			138.5	%	B
	Allowance for equity funds used during construction		14,240			—			14,240			N/A		B
	Other expense		(20,574	)		(33,655	)		13,081			38.9	%	B
	Total		29,229			(18,745	)		47,974			255.9	%	B
Interest Expense
	Interest charges		204,590			187,512			17,078			9.1	%	W
	Capitalized interest		(29,444	)		(43,749	)		14,305			32.7	%	W
	Total		175,146			143,763			31,383			21.8	%	W
Income From Continuing Operations Before Income Taxes			336,136			338,426			(2,290	)		0.7	%	W
Income Taxes			105,560			132,228			(26,668	)		20.2	%	B
Income From Continuing Operations			230,576			206,198			24,378			11.8	%	B
Income from Discontinued Operations Net of Income Tax Expense			10,003			8,955			1,048			11.7	%	B
Cumulative Effect of a Change in Accounting for Trading Activities — Net of Income Tax Benefit			—			(65,745	)		65,745			100.0	%	B
Net Income		$	240,579		$	149,408		$	91,171			61.0	%	B
Weighted-Average Common Shares Outstanding — Basic			91,265			84,903			6,362			7.5	%
Weighted-Average Common Shares Outstanding — Diluted			91,405			84,964			6,441			7.6	%
Earnings Per Weighted-Average Common Share Outstanding
	Income From Continuing Operations — Basic	$	2.53		$	2.43		$	0.10			4.1	%	B
	Net Income — Basic	$	2.64		$	1.76		$	0.88			50.0	%	B
	Income From Continuing Operations — Diluted	$	2.52		$	2.43		$	0.09			3.7	%	B
	Net Income — Diluted	$	2.63		$	1.76		$	0.87			49.4	%	B

Certain prior year amounts have been restated to conform to the 2002 presentation.

      B — Better

      W — Worse

EX-99.9 11 p68708pexv99w9.htm EXHIBIT 99.9

Exhibit 99.9

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 (Losses) For Future-Period Deliveries	The gross margin related to the change in mark-to-market value in the current period of transactions which have been entered into during the current period or prior periods for which the commodities are scheduled for delivery in a future period.
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°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°F for the month. Average temperatures greater than the base temperature are ignored.

- 2 -

Electricity Marketing and Trading – Delivered	All wholesale sales of electricity not accounted for in sales under traditional contracts or retail load hedge management. These sales are made to other electric companies, power marketers, or public entities for the purpose of resale. Measured in gigawatt-hours.
Electricity Spot Prices — Palo Verde – Off-Peak	Electricity average daily spot prices at Palo Verde substation during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Electricity Spot Prices — Palo Verde – On-Peak	Electricity average daily spot prices at Palo Verde substation during on-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Electricity Spot Prices — SP15 – Off-Peak	Electricity average daily spot prices at SP15, a region of California substations, during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Electricity Spot Prices — SP15 – On-Peak	Electricity average daily spot prices at SP15, a region of California substations, during on-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Generation Capacity Out of Service and Replaced for Native Load	Total capacity required and economic, yet unavailable for retail customers and traditional wholesale contracts due to scheduled or unscheduled outages. Measured in megawatts per day.
Generation Sales Other Than Native Load	Sales of electricity from generation 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 — Gas/Oil/Other	Amount of net energy predominately produced by natural gas and oil-fueled generators. A small amount of energy from hydroelectric and solar power plants is also included. Measured in gigawatt-hours.
Generation Production — Nuclear	Amount of net energy produced by nuclear-fueled generators. Measured in gigawatt-hours.
Gigawatt-hour (GWH)	A unit of energy equivalent to 1,000 megawatt-hours or 1,000,000 kilowatt-hours.
Marketing and Trading Gross Margin – Pretax	Revenues from marketing and trading activities (other than retail sales, traditional wholesale sales and retail load hedge management) less the costs of the related commodities, with mark-to-market gains or losses, before income taxes.
Marketing and Trading Gross Margin by Commodity — Pretax	Marketing and trading gross margin, 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 Components	Marketing and trading gross margin, 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) Losses on Contracts Delivered During Current Period	The reversal of the gross margin related to mark-to-market transactions entered into in prior periods for which the commodities were delivered in the current period. Realization of prior-period mark-to-market relates to cash flow recognition, not revenue recognition or earnings recognition, because in accordance with mark-to-market accounting, the margin was already recorded in the prior period. A negative amount shown in this category represents the arithmetic opposite of a gain recognized in the period in which the commodities were delivered; an equal positive amount is reflected in the realized revenue or margin for delivered commodities. A positive amount shown in this category represents the arithmetic opposite of a loss recognized in the period in which the commodities were delivered; an equal negative amount is reflected in the realized revenue or margin for delivered commodities.
Purchased Power – Firm Load	Power purchased from wholesale market sources used to serve regulated retail demand and traditional wholesale contracts. Measured in gigawatt-hours.
Purchased Power – Marketing and Trading	Power purchased from wholesale market sources used to serve marketing and trading sales not served by company-owned generation. Measured in gigawatt-hours.
Realized Margin on Delivered Commodities	Marketing and trading gross margin 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.

