-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HuPph8NEcHibDzUC5IQwKsfPqqH062dRMlZwgOeil+TgPFaen0Z5VftS6FJ6hkEf URSNLtALtAn106iZ/X9M6Q== 0000950153-06-000211.txt : 20060201 0000950153-06-000211.hdr.sgml : 20060201 20060201080142 ACCESSION NUMBER: 0000950153-06-000211 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20051231 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060201 DATE AS OF CHANGE: 20060201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARIZONA PUBLIC SERVICE CO CENTRAL INDEX KEY: 0000007286 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 860011170 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04473 FILM NUMBER: 06567812 BUSINESS ADDRESS: STREET 1: 400 N FIFTH ST STREET 2: P O BOX 53999 CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6022501000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PINNACLE WEST CAPITAL CORP CENTRAL INDEX KEY: 0000764622 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 860512431 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08962 FILM NUMBER: 06567813 BUSINESS ADDRESS: STREET 1: 400 NORTH FIFTH STREET STREET 2: . CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6023792500 MAIL ADDRESS: STREET 1: 400 NORTH FIFTH STREET STREET 2: . CITY: PHOENIX STATE: AZ ZIP: 85004 FORMER COMPANY: FORMER CONFORMED NAME: AZP GROUP INC DATE OF NAME CHANGE: 19870506 8-K 1 p71793e8vk.htm 8-K e8vk
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UNITED STATES
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, 2005
         
    Exact Name of Registrant as Specified    
    in Charter; State of Incorporation;   IRS Employer
Commission File Number   Address and Telephone Number   Identification Number
         
         
1-8962   Pinnacle West Capital Corporation   86-0512431
    (an Arizona corporation)    
    400 North Fifth Street, P.O. Box 53999    
    Phoenix, AZ 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, AZ 85072-3999    
    (602) 250-1000    
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
     This combined Form 8-K is separately filed by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries. Except as stated in the preceding sentence, neither registrant is filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
 
 

 


 


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Item 2.02. Results of Operations and Financial Condition
     Certain of the Information referenced in Item 7.01 below relates to Pinnacle West Capital Corporation’s (“Pinnacle West” or the “Company”) results of operations for its fiscal quarter and fiscal year ended December 31, 2005. This Information is attached hereto as Exhibits 99.2, 99.3, 99.7, 99.9, and 99.10.
     On February 1, 2006, the Company issued a press release regarding its financial results for its fiscal quarter and fiscal year ended December 31, 2005. A copy of the press release is attached hereto as Exhibit 99.9.
     The information being furnished pursuant to this Item 2.02 and in Exhibits 99.2, 99.3, 99.7, 99.9 and 99.10 of this report relating to the Company’s financial results for its fiscal quarter and fiscal year ended December 31, 2005 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 liabilities 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.
Item 7.01. Regulation FD Disclosure
Financial and Business Information
     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 (see Exhibits 99.1, 99.2, 99.3, 99.4, 99.5, 99.6, 99.7, 99.8 and 99.10). 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.

2


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Item 8.01 Other Events
General Rate Case
     On January 31, 2006, Arizona Public Service Company (“APS”) filed with the Arizona Corporation Commission (the “ACC”) updated financial schedules, testimony and other data in the general rate case that APS filed on November 4, 2005. As requested by the ACC staff, the updated information uses the twelve months ended September 30, 2005 as the test period instead of the test year ended December 31, 2004 used in APS’ original filing. As a result of the updated filing, APS is requesting a 21.3%, or $453.9 million, increase in its annual retail electricity revenues effective no later than December 31, 2006. The original filing requested a 19.9%, or $409.1 million, retail rate increase.
     The updated requested rate increase is necessary to recover the following increased costs (dollars in millions):
                                 
    Updated Filing     Original Filing
    (January 31, 2006)     (November 4, 2005)
    Annual           Annual        
    Revenue     Percentage     Revenue     Percentage  
    Increase     Increase     Increase     Increase  
Increased fuel and purchased power
  $ 299.0       14.0 %   $ 246.8       12.0 %
Capital structure update
    98.3       4.6 %     96.8       4.7 %
Rate base update, including acquisition of Sundance Power Plant
    46.2       2.2 %     42.5       2.1 %
Pension funding
    41.3       1.9 %     41.2       2.0 %
Other items
    (30.9 )     (1.4 )%     (18.2 )     (0.9 )%
 
                               
Total Increase
  $ 453.9       21.3 %   $ 409.1       19.9 %

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     The request is based on (a) a rate base of $4.4 billion, which approximates the ACC-jurisdictional portion of the book value of utility plant, net of accumulated depreciation, as of September 30, 2005; (b) a base rate for fuel and purchased power costs of $0.031904 per kilowatt-hour based on estimated 2006 prices; and (c) a proposed capital structure of 45% long-term debt and 55% common stock equity, with a weighted-average cost of capital of 8.73% (5.41% for long-term debt and 11.50% for common stock equity). As noted in the above chart, the requested increase in annual retail electricity revenues from the original filing is based solely on increased fuel and purchased power costs. If the ACC approves the requested base rate increase for fuel and purchased power costs (see clause (b) of this paragraph), subsequent power supply adjustor (“PSA”) rate adjustments and/or PSA surcharges would be reduced because such costs would otherwise be eligible for recovery in the future under APS’ PSA.
     The other primary components of the updated request remain unchanged from APS’ November 4, 2005 original rate case filing. For additional information regarding APS’ original filing, see “APS 2005 General Rate Case” in Note 5 of Notes to Condensed Consolidated Financial Statements in the Pinnacle West Capital Corporation/APS Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005.
     The updated request does not include the power supply adjustor rate increase of approximately 5% that will take effect February 1, 2006 or any PSA surcharge APS may seek pursuant to the terms of the ACC’s decision entered on January 25, 2006. For additional information regarding this decision, see “Power Supply Adjustor Order” in Item 8.01 of the Pinnacle West/APS Current Report on Form 8-K filed January 26, 2006.

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Item 9.01. Financial Statements and Exhibits
  (c)   Exhibits.
         
Exhibit        
No.   Registrant(s)   Description
 
       
10.1
  Pinnacle West APS   Performance Share Agreement under the Pinnacle
West Capital Corporation 2002 Long-Term
Incentive Plan
 
       
99.1
  Pinnacle West
APS
  Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).
 
       
99.2
  Pinnacle West
APS
  Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended December 31, 2005 and 2004.
 
       
99.3
  Pinnacle West
APS
  Pinnacle West Capital Corporation consolidated statistics by quarter for 2005.
 
       
99.4
  Pinnacle West   Pinnacle West Capital Corporation consolidated statistics by quarter for 2004.
 
       
99.5
  Pinnacle West   Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
 
       
99.6
  Pinnacle West   Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
 
       
99.7
  Pinnacle West
APS
  Pinnacle West Capital Corporation earnings variance explanations for periods ended December 31, 2005 and 2004, unaudited condensed consolidated statements of income for the three and twelve months ended December 31, 2005 and 2004 and non-GAAP financial measure reconciliation operating income (GAAP measure) to gross margin (non-GAAP financial measure).
 
       
99.8
  Pinnacle West
APS
  Glossary of Terms.
 
       
99.9
  Pinnacle West
APS
  Earnings News Release issued on February 1, 2006.
 
       
99.10
  Pinnacle West
APS
  Non-GAAP Financial Measure Reconciliation-Operating Income (GAAP measure) to Gross Margin (non-GAAP financial measure).
 
       

5


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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  PINNACLE WEST CAPITAL CORPORATION
(Registrant)
 
 
Dated: February 1, 2006 By:   /s/ Barbara M. Gomez    
    Barbara M. Gomez   
    Vice President and Treasurer   
 
         
  ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
 
 
Dated: February 1, 2006  By:   /s/ Barbara M. Gomez    
    Barbara M. Gomez   
    Vice President and Treasurer   
 

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Exhibit Index
         
Exhibit        
No.   Registrant(s)   Description
 
       
10.1
  Pinnacle West
APS
  Performance Share Agreement under the Pinnacle
West Capital Corporation 2002 Long-Term
Incentive Plan
 
       
99.1
  Pinnacle West
APS
  Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).
 
       
99.2
  Pinnacle West
APS
  Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended December 31, 2005 and 2004.
 
       
99.3
  Pinnacle West
APS
  Pinnacle West Capital Corporation consolidated statistics by quarter for 2005.
 
       
99.4
  Pinnacle West   Pinnacle West Capital Corporation consolidated statistics by quarter for 2004.
 
       
99.5
  Pinnacle West   Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
 
       
99.6
  Pinnacle West   Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
 
       
99.7
  Pinnacle West
APS
  Pinnacle West Capital Corporation earnings variance explanations for periods ended December 31, 2005 and 2004, unaudited condensed consolidated statements of income for the three and twelve months ended December 31, 2005 and 2004 and non-GAAP financial measure reconciliation operating income (GAAP measure) to gross margin (non-GAAP financial measure).
 
       
99.8
  Pinnacle West
APS
  Glossary of Terms.
 
       
99.9
  Pinnacle West
APS
  Earnings News Release issued on February 1, 2006.
 
       
99.10
  Pinnacle West
APS
  Non-GAAP Financial Measure Reconciliation-Operating Income (GAAP measure) to Gross Margin (non-GAAP financial measure).
 
       

 

EX-10.1 2 p71793exv10w1.htm EXHIBIT 10.1 exv10w1
 

Exhibit 10.1

PERFORMANCE SHARE AGREEMENT
UNDER THE
PINNACLE WEST CAPITAL CORPORATION 2002
LONG-TERM INCENTIVE PLAN
     THIS AWARD AGREEMENT is made and entered into as of _________, 200___(the “Date of Grant”), by and between Pinnacle West Capital Corporation (the “Company”), and «Name» (“Employee”).
BACKGROUND
  A.   The Board of Directors of the Company (the “Board of Directors”) has adopted, and the Company’s shareholders have approved, the Pinnacle West Capital Corporation 2002 Long-Term Incentive Plan (the “Plan”), pursuant to which performance share incentive awards may be granted to employees of the Company and its subsidiaries and certain other individuals.
 
  B.   The Company desires to grant to Employee a performance share award under the terms of the Plan.
 
  C.   Pursuant to the Plan, the Company and Employee agree as follows:
AGREEMENT
  1.   Grant of Award. Pursuant to action of the Committee (as defined herein) which was taken on the Date of Grant, the Company grants to Employee «Shares» performance shares (“Performance Shares”), subject to the terms, conditions, and adjustments set forth in this Award Agreement. The Performance Shares granted under this Section 1 are referred to in this Award Agreement as the “Base Grant.”
 
  2.   Award Subject to Plan. This award is granted under and is expressly subject to, all of the terms and provisions of the Plan, which terms are incorporated herein by reference, and this Award Agreement. The Committee described in Section 4 of the Plan (the “Committee”) has been appointed by the Board of Directors, and designated by it, as the Committee to make awards.
 
  3.   Performance Period. The performance period for this award begins _________, 20___, and ends _________, 20___(the “Performance Period”).

 


 

Page 2
Performance Share Agreement
  4.   Payment.
  (a)   Performance Shares Payable In Common Stock. Subject to early termination of this Award Agreement pursuant to Section 7 below, as soon as practicable following the end of the Performance Period and the determination of the Company’s Earnings Per Share Growth Rate (as defined herein) as compared to the Earnings Per Share Growth Rate of the Index set forth on Attachment A (the “Index”) over such Performance Period but in no event later than December 31, 20___, the Company will deliver to Employee one (1) share of the Company’s Common Stock for each then-outstanding Performance Share under this Award Agreement. If the Employee terminates employment after the end of the Performance Period but before distribution of any shares pursuant to this Award Agreement, the distribution of the shares will not be made until six (6) months following the Employee’s termination of employment if required by Section 409A of the Code.
 
  (b)   Retirement. In the case of Employee’s Retirement (as defined herein) Employee shall have been deemed to have been employed by the Company through the end of the Performance Period. For purposes of this Award Agreement, “Retirement” means a termination of employment which constitutes an “Early Retirement” or a “Normal Retirement” under the Pinnacle West Capital Corporation Retirement Plan.
 
  (c)   Dividend Equivalents. At the time of the Company’s delivery of Common Stock to Employee pursuant to Subsection 4(a) above, the Company will also deliver to Employee a cash payment equal to the amount of dividends that Employee would have received if Employee had directly owned all of such Common Stock during the Performance Period, plus interest on such amount at the rate of ___percent, compounded quarterly.
 
  (d)   Maximum Award. Employee may not receive more than 120,000 shares of Common Stock under this Award Agreement.
  5.   Performance Criteria and Adjustments.
 
