EX-99.2 3 p69118exv99w2.htm EX-99.2 exv99w2
 

EXHIBIT 99.2

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
EARNINGS CONTRIBUTION
BY SUBSIDIARY ($ Millions)
                        
  1    
Arizona Public Service
   $ 33     $ 16     $ 17  
  2    
Pinnacle West Energy
     (18 )     5       (23 )
  3    
APS Energy Services
     2       8       (6 )
  4    
SunCor
     2       1       1  
  5    
El Dorado
     —       3       (3 )
  6    
Parent Company
     11       (13 )     24  
       
 
    
 		      
 		      
 		  
  7    
Income From Continuing Operations
     30       20       10  
       
Income From Discontinued Operations -
                        
  8    
Net of Tax
     —       5       (5 )
  9    
Net Income
   $ 30     $ 25     $ 5  
       
 
    
 		      
 		      
 		  
       
EARNINGS PER SHARE
BY SUBSIDIARY — DILUTED
                        
  10    
Arizona Public Service
   $ 0.37     $ 0.17     $ 0.20  
  11    
Pinnacle West Energy
     (0.20 )     0.06       (0.26 )
  12    
APS Energy Services
     0.02       0.08       (0.06 )
  13    
SunCor
     0.02       0.01       0.01  
  14    
El Dorado
     —       0.03       (0.03 )
  15    
Parent Company
     0.12       (0.13 )     0.25  
       
 
    
 		      
 		      
 		  
  16    
Income From Continuing Operations
     0.33       0.22       0.11  
       
Income From Discontinued Operations -
                        
  17    
Net of Tax
     —       0.06       (0.06 )
  18    
Net Income
   $ 0.33     $ 0.28     $ 0.05  
       
 
    
 		      
 		      
 		  
  19    
BOOK VALUE PER SHARE
   $ 31.19     $ 29.39     $ 1.80  
       
COMMON SHARES OUTSTANDING -
DILUTED (Thousands)
                        
  20    
Average
     91,376       91,359       17  
  21    
End of Period
     91,310       91,257       53  

      

See Glossary of Terms.   `   Page 1 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
ELECTRIC OPERATING REVENUES
(Dollars in Millions)
                        
       
Regulated Electricity Segment
                        
       
Retail
                        
  22    
Residential
   $ 189     $ 168     $ 21  
  23    
Business
     211       196       15  
       
 
    
 		      
 		      
 		  
  24    
Total retail
     400       364       36  
       
Wholesale revenue on delivered electricity
                        
  25    
Traditional contracts
     3       3       —  
  26    
Retail load hedge management
     —       —       —  
  27    
Transmission for others
     8       6       2  
  28    
Other miscellaneous services
     4       7       (3 )
       
 
    
 		      
 		      
 		  
  29    
Total regulated electricity
     415       380       35  
       
 
    
 		      
 		      
 		  
       
Marketing and Trading Segment
                        
       
Delivered marketing and trading
                        
  30    
Generation sales other than native load
     10       44       (34 )
  31    
Realized margins on electricity trading (a)
     5       9       (4 )
  32    
Other delivered electricity (a)
     66       72       (6 )
       
 
    
 		      
 		      
 		  
  33    
Total delivered marketing and trading
     81       125       (44 )
       
 
    
 		      
 		      
 		  
       
Other Marketing and Trading
                        
  34    
Realized margins on delivered commodities other than electricity (a)
     (2 )     (2 )     —  
  35    
Prior period mark-to-market (gains) losses on contracts delivered during current period (a)
     1       (3 )     4  
  36    
Change in mark-to-market for future-period deliveries
     8       (3 )     11  
       
 
    
 		      
 		      
 		  
  37    
Total other marketing and trading
     7       (8 )     15  
       
 
    
 		      
 		      
 		  
  38    
Total marketing and trading
     88       117       (29 )
       
 
    
 		      
 		      
 		  
  39    
Total operating electric revenues
   $ 503     $ 497     $ 6  
       
 
    
 		      
 		      
 		  

(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, 32 and 34. For example, line 35 shows that a prior-period mark-to-market loss of $1 million was transferred to “realized” for the first quarter of 2004. Lines 31, 32 and 34 include amounts totaling $1 million of realized loss for the first quarter of 2004.