EX-99.10 12 p68708pexv99w10.htm EXHIBIT 99.10

Exhibit 99.10

FOR IMMEDIATE RELEASE		January 29, 2004
Media Contacts:	Alan Bunnell, (602) 250-3376	Page 1 of 2
Analyst Contacts:	Rebecca Hickman, (602) 250-5668
	Lisa Malagon, (602) 250-5671
Website:	www.pinnaclewest.com

PINNACLE WEST 2003 EARNINGS IN LINE WITH EXPECTATIONS

PHOENIX – Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the year 2003 of $240.6 million, or $2.63 per diluted share of common stock. This result compares with $149.4 million, or $1.76 per share, for the year 2002. Arizona Public Service (APS) reported net income for 2003 of $180.9 million, compared with $199.3 million for 2002. APS’ on-going earnings were $168.7 million for 2003 versus $219.6 million for the prior year.

On-going consolidated earnings in 2003 were $223.4 million, or $2.44 per share, compared with $302.1 million, or $3.56 per share, for the prior year. On-going earnings exclude income tax credits related to prior years and recorded in 2003 of $17.2 million, or $0.19 per share; previously disclosed, non-recurring charges in 2002 totaling $87.0 million, or $1.03 per share; and a 2002 charge for the cumulative effect of an accounting change of $65.7 million, or $0.77 per share.

“Earnings for the year were in line with our guidance, and our operational performance and market area remained strong,” said Chairman Bill Post, citing vibrant customer growth of 3.3 percent, about three times the national average. In addition, retail electricity consumption hit record levels, with the Company experiencing a 9 percent increase in its peak demand and a 5 percent increase in total retail kilowatt-hour sales.

Looking forward, Post said, “The Company needs to achieve a constructive regulatory outcome in our pending rate case to cover the costs of providing reliable service for our retail customers.”

APS’ on-going earnings exclude income tax credits related to prior years and recorded in 2003 of $12.2 million, and previously disclosed, non-recurring severance charges in 2002 of $20.3 million. These lower results were due to deterioration in the western wholesale power market; higher hedged natural gas and purchased power prices; retail electricity price decreases; and other operating cost increases necessary to meet the growing demand of retail customers, which were partially offset by the effects of higher retail sales due to customer growth and favorable weather. These higher costs – and the Company’s investment in new power plants and other infrastructure – are currently under review by the Arizona Corporation Commission. A decision on their recovery in rates is anticipated before the end of 2004.

PINNACLE WEST REPORTS 2003 EARNINGS	January 29, 2004
	Page 2 of 2

In addition to APS’ earnings variances, Pinnacle West’s consolidated results were impacted by deterioration in the western wholesale power markets; an increase in fixed costs related to placing new electricity-generating units into service in 2002 and 2003; and improved results from the Company’s unregulated subsidiaries.

Consistent with its accelerated asset sales program for 2003-2005, SunCor Development Co., Pinnacle West’s real estate subsidiary, delivered solid, on-plan performance, reporting 2003 net income of $56.1 million, compared with net income of $18.9 million for 2002.

For the 2003 fourth quarter, the Company reported consolidated net income of $49.1 million, or $0.54 per diluted share, compared with a net loss of $80.6 million, or $0.95 per share, in the comparable 2002 period. On-going consolidated earnings in the 2003 fourth quarter were $38.4 million, or $0.42 per share, compared with $44.5 million, or $0.52 per share. On-going earnings exclude income tax credits related to prior years and recorded in 2003 totaling $10.7 million, or $0.12 per share; previously disclosed, non-recurring charges in 2002’s fourth quarter totaling $59.4 million, or $0.70 per share; and a 2002 charge for the cumulative effect of a change in accounting of $65.7 million, or $0.77 per share. In addition, fourth quarter earnings reflect an increase in SunCor’s earnings of $29.4 million, or $0.33 per share, compared with the prior year’s same period.