      Adjustment of Base Grant. The Base Grant will increase or decrease based upon the Company’s “Earnings Per Share Growth Rate” as compared to the Earnings Per Share Growth Rate of the Index during the Performance Period, as follows:

 


 

Page 3
Performance Share Agreement
     
If the Company's Earnings Per Share    
Compound Growth Rate Over The Performance   The Number of
Period As Compared to the Index is:   Performance Shares will be:
___th Percentile or Greater   ___X Base Grant
___th Percentile   ___X Base Grant
___th Percentile   Base Grant
___th Percentile   ___X Base Grant
Less than ___th Percentile   [None / ___X Base Grant]
     If intermediate percentiles are achieved, the number of Performance Shares awarded will be prorated (partial shares will be rounded down to the nearest whole share when applicable). For example, if the Company’s Earnings Per Share Growth Rate during the Performance Period places the Company’s performance in the ___th percentile, then the number of Performance Shares would be increased to ___multiplied by the Base Grant. In no event will Employee be entitled to receive a number of Performance Shares greater than ___times the Base Grant, even if the Company’s Earnings Per Share Growth Rate during the Performance Period places the Company’s performance higher than the ___th percentile. Attachment B provides a generic example of the operation of an award granted under this Award Agreement.
  6.   Earnings Per Share Growth Rate. “Earnings Per Share Growth Rate” for the Performance Period is the compounded annual-growth rate (CAGR) of a company’s earnings per share from continuing operations, on a fully diluted basis, during the Performance Period provided, however, that for purposes of calculating the Company’s Earnings Per Share Growth Rate, SunCor Development Company’s earnings from discontinued operations will be considered earnings from continuing operations for each fiscal year during the Performance Period. Only those companies which were in the Index at both the beginning and the ending of the Performance Period will be considered. The Earnings Per Share Growth Rate of the companies in the Index will be determined using an independent third party data system. If the Index is discontinued, the Committee shall select the most comparable index then in use for the sector comparison. In addition, if the sector comparison is no longer representative of the Company’s industry or business, the Committee shall replace the index with the most representative index then in use. Once the CAGR of the Company and all relevant companies in the Index have been determined, the member companies will be ranked from greatest to least CAGR. Percentiles will be calculated based on a company’s relative ranking. For example, company 1 out of 26 companies is given a

 


 

Page 4
Performance Share Agreement
      percentile of 96.2% (1.0 — 1/26). Percentiles will be carried out to one (1) decimal place. If the Company is not in the Index, then its percentile will be interpolated between the companies listed in the relative ranking. These calculations will be verified by the Company’s internal auditors.
 
  7.   Termination of Award. This Award Agreement will terminate and be of no further force or effect on the date that Employee is no longer actively employed by the Company or any of its subsidiaries, whether due to voluntary or involuntary termination, death, retirement, disability, or otherwise, except as specifically set forth in Section 4. Subject to Section 4, Employee will, however, be entitled to receive any Common Stock and dividend equivalents payable under Section 4 of this Award Agreement if Employee’s employment terminates after the Performance Period but before Employee’s receipt of such Common Stock and dividend equivalents. For avoidance of doubt, no acceleration of Performance Shares or the Performance Period will occur on a change of control of the Company.
 
  8.   Tax Withholding. Employee must pay, or make arrangements acceptable to the Company for the payment of any and all federal, state, and local income and payroll tax withholding that in the opinion of the Company is required by law. Unless Employee satisfies any such tax withholding obligation by paying the amount in cash or by check, the Company will withhold shares of Common Stock having a Fair Market Value on the date of withholding sufficient to cover the withholding obligation.
 
  9.   Non-Transferability. Neither this award nor any rights under this Award Agreement may be assigned, transferred, or in any manner encumbered except by will or the laws of descent and distribution, and any attempted assignment, transfer, mortgage, pledge or encumbrance except as herein authorized, will be void and of no effect.
 
  10.   Definitions: Copy of Plan and Plan Prospectus. To the extent not specifically defined in this Award Agreement, all capitalized terms used in this Award Agreement will have the same meanings ascribed to them in the Plan. By signing this Award Agreement, Employee acknowledges receipt of a copy of the Plan and the related Plan Prospectus.
 
  11.   Choice of Law. This Agreement will be governed by the laws of the State of Arizona, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to another jurisdiction.

 


 

Page 5
Performance Share Agreement
     An authorized representative of the Company has signed this Award Agreement, and Employee has signed this Award Agreement to evidence Employee’s acceptance of the award on the terms specified in this Award Agreement, all as of the Date of Grant.
         
 
  PINNACLE WEST CAPITAL CORPORATION
 
   
 
   
 
  By:
 
   
 
  Its: Vice President and Treasurer
 
   
 
   
 
   
     
 
  Employee

 


 

Page 6
Performance Share Agreement
Attachment A
     The Index will be the S&P 1500 Super Composite Electric Utility Index.

 


 

Page 7
Performance Share Agreement
Attachment B
Generic Example
(Performance Share Award)
ASSUMPTIONS:
    Employee is granted 500 Performance Shares, which constitutes Employee’s “Base Grant.”
 
    During the Performance Period, the Company’s Earnings Per Share Growth Rate is in the 88.3 percentile compared to the Index.
CALCULATION OF EMPLOYEE’S COMMON STOCK PAYMENT:
    Based on the Company’s achievement of the 88.3 Percentile during the Performance Period, in April of the fiscal year immediately following the end of the Performance Period, Employee will receive ___ shares of Common Stock, calculated as follows:
    ___ shares of Common Stock as a result of the Company’s Earnings Per Share Growth Rate meeting at least the ___th Percentile (___X Base Grant) plus
 
    ___ shares of Common Stock as a result of the Company’s Earnings Per Share Growth Rate achieving ___ of the Percentile increase between the ___th and ___th Percentile (___X ___) shares, with the ___ shares representing the Common Stock opportunity between the ___th and ___th Percentiles). (Note: ___X ___ shares = ___ shares and must be rounded down to ___ shares.)

 

EX-99.1 3 p71793exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
 
Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
List of Contents
2005 Fourth Quarter Summary
2005 Year-to-Date
2004 by Quarter
2003 by Quarter
2002 by Quarter
Quarters may not sum to totals due to rounding.
Certain current and prior-year amounts have been reclassified to conform to current-period presentation.
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/2005Q4QuarStatsGloss.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 p71793exv99w2.htm EXHIBIT 99.2 exv99w2
 

Exhibit 99.2
Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
                                                       
          3 Mo. Ended December     12 Mo. Ended December  
Line         2005     2004     Incr (Decr)     2005     2004     Incr (Decr)  
     
EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)
                                               
     
 
                                               
1    
Arizona Public Service
  $ 18     $ 15     $ 3     $ 170     $ 200     $ (30 )
2    
Pinnacle West Energy
    (6 )     (23 )     17       (85 )     (58 )     (27 )
3    
APS Energy Services
    (3 )     (1 )     (2 )     (6 )     3       (9 )
4    
SunCor
    13       31       (18 )     39       41       (2 )
5    
El Dorado
                      (2 )     33       (35 )
6    
Parent Company
    2       16       (14 )     107       28       79  
     
 
                                   
     
 
                                               
7    
Income From Continuing Operations
    24       38       (14 )     223       247       (24 )
     
 
                                               
8    
Loss From Discontinued Operations — Net of Tax
    (3 )     (4 )     1       (47 )     (4 )     (43 )
9    
Cumulative Effect of Change in Accounting — Net of Tax
                                   
     
 
                                   
10    
Net Income
  $ 21     $ 34     $ (13 )   $ 176     $ 243     $ (67 )
     
 
                                   
     
 
                                               
     
EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
                                               
     
 
                                               
11    
Arizona Public Service
  $ 0.19     $ 0.16     $ 0.03     $ 1.77     $ 2.18     $ (0.41 )
12    
Pinnacle West Energy
    (0.06 )     (0.25 )     0.19       (0.89 )     (0.63 )     (0.26 )
13    
APS Energy Services
    (0.04 )     (0.01 )     (0.03 )     (0.06 )     0.03       (0.09 )
14    
SunCor
    0.13       0.34       (0.21 )     0.40       0.45       (0.05 )
15    
El Dorado
    (0.01 )           (0.01 )     (0.02 )     0.36       (0.38 )
16    
Parent Company
    0.03       0.17       (0.14 )     1.11       0.30       0.81  
     
 
                                   
     
 
                                               
17    
Income From Continuing Operations
    0.24       0.41       (0.17 )     2.31       2.69       (0.38 )
     
 
                                               
18    
Loss From Discontinued Operations — Net of Tax
    (0.02 )     (0.04 )     0.02       (0.49 )     (0.03 )     (0.46 )
19    
Cumulative Effect of Change in Accounting — Net of Tax
                                   
     
 
                                   
20    
Net Income
  $ 0.22     $ 0.37     $ (0.15 )   $ 1.82     $ 2.66     $ (0.84 )
     
 
                                   
     
 
                                               
21    
BOOK VALUE PER SHARE
  $ 34.80  *   $ 32.14     $ 2.66     $ 34.80  *   $ 32.14     $ 2.66  
     
 
                                               
     
COMMON SHARES OUTSTANDING (Thousands)
                                               
22    
Average — Diluted
    99,050       91,779       7,271       96,590       91,532       5,058  
23    
End of Period
    99,057       91,793       7,264       99,057       91,793       7,264  
 
*   Estimate
 
See Glossary of Terms.   Page 2 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
                                                       
          3 Mo. Ended December     12 Mo. Ended December  
Line       2005     2004     Incr (Decr)     2005     2004     Incr (Decr)  
     
ELECTRIC OPERATING REVENUES (Dollars in Millions)
                                               
     
 
                                               
     
REGULATED ELECTRICITY SEGMENT
                                               
     
Retail
                                               
24    
Residential
  $ 208     $ 190     $ 18     $ 1,080     $ 984     $ 96  
25    
Business
    242       222       20       1,040       979       61  
     
 
                                   
26    
Total retail
    450       412       38       2,120       1,963       157  
     
Wholesale revenue on delivered electricity
                                               
27    
Traditional contracts
    6       3       3       23       16       7  
28    
Off-system sales
    20             20       40             40  
29    
Transmission for others
    5       8       (3 )     26       32       (6 )
30    
Other miscellaneous services
    7       6       1       28       24       4  
     
 
                                   
31    
Total regulated electricity
    488       429       59       2,237       2,035       202  
     
 
                                               
     
MARKETING AND TRADING SEGMENT
                                               
32    
Electricity and other commodity sales
    84       111       (27 )     352       401       (49 )
     
 
                                   
33    
Total operating electric revenues
  $ 572     $ 540     $ 32     $ 2,589     $ 2,436     $ 153  
     
 
                                   
     
 
                                               
     
ELECTRIC SALES (GWH)
                                               
     
 
                                               
     
REGULATED ELECTRICITY SEGMENT
                                               
     
Retail sales
                                               
34    
Residential
    2,519       2,368       151       12,224       11,528       696  
35    
Business
    3,427       3,236       191       14,254       13,826       428  
     
 
                                   
36    
Total retail
    5,946       5,604       342       26,478       25,354       1,124  
     
Wholesale electricity delivered
                                               
37    
Traditional contracts
    227       167       60       850       710       140  
38    
Off-system sales
    526             526       1,336             1,336  
39    
Retail load hedge management
    532       889       (357 )     3,010       2,732       278  
     
 
                                   
40    
Total regulated electricity
    7,231       6,660       571       31,674       28,796       2,878  
     
 
                                               
     
MARKETING AND TRADING SEGMENT
                                               
41    
Wholesale sales of electricity
    5,239       8,348       (3,109 )     23,571       30,182       (6,611 )
     
 
                                   
42    
Total electric sales
    12,470       15,008       (2,538 )     55,245       58,978       (3,733 )
     
 
                                   
 
See Glossary of Terms.   Page 3 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
                                                       
          3 Mo. Ended December     12 Mo. Ended December  
Line       2005     2004     Incr (Decr)     2005     2004     Incr (Decr)  
     
POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)
                                               
     
 
                                               
43    
Deferred fuel and purchased power regulatory asset — beginning balance
  $ 143     $     $ 143     $     $     $  
44    
Deferred fuel and purchased power costs — current period
    29             29       171             171  
45    
Interest on deferred fuel
    1             1       2             2  
46    
Amounts recovered through revenues
                                   
     
 
                                   
47    
Deferred fuel and purchased power regulatory asset — ending balance
  $ 173     $     $ 173     $ 173     $     $ 173  
     
 
                                   
     
 
                                               
     
MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)
                                               
     
 
                                               
     
Realized and Mark-To-Market Components
                                               
48    
Electricity and other commodity sales, realized (a)
  $ 22     $ 16     $ 6     $ 56     $ 63     $ (7 )
49    
Mark-to-market reversals on realized sales (b)
    (17 )           (17 )     (16 )     (6 )     (10 )
50    
Change in mark-to-market value of forward sales
    1       6       (5 )     19       23       (4 )
     
 
                                   
51    
Total gross margin
  $ 6     $ 22     $ (16 )   $ 59     $ 80     $ (21 )
     
 
                                   
     
 
                                               
     
By Pinnacle West Entity
                                               
     
 
                                               
52    
Parent company marketing and trading division
  $ 5     $ 12     $ (7 )   $ 59     $ 44     $ 15  
53    
APS
    3       (2 )     5       (6 )     (5 )     (1 )
54    
Pinnacle West Energy
          10       (10 )     5       27       (22 )
55    
APS Energy Services
    (2 )     2       (4 )     1       14       (13 )
     
 
                                   
56    
Total gross margin
  $ 6     $ 22     $ (16 )   $ 59     $ 80     $ (21 )
     
 
                                   
Future Marketing and Trading Mark-to-Market Realization
As of December 31, 2005, Pinnacle West had accumulated net mark-to-market gains of $45 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: 2006, $14 million; 2007, $20 million; and thereafter, $11 million.
 
