UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to          

Commission File Number	Exact Name of Each Registrant as specified in its charter; State of Incorporation; Address; and Telephone Number			IRS Employer Identification No.
1-8962	PINNACLE WEST CAPITAL CORPORATION			86-0512431
	(an Arizona corporation)
	400 North Fifth Street, P.O. Box 53999
	Phoenix	Arizona	85072-3999
	(602)	250-1000
1-4473	ARIZONA PUBLIC SERVICE COMPANY			86-0011170
	(an Arizona corporation)
	400 North Fifth Street, P.O. Box 53999
	Phoenix	Arizona	85072-3999
	(602)	250-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	PNW	The New York Stock Exchange

Indicate by check mark whether each registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

PINNACLE WEST CAPITAL CORPORATION	Yes	☒	No	☐
ARIZONA PUBLIC SERVICE COMPANY	Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

PINNACLE WEST CAPITAL CORPORATION	Yes	☒	No	☐
ARIZONA PUBLIC SERVICE COMPANY	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 PINNACLE WEST CAPITAL CORPORATION

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

ARIZONA PUBLIC SERVICE COMPANY

Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

PINNACLE WEST CAPITAL CORPORATION	Yes	☐	No	☒
ARIZONA PUBLIC SERVICE COMPANY	Yes	☐	No	☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

PINNACLE WEST CAPITAL CORPORATION	Number of shares of common stock, no par value, outstanding as of July 27, 2022:	113,043,622
ARIZONA PUBLIC SERVICE COMPANY	Number of shares of common stock, $2.50 par value, outstanding as of July 27, 2022:	71,264,947

Arizona Public Service Company meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format allowed under that General Instruction.

TABLE OF CONTENTS

		Page
Forward-Looking Statements		2
Part I		4
Item 1.	Financial Statements	4
	Pinnacle West Capital Corporation	5
	Arizona Public Service Company	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	67
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	95
Item 4.	Controls and Procedures	95
Part II		97
Item 1.	Legal Proceedings	97
Item 1A.	Risk Factors	97
Item 5.	Other Information	97
Item 6.	Exhibits	98
Signatures		100

This combined Form 10-Q is separately provided by Pinnacle West Capital Corporation (“Pinnacle West”) and Arizona Public Service Company (“APS”).  Any use of the words “Company,” “we,” and “our” refer to Pinnacle West.  Each registrant is providing on its own behalf all of the information contained in this Form 10-Q that relates to such registrant and, where required, its subsidiaries.  Except as stated in the preceding sentence, neither registrant is providing any information that does not relate to such registrant, and therefore makes no representation as to any such information.  The information required with respect to each company is set forth within the applicable items.  Item 1 of this report includes Condensed Consolidated Financial Statements of Pinnacle West and Condensed Consolidated Financial Statements of APS.  Item 1 also includes Combined Notes to Condensed Consolidated Financial Statements.

1

FORWARD-LOOKING STATEMENTS

    This document contains forward-looking statements based on current expectations.  These forward-looking statements are often identified by words such as “estimate,” “predict,” “may,” “believe,” “plan,” “expect,” “require,” “intend,” “assume,” “project,” “anticipate,” “goal,” “seek,” “strategy,” “likely,” “should,” “will,” “could,” and similar words.  Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements.  A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS.  In addition to the Risk Factors described in Part I, Item 1A of the Pinnacle West/APS Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (“2021 Form 10-K”), Part II, Item 1A of the Pinnacle West/APS Quarterly Report on Form 10‑Q for the quarter ended March 31, 2022 (“2022 1st Quarter 10-Q”), Part II, Item 1A of this report and in Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report, these factors include, but are not limited to:

•the potential effects of the continued Coronavirus (“COVID-19”) pandemic, including, but not limited to, demand for energy, economic growth, our employees and contractors, vaccine mandates, supply chain, expenses, inflation, capital markets, capital projects, operations and maintenance activities, uncollectable accounts, liquidity, cash flows or other unpredictable events;