All dollar amounts included in this release are reported after income tax effects. For more information on Pinnacle West’s operating statistics and earnings, please visit http://www.pinnaclewest.com/main/pnw/investors/default.html.

Pinnacle West is a Phoenix-based company with consolidated assets of approximately $9 billion. Through its subsidiaries, the Company generates, sells and delivers electricity and sells energy-related products and services to retail and wholesale customers in the western United States. It also develops residential, commercial, and industrial real estate projects.

Webcast and Conference Call

The Company will hold a conference call and live webcast at 11:30 a.m. (ET) today, Thursday, January 29 to discuss its earnings and recent events. The webcast can be accessed at http://www.pinnaclewest.com/main/pnw/investors/presentations/default.html and will be available for replay on the website for 30 days. To access the conference call by telephone, dial (877) 356-3961 and enter reservation number 4861194. A replay of the call also will be available until 12:00 midnight (ET), Thursday, February 5, 2004, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same reservation number.

-30-

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
( in thousands, except per share amounts)

		THREE MONTHS ENDED						TWELVE MONTHS ENDED
		December 31,						December 31,
		2003			2002			2003			2002
Operating Revenues
	Regulated electricity segment	$	432,246		$	405,915		$	1,978,075		$	1,890,391
	Marketing and trading segment		91,447			101,116			391,886			286,879
	Real estate segment		188,718			73,729			361,604			201,081
	Other revenues		21,793			33,555			86,287			61,937
	Total		734,204			614,315			2,817,852			2,440,288
Operating Expenses
	Regulated electricity segment purchased power and fuel		122,947			65,269			517,320			376,911
	Marketing and trading segment purchased power and fuel		81,661			72,175			344,862			154,987
	Operations and maintenance		140,244			193,674			548,732			584,538
	Real estate segment operations		148,677			62,706			305,974			185,925
	Depreciation and amortization		114,672			113,968			438,143			424,082
	Taxes other than income taxes		25,419			26,805			110,270			107,952
	Other expenses		19,118			65,843			70,498			104,959
			652,738			600,440			2,335,799			1,939,354
Operating Income			81,466			13,875			482,053			500,934
Other
	Allowance for equity funds used during construction		3,046			—			14,240			—
	Other income		21,967			4,771			35,563			14,910
	Other expense		(5,785	)		(6,868	)		(20,574	)		(33,655	)
	Total		19,228			(2,097	)		29,229			(18,745	)
Interest Expense
	Interest charges		53,051			46,974			204,590			187,512
	Capitalized interest		(5,383	)		(4,967	)		(29,444	)		(43,749	)
	Total		47,668			42,007			175,146			143,763
Income From Continuing Operations Before Income Taxes			53,026			(30,229	)		336,136			338,426
Income Taxes			7,030			(13,660	)		105,560			132,228
Income From Continuing Operations			45,996			(16,569	)		230,576			206,198
Income From Discontinued Operations — Net of Income Tax Expense			3,095			1,684			10,003			8,955
Cumulative Effect of a Change in Accounting for Trading Activities — Net of Income Tax Benefit			—			(65,745	)		—			(65,745	)
Net Income		$	49,091		$	(80,630	)	$	240,579		$	149,408
Weighted-Average Common Shares Outstanding — Basic			91,273			85,302			91,265			84,903
Weighted-Average Common Shares Outstanding — Diluted			91,403			85,302			91,405			84,964
Earnings Per Weighted-Average Common Share Outstanding
	Income From Continuing Operations — Basic	$	0.50		$	(0.19	)	$	2.53		$	2.43
	Net Income — Basic	$	0.54		$	(0.95	)	$	2.64		$	1.76
	Income From Continuing Operations — Diluted	$	0.50		$	(0.19	)	$	2.52		$	2.43
	Net Income — Diluted	$	0.54		$	(0.95	)	$	2.63		$	1.76

Certain prior year amounts have been restated to conform to the 2003 presentation.

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EX-99.1

EXHIBIT 99.1

EX-99.2

EX-99.3

EXHIBIT 99.3

EX-99.4

EXHIBIT 99.4

EX-99.5

EXHIBIT 99.5

EX-99.6

EXHIBIT 99.6

EX-99.7

EXHIBIT 99.7

EX-99.8

EXHIBIT 99.8

EX-99.9

EXHIBIT 99.9

EX-99.10

EXHIBIT 99.10