(a)   Net effect on pretax gross margin from realization of prior-period mark-to-market included in line 48 and in line 49 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 48 are included in line 49. For example, line 49 shows that a prior-period mark-to-market gain of $17 million was transferred to “realized” for the fourth quarter of 2005. A $17 million realized gain is included in the $22 million on line 48 for the fourth quarter of 2005.
 
(b)   Quarterly amounts do not total to annual amounts because of intra-year mark-to-market eliminations.
 
See Glossary of Terms.   Page 4 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
                                                       
          3 Mo. Ended December     12 Mo. Ended December  
Line         2005     2004     Incr (Decr)     2005     2004     Incr (Decr)  
     
AVERAGE ELECTRIC CUSTOMERS
                                               
     
 
                                               
     
Retail customers
                                               
57    
Residential
    911,623       871,575       40,048       896,472       859,069       37,403  
58    
Business
    112,569       108,860       3,709       111,168       107,115       4,053  
     
 
                                   
59    
Total
    1,024,192       980,435       43,757       1,007,640       966,184       41,456  
60    
Wholesale customers
    77       77             78       81       (3 )
     
 
                                   
61    
Total customers
    1,024,269       980,512       43,757       1,007,718       966,265       41,453  
     
 
                                   
     
 
                                               
62    
Customer growth (% over prior year)
    4.5 %     3.9 %     0.6 %     4.3 %     3.7 %     0.6 %
     
 
                                               
     
RETAIL SALES (GWH) — WEATHER NORMALIZED
                                               
     
 
                                               
63    
Residential
    2,525       2,340       185       12,304       11,704       600  
64    
Business
    3,414       3,252       162       14,285       13,870       415  
     
 
                                   
65    
Total
    5,939       5,592       347       26,589       25,574       1,015  
     
 
                                   
     
 
                                               
     
RETAIL USAGE (KWh/Average Customer)
                                               
     
 
                                               
66    
Residential
    2,763       2,717       46       13,636       13,418       218  
67    
Business
    30,444       29,726       718       128,212       129,392       (1,180 )
     
 
                                               
     
RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)
                                               
     
 
                                               
68    
Residential
    2,770       2,686       84       13,724       13,624       100  
69    
Business
    30,328       29,871       457       128,498       129,495       (997 )
     
 
                                               
     
ELECTRICITY DEMAND (MW)
                                               
     
 
                                               
70    
System peak demand
    5,169       4,432       737       7,000       6,402       598  
 
     See Glossary of Terms.   Page 5 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
                                                       
          3 Mo. Ended December     12 Mo. Ended December  
Line         2005     2004     Incr (Decr)     2005     2004     Incr (Decr)  
     
ENERGY SOURCES (GWH)
                                               
     
 
                                               
     
Generation production
                                               
71    
Nuclear
    1,496       1,812       (316 )     7,509       8,184       (675 )
72    
Coal
    3,459       3,327       132       13,061       12,666       395  
73    
Gas, oil and other
    1,483       1,074       409       7,702       5,327       2,375  
     
 
                                   
74    
Total generation production
    6,438       6,213       225       28,272       26,177       2,095  
     
 
                                   
     
Purchased power
                                               
75    
Firm load
    402       1,024       (622 )     3,474       4,325       (851 )
76    
Marketing and trading
    6,102       8,218       (2,116 )     25,713       30,192       (4,479 )
     
 
                                   
77    
Total purchased power
    6,504       9,242       (2,738 )     29,187       34,517       (5,330 )
     
 
                                   
78    
Total energy sources
    12,942       15,455       (2,513 )     57,459       60,694       (3,235 )
     
 
                                   
     
 
                                               
     
POWER PLANT PERFORMANCE
                                               
     
 
                                               
     
Capacity Factors
                                               
79    
Nuclear
    61 %     74 %     (13 )%     77 %     84 %     (7 )%
80    
Coal
    92 %     88 %     4 %     87 %     84 %     3 %
81    
Gas, oil and other
    19 %     12 %     7 %     26 %     18 %     8 %
82    
System average
    46 %     48 %     (2 )%     52 %     51 %     1 %
     
 
                                               
     
Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
                                               
83    
Nuclear
    419       261       158       227       161       66  
84    
Coal
    103       61       42       150       107       43  
85    
Gas
    226       34       192       186       42       144  
     
 
                                   
86    
Total
    748       356       392       563       310       253  
     
 
                                   
 
     See Glossary of Terms.   Page 6 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended December 31, 2005 and 2004
                                                       
          3 Mo. Ended December     12 Mo. Ended December  
Line         2005     2004     Incr (Decr)     2005     2004     Incr (Decr)  
     
ENERGY MARKET INDICATORS (a)
                                               
     
 
                                               
     
Electricity Average Daily Spot Prices ($/MWh)
                                               
     
On-Peak
                                               
87    
Palo Verde
  $ 83.58     $ 51.23     $ 32.35     $ 66.40     $ 49.30     $ 17.10  
88    
SP15
  $ 97.65     $ 60.62     $ 37.03     $ 72.94     $ 55.20     $ 17.74  
     
Off-Peak
                                               
89    
Palo Verde
  $ 67.79     $ 38.21     $ 29.58     $ 47.55     $ 34.75     $ 12.81  
90    
SP15
  $ 76.45     $ 43.07     $ 33.38     $ 52.06     $ 38.62     $ 13.44  
     
 
                                               
     
WEATHER INDICATORS Actual
                                               
     
 
                                               
     
Actual
                                               
91    
Cooling degree-days
    508       352       156       4,663       4,694       (31 )
92    
Heating degree-days
    308       422       (114 )     766       985       (219 )
93    
Average humidity
    30 %     45 %     (15 )%     34 %     32 %     2 %
     
10-Year Averages
                                               
94    
Cooling degree-days
    420       420             4,531       4,531        
95    
Heating degree-days
    415       415             972       972        
96    
Average humidity
    40 %     40 %     0 %     35 %     35 %     0 %
     
 
                                               
     
ECONOMIC INDICATORS
                                               
     
 
                                               
     
Building Permits — Metro Phoenix (b) (d)
                                               
97    
Single-family
    6,131       6,830       (699 )     40,077       44,622       (4,545 )
98    
Multi-family
    1,398       995       403       7,144       6,225       919  
     
 
                                   
99    
Total
    7,529       7,825       (296 )     47,221       50,847       (3,626 )
     
 
                                   
     
 
                                               
     
Arizona Job Growth (c) (d)
                                               
100    
Payroll job growth (% over prior year)
    4.1 %     4.0 %     0.1 %     4.1 %     3.3 %     0.8 %
101    
Unemployment rate
                                               
     
(%, seasonally adjusted)
    4.9 %     4.7 %     0.2 %     4.7 %     5.0 %     (0.3 )%
 
Sources:
 
(a)   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)   Economic indicators reflect latest available data through periods ended November 30, 2005.
 
     See Glossary of Terms.   Page 7 of 31

 

EX-99.3 5 p71793exv99w3.htm EXHIBIT 99.3 exv99w3
 

Exhibit 99.3
Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
                                                       
                                                  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
  $ 27     $ 64     $ 61     $ 18     $ 170     $ (30 )
2    
Pinnacle West Energy
    (21 )     12       (71 )     (6 )     (85 )     (27 )
3    
APS Energy Services
    (3 )     1             (3 )     (6 )     (9 )
4    
SunCor
    9       11       6       13       39       (2 )
5    
El Dorado
    (1 )                       (2 )     (35 )
6    
Parent Company
    19       (3 )     89       2       107       79  
     
 
                                   
     
 
                                               
7    
Income From Continuing Operations
    30       85       85       24       223       (24 )
     
 
                                               
8    
Loss From Discontinued Operations — Net of Tax
    (6 )     (58 )     19       (3 )     (47 )     (43 )
9    
Cumulative Effect of Change in Accounting — Net of Tax
                                   
     
 
                                   
10    
Net Income
  $ 24     $ 27     $ 104     $ 21     $ 176     $ (67 )
     
 
                                   
     
 
                                               
     
EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
                                               
     
 
                                               
11    
Arizona Public Service
  $ 0.30     $ 0.66     $ 0.62     $ 0.19     $ 1.77     $ (0.41 )
12    
Pinnacle West Energy
    (0.23 )     0.13       (0.72 )     (0.06 )     (0.89 )     (0.26 )
13    
APS Energy Services
    (0.04 )     0.01             (0.04 )     (0.06 )     (0.09 )
14    
SunCor
    0.09       0.11       0.07       0.13       0.40       (0.05 )
15    
El Dorado
    (0.01 )           (0.01 )     (0.01 )     (0.02 )     (0.38 )
16    
Parent Company
    0.21       (0.03 )     0.90       0.03       1.11       0.81  
     
 
                                   
     
 
                                               
17    
Income From Continuing Operations
    0.32       0.88       0.86       0.24       2.31       (0.38 )
     
 
                                               
18    
Loss From Discontinued Operations — Net of Tax
    (0.05 )     (0.60 )     0.19       (0.02 )     (0.49 )     (0.46 )
19    
Cumulative Effect of Change in Accounting — Net of Tax
                                   
     
 
                                   
20    
Net Income
  $ 0.27     $ 0.28     $ 1.05     $ 0.22     $ 1.82     $ (0.84 )
     
 
                                   
     
 
                                               
21    
BOOK VALUE PER SHARE
  $ 32.50     $ 32.89     $ 35.81     $ 34.80 *   $ 34.80 *   $ 2.66  
     
 
                                               
     
COMMON SHARES OUTSTANDING (Thousands)
                                               
22    
Average — Diluted
    92,045       96,299       98,816       99,050       96,590       5,058  
23    
End of Period
    92,103       98,442       98,881       99,057       99,057       7,264  
 
*   Estimate
 
     See Glossary of Terms.   Page 8 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
                                                       
                                                  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
                                               
24    
Residential
  $ 190     $ 268     $ 414     $ 208     $ 1,080     $ 96  
25    
Business
    209       281       308       242       1,040       61  
     
 
                                   
26    
Total retail
    399       549       722       450       2,120       157  
     
Wholesale revenue on delivered electricity
                                               
27    
Traditional contracts
    3       5       9       6       23       7  
28    
Off-system sales
          12       8       20       40       40  
29    
Transmission for others
    7       7       7       5       26       (6 )
30    
Other miscellaneous services
    7       7       7       7       28       4  
     
 
                                   
31    
Total regulated electricity
    416       580       753       488       2,237       202  
     
 
                                               
     
MARKETING AND TRADING SEGMENT
                                               
32    
Electricity and other commodity sales
    89       71       107       84       352       (49 )
     
 
                                   
33    
Total operating electric revenues
  $ 505     $ 651     $ 860     $ 572     $ 2,589     $ 153  
     
 
                                   
     
 
                                               
     
ELECTRIC SALES (GWH)
                                               
     
 
                                               
     
REGULATED ELECTRICITY SEGMENT
                                               
     
Retail sales
                                               
34    
Residential
    2,367       2,889       4,449       2,519       12,224       696  
35    
Business
    3,042       3,684       4,100       3,427       14,254       428  
     
 
                                   
36    
Total retail
    5,409       6,573       8,549       5,946       26,478       1,124  
     
Wholesale electricity delivered
                                               
37    
Traditional contracts
    155       200       269       227       850       140  
38    
Off-system sales
          598       212       526       1,336       1,336  
39    
Retail load hedge management
    750       702       1,026       532       3,010       278  
     
 
                                   
