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 September 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 October 28, 2022:	113,140,203
ARIZONA PUBLIC SERVICE COMPANY	Number of shares of common stock, $2.50 par value, outstanding as of October 28, 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	69
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	97
Item 4.	Controls and Procedures	97
Part II		99
Item 1.	Legal Proceedings	99
Item 1A.	Risk Factors	99
Item 5.	Other Information	100
Item 6.	Exhibits	101
Signatures		103

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 Nine Months Ended September 30, 2022 and 2021	5
Pinnacle West Condensed Consolidated Statements of Comprehensive Income for Three and Nine Months Ended September 30, 2022 and 2021	6
Pinnacle West Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	7
Pinnacle West Condensed Consolidated Statements of Cash Flows for Nine Months Ended September 30, 2022 and 2021	9
Pinnacle West Condensed Consolidated Statements of Changes in Equity for Three and Nine Months Ended September 30, 2022 and 2021	10
APS Condensed Consolidated Statements of Income for Three and Nine Months Ended September 30, 2022 and 2021	12
APS Condensed Consolidated Statements of Comprehensive Income for Three and Nine Months Ended September 30, 2022 and 2021	13
APS Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	14
APS Condensed Consolidated Statements of Cash Flows for Nine Months Ended September 30, 2022 and 2021	16
APS Condensed Consolidated Statements of Changes in Equity for Three and Nine Months Ended September 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	44
Note 6. Palo Verde Sale Leaseback Variable Interest Entities	45
Note 7. Derivative Accounting	46
Note 8. Commitments and Contingencies	50
Note 9. Other Income and Other Expense	57
Note 10. Earnings Per Share	58
Note 11. Fair Value Measurements	58
Note 12. Investment in Nuclear Decommissioning Trusts and Other Special Use Funds	63
Note 13. Changes in Accumulated Other Comprehensive Loss	67

4

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
OPERATING REVENUES (Note 2)	$	1,469,871	$	1,308,254	$	3,315,071	$	3,004,978
OPERATING EXPENSES
Fuel and purchased power	556,571		427,452		1,174,027		895,514
Operations and maintenance	251,663		232,386		715,392		692,131
Depreciation and amortization	190,389		163,523		563,491		480,093
Taxes other than income taxes	53,475		57,608		165,591		176,586
Other expenses - net	200		(2,088)		1,410		5,361
Total	1,052,298		878,881		2,619,911		2,249,685
OPERATING INCOME	417,573		429,373		695,160		755,293
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction	9,133		11,352		30,966		30,549
Pension and other postretirement non-service credits - net (Note 5)	24,673		28,135		73,739		84,101
Other income (Note 9)	2,219		12,083		5,605		36,719
Other expense (Note 9)	(6,745)		(6,182)		(14,751)		(15,219)
Total	29,280		45,388		95,559		136,150
INTEREST EXPENSE
Interest charges	72,185		64,067		205,677		188,782
Allowance for borrowed funds used during construction	(8,692)		(5,273)		(19,047)		(15,466)
Total	63,493		58,794		186,630		173,316
INCOME BEFORE INCOME TAXES	383,360		415,967		604,089		718,127
INCOME TAXES	52,728		71,863		83,577		114,073
NET INCOME	330,632		344,104		520,512		604,054
Less: Net income attributable to noncontrolling interests (Note 6)	4,306		4,306		12,918		12,918
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	326,326	$	339,798	$	507,594	$	591,136
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC	113,211		112,923		113,162		112,878
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING -DILUTED	113,463		113,217		113,376		113,178
EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING
Net income attributable to common shareholders - basic	$	2.88	$	3.01	$	4.49	$	5.24
Net income attributable to common shareholders - diluted	$	2.88	$	3.00	$	4.48	$	5.22

 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
NET INCOME	$	330,632	$	344,104	$	520,512	$	604,054
OTHER COMPREHENSIVE INCOME, NET OF TAX
Derivative instruments net unrealized gain (loss), net of tax benefit (expense) of $(169), $64, $(582), and $(308)	513		(194)		1,772		938
Pension and other postretirement benefit activity, net of tax benefit (expense) of $(329), $(363), $69 and $(720)	1,001		1,106		(211)		2,192
Total other comprehensive income	1,514		912		1,561		3,130
COMPREHENSIVE INCOME	332,146		345,016		522,073		607,184
Less: Comprehensive income attributable to noncontrolling interests	4,306		4,306		12,918		12,918
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	327,840	$	340,710	$	509,155	$	594,266