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

•variations in demand for electricity, including those due to weather, seasonality (including large increases in ambient temperatures), the general economy or social conditions, customer and sales growth (or decline), the effects of energy conservation measures and distributed generation, and technological advancements;

•the potential effects of climate change on our electric system, including as a result of weather extremes, such as prolonged drought and high temperature variations in the area where APS conducts its business;

•power plant and transmission system performance and outages;

•competition in retail and wholesale power markets;

•regulatory and judicial decisions, developments, and proceedings;

•new legislation, ballot initiatives and regulation or interpretations of existing legislation or regulations, including those relating to environmental requirements, regulatory and energy policy, nuclear plant operations and potential deregulation of retail electric markets;

•fuel and water supply availability;

•our ability to achieve timely and adequate rate recovery of our costs through our rates and adjustor recovery mechanisms, including returns on and of debt and equity capital investment;

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

•the ability of APS to achieve its clean energy goals (including a goal by 2050 of 100% clean, carbon-free electricity) and, if these goals are achieved, the impact of such achievement on APS, its customers, and its business, financial condition, and results of operations;

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

•current and future economic conditions in Arizona, including in real estate markets;

•the direct or indirect effect on our facilities or business from cybersecurity threats or intrusions, data security breaches, war, acts of war, international sanctions, terrorist attack, physical attack, severe storms, or other catastrophic events, such as fires, explosions, pandemic health events, or similar occurrences;

•the development of new technologies which may affect electric sales or delivery;

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

•general economic conditions, including inflation rates, monetary fluctuations, and supply chain constraints;

•environmental, economic, and other concerns surrounding coal-fired generation, including regulation of greenhouse gas emissions;

•volatile fuel and purchased power costs;

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

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

•potential shortfalls in insurance coverage;

•new accounting requirements or new interpretations of existing requirements;

2

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

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

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

•restrictions on dividends or other provisions in our credit agreements and Arizona Corporation Commission (“ACC”) orders. 

These and other factors are discussed in the Risk Factors described in Part I, Item 1A of our 2021 Form 10-K, Part II, Item 1A of our 2022 1st Quarter 10-Q, Part II, Item 1A of this report, and in Part I, Item 2 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report, which readers should review carefully before placing any reliance on our financial statements or disclosures.  Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law.

3

PART I — FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

 INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

	Page
Pinnacle West Condensed Consolidated Statements of Income for Three and Six Months Ended June 30, 2022 and 2021	5
Pinnacle West Condensed Consolidated Statements of Comprehensive Income for Three and Six Months Ended June 30, 2022 and 2021	6
Pinnacle West Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	7
Pinnacle West Condensed Consolidated Statements of Cash Flows for Six Months Ended June 30, 2022 and 2021	9
Pinnacle West Condensed Consolidated Statements of Changes in Equity for Three and Six Months Ended June 30, 2022 and 2021	10
APS Condensed Consolidated Statements of Income for Three and Six Months Ended June 30, 2022 and 2021	12
APS Condensed Consolidated Statements of Comprehensive Income for Three and Six Months Ended June 30, 2022 and 2021	13
APS Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	14
APS Condensed Consolidated Statements of Cash Flows for Six Months Ended June 30, 2022 and 2021	16
APS Condensed Consolidated Statements of Changes in Equity for Three and Six Months Ended June 30, 2022 and 2021	17
Combined Notes to Condensed Consolidated Financial Statements	19
Note 1. Consolidation and Nature of Operations	19
Note 2. Revenue	21
Note 3. Long-Term Debt and Liquidity Matters	22
Note 4. Regulatory Matters	24
Note 5. Retirement Plans and Other Postretirement Benefits	42
Note 6. Palo Verde Sale Leaseback Variable Interest Entities	43
Note 7. Derivative Accounting	44
Note 8. Commitments and Contingencies	48
Note 9. Other Income and Other Expense	55
Note 10. Earnings Per Share	56
Note 11. Fair Value Measurements	56
Note 12. Investment in Nuclear Decommissioning Trusts and Other Special Use Funds	61
Note 13. Changes in Accumulated Other Comprehensive Loss	65