40    
Total regulated electricity
    6,314       8,073       10,056       7,231       31,674       2,878  
     
 
                                               
     
MARKETING AND TRADING SEGMENT
                                               
41    
Wholesale sales of electricity
    6,060       5,009       7,263       5,239       23,571       (6,611 )
     
 
                                   
42    
Total electric sales
    12,374       13,082       17,319       12,470       55,245       (3,733 )
     
 
                                   
 
     See Glossary of Terms.   Page 9 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
                                                         
                                                    Increase  
                                                    (Decrease)  
Line         1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year-To-Date     vs Prior YTD  
       
POWER SUPPLY ADJUSTOR (“PSA”)REGULATED ELECTRICITY SEGMENT (Dollars in Millions)
                                               
       
 
                                               
43      
Deferred fuel and purchased power regulatory asset — beginning balance
  $     $     $ 38       143     $     $  
44      
Deferred fuel and purchased power costs — current period
          38       104       29       171       171  
45      
Interest on deferred fuel
                1       1       2       2  
46      
Amounts recovered through revenues
                                   
       
 
                                   
47      
Deferred fuel and purchased power regulatory asset — ending balance
  $     $ 38     $ 143     $ 173     $ 173     $ 173  
       
 
                                   
       
 
                                               
       
MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)
                                               
       
 
                                               
       
Realized and Mark-To-Market Components
                                               
48      
Electricity and other commodity sales, realized (a)
  $ 12     $ 18     $ 3     $ 22     $ 56     $ (7 )
49      
Mark-to-market reversals on realized sales (b)
    (3 )     (8 )     3       (17 )     (16 )     (10 )
50      
Change in mark-to-market value of forward sales
    10       3       14       1       19       (4 )
       
 
                                   
51      
Total gross margin
  $ 19     $ 13     $ 20     $ 6     $ 59     $ (21 )
       
 
                                   
       
 
                                               
       
By Pinnacle West Entity
                                               
       
 
                                               
52      
Parent company marketing and trading division
  $ 21     $ 6     $ 26     $ 5     $ 59     $ 15  
53      
APS
    (4 )     3       (8 )     3       (6 )     (1 )
54      
Pinnacle West Energy
    5                         5       (22 )
55      
APS Energy Services
    (3 )     4       2       (2 )     1       (13 )
       
 
                                   
56      
Total gross margin
  $ 19     $ 13     $ 20     $ 6     $ 59     $ (21 )
       
 
                                   
Future Marketing and Trading Mark-to-Market Realization
As of December 31, 2005, Pinnacle West had accumulated net mark-to-market gains of $45 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: 2006, $14 million; 2007, $20 million; and thereafter, $11 million.
 
(a)   Net effect on pretax gross margin from realization of prior-period mark-to-market included in line 48 and in line 49 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 48 are included in line 49. For example, line 49 shows that a prior-period mark-to-market gain of $17 million was transferred to “realized” for the fourth quarter of 2005. A $17 million realized gain is included in the $22 million on line 48 for the fourth quarter of 2005.
 
(b)   Quarterly amounts do not total to annual amounts because of intra-year mark-to-market eliminations.
     
   See Glossary of Terms.   Page 10 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
                                                         
                                                    Increase
                                                    (Decrease)
Line       1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year-To-Date   vs Prior YTD
       
AVERAGE ELECTRIC CUSTOMERS
                                               
       
 
                                               
       
Retail customers
                                               
  57    
Residential
    889,967       888,509       895,789       911,623       896,472       37,403  
  58    
Business
    109,772       110,658       111,648       112,569       111,168       4,053  
       
 
                                               
  59    
Total
    999,739       999,167       1,007,437       1,024,192       1,007,640       41,456  
  60    
Wholesale customers
    81       76       78       77       78       (3 )
       
 
                                               
  61    
Total customers
    999,820       999,243       1,007,515       1,024,269       1,007,718       41,453  
       
 
                                               
       
 
                                               
  62    
Customer growth (% over prior year)
    4.0 %     4.2 %     4.5 %     4.5 %     4.3 %     0.6 %
       
 
                                               
       
RETAIL SALES (GWH) — WEATHER NORMALIZED
                                               
       
 
                                               
  63    
Residential
    2,430       2,903       4,445       2,525       12,304       600  
  64    
Business
    3,058       3,693       4,119       3,414       14,285       415  
       
 
                                               
  65    
Total
    5,488       6,596       8,564       5,939       26,589       1,015  
       
 
                                               
       
 
                                               
       
RETAIL USAGE (KWh/Average Customer)
                                               
       
 
                                               
  66    
Residential
    2,660       3,252       4,967       2,763       13,636       218  
  67    
Business
    27,712       33,292       36,723       30,444       128,212       (1,180 )
       
 
                                               
       
RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)
                                               
       
 
                                               
  68    
Residential
    2,730       3,268       4,963       2,770       13,724       100  
  69    
Business
    27,860       33,374       36,897       30,328       128,498       (997 )
       
 
                                               
       
ELECTRICITY DEMAND (MW)
                                               
       
 
                                               
  70    
System peak demand
    3,997       6,458       7,000       5,169       7,000       598  
     
    See Glossary of Terms.   Page 11 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
                                                         
                                                    Increase
                                                    (Decrease)
Line       1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year-To-Date   vs Prior YTD
       
ENERGY SOURCES (GWH)
                                               
       
 
                                               
       
Generation production
                                               
  71    
Nuclear
    2,247       1,619       2,147       1,496       7,509       (675 )
  72    
Coal
    2,940       3,088       3,574       3,459       13,061       395  
  73    
Gas, oil and other
    1,127       2,074       3,018       1,483       7,702       2,375  
       
 
                                               
  74    
Total generation production
    6,314       6,781       8,739       6,438       28,272       2,095  
       
 
                                               
       
Purchased power
                                               
  75    
Firm load
    586       880       1,589       402       3,474       (851 )
  76    
Marketing and trading
    5,832       5,984       7,795       6,102       25,713       (4,479 )
       
 
                                               
  77    
Total purchased power
    6,418       6,864       9,384       6,504       29,187       (5,330 )
       
 
                                               
  78    
Total energy sources
    12,732       13,645       18,123       12,942       57,459       (3,235 )
       
 
                                               
       
 
                                               
       
POWER PLANT PERFORMANCE
                                               
       
 
                                               
       
Capacity Factors
                                               
  79    
Nuclear
    94 %     67 %     88 %     61 %     77 %     (7 )%
  80    
Coal
    80 %     83 %     95 %     92 %     87 %     3 %
  81    
Gas, oil and other
    17 %     27 %     40 %     19 %     26 %     8 %
  82    
System average
    49 %     49 %     63 %     46 %     52 %     1 %
       
 
                                               
       
Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
                                               
  83    
Nuclear
    52       329       107       419       227       66  
  84    
Coal
    195       244       57       103       150       43  
  85    
Gas
    212       164       140       226       186       144  
       
 
                                               
  86    
Total
    459       737       304       748       563       253  
       
 
                                               
     
See Glossary of Terms.   Page 12 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2005
                                                         
                                                    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
                                               
  87    
Palo Verde
  $ 49.74     $ 53.33     $ 78.94     $ 83.58     $ 66.40     $ 17.10  
  88    
SP15
  $ 55.70     $ 55.19     $ 83.21     $ 97.65     $ 72.94     $ 17.74  
       
Off-Peak
                                               
  89    
Palo Verde
  $ 37.04     $ 33.03     $ 52.35     $ 67.79     $ 47.55     $ 12.81  
  90    
SP15
  $ 40.96     $ 34.73     $ 56.08     $ 76.45     $ 52.06     $ 13.44  
       
 
                                               
       
WEATHER INDICATORS
                                               
       
 
                                               
       
Actual
                                               
  91    
Cooling degree-days
    34       1,538       2,583       508       4,663       (31 )
  92    
Heating degree-days
    457       1             308       766       (219 )
  93    
Average humidity
    56 %     20 %     29 %     30 %     34 %     2 %
       
10-Year Averages
                                               
  94    
Cooling degree-days
    80       1,491       2,540       420       4,531        
  95    
Heating degree-days
    521       36             415       972        
  96    
Average humidity
    43 %     24 %     33 %     40 %     35 %     0 %
       
 
                                               
       
ECONOMIC INDICATORS
                                               
       
 
                                               
       
Building Permits — Metro Phoenix (b) (d)
                                               
  97    
Single-family
    10,356       12,013       11,577       6,131       40,077       (4,545 )
  98    
Multi-family
    1,741       1,645       2,360       1,398       7,144       919  
       
 
                                   
  99    
Total
    12,097       13,658       13,937       7,529       47,221       (3,626 )
       
 
                                   
       
 
                                               
       
Arizona Job Growth (c) (d)
                                               
  100    
Payroll job growth (% over prior year)
    4.1 %     3.9 %     4.8 %     4.1 %     4.1 %     0.8 %
  101    
Unemployment rate (%, seasonally adjusted)
    4.4 %     4.7 %     4.2 %     4.9 %     4.7 %     (0.3 )%
 
Sources:
(a)   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)   Economic indicators reflect latest available data through periods ended November 30, 2005.
     
    See Glossary of Terms.   Page 13 of 31

 

EX-99.4 6 p71793exv99w4.htm EXHIBIT 99.4 exv99w4
 

Exhibit 99.4
Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
                                                         
                                                    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
  $ 34     $ 55     $ 95     $ 15     $ 200     $ 19  
  2    
Pinnacle West Energy
    (22 )     (14 )     1       (23 )     (58 )     (50 )
  3    
APS Energy Services
    2       1       1       (1 )     3       (13 )
  4    
SunCor
    2       4       4       31       41       (5 )
  5    
El Dorado
          34                   33       34  
  6    
Parent Company
    15       (6 )     3       16       28       37  
       
 
                                   
       
 
                                               
  7    
Income From Continuing Operations
    31       74       104       38       247       22  
       
 
                                               
  8    
Income (Loss) From Discontinued Operations — Net of Tax
          (1 )     1       (4 )     (4 )     (20 )
  9    
Cumulative Effect of Change in Accounting — Net of Tax
                                   
       
 
                                   
  10    
Net Income
  $ 31     $ 73     $ 105     $ 34     $ 243     $ 2  
       
 
                                   
       
 
                                               
       
EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
                                               
       
 
                                               
  11    
Arizona Public Service
  $ 0.38     $ 0.60     $ 1.04     $ 0.16     $ 2.18     $ 0.20  
  12    
Pinnacle West Energy
    (0.24 )     (0.15 )     0.01       (0.25 )     (0.63 )     (0.55 )
  13    
APS Energy Services
    0.02       0.01       0.01       (0.01 )     0.03       (0.15 )
  14    
SunCor
    0.02       0.04       0.05       0.34       0.45       (0.05 )
  15    
El Dorado
          0.37                   0.36       0.37  
  16    
Parent Company
    0.15       (0.06 )     0.03       0.17       0.30       0.40  
       
 
                                   
       
 
                                               
  17    
Income From Continuing Operations
    0.33       0.81       1.14       0.41       2.69       0.22  
       
 
                                               
  18    
Income (Loss) From Discontinued Operations — Net of Tax
    0.01       (0.02 )     0.01       (0.04 )     (0.03 )     (0.19 )
  19    
Cumulative Effect of Change in Accounting — Net of Tax
                                   
       
 
                                   
  20    
Net Income
  $ 0.34     $ 0.79     $ 1.15     $ 0.37     $ 2.66     $ 0.03  
       
 
                                   
       
 
                                               
  21    
BOOK VALUE PER SHARE
  $ 31.19     $ 31.68     $ 32.55     $ 32.14     $ 32.14     $ 1.17  
       
 
                                               
       
COMMON SHARES OUTSTANDING (Thousands)
                                               
  22    
Average — Diluted
    91,376       91,400       91,491       91,779       91,532       127  
  23    
End of Period
    91,310       91,309       91,443       91,793       91,793       505  
     

        See Glossary of Terms.

