Exhibit 99.2

ARIZONA PUBLIC SERVICE COMPANY
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME
(GAAP MEASURE) TO GROSS MARGIN (NON-GAAP FINANCIAL MEASURE)
(in thousands)

	THREE MONTHS ENDED
	SEPTEMBER 30,				Increase (Decrease)
	2006		2005		Pretax			After Tax
RECONCILIATION OF GROSS MARGIN
Operating Income (closest GAAP measure)	$	200,580	$	174,415	$	26,165		$	15,948
Plus:
Operations and maintenance		156,170		149,198		6,972			4,249
Depreciation and amortization		88,999		81,701		7,298			4,448
Income taxes		93,061		88,984		4,077			2,485
Other taxes		31,371		34,407		(3,036	)		(1,850	)
Gross margin	$	570,181	$	528,705	$	41,476		$	25,280

ARIZONA PUBLIC SERVICE COMPANY
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME
(GAAP MEASURE) TO GROSS MARGIN (NON-GAAP FINANCIAL MEASURE)
(in thousands)

	NINE MONTHS ENDED
	SEPTEMBER 30,				Increase (Decrease)
	2006		2005		Pretax			After Tax
RECONCILIATION OF GROSS MARGIN
Operating Income (closest GAAP measure)	$	345,591	$	328,479	$	17,112		$	10,430
Plus:
Operations and maintenance		493,896		429,806		64,090			39,063
Depreciation and amortization		263,279		240,723		22,556			13,748
Income taxes		136,682		147,136		(10,454	)		(6,372	)
Other taxes		99,585		97,174		2,411			1,470
Gross margin	$	1,339,033	$	1,243,318	$	95,715		$	58,339