4

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
OPERATING REVENUES (Note 2)	$	1,061,669	$	1,000,249	$	1,845,200	$	1,696,724
OPERATING EXPENSES
Fuel and purchased power	352,187		269,835		617,456		468,062
Operations and maintenance	245,387		229,690		463,729		459,745
Depreciation and amortization	186,497		158,750		373,102		316,570
Taxes other than income taxes	54,118		59,495		112,116		118,978
Other expenses	385		4,093		1,210		7,449
Total	838,574		721,863		1,567,613		1,370,804
OPERATING INCOME	223,095		278,386		277,587		325,920
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction	12,086		9,990		21,833		19,197
Pension and other postretirement non-service credits - net (Note 5)	25,257		28,175		49,066		55,966
Other income (Note 9)	1,682		12,207		3,386		24,636
Other expense (Note 9)	(4,584)		(5,184)		(8,006)		(9,037)
Total	34,441		45,188		66,279		90,762
INTEREST EXPENSE
Interest charges	68,103		62,777		133,492		124,715
Allowance for borrowed funds used during construction	(5,873)		(5,199)		(10,355)		(10,193)
Total	62,230		57,578		123,137		114,522
INCOME BEFORE INCOME TAXES	195,306		265,996		220,729		302,160
INCOME TAXES	26,688		46,560		30,849		42,210
NET INCOME	168,618		219,436		189,880		259,950
Less: Net income attributable to noncontrolling interests (Note 6)	4,306		3,739		8,612		8,612
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	164,312	$	215,697	$	181,268	$	251,338
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC	113,172		112,882		113,137		112,855
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING -DILUTED	113,369		113,223		113,332		113,158
EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING
Net income attributable to common shareholders - basic	$	1.45	$	1.91	$	1.60	$	2.23
Net income attributable to common shareholders - diluted	$	1.45	$	1.91	$	1.60	$	2.22

 The accompanying notes are an integral part of the financial statements.

5

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(dollars in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
NET INCOME	$	168,618	$	219,436	$	189,880	$	259,950
OTHER COMPREHENSIVE INCOME, NET OF TAX
Derivative instruments net unrealized gain, net of tax expense of $(331), $(286), $(413), and $(372)	1,007		870		1,259		1,132
Pension and other postretirement benefit activity, net of tax benefit (expense) of $693, $(21), $398 and $(357)	(2,113)		64		(1,212)		1,086
Total other comprehensive income (loss)	(1,106)		934		47		2,218
COMPREHENSIVE INCOME	167,512		220,370		189,927		262,168
Less: Comprehensive income attributable to noncontrolling interests	4,306		3,739		8,612		8,612
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	163,206	$	216,631	$	181,315	$	253,556

The accompanying notes are an integral part of the financial statements.

6

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

	June 30, 2022		December 31, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	29,189	$	9,969
Customer and other receivables	420,288		391,923
Accrued unbilled revenues	234,523		133,980
Allowance for doubtful accounts (Note 2)	(23,147)		(25,354)
Materials and supplies (at average cost)	371,655		349,135
Income tax receivable	—		7,514
Fossil fuel (at average cost)	29,827		18,032
Assets from risk management activities (Note 7)	137,028		63,481
Deferred fuel and purchased power regulatory asset (Note 4)	390,013		388,148
Other regulatory assets (Note 4)	119,163		130,376
Other current assets	89,609		83,896
Total current assets	1,798,148		1,551,100
INVESTMENTS AND OTHER ASSETS
Nuclear decommissioning trusts (Notes 11 and 12)	1,076,088		1,294,757
Other special use funds (Notes 11 and 12)	346,406		358,410
Assets from risk management activities (Note 7)	111,847		46,908
Other assets	117,573		97,884
Total investments and other assets	1,651,914		1,797,959
PROPERTY, PLANT AND EQUIPMENT
Plant in service and held for future use	22,167,179		21,688,661
Accumulated depreciation and amortization	(7,667,678)		(7,504,603)
Net	14,499,501		14,184,058
Construction work in progress	1,386,113		1,329,478
Palo Verde sale leaseback, net of accumulated depreciation (Note 6)	92,231		94,166
Intangible assets, net of accumulated amortization	265,662		273,693
Nuclear fuel, net of accumulated amortization	132,696		106,039
Total property, plant and equipment	16,376,203		15,987,434
DEFERRED DEBITS
Regulatory assets (Note 4)	1,180,656		1,192,987
Operating lease right-of-use assets	871,480		890,057
Assets for pension and other postretirement benefits (Note 5)	577,399		545,723
Other	45,680		37,962
Total deferred debits	2,675,215		2,666,729
TOTAL ASSETS	$	22,501,480	$	22,003,222