  Page 14 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
                                                         
                                                    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
                                               
  24    
Residential
  $ 189     $ 245     $ 360     $ 190     $ 984     $ 27  
  25    
Business
    211       257       289       222       979       26  
       
 
                                   
  26    
Total retail
    400       502       649       412       1,963       53  
       
Wholesale revenue on delivered electricity
                                               
  27    
Traditional contracts
    3       4       6       3       16       1  
  28    
Off-system sales
                                   
  29    
Transmission for others
    8       8       8       8       32       5  
  30    
Other miscellaneous services
    4       6       8       6       24       (2 )
       
 
                                   
  31    
Total regulated electricity
    415       520       671       429       2,035       57  
       
 
                                               
       
MARKETING AND TRADING SEGMENT
                                               
  32    
Electricity and other commodity sales
    89       110       91       111       401       9  
       
 
                                   
  33    
Total operating electric revenues
  $ 504     $ 630     $ 762     $ 540     $ 2,436     $ 66  
       
 
                                   
       
 
                                               
       
ELECTRIC SALES (GWH)
                                               
       
 
                                               
       
REGULATED ELECTRICITY SEGMENT
                                               
       
Retail sales
                                               
  34    
Residential
    2,410       2,722       4,028       2,368       11,528       381  
  35    
Business
    3,051       3,602       3,937       3,236       13,826       410  
       
 
                                   
  36    
Total retail
    5,461       6,324       7,965       5,604       25,354       791  
       
Wholesale electricity delivered
                                               
  37    
Traditional contracts
    138       195       210       167       710       210  
  38    
Off-system sales
                                   
  39    
Retail load hedge management
    169       731       943       889       2,732       1,639  
       
 
                                   
  40    
Total regulated electricity
    5,768       7,250       9,118       6,660       28,796       2,640  
       
 
                                               
       
MARKETING AND TRADING SEGMENT
                                               
  41    
Wholesale sales of electricity
    5,696       7,143       8,995       8,348       30,182       1,380  
       
 
                                   
  42    
Total electric sales
    11,464       14,393       18,113       15,008       58,978       4,020  
       
 
                                   
     

        See Glossary of Terms.

  Page 15 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
                                                         
                                                    Increase  
                                                    (Decrease)  
Line         1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year-To-Date     vs Prior YTD  
       
POWER SUPPLY ADJUSTOR (“PSA”) — REGULATED ELECTRICITY SEGMENT (Dollars in Millions)
                                               
       
 
                                               
  43    
Deferred fuel and purchased power regulatory asset — beginning balance
  $     $     $     $     $     $  
  44    
Deferred fuel and purchased power costs — current period
                                   
  45    
Interest on deferred fuel
                                   
  46    
Amounts recovered through revenues
                                   
       
 
                                   
  47    
Deferred fuel and purchased power regulatory asset — ending balance
  $     $     $     $     $     $  
       
 
                                   
       
 
                                               
       
MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)
                                               
       
 
                                               
       
Realized and Mark-To-Market Components
                                               
  48    
Electricity and other commodity sales, realized (a)
  $ 12     $ 22     $ 13     $ 16     $ 63     $ (2 )
  49    
Mark-to-market reversals on realized sales (b)
    1       (4 )     (3 )           (6 )      
  50    
Change in mark-to-market value of forward sales
    8       4       5       6       23       35  
       
 
                                   
  51    
Total gross margin
  $ 21     $ 22     $ 15     $ 22     $ 80     $ 33  
       
 
                                   
       
 
                                               
       
By Pinnacle West Entity
                                               
       
 
                                               
  52    
Parent company marketing and trading division
  $ 12     $ 11     $ 9     $ 12     $ 44     $ 49  
  53    
APS
    (5 )           2       (2 )     (5 )     (13 )
  54    
Pinnacle West Energy
    10       7             10       27       19  
  55    
APS Energy Services
    4       4       4       2       14       (22 )
       
 
                                   
  56    
Total gross margin
  $ 21     $ 22     $ 15     $ 22     $ 80     $ 33  
       
 
                                   
 
(a)   Net effect on pretax gross margin from realization of prior-period mark-to-market included in line 48 and in line 49 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 48 are included in line 49. For example, line 49 shows that a prior-period mark-to-market gain of $6 million was transferred to “realized” for the total year 2004. A $6 million realized gain is included in the $63 million on line 48 for the total year 2004.
 
(b)   Quarterly amounts do not total to annual amounts because of intra-year mark-to-market eliminations.
     
See Glossary of Terms.   Page 16 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
                                                         
                                                    Increase
                                                    (Decrease)
Line       1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year-To-Date   vs Prior YTD
       
AVERAGE ELECTRIC CUSTOMERS
                                               
       
 
                                               
       
Retail customers
                                               
  57    
Residential
    855,754       852,594       856,353       871,575       859,069       30,703  
  58    
Business
    105,502       106,517       107,583       108,860       107,115       4,019  
       
 
                                               
  59    
Total
    961,256       959,111       963,936       980,435       966,184       34,722  
  60    
Wholesale customers
    81       82       85       77       81       15  
       
 
                                               
  61    
Total customers
    961,337       959,193       964,021       980,512       966,265       34,737  
       
 
                                               
       
 
                                               
  62    
Customer growth (% over prior year)
    3.4 %     3.8 %     3.9 %     3.9 %     3.7 %     0.4 %
       
 
                                               
       
RETAIL SALES (GWH) —
WEATHER NORMALIZED
                                               
       
 
                                               
  63    
Residential
    2,371       2,762       4,231       2,340       11,704       825  
  64    
Business
    2,998       3,616       4,005       3,252       13,870       467  
       
 
                                               
  65    
Total
    5,369       6,378       8,236       5,592       25,574       1,292  
       
 
                                               
       
 
                                               
       
RETAIL USAGE (KWh/Average Customer)
                                               
       
 
                                               
  66    
Residential
    2,816       3,193       4,704       2,717       13,418       (39 )
  67    
Business
    28,919       33,816       36,595       29,726       129,392       (1,137 )
       
 
                                               
       
RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)
                                               
       
 
                                               
  68    
Residential
    2,770       3,240       4,941       2,686       13,624       491  
  69    
Business
    28,422       33,944       37,227       29,871       129,495       (511 )
       
 
                                               
       
ELECTRICITY DEMAND (MW)
                                               
       
 
                                               
  70    
System peak demand
    3,979       5,632       6,402       4,432       6,402       70  
     

      See Glossary of Terms.

  Page 17 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
                                                         
                                                    Increase
                                                    (Decrease)
Line       1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year-To-Date   vs Prior YTD
       
ENERGY SOURCES (GWH)
                                               
       
 
                                               
       
Generation production
                                               
  71    
Nuclear
    2,148       1,860       2,364       1,812       8,184       (131 )
  72    
Coal
    2,887       3,035       3,417       3,327       12,666       1,300  
  73    
Gas, oil and other
    367       1,339       2,547       1,074       5,327       (764 )
       
 
                                               
  74    
Total generation production
    5,402       6,234       8,328       6,213       26,177       405  
       
 
                                               
       
Purchased power
                                               
  75    
Firm load
    701       1,532       1,068       1,024       4,325       1,214  
  76    
Marketing and trading
    5,506       7,167       9,301       8,218       30,192       2,443  
       
 
                                               
  77    
Total purchased power
    6,207       8,699       10,369       9,242       34,517       3,657  
       
 
                                               
  78    
Total energy sources
    11,609       14,933       18,697       15,455       60,694       4,062  
       
 
                                               
       
 
                                               
       
POWER PLANT PERFORMANCE
                                               
       
 
                                               
       
Capacity Factors
                                               
  79    
Nuclear
    88 %     77 %     96 %     74 %     84 %     (3 )%
  80    
Coal
    77 %     81 %     90 %     88 %     84 %     8 %
  81    
Gas, oil and other
    5 %     20 %     38 %     12 %     18 %     (10 )%
  82    
System average
    44 %     50 %     64 %     48 %     51 %     (4 )%
       
 
                                               
       
Generation Capacity Out of Service and
Replaced for Native Load (average MW/day)
                                               
  83    
Nuclear
    135       233       13       261       161       29  
  84    
Coal
    149       153       63       61       107       (163 )
  85    
Gas
    49       47       39       34       42       (163 )
       
 
                                               
  86    
Total
    333       433       115       356       310       (296 )
       
 
                                               
     
See Glossary of Terms.   Page 18 of 31

 


 

Last Updated 2/1/2006
Pinnacle West Capital Corporation
Consolidated Statistics By Quarter
2004
                                                         
                                                    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
                                               
  87    
Palo Verde
  $ 43.73     $ 50.36     $ 51.86     $ 51.23     $ 49.30     $ 0.70  
  88    
SP15
  $ 48.37     $ 54.73     $ 57.09     $ 60.62     $ 55.20     $ 3.82  
       
Off-Peak
                                               
  89    
Palo Verde
  $ 33.66     $ 33.74     $ 33.37     $ 38.21     $ 34.75     $ 2.72  
  90    
SP15
  $ 36.90     $ 37.32     $ 37.18     $ 43.07     $ 38.62     $ 3.96  
       
 
                                               
       
WEATHER INDICATORS
                                               
       
 
                                               
       
Actual
                                               
  91    
Cooling degree-days
    273       1,598       2,471       352       4,694       (205 )
  92    
Heating degree-days
    552       11             422       985       249  
  93    
Average humidity
    39 %     19 %     26 %     45 %     32 %     1 %
       
10-Year Averages
                                               
  94    
Cooling degree-days
    80       1,491       2,540       420       4,531       420  
  95    
Heating degree-days
    521       36             415       972       415  
  96    
Average humidity
    43 %     24 %     33 %     40 %     35 %     0 %
       
 
                                               
       
ECONOMIC INDICATORS
                                               
       
 
                                               
       
Building Permits — Metro Phoenix (b)
                                               
  97    
Single-family
    10,045       13,636       14,111       10,325       48,117       8,466  
  98    
Multi-family
    1,757       1,324       2,149       2,356       7,586       859  
       
 
                                   
  99    
Total
    11,802       14,960       16,260       12,681       55,703       9,325  
       
 
                                   
       
 
                                               
       
Arizona Job Growth (c)
                                               
  100    
Payroll job growth (% over prior year)
    2.7 %     3.3 %     3.6 %     3.9 %     3.4 %     2.0 %
  101    
Unemployment rate (%, seasonally adjusted)
    5.2 %     5.1 %     4.9 %     4.6 %     5.0 %     (0.7 )%
 
Sources:
(a)   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 19 of 31

 

EX-99.5 7 p71793exv99w5.htm EXHIBIT 99.5 exv99w5
 

Exhibit 99.5

Last Updated 2/1/2006
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
    4       1       2       (15 )     (8 )     11  
3  
APS Energy Services
    8       5       1       3       16       (12 )
4  
SunCor
    1       2       6       36       46       36  
5  
El Dorado
                            (1 )     4  
6  
Parent Company
    (11 )     3                   (9 )     (32 )
   
 
                                   
   
 
                                               
7  
Income From Continuing Operations
    18       54       109       45       225       (11 )
   
 
                                               
8  
Income From Discontinued Operations — Net of Tax
    7       2       1       4       16       37  
9  
Cumulative Effect of Change in Accounting — Net of Tax
                                  66  
   
 
                                   
   
 
                                               
10  
Net Income
  $ 25     $ 56     $ 110     $ 49     $ 241     $ 92  
   
 
                                   
   
 
                                               
   
EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
                                               
   
 
                                               
11  
Arizona Public Service
  $ 0.17     $ 0.47     $ 1.10     $ 0.24     $ 1.98     $ (0.37 )
12  
Pinnacle West Energy
    0.05       0.01       0.02       (0.16 )     (0.08 )     0.15  
13  
APS Energy Services
    0.08       0.06       0.01       0.03       0.18       (0.15 )
14  
SunCor
    0.01       0.03       0.07       0.39       0.50       0.37  
15  
El Dorado
                            (0.01 )     0.05  
16  
Parent Company
    (0.11 )     0.02       (0.01 )     (0.01 )     (0.10 )     (0.36 )
   
 
                                   
   
 
                                               
17  
Income From Continuing Operations
    0.20       0.59       1.19       0.49       2.47       (0.31 )
   
 
                                               
18  
Income From Discontinued Operations — Net of Tax
    0.08       0.02       0.01       0.05       0.16       0.41  
19  
Cumulative Effect of Change in Accounting — Net of Tax
                                  0.77  
   
 
                                   
   
 
                                               
20  
Net Income
  $ 0.28     $ 0.61     $ 1.20     $ 0.54     $ 2.63     $ 0.87  
   
 
                                   
   
 
                                               
21  
BOOK VALUE PER SHARE
  $ 29.39     $ 29.95     $ 30.68     $ 30.97     $ 30.97     $ 1.57  
   
 
                                               
   
COMMON SHARES OUTSTANDING (Thousands)
                                               
22  
Average — Diluted
    91,359       91,450       91,467       91,403       91,405       6,441  
23  
End of Period
    91,257       91,262       91,271       91,288       91,288       33  
     
See Glossary of Terms.
 