      

See Glossary of Terms.   Page 2 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
ELECTRIC SALES (GWH)
                        
       
Regulated Electricity Segment
                        
       
Retail
                        
  40    
Residential
     2,410       2,104       306  
  41    
Business
     3,051       2,849       202  
       
 
    
 		      
 		      
 		  
  42    
Total retail
     5,461       4,953       508  
       
Wholesale electricity delivered
                        
  43    
Traditional contracts
     138       130       8  
  44    
Retail load hedge management
     169       109       60  
       
 
    
 		      
 		      
 		  
  45    
Total regulated electricity
     5,768       5,192       576  
       
 
    
 		      
 		      
 		  
       
Marketing and Trading Segment
                        
       
Delivered marketing and trading
                        
  46    
Generation sales other than native load
     358       992       (634 )
  47    
Electricity trading
     4,198       5,074       (876 )
  48    
Other delivered electricity
     1,140       1,306       (166 )
       
 
    
 		      
 		      
 		  
  49    
Total delivered marketing and trading
     5,696       7,372       (1,676 )
       
 
    
 		      
 		      
 		  
  50    
Total electric sales
     11,464       12,564       (1,100 )
       
 
    
 		      
 		      
 		  

      

See Glossary of Terms.   `   Page 3 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   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     $ 3     $ —  
  52    
Other electricity marketing and trading (a)
     11       24       (13 )
       
 
    
 		      
 		      
 		  
  53    
Total electricity
     14       27       (13 )
  54    
Other commodities (a)
     (2 )     (2 )     —  
       
 
    
 		      
 		      
 		  
  55    
Total realized margin
     12       25       (13 )
       
 
    
 		      
 		      
 		  
       
Prior-period mark-to-market (gains) losses on contracts delivered during current period
                        
  56    
Electricity (a)
     (1 )     (5 )     4  
  57    
Other commodities (a)
     2       2       —  
  58    
Charge related to trading activities with Enron and its affiliates
     —       —       —  
       
 
    
 		      
 		      
 		  
  59    
Subtotal
     1       (3 )     4  
       
 
    
 		      
 		      
 		  
  60    
Total current period effects
     13       22       (9 )
       
 
    
 		      
 		      
 		  
       
Change in mark-to-market gains (losses) for future period deliveries
                        
  61    
Electricity
     7       (6 )     13  
  62    
Other commodities
     1       3       (2 )
       
 
    
 		      
 		      
 		  
  63    
Subtotal
     8       (3 )     11  
       
 
    
 		      
 		      
 		  
  64    
Total gross margin
   $ 21     $ 19     $ 2  
       
 
    
 		      
 		      
 		  

Future Marketing and Trading Mark-to-Market Realization

As of March 31, 2004, Pinnacle West had accumulated mark-to-market net gains of $32 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, $8 million; 2005, $7 million; 2006, $3 million and thereafter, $14 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 $1 million was transferred to “realized” for the first quarter of 2004. A $1 million realized gain is included in the $11 million on line 52 for the first quarter of 2004.

      

See Glossary of Terms.   `   Page 4 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS (continued)
(Dollars in Millions)
                        
       
By Commodity Sold or Traded
                        
  65    
Electricity
   $ 20     $ 17     $ 3  
  66    
Natural gas
     1       2       (1 )
  67    
Coal
     —       (1 )     1  
  68    
Emission allowances
     —       —       —  
  69    
Other
     —       1       (1 )
       
 
    
 		      
 		      
 		  
  70    
Total Gross Margin
   $ 21     $ 19     $ 2  
       
 
    
 		      
 		      
 		  
       
By Pinnacle West Entity
                        
       
Parent company marketing and trading division
                        
  71    
Generation sales other than native load
   $ —     $ (2 )   $ 2  
  72    
Other marketing and trading
     12       4       8  
       
APS
                        
  73    
Generation sales other than native load
     3       6       (3 )
  74    
Other marketing and trading
     (8 )     —       (8 )
       
Pinnacle West Energy
                        
  75    
Generation sales other than native load
     —       (1 )     1  
  76    
Other marketing and trading
     10       —       10  
       
APS ES
                        
  77    
Other marketing and trading
     4       12       (8 )
       
 
    
 		      
 		      
 		  
  78    
Total gross margin before income taxes
   $ 21     $ 19     $ 2  
       
 
    
 		      
 		      
 		  

      

See Glossary of Terms.   `   Page 5 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
AVERAGE ELECTRIC CUSTOMERS
                        
       
Retail customers
                        
  79    
Residential
     855,754       827,937       27,817  
  80    
Business
     105,502       101,999       3,503  
       
 
    
 		      
 		      
 		  
  81    
Total
     961,256       929,936       31,320  
  82    
Wholesale customers
     66       65       1  
       
 
    
 		      
 		      
 		  
  83    
Total customers
     961,322       930,001       31,321  
       
 
    
 		      
 		      