 The accompanying notes are an integral part of the financial statements.

7

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

	June 30, 2022		December 31, 2021
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	436,308	$	393,083
Accrued taxes	181,927		168,645
Accrued interest	57,349		57,332
Common dividends payable	96,081		95,988
Short-term borrowings (Note 3)	541,000		292,000
Current maturities of long-term debt (Note 3)	—		150,000
Customer deposits	41,459		42,293
Liabilities from risk management activities (Note 7)	5,596		4,373
Liabilities for asset retirements	5,111		4,473
Operating lease liabilities	125,320		100,443
Regulatory liabilities (Note 4)	404,107		296,271
Other current liabilities	128,190		151,968
Total current liabilities	2,022,448		1,756,869
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 3)	7,241,295		6,913,735
DEFERRED CREDITS AND OTHER
Deferred income taxes	2,357,469		2,311,862
Regulatory liabilities (Note 4)	2,268,148		2,499,213
Liabilities for asset retirements	779,360		762,909
Liabilities for pension benefits (Note 5)	150,837		152,865
Customer advances	336,198		257,151
Coal mine reclamation	176,936		174,616
Deferred investment tax credit	184,032		186,570
Unrecognized tax benefits	4,896		4,657
Operating lease liabilities	710,511		728,401
Other	247,827		232,914
Total deferred credits and other	7,216,214		7,311,158
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY
Common stock, no par value; authorized 150,000,000 shares, 113,078,049 and 113,014,528 issued at respective dates	2,712,297		2,702,743
Treasury stock at cost; 41,531 and 87,608 shares at respective dates	(2,976)		(6,401)
Total common stock	2,709,321		2,696,342
Retained earnings	3,253,772		3,264,719
Accumulated other comprehensive loss (Note 13)	(54,814)		(54,861)
Total shareholders’ equity	5,908,279		5,906,200
Noncontrolling interests (Note 6)	113,244		115,260
Total equity	6,021,523		6,021,460
TOTAL LIABILITIES AND EQUITY	$	22,501,480	$	22,003,222

The accompanying notes are an integral part of the financial statements.