Page 20 of 31

 


 

Last Updated 2/1/2006
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
                                               
24  
Residential
  $ 168     $ 233     $ 363     $ 193     $ 957     $ 51  
25  
Business
    196       251       284       222       953       25  
   
 
                                   
26  
Total retail
    364       484       647       415       1,910       76  
   
Wholesale revenue on delivered electricity
                                               
27  
Traditional contracts
    3       4       5       3       15       6  
28  
Off-system sales
                                   
29  
Transmission for others
    6       5       9       7       27       (3 )
30  
Other miscellaneous services
    7       6       6       7       26       9  
   
 
                                   
31  
Total regulated electricity
    380       499       667       432       1,978       88  
   
 
                                               
   
MARKETING AND TRADING SEGMENT
                                               
32  
Electricity and other commodity sales
    117       101       83       91       392       105  
   
 
                                   
33  
Total operating electric revenues
  $ 497     $ 600     $ 750     $ 523     $ 2,370     $ 193  
   
 
                                   
   
 
                                               
   
ELECTRIC SALES (GWH)
                                               
   
 
                                               
   
REGULATED ELECTRICITY SEGMENT
                                               
   
Retail sales
                                               
34  
Residential
    2,104       2,543       4,126       2,374       11,147       703  
35  
Business
    2,849       3,450       3,891       3,226       13,416       499  
   
 
                                   
36  
Total retail
    4,953       5,993       8,017       5,600       24,563       1,202  
   
Wholesale electricity delivered
                                               
37  
Traditional contracts
    130       131       127       112       500       26  
38  
Off-system sales
                                   
39  
Retail load hedge management
    109       205       446       333       1,093       (1,549 )
   
 
                                   
40  
Total regulated electricity
    5,192       6,329       8,590       6,045       26,156       (321 )
   
 
                                               
   
MARKETING AND TRADING SEGMENT
                                               
41  
Wholesale sales of electricity
    7,372       6,798       7,255       7,377       28,802       5,947  
   
 
                                   
42  
Total electric sales
    12,564       13,127       15,845       13,422       54,958       5,626  
   
 
                                   
     
See Glossary of Terms.
 
Page 21 of 31

 


 

Last Updated 2/1/2006
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  
   
POWER SUPPLY ADJUSTOR (“PSA”)—REGULATED ELECTRICITY SEGMENT (Dollars in Millions)
                                               
   
 
                                               
43  
Deferred fuel and purchased power regulatory asset — beginning balance
  $     $     $     $     $     $  
44  
Deferred fuel and purchased power costs — current period
                                   
45  
Interest on deferred fuel
                                   
46  
Amounts recovered through revenues
                                   
   
 
                                   
47  
Deferred fuel and purchased power regulatory asset — ending balance
  $     $     $     $     $     $  
   
 
                                   
   
 
                                               
   
MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)
                                               
   
 
                                               
   
Realized and Mark-To-Market Components
                                               
48  
Electricity and other commodity sales, realized (a)
  $ 25     $ 20     $ 4     $ 16     $ 65     $ (56 )
49  
Mark-to-market reversals on realized sales (b)
    (3 )     1       (3 )     (1 )     (6 )     35  
50  
Change in mark-to-market value of forward sales
    (3 )     (1 )     (3 )     (5 )     (12 )     (64 )
   
 
                                   
51  
Total gross margin
  $ 19     $ 20     $ (2 )   $ 10     $ 47     $ (85 )
   
 
                                   
   
 
                                               
   
By Pinnacle West Entity
                                               
   
 
                                               
52  
Parent company marketing and trading division
  $ 2     $ 4     $ (2 )   $ (9 )   $ (5 )   $ (95 )
53  
APS
    6       4       (6 )     4       8     $ 6  
54  
Pinnacle West Energy
    (1 )                 9       8     $ 4  
55  
APS Energy Services
    12       12       6       6       36     $  
   
 
                                   
56  
Total gross margin
  $ 19     $ 20     $ (2 )   $ 10     $ 47     $ (85 )
   
 
                                   
 
(a)   Net effect on pretax gross margin from realization of prior-period mark-to-market included in line 48 and in line 49 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 48 are included in line 49. For example, line 49 shows that a prior-period mark-to-market gain of $6 million was transferred to “realized” for the total year 2003. A $6 million realized gain is included in the $65 million on line 48 for the total year 2003.
 
(b)   Quarterly amounts do not total to annual amounts because of intra-year mark-to-market eliminations.
     
See Glossary of Terms.
 
Page 22 of 31

 


 

Last Updated 2/1/2006
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
                                               
57  
Residential
    827,937       821,331       824,655       839,539       828,366       26,565  
58  
Business
    101,999       102,601       103,262       104,521       103,096       2,868  
   
 
                                   
59  
Total
    929,936       923,932       927,917       944,060       931,462       29,432  
60  
Wholesale customers
    65       66       66       66       66       (1 )
   
 
                                   
61  
Total customers
    930,001       923,998       927,983       944,126       931,528       29,431  
   
 
                                   
   
 
                                               
62  
Customer growth (% over prior year)
    3.3 %     3.1 %     3.2 %     3.4 %     3.3 %     0.2 %
   
 
                                               
   
RETAIL SALES (GWH)—WEATHER NORMALIZED
                                               
   
 
                                               
63  
Residential
    2,223       2,520       3,872       2,264       10,879       389  
64  
Business
    2,886       3,485       3,858       3,174       13,403       498  
   
 
                                   
65  
Total
    5,109       6,005       7,730       5,438       24,282       887  
   
 
                                   
   
 
                                               
   
RETAIL USAGE (KWh/Average Customer)
                                               
   
 
                                               
66  
Residential
    2,541       3,096       5,004       2,828       13,457       432  
67  
Business
    27,927       33,625       37,677       30,865       130,529       1,288  
   
 
                                               
   
RETAIL USAGE—WEATHER NORMALIZED (KWh/Average Customer)
                                               
   
 
                                               
68  
Residential
    2,685       3,067       4,695       2,697       13,133       50  
69  
Business
    28,290       33,969       37,360       30,371       130,006       1,251  
   
 
                                               
   
ELECTRICITY DEMAND (MW)
                                               
   
 
                                               
70  
System peak demand
    3,569       5,571       6,332       5,124       6,332       529  
     
See Glossary of Terms.
 
Page 23 of 31

 


 

Last Updated 2/1/2006
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
                                               
71  
Nuclear
    2,306       2,047       2,230       1,732       8,315       (666 )
72  
Coal
    2,770       2,824       2,972       2,800       11,366       (690 )
73  
Gas, oil and other
    1,288       1,572       2,696       535       6,091       1,722  
   
 
                                   
74  
Total generation production
    6,364       6,443       7,898       5,067       25,772       366  
   
 
                                   
   
Purchased power
                                               
75  
Firm load
    (12 )     606       1,099       1,418       3,111       1,492  
76  
Marketing and trading
    6,489       6,527       7,498       7,235       27,749       4,045  
   
 
                                   
77  
Total purchased power
    6,477       7,133       8,597       8,653       30,860       5,537  
   
 
                                   
78  
Total energy sources
    12,841       13,576       16,495       13,720       56,632       5,903  
   
 
                                   
   
 
                                               
   
POWER PLANT PERFORMANCE
                                               
   
 
                                               
   
Capacity Factors
                                               
79  
Nuclear
    98 %     86 %     93 %     72 %     87 %     (7 )%
80  
Coal
    75 %     75 %     79 %     74 %     76 %     (4 )%
81  
Gas, oil and other
    26 %     31 %     44 %     9 %     28 %     1 %
82  
System average
    58 %     59 %     64 %     41 %     55 %     (8 )%
   
 
                                               
   
Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
                                               
83  
Nuclear
    31       136       61       297       131       64  
84  
Coal
    292       254       277       253       269       102  
85  
Gas
    189       148       154       338       205       157  
   
 
                                   
86  
Total
    512       538       492       888       605       323  
   
 
                                   
     
See Glossary of Terms.
 
Page 24 of 31

 


 

Last Updated 2/1/2006
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
                                               
87  
Palo Verde
  $ 49.66     $ 48.88     $ 52.88     $ 42.98     $ 48.60     $ 16.32  
88  
SP15
  $ 54.35     $ 50.73     $ 53.54     $ 46.88     $ 51.38     $ 17.16  
   
Off-Peak
                                               
89  
Palo Verde
  $ 36.09     $ 25.48     $ 36.08     $ 30.48     $ 32.03     $ 12.14  
90  
SP15
  $ 39.70     $ 28.27     $ 37.81     $ 32.85     $ 34.66     $ 12.97  
   
 
                                               
   
WEATHER INDICATORS
                                               
   
 
                                               
   
Actual
                                               
91  
Cooling degree-days
    76       1,550       2,701       572       4,899       24  
92  
Heating degree-days
    349       17             370       736       (64 )
93  
Average humidity
    44 %     18 %     30 %     34 %     31 %     4 %
   
10-Year Averages
                                               
94  
Cooling degree-days
    80       1,491       2,540       420       4,531        
95  
Heating degree-days
    521       36             415       972        
96  
Average humidity
    43 %     24 %     33 %     40 %     35 %     0 %
   
 
                                               
   
ECONOMIC INDICATORS
                                               
   
 
                                               
   
Building Permits — Metro Phoenix (b)
                                               
97  
Single-family
    8,030       10,613       11,191       9,817       39,651       5,339  
98  
Multi-family
    863       2,053       1,231       2,580       6,727       (347 )
   
 
                                   
99  
Total
    8,893       12,666       12,422       12,397       46,378       4,992  
   
 
                                   
   
 
                                               
   
Arizona Job Growth (c)
                                               
100  
Payroll job growth (% over prior year)
    1.1 %     0.9 %     1.5 %     2.0 %     1.4 %     1.4 %
101  
Unemployment rate (%, seasonally adjusted)
    5.8 %     5.9 %     5.7 %     5.3 %     5.7 %     (0.5 )%
 
Sources:  
 
(a)   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 25 of 31

 

EX-99.6 8 p71793exv99w6.htm EXHIBIT 99.6 exv99w6
 

Exhibit 99.6

Last Updated 2/1/2006
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 )     (2 )           (5 )     (5 )
6  
Parent Company
    17       (6 )     8       4       23       (12 )
   
 
                                   
 
7  
Income From Continuing Operations
    53       69       109       5       236       (91 )
 
8  
Income (Loss) From Discontinued Operations — Net of Tax
    1       6       (8 )     (20 )     (21 )     (21 )
9  
Cumulative Effect of Change in Accounting — Net of Tax
                      (66 )     (66 )     (51 )
   
 
                                   
   
 
                                               
10  
Net Income
  $ 54     $ 75     $ 101     $ (81 )   $ 149     $ (163 )
   
 
                                   
   
 
                                               
   
EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
                                               
   
 
                                               
11  
Arizona Public Service
  $ 0.37     $ 0.76     $ 1.02     $ 0.19     $ 2.35     $ (0.95 )
12  
Pinnacle West Energy
    0.01       0.01       0.12       (0.37 )     (0.23 )     (0.44 )
13  
APS Energy Services
    0.03       0.13       0.08       0.09       0.33       0.45  
14  
SunCor
    0.02       0.02       (0.01 )     0.09       0.13       0.09  
15  
El Dorado
          (0.04 )     (0.02 )           (0.06 )     (0.06 )
16  
Parent Company
    0.20       (0.07 )     0.10       0.07       0.26       (0.16 )
   
 
                                   
   
 
                                               
17  
Income From Continuing Operations
    0.63       0.81       1.29       0.07       2.78       (1.07 )
   
 
                                               
18  
Income (Loss) From Discontinued Operations — Net of Tax
          0.08       (0.10 )     (0.24 )     (0.25 )     (0.25 )
19  
Cumulative Effect of Change in Accounting — Net of Tax
                      (0.77 )     (0.77 )     (0.60 )
   
 
                                   
   
 
                                               
20  
Net Income
  $ 0.63     $ 0.89     $ 1.19     $ (0.94 )   $ 1.76     $ (1.92 )
   
 
                                   
 
21  
BOOK VALUE PER SHARE
  $ 30.06     $ 30.54     $ 31.39     $ 29.40     $ 29.40     $ (0.06 )
   
 
                                               
   
COMMON SHARES OUTSTANDING (Thousands)
                                               
22  
Average — Diluted
    84,884       84,926       84,797       85,302       84,964       34  
23  
End of Period
    84,789       84,768       84,756       91,255       91,255       6,531  
     
See Glossary of Terms.
 
Page 26 of 31

 


 

Last Updated 2/1/2006
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
                                               
24  
Residential
  $ 171     $ 226     $ 337     $ 172     $ 906     $ (9 )
25  
Business
    195       251       270       212       928       (24 )
   
 
                                   
26  
Total retail
    366       477       607       384       1,834       (33 )
   
Wholesale revenue on delivered electricity
                                               
27  
Traditional contracts
    2       1       3       3       9       (64 )
28  
Off-system sales
                                   
29  
Transmission for others
    6       6       6       12       30       4  
30  
Other miscellaneous services
    4       2       4       7       17       (1 )
   
 
                                   
31  
Total regulated electricity
    378       486       620       406       1,890       (94 )
   
 
                                               
   
MARKETING AND TRADING SEGMENT
                                               
32  
Electricity and other commodity sales
    62       41       83       101       287       (183 )
   
 
                                   
33  
Total operating electric revenues
  $ 440     $ 527     $ 703     $ 507     $ 2,177     $ (277 )
   
 
                                   
   
 
                                               
   
ELECTRIC SALES (GWH)
                                               
   
 
                                               
   
REGULATED ELECTRICITY SEGMENT
                                               
   
Retail sales
                                               
34  
Residential
    2,141       2,441       3,806       2,056       10,444       109  
35  
Business
    2,771       3,429       3,681       3,036       12,917       (147 )
   
 
                                   
36  
Total retail
    4,912       5,870       7,487       5,092       23,361       (38 )
   
Wholesale electricity delivered
                                               
37  
Traditional contracts
    71       121       142       140       474       (739 )
38  
Off-system sales
                                   
39  
Retail load hedge management
    158       230       1,958       296       2,642       (398 )
   
 
                                   
40  
Total regulated electricity
    5,141       6,221       9,587       5,528       26,477       (1,175 )
   
 
                                               
   
MARKETING AND TRADING SEGMENT
                                               
41  
Wholesale sales of electricity
    4,212       4,443       7,104       7,096       22,855       6,854  
   
 
                                   
42  
Total electric sales
    9,353       10,664       16,691       12,624       49,332       5,679  
   
 
                                   
     
See Glossary of Terms.
 
Page 27 of 31

 


 

Last Updated 2/1/2006
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  
   
POWER SUPPLY ADJUSTOR (“PSA”) - - REGULATED ELECTRICITY SEGMENT (Dollars in Millions)
                                               
   
 
                                               
43  
Deferred fuel and purchased power regulatory asset — beginning balance
  $     $     $     $     $     $  
44  
Deferred fuel and purchased power costs — current period
                                   
45  
Interest on deferred fuel
                                   
46  
Amounts recovered through revenues
                                   
   
 
                                   
47  
Deferred fuel and purchased power regulatory asset — ending balance
  $     $     $     $     $     $  
   
 
                                   
   
 
                                               
   
MARKETING AND TRADING SEGMENT PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions)
                                               
   
 
                                               
   
Realized and Mark-To-Market Components
                                               
48  
Electricity and other commodity sales, realized (a)
  $ 39     $ 25     $ 19     $ 38     $ 121     $ (62 )
49  
Mark-to-market reversals on realized sales (b)
    (22 )     (9 )     2       (8 )     (41 )     (47 )
50  
Change in mark-to-market value of forward sales
    23       3       23       (1 )     52       (76 )
   
 
                                   
51  
Total gross margin
  $ 40     $ 19     $ 44     $ 29     $ 132     $ (185 )
   
 
                                   
   
 
                                               
   
By Pinnacle West Entity
                                               
   
 
                                               
52  
Parent company marketing and trading division
  $ 35     $ 9     $ 32     $ 14     $ 90     $ 12  
53  
APS
    1             1             2       (233 )
54  
Pinnacle West Energy
                      4       4       4  
55  
APS Energy Services
    4       10       11       11       36       32  
   
 
                                   
56  
Total gross margin
  $ 40     $ 19     $ 44     $ 29     $ 132     $ (185 )
   
 
                                   
 
(a)   Net effect on pretax gross margin from realization of prior-period mark-to-market included in line 48 and in line 49 is zero. Realization of prior-period mark-to-market relates to cash flow recognition, not earnings recognition. The opposites of amounts included in line 48 are included in line 49. For example, line 49 shows that a prior-period mark-to-market gain of $41 million was transferred to “realized” for the total year 2002. A $41 million realized gain is included in the $121 million on line 48 for total year 2002.
 
(b)   Quarterly amounts do not total to annual amounts because of intra-year mark-to-market eliminations.
     
See Glossary of Terms.
 
Page 28 of 31

 


 

Last Updated 2/1/2006
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
                                               
57  
Residential
    801,000       795,681       798,590       811,930       801,801       25,462  
58  
Business
    99,335       100,096       100,318       101,177       100,228       2,030  
   
 
                                   
59  
Total
    900,335       895,777       898,908       913,107       902,029       27,492  
60  
Wholesale customers
    67       67       67       67       67       1  
   
 
                                   
61  
Total customers
    900,402       895,844       898,975       913,174       902,096       27,493  
   
 
                                   
   
 
                                               
62  
Customer growth (% over prior year)
    3.2 %     3.2 %     3.1 %     3.2 %     3.1 %     (0.5 )%
   
 
                                               
   
RETAIL SALES (GWH) — WEATHER NORMALIZED
                                               
   
 
                                               
63  
Residential
    2,148       2,461       3,746       2,135       10,490       641  
64  
Business
    2,776       3,410       3,696       3,024       12,905       86  
   
 
                                   
65  
Total
    4,924       5,871       7,441       5,159       23,395       727  
   
 
                                   
   
 
                                               
   
RETAIL USAGE (KWh/Average Customer)
                                               
   
 
                                               
66  
Residential
    2,673       3,068       4,766       2,532       13,025       (287 )
67  
Business
    27,896       34,258       36,691       30,011       129,241       (4,384 )
   
 
                                               
   
RETAIL USAGE — WEATHER NORMALIZED (KWh/Average Customer)
                                               
   
 
                                               
68  
Residential
    2,681       3,093       4,690       2,630       13,083       396  
69  
Business
    27,943       34,065       36,839       29,885       128,754       (1,788 )
   
 
                                               
   
ELECTRICITY DEMAND (MW)
                                               
   
 
                                               
70  
System peak demand
    3,921       5,425       5,803       3,828       5,803       116  
     
See Glossary of Terms.
 
Page 29 of 31

 


 

Last Updated 2/1/2006
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
                                               
71  
Nuclear
    2,257       2,242       2,387       2,095       8,981       596  
72  
Coal
    2,890       2,703       3,280       3,183       12,056       (516 )
73  
Gas, oil and other
    337       659       1,918       1,455       4,369       375  
   
 
                                   
74  
Total generation production
    5,484       5,604       7,585       6,733       25,406       455  
   
 
                                   
   
Purchased power
                                               
75  
Firm load
    70       846       859       (157 )     1,619       (1,342 )
76  
Marketing and trading
    3,993       4,599       8,771       6,340       23,704       6,051  
   
 
                                   
77  
Total purchased power
    4,063       5,445       9,630       6,183       25,323       4,709  
   
 
                                   
78  
Total energy sources
    9,547       11,049       17,215       12,916       50,729       5,164  
   
 
                                   
   
 
                                               
   
POWER PLANT PERFORMANCE
                                               
   
 
                                               
   
Capacity Factors
                                               
79  
Nuclear
    96 %     95 %     100 %     87 %     94 %     6 %
80  
Coal
    78 %     72 %     87 %     84 %     80 %     (4 )%
81  
Gas, oil and other
    12 %     20 %     38 %     29 %     27 %     (10 )%
82  
System average
    62 %     62 %     69 %     60 %     63 %     (7 )%
   
 
                                               
   
Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
                                               
83  
Nuclear
    62       66       12       129       67       (60 )
84  
Coal
    184       279       88       116       167        
85  
Gas
    12       18       106       54       48       16  
   
 
                                   
86  
Total
    258       363       206       299       282       (44 )
   
 
                                   
     
See Glossary of Terms.
 
Page 30 of 31

 


 

Last Updated 2/1/2006
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
                                               
87  
Palo Verde
  $ 26.86     $ 30.65     $ 35.45     $ 36.18     $ 32.28     $ (86.13 )
88  
SP15
  $ 28.46     $ 31.51     $ 35.55     $ 41.35     $ 34.22     $ (85.77 )
   
Off-Peak
                                               
89  
Palo Verde
  $ 22.17     $ 14.10     $ 18.21     $ 25.09     $ 19.89     $ (41.68 )
90  
SP15
  $ 22.76     $ 15.95     $ 19.54     $ 28.52     $ 21.69     $ (51.79 )
   
 
                                               
   
WEATHER INDICATORS
                                               
   
 
                                               
   
Actual
                                               
91  
Cooling degree-days
    89       1,741       2,647       398       4,875       (247 )
92  
Heating degree-days
    472                   328       800       (360 )
93  
Average humidity
    28 %     16 %     27 %     38 %     27 %     (9 )%
   
10-Year Averages
                                               
94  
Cooling degree-days
    80       1,491       2,540       420       4,531        
95  
Heating degree-days
    521       36             415       972        
96  
Average humidity
    43 %     24 %     33 %     40 %     35 %     0 %
   
 
                                               
   
ECONOMIC INDICATORS
                                               
   
 
                                               
   
Building Permits — Metro Phoenix (b)
                                               
97  
Single-family
    7,682       9,666       8,689       8,275       34,312       1,447  
98  
Multi-family
    1,249       2,005       2,662       1,158       7,074       (1,930 )
   
 
                                   
99  
Total
    8,931       11,671       11,351       9,433       41,386       (483 )
   
 
                                   
   
 
                                               
   
Arizona Job Growth (c)
                                               
100  
Payroll job growth (% over prior year)
    (0.8 )%     (0.2 )%     (0.1 )%     1.1 %     0.0 %     (1.0 )%
101  
Unemployment rate (%, seasonally adjusted)
    6.3 %     6.2 %     6.1 %     6.0 %     6.2 %     1.5 %
 
Sources:
 
(a)   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 31 of 31

 

EX-99.7 9 p71793exv99w7.htm EXHIBIT 99.7 exv99w7
 

Exhibit 99.7

LAST UPDATED 2/1/06
Pinnacle West Capital Corporation
Earnings Variance Explanations
for the Periods Ended December 31, 2005 and 2004
     This discussion explains the changes in our consolidated earnings for the three-month and twelve-month periods ended December 31, 2005 and 2004. Unaudited Condensed Consolidated Statements of Income for the three months and twelve months ended December 31, 2005 and 2004 follow this discussion. We will file our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 on or before March 16, 2006. We suggest that this discussion be read in connection with the Pinnacle West Capital Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and the Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2005, June 30, 2005 and September 30, 2005. Additional operating and financial statistics and a glossary of terms are available on our website (www.pinnaclewest.com). We have reclassified certain prior-period amounts to conform to our current-period presentation.
EARNINGS CONTRIBUTION BY 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 (primarily electric service to Native Load customers) and related activities and includes electricity generation, transmission and distribution;
 
    our real estate segment, which consists of SunCor’s real estate development and investment activities; and
 
    our marketing and trading segment, which consists of our competitive energy business activities, including wholesale marketing and trading and APS Energy Services’ commodity-related energy services.

 


 

     The following table summarizes net income for the three months and twelve months ended December 31, 2005 and 2004 (dollars in millions):
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2005     2004     2005     2004  
Regulated electricity
  $ 15     $ 1     $ 167     $ 152  
Real estate
    10       30       35       40  
Marketing and trading
    (2 )     6       16       29  
Other (a)
    1       1       5       26  
 
                       
Income from continuing operations
    24       38       223       247  
Discontinued operations — net of tax:
                               
Real estate (b)
          1       17       4  
Marketing and trading (c)
    (3 )     (8 )     (67 )     (12 )
Other (d)
          3       3       4  
 
                       
Net income
  $ 21     $ 34     $ 176     $ 243  
 
                       
  (a)   The twelve months ended December 31, 2004 includes a $21 million after-tax gain related to the sale of a limited partnership interest in the Phoenix Suns.
 
  (b)   Primarily relates to the sale of commercial properties.
 
  (c)   See “Sale of Silverhawk” below.
 
  (d)   Relates to the 2004 sale of NAC.
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. “Gross margin” is a “non-GAAP financial measure,” as defined in accordance with Securities and Exchange Commission rules. Exhibit 99.10 reconciles this non-GAAP financial measure to operating income, which is the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We view gross margin as an important performance measure of the core profitability of our operations. This measure is a key component of our internal financial reporting and is used by our management in analyzing our business segments. We believe that investors benefit from having access to the same financial measures that our management uses.
Sale of Silverhawk
     In June 2005, we entered into an agreement to sell our 75% interest in the Silverhawk Power Station to Nevada Power Company. As a result of the sale, we recorded an after-tax loss from discontinued operations of approximately $56 million in the second quarter of 2005. The marketing and trading segment discontinued operations in the chart above include this loss as well as revenues and expenses related to the operations of Silverhawk. The sale was completed on January 10, 2006.