 		  
  84    
Customer Growth (% over prior year)
     3.4 %     3.3 %     0.1 %
       
RETAIL SALES (GWH) -
WEATHER NORMALIZED
                        
  85    
Residential
     2,383       2,243       140  
  86    
Business
     3,007       2,875       132  
       
 
    
 		      
 		      
 		  
  87    
Total
     5,390       5,118       272  
       
 
    
 		      
 		      
 		  
       
RETAIL USAGE
(KWh/Average Customer)
                        
  88    
Residential
     2,816       2,541       275  
  89    
Business
     28,919       27,927       992  
       
RETAIL USAGE -
WEATHER NORMALIZED
(KWh/Average Customer)
                        
  90    
Residential
     2,784       2,709       75  
  91    
Business
     28,502       28,187       315  
       
ELECTRICITY DEMAND (MW)
                        
  92    
System peak demand
     3,979       3,569       410  

      

See Glossary of Terms.   `   Page 6 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
ENERGY SOURCES (GWH)
                        
       
Generation production
                        
  93    
Nuclear
     2,148       2,306       (158 )
  94    
Coal
     2,887       2,770       117  
  95    
Gas, oil and other
     363       1,288       (925 )
       
 
    
 		      
 		      
 		  
  96    
Total
     5,398       6,364       (966 )
       
 
    
 		      
 		      
 		  
       
Purchased power
                        
  97    
Firm load
     701       (12 )     713  
  98    
Marketing and trading
     5,507       6,489       (982 )
       
 
    
 		      
 		      
 		  
  99    
Total
     6,208       6,477       (269 )
       
 
    
 		      
 		      
 		  
  100    
Total energy sources
     11,606       12,841       (1,235 )
       
 
    
 		      
 		      
 		  
       
POWER PLANT PERFORMANCE
                        
       
Capacity Factors
                        
  101    
Nuclear
     88 %     98 %     (10 )%
  102    
Coal
     77 %     75 %     2 %
  103    
Gas, oil and other
     5 %     26 %     (21 )%
  104    
System average
     44 %     58 %     (14 )%
       
Generation Capacity Out of Service and Replaced for
Native Load (average MW/day)
                        
  105    
Nuclear
     135       31       104  
  106    
Coal
     149       292       (143 )
  107    
Gas
     49       189       (140 )
  108    
Total
     333       512       (179 )
       
 
                        
  109    
Generation Fuel Cost ($/MWh)
   $ 11.17     $ 15.89     $ (4.72 )

      

See Glossary of Terms.   `   Page 7 of 8

 

 

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended March 31, 2004 and 2003

                                 
            3 Mo. Ended March 31
Line
       2004
   2003
   Incr (Decr)
       
ENERGY MARKET INDICATORS (a)
                        
       
Electricity Average Daily Spot Prices ($/MWh)
                        
       
On-Peak
                        
  110    
Palo Verde
   $ 43.73     $ 49.66     $ (5.93 )
  111    
SP15
   $ 48.37     $ 54.35     $ (5.98 )
       
Off-Peak
                        
  112    
Palo Verde
   $ 33.66     $ 36.09     $ (2.43 )
  113    
SP15
   $ 36.90     $ 39.70     $ (2.80 )
       
WEATHER INDICATORS
                        
       
Actual
                        
  114    
Cooling degree-days
     273       76       197  
  115    
Heating degree-days
     552       349       203  
  116    
Average humidity
     39 %     44 %     (5 )%
       
10-Year Averages
                        
  117    
Cooling degree-days
     80       80       —  
  118    
Heating degree-days
     521       521       —  
  119    
Average humidity
     43 %     43 %     0 %
       
ECONOMIC INDICATORS
                        
       
Building Permits — Metro Phoenix (b) (d)
                        
  120    
Single-family
     5,564       4,957       607  
  121    
Multi-family
     1,039       227       812  
       
 
    
 		      
 		      
 		  
  122    
Total
     6,603       5,184       1,419  
       
 
    
 		      
 		      
 		  
       
Arizona Job Growth (c) (d)
                        
  123    
Payroll job growth (% over prior year)
     2.2 %     1.2 %     1.0 %
  124    
Unemployment rate (%, seasonally adjusted)
     5.2 %     5.9 %     (0.7 )%

      

     
Sources:
(a)
  This price is an average of daily prices obtained and used with permission from Dow Jones & Company, Inc.
(b)
  Arizona Real Estate Center, Arizona State University W.P. Carey College of Business
(c)
  Arizona Department of Economic Security
(d)
  The economic indicators reflect three month ended February 2003 and February 2004.

      

See Glossary of Terms.   `   Page 8 of 8