8

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

	Six Months Ended June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	189,880	$	259,950
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization including nuclear fuel	405,127		350,536
Deferred fuel and purchased power	(98,707)		(135,905)
Deferred fuel and purchased power amortization	96,842		10,828
Allowance for equity funds used during construction	(21,833)		(19,197)
Deferred income taxes	22,169		30,231
Deferred investment tax credit	(2,538)		(3,651)
Stock compensation	7,872		13,484
Changes in current assets and liabilities:
Customer and other receivables	(31,146)		(41,138)
Accrued unbilled revenues	(100,543)		(91,721)
Materials, supplies and fossil fuel	(34,315)		(31,449)
Income tax receivable	7,514		6,792
Other current assets	5,195		(14,021)
Accounts payable	104,849		66,558
Accrued taxes	13,282		23,486
Other current liabilities	(7,316)		(39,638)
Change in margin and collateral accounts — assets	40,430		—
Change in other long-term assets	174,013		(152,846)
Change in operating lease assets	29,759		34,810
Change in other long-term liabilities	(184,626)		76,290
Change in operating lease liabilities	(27,622)		(31,049)
Net cash provided by operating activities	588,286		312,350
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(843,219)		(681,148)
Contributions in aid of construction	68,879		32,104
Allowance for borrowed funds used during construction	(10,111)		(10,193)
Proceeds from nuclear decommissioning trusts sales and other special use funds	692,186		587,842
Investment in nuclear decommissioning trusts and other special use funds	(692,811)		(588,982)
Other	(9,174)		10,809
Net cash used for investing activities	(794,250)		(649,568)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt	325,802		150,000
Short-term borrowing and (repayments) — net	249,000		354,700
Short-term debt repayments under revolving credit facility	—		(19,000)
Dividends paid on common stock	(188,542)		(183,500)
Repayment of long-term debt	(150,000)		—
Common stock equity issuances and (purchases) — net	(448)		(176)
Distributions to noncontrolling interests	(10,628)		(10,628)
Net cash provided by financing activities	225,184		291,396
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	19,220		(45,822)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	9,969		59,968
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	29,189	$	14,146

The accompanying notes are an integral part of the financial statements.

9

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited)

(dollars in thousands)

	Three Months Ended June 30, 2022
	Common Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, April 1, 2022	113,047,699	$	2,706,325	(50,921)	$	(3,648)	$	3,281,601	$	(53,708)	$	119,566	$	6,050,136
Net income		—			—		164,312		—		4,306		168,618
Other comprehensive loss		—			—		—		(1,106)		—		(1,106)
Dividends on common stock ($1.70 per share)		—			—		(192,139)				—		(192,139)
Issuance of common stock	30,350	5,972			—		—		—		—		5,972
Reissuance of treasury stock for stock-based compensation and other		—		9,390	673		—		—		—		673
Capital activities by noncontrolling activities		—			—		—		—		(10,628)		(10,628)
Other		—			(1)		(2)		—		—		(3)
Balance, June 30, 2022	113,078,049	$	2,712,297	(41,531)	$	(2,976)	$	3,253,772	$	(54,814)	$	113,244	$	6,021,523

	Three Months Ended June 30, 2021
	Common Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, April 1, 2021	112,791,565	$	2,687,052	(44,338)	$	(3,776)	$	3,060,752	$	(61,512)	$	124,164	$	5,806,680
Net income		—			—		215,697		—		3,739		219,436
Other comprehensive income		—			—		—		934		—		934
Dividends on common stock ($1.66 per share)		—			—		(187,181)		—		—		(187,181)
Issuance of common stock	28,138	4,963			—		—		—		—		4,963
Reissuance of treasury stock for stock-based compensation and other		—		8,185	697		—		—		—		697
Capital activities by noncontrolling interests		—			—		—		—		(10,628)		(10,628)
Other		—			—		(2)		—		—		(2)
Balance, June 30, 2021	112,819,703	$	2,692,015	(36,153)	$	(3,079)	$	3,089,266	$	(60,578)	$	117,275	$	5,834,899

The accompanying notes are an integral part of the financial statements.

10

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited)

(dollars in thousands)

	Six Months Ended June 30, 2022
	Common Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, January 1, 2022	113,014,528	$	2,702,743	(87,608)	$	(6,401)	$	3,264,719	$	(54,861)	$	115,260	$	6,021,460
Net income		—			—		181,268		—		8,612		189,880
Other comprehensive income		—			—		—		47		—		47
Dividends on common stock ($1.70 per share)		—			—		(192,213)		—		—		(192,213)
Issuance of common stock	63,521	9,554			—		—		—		—		9,554
Purchase of treasury stock (a)		—		(24,885)	(1,715)		—		—		—		(1,715)
Reissuance of treasury stock for stock-based compensation and other		—		70,962	5,140		—