2


 

Deferred Fuel and Purchased Power Costs
     The settlement of APS’ 2003 general retail rate case became effective April 1, 2005. As part of the settlement, the ACC approved a 4.2% annual retail rate increase and a power supply adjustor (“PSA”) that provides mechanisms for adjusting rates to reflect variations in fuel and purchased power costs. In accordance with the PSA, APS defers for future rate recovery 90% of the difference between actual fuel and purchased power costs, net of Off-System Sales margins, and the amount for such costs currently included in base rates. The current base rate for fuel and purchased power costs is based on 2003 price levels and spot prices for natural gas and wholesale power have increased over 40% since then. Although APS defers actual fuel and purchased power costs on a current basis, APS’ recovery of the deferrals from its ratepayers is subject to annual PSA adjustments and ACC approval of periodic surcharge applications.
     Actual fuel and purchased power costs are higher than prior periods primarily due to higher fuel prices and increased plant outage days.
     The amount of APS’ pretax accumulated PSA deferrals of realized costs at December 31, 2005 was $173 million, including interest. This amount includes $111 million of PSA deferrals that are expected to be recovered through the PSA annual adjustor rate that became effective February 1, 2006.
Operating Results — Three-month period ended December 31, 2005 compared with three-month period ended December 31, 2004
     Our consolidated net income for the three months ended December 31, 2005 was $21 million compared with $34 million for the prior-year period. The current-quarter net income included an after-tax net loss from discontinued operations of $3 million compared with an after-tax loss of $4 million in the prior-year quarter, both of which are primarily related to Silverhawk operations (see “Sale of Silverhawk” above). Income from continuing operations decreased $14 million in the period-to-period comparison, reflecting the following changes in earnings by segment:
    Regulated Electricity Segment — Income from continuing operations increased approximately $14 million primarily due to deferred fuel and purchased power costs; higher retail sales volumes due to customer growth; lower depreciation due to lower depreciation rates; a retail price increase effective April 1, 2005; and lower interest expense primarily due to lower outstanding debt balances. These positive factors were partially offset by higher fuel and purchased power costs due to more plant outage days and higher prices, and higher operations and maintenance expense related to generation and customer service.
 
    Real Estate Segment — Income from continuing operations decreased approximately $20 million primarily due to the timing of parcel sales. Most of these sales closed earlier in 2005 than in 2004.

3


 

    Marketing and Trading Segment — Income from continuing operations decreased approximately $8 million primarily due to the absence of Off-System Sales that we began reporting in the regulated electricity segment in April 2005; lower mark-to-market gains on contracts for future delivery; and lower unit margins on competitive retail sales in California.
Additional details on the major factors that increased (decreased) net income are contained in the following table (dollars in millions).
                 
    Increase (Decrease)  
    Pretax     After Tax  
Regulated electricity segment gross margin:
               
Deferred fuel and purchased power costs (see discussion above)
  $ 29     $ 18  
Higher retail sales volumes due to customer growth, excluding weather effects
    17       10  
Retail price increase effective April 1, 2005
    10       6  
Higher fuel and purchased power costs primarily due to more plant outage days and higher prices
    (23 )     (14 )
Miscellaneous items, net
    (2 )     (1 )
 
           
Net increase in regulated electricity segment gross margin
    31       19  
 
           
Marketing and trading segment gross margin:
               
Lower realized margins on wholesale sales primarily due to the absence of sales that we began reporting in the regulated electricity segment in April 2005
    (7 )     (4 )
Lower unit margins on competitive retail sales in California
    (5 )     (3 )
Lower mark-to-market gains on contracts for future delivery due to changes in forward prices
    (4 )     (3 )
 
           
Net decrease in marketing and trading segment gross margin
    (16 )     (10 )
 
           
Net increase in gross margin for regulated electricity and marketing and trading segments
    15       9  
Lower real estate segment contribution primarily due to decreased parcel sales in the quarter related to the timing of closings in 2005 compared to 2004
    (33 )     (20 )
Higher operations and maintenance expense primarily related to increased generation and customer service costs, including regulatory demand-side management programs
    (11 )     (7 )
Lower interest expense net of capitalized financing costs primarily due to lower outstanding debt balances
    6       4  
Lower depreciation and amortization due to lower depreciation rates, partially offset by increased depreciable assets
    11       7  
Miscellaneous items, net
    (6 )     (7 )
 
           
Net decrease in income from continuing operations
  $ (18 )     (14 )
 
             
Discontinued operations primarily related to Silverhawk
            1  
 
             
Net decrease in net income
          $ (13 )
 
             

4


 

Regulated Electricity Segment Revenues
     Regulated electricity segment revenues were $59 million higher for the three months ended December 31, 2005 compared with the prior-year period primarily as a result of:
    a $25 million increase in retail revenues related to customer growth, excluding weather effects;
 
    a $20 million increase in Off-System Sales primarily due to sales previously reported in the marketing and trading segment that were classified beginning in April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate case settlement;
 
    a $10 million increase in retail revenues due to a price increase effective April 1, 2005; and
 
    a $4 million increase due to miscellaneous factors.
     Real Estate Revenues
     Real estate revenues were $58 million lower for the three months ended December 31, 2005 compared with the prior-year period primarily due to the timing of parcel sales. Most of these sales closed earlier in 2005 than in 2004.
     Marketing and Trading Segment Revenues
     Marketing and trading segment revenues were $27 million lower for the three months ended December 31, 2005 compared with the prior-year period primarily as a result of:
    a $20 million decrease in Off-System Sales due to the absence of sales previously reported in the marketing and trading segment that were classified beginning in April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate case settlement;
 
    a $7 million decrease in marketing and trading revenues due to lower sales volumes;
 
    a $5 million decrease in mark-to-market gains on forward contracts resulting from lower prices for wholesale electricity; and
 
    a $5 million increase from higher prices for competitive retail sales in California.

5


 

Operating Results — Twelve-month period ended December 31, 2005 compared with twelve-month period ended December 31, 2004
     Our consolidated net income for the year ended December 31, 2005 was $176 million compared with $243 million for the prior year. The current-year net income included an after-tax net loss from discontinued operations of $47 million compared with a $4 million after-tax loss in the prior year, which for both years is related primarily to the sale and operations of Silverhawk (see “Sale of Silverhawk” above), partially offset by sales of commercial properties at SunCor. Income from continuing operations decreased $24 million in the period-to-period comparison, reflecting the following changes in earnings by segment:
    Regulated Electricity Segment — Income from continuing operations increased approximately $15 million primarily due to deferred fuel and purchased power costs; a retail price increase effective April 1, 2005; higher retail sales volumes due to customer growth; lower depreciation due to lower depreciation rates; lower regulatory asset amortization; and effects of weather on retail sales. These positive factors were partially offset by the regulatory disallowance of plant costs in accordance with the APS retail rate case settlement; higher fuel and purchased power costs primarily due to higher prices and more plant outage days; higher operations and maintenance expense related to generation and customer service; and higher property taxes due to increased plant in service.
 
    Marketing and Trading Segment — Income from continuing operations decreased approximately $13 million primarily due to lower unit margins on competitive retail sales in California; the absence of Off-System Sales that we began reporting in the regulated electricity segment in April 2005; and lower mark-to-market gains on contracts for future delivery.
 
    Real Estate Segment — Income from continuing operations decreased approximately $5 million primarily due to decreased parcel sales partially offset by increased margins on home sales. Income from discontinued real estate operations increased $13 million due to higher commercial property sales.
 
    Other Segment — Income from continuing operations decreased approximately $21 million primarily due to an after-tax gain related to the sale of a limited partnership interest in the Phoenix Suns recorded in the prior year.

6


 

Additional details on the major factors that increased (decreased) net income are contained in the following table (dollars in millions).
                 
    Increase (Decrease)  
    Pretax     After Tax  
Regulated electricity segment gross margin:
               
Deferred fuel and purchased power costs (see discussion above)
  $ 171     $ 104  
Retail price increase effective April 1, 2005
    65       40  
Higher retail sales volumes due to customer growth, excluding weather effects
    58       35  
Effects of weather on retail sales
    14       9  
Higher fuel and purchased power costs primarily due to higher prices and more plant outage days
    (126 )     (77 )
Miscellaneous items, net
    (8 )     (5 )
 
           
Net increase in regulated electricity segment gross margin
    174       106  
 
           
Marketing and trading segment gross margin:
               
Lower unit margins on competitive retail sales in California
    (13 )     (8 )
Lower realized margins on wholesale sales primarily due to the absence of sales that we began reporting in the regulated segment in April 2005
    (4 )     (3 )
Lower mark-to-market gains on contracts for future delivery due to changes in forward prices
    (4 )     (2 )
 
           
Net decrease in marketing and trading segment gross margin
    (21 )     (13 )
 
           
Net increase in gross margin for regulated electricity and marketing and trading segments
    153       93  
Regulatory disallowance, in accordance with the APS retail rate case settlement
    (139 )     (84 )
Lower real estate segment contribution primarily related to decreased parcel sales, partially offset by increased margins on home sales
    (8 )     (5 )
Lower other income primarily due to sale of limited partnership interest in Phoenix Suns recorded in the prior year, partially offset by higher interest income
    (30 )     (18 )
Operations and maintenance increases primarily due to:
               
Generation costs, including maintenance and overhauls
    (20 )     (12 )
Customer service costs, including regulatory demand-side management programs and planned maintenance
    (20 )     (12 )
Miscellaneous items, net
    (4 )     (2 )
Depreciation and amortization decreases primarily due to:
               
Lower regulatory asset amortization
    22       13  
Lower depreciation rates, partially offset by increased depreciable assets
    22       13  
Higher property taxes primarily due to increased plant in service
    (11 )     (7 )
Miscellaneous items, net
    2       (3 )
 
           
Net decrease in income from continuing operations
  $ (33 )     (24 )
 
             
Discontinued operations related to:
               
Sale of Silverhawk (see discussion above)
            (56 )
Sales of real estate assets and other
            13  
 
             
Net decrease in net income
          $ (67 )
 
             

7


 

     Regulated Electricity Segment Revenues
     Regulated electricity segment revenues were $202 million higher for the year ended December 31, 2005 compared with the prior year primarily as a result of:
    an $81 million increase in retail revenues related to customer growth, excluding weather effects;
 
    a $65 million increase in retail revenues due to a price increase effective April 1, 2005;
 
    a $40 million increase in Off-System Sales primarily resulting from sales previously reported in the marketing and trading segment that were classified beginning in April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate case settlement;
 
    an $11 million increase in retail revenues related to weather; and
 
    a $5 million increase due to miscellaneous factors.
     Marketing and Trading Segment Revenues
     Marketing and trading segment revenues were $49 million lower for the year ended December 31, 2005 compared with the prior year primarily as a result of:
    a $40 million decrease in Off-System Sales due to the absence of sales previously reported in the marketing and trading segment that were classified beginning in April 2005 as sales in the regulated electricity segment in accordance with the APS retail rate case settlement;
 
    a $4 million decrease in mark-to-market gains on forward contracts resulting from lower volumes;
 
    a $3 million decrease in marketing and trading revenues due to lower sales volumes; and
 
    a $2 million decrease from lower volumes of competitive retail sales in California.
     Real Estate Revenues
     Real estate revenues were $12 million lower for the year ended December 31, 2005 compared with the prior year primarily due to decreased parcel sales, partially offset by increased home sales at SunCor.
Other Revenues
     Other revenues were $18 million higher for the year ended December 31, 2005 compared to the prior year primarily due to increased sales of energy-related products and services by APS Energy Services.

8


 

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)
(in thousands, except per share amounts)
                                         
    THREE MONTHS ENDED                
    DECEMBER 31,     Increase (Decrease)          
    2005     2004     Amount     Percent          
Operating Revenues
                                       
Regulated electricity segment
  $ 488,035     $ 429,295     $ 58,740       13.7 %     B  
Marketing and trading segment
    84,098       110,521       (26,423 )     23.9 %     W  
Real estate segment
    105,081       163,553       (58,472 )     35.8 %     W  
Other revenues
    14,458       9,912       4,546       45.9 %     B  
 
                                 
Total
    691,672       713,281       (21,609 )     3.0 %     W  
 
                                 
Operating Expenses
                                       
Regulated electricity segment fuel and purchased power
    152,609       125,024       27,585       22.1 %     W  
Marketing and trading segment fuel and purchased power
    77,744       88,151       (10,407 )     11.8 %     B  
Operations and maintenance
    168,706       157,732       10,974       7.0 %     W  
Real estate segment operations
    87,811       108,634       (20,823 )     19.2 %     B  
Depreciation and amortization
    85,622       96,655       (11,033 )     11.4 %     B  
Taxes other than income taxes