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

6

PINNACLE WEST CAPITAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(dollars in thousands)

	September 30, 2022		December 31, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	7,032	$	9,969
Customer and other receivables	603,197		391,923
Accrued unbilled revenues	221,023		133,980
Allowance for doubtful accounts (Note 2)	(23,999)		(25,354)
Materials and supplies (at average cost)	386,703		349,135
Income tax receivable	—		7,514
Fossil fuel (at average cost)	53,087		18,032
Assets from risk management activities (Note 7)	164,794		63,481
Deferred fuel and purchased power regulatory asset (Note 4)	445,025		388,148
Other regulatory assets (Note 4)	94,676		130,376
Other current assets	65,019		83,896
Total current assets	2,016,557		1,551,100
INVESTMENTS AND OTHER ASSETS
Nuclear decommissioning trusts (Notes 11 and 12)	1,025,913		1,294,757
Other special use funds (Notes 11 and 12)	359,394		358,410
Assets from risk management activities (Note 7)	86,864		46,908
Other assets	121,346		97,884
Total investments and other assets	1,593,517		1,797,959
PROPERTY, PLANT AND EQUIPMENT
Plant in service and held for future use	22,275,468		21,688,661
Accumulated depreciation and amortization	(7,798,591)		(7,504,603)
Net	14,476,877		14,184,058
Construction work in progress	1,684,481		1,329,478
Palo Verde sale leaseback, net of accumulated depreciation (Note 6)	91,264		94,166
Intangible assets, net of accumulated amortization	246,690		273,693
Nuclear fuel, net of accumulated amortization	115,227		106,039
Total property, plant and equipment	16,614,539		15,987,434
DEFERRED DEBITS
Regulatory assets (Note 4)	1,173,415		1,192,987
Operating lease right-of-use assets	806,509		890,057
Assets for pension and other postretirement benefits (Note 5)	595,511		545,723
Other	44,550		37,962
Total deferred debits	2,619,985		2,666,729
TOTAL ASSETS	$	22,844,598	$	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)

	September 30, 2022		December 31, 2021
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	475,362	$	393,083
Accrued taxes	285,689		168,645
Accrued interest	61,892		57,332
Common dividends payable	—		95,988
Short-term borrowings (Note 3)	466,820		292,000
Current maturities of long-term debt (Note 3)	27,628		150,000
Customer deposits	41,731		42,293
Liabilities from risk management activities (Note 7)	7,240		4,373
Liabilities for asset retirements	6,307		4,473
Operating lease liabilities	128,618		100,443
Regulatory liabilities (Note 4)	420,357		296,271
Other current liabilities	139,260		151,968
Total current liabilities	2,060,904		1,756,869
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 3)	7,344,205		6,913,735
DEFERRED CREDITS AND OTHER
Deferred income taxes	2,418,914		2,311,862
Regulatory liabilities (Note 4)	2,108,289		2,499,213
Liabilities for asset retirements	785,540		762,909
Liabilities for pension benefits (Note 5)	148,403		152,865
Customer advances	362,140		257,151
Coal mine reclamation	178,095		174,616
Deferred investment tax credit	179,418		186,570
Unrecognized tax benefits	4,717		4,657
Operating lease liabilities	642,573		728,401
Other	249,287		232,914
Total deferred credits and other	7,077,376		7,311,158
COMMITMENTS AND CONTINGENCIES (Note 8)
EQUITY
Common stock, no par value; authorized 150,000,000 shares, 113,108,728 and 113,014,528 issued at respective dates	2,720,364		2,702,743
Treasury stock at cost; 36,204 and 87,608 shares at respective dates	(2,603)		(6,401)
Total common stock	2,717,761		2,696,342
Retained earnings	3,580,102		3,264,719
Accumulated other comprehensive loss (Note 13)	(53,300)		(54,861)
Total shareholders’ equity	6,244,563		5,906,200
Noncontrolling interests (Note 6)	117,550		115,260
Total equity	6,362,113		6,021,460
TOTAL LIABILITIES AND EQUITY	$	22,844,598	$	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)

	Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	520,512	$	604,054
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization including nuclear fuel	612,958		532,341
Deferred fuel and purchased power	(228,483)		(224,541)
Deferred fuel and purchased power amortization	171,607		25,195
Allowance for equity funds used during construction	(30,966)		(30,549)
Deferred income taxes	43,440		104,128
Deferred investment tax credit	(7,152)		(8,333)
Stock compensation	12,824		16,708
Changes in current assets and liabilities:
Customer and other receivables	(213,181)		(110,584)
Accrued unbilled revenues	(87,043)		(58,334)
Materials, supplies and fossil fuel	(72,623)		(46,744)
Income tax receivable	7,514		6,792
Other current assets	54,272		(19,129)
Accounts payable	137,433		19,005
Accrued taxes	117,044		93,953
Other current liabilities	12,575		(26,491)
Change in margin and collateral accounts - assets	8,832		(77)
Change in other long-term assets	208,599		(284,291)
Change in operating lease assets	98,081		106,802
Change in other long-term liabilities	(235,986)		62,012
Change in operating lease liabilities	(98,343)		(101,404)
Net cash provided by operating activities	1,031,914		660,513
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,276,861)		(1,006,431)
Contributions in aid of construction	103,366		67,278
Allowance for borrowed funds used during construction	(18,381)		(15,466)
Proceeds from nuclear decommissioning trusts sales and other special use funds	911,003		797,179
Investment in nuclear decommissioning trusts and other special use funds	(929,965)		(815,193)
Other	(11,057)		10,321
Net cash used for investing activities	(1,221,895)		(962,312)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt	455,628		596,999
Short-term borrowing and (repayments) - net	174,820		(25,000)
Short-term debt repayments under revolving credit facility	—		(19,000)
Dividends paid on common stock	(282,838)		(275,329)
Repayment of long-term debt	(150,000)		—
Common stock equity issuances and (purchases) -net	62		477
Distributions to noncontrolling interests	(10,628)		(10,628)
Net cash provided by financing activities	187,044		267,519
NET DECREASE IN CASH AND CASH EQUIVALENTS	(2,937)		(34,280)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	9,969		59,968
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	7,032	$	25,688

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 September 30, 2022
	Common Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, July 1, 2022	113,078,049	$	2,712,297	(41,531)	$	(2,976)	$	3,253,772	$	(54,814)	$	113,244	$	6,021,523
Net income		—			—		326,326				4,306		330,632
Other comprehensive income		—			—		—		1,514		—		1,514
Issuance of common stock	30,679	8,067			—		—		—		—		8,067
Purchase of treasury stock (a)		—		(3,735)	(279)		—		—		—		(279)
Reissuance of treasury stock for stock-based compensation and other		—		9,062	652		—		—		—		652
Other		—			—		4		—		—		4
Balance, September 30, 2022	113,108,728	$	2,720,364	(36,204)	$	(2,603)	$	3,580,102	$	(53,300)	$	117,550	$	6,362,113

	Three Months Ended September 30, 2021
	Common Stock			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
	Shares	Amount		Shares	Amount
Balance, July 1, 2021	112,819,703	$	2,692,015	(36,153)	$	(3,079)	$	3,089,266	$	(60,578)	$	117,275	$	5,834,899
Net income		—			—		339,798		—		4,306		344,104
Other comprehensive income		—			—		—		912		—		912
Dividends on common stock		—			—		11		—		—		11
Issuance of common stock	32,418	6,537			—		—		—		—		6,537
Other		—			—		1		—		—		1
Balance, September 30, 2021	112,852,121	$	2,698,552	(36,153)	$	(3,079)	$	3,429,076	$	(59,666)	$	121,581	$	6,186,464

(a)Primarily represents shares of common stock withheld from certain stock awards for tax purposes.

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)

	Nine Months Ended September 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		—			—		507,594		—		12,918		520,512
Other comprehensive income		—			—		—		1,561		—		1,561
Dividends on common stock ($1.70 per share)		—			—		(192,213)		—		—		(192,213)
Issuance of common stock	94,200	17,621			—		—		—		—		17,621
Purchase of treasury stock (a)		—		(28,620)	(1,994)		—		—		—		(1,994)
Reissuance of treasury stock for stock-based compensation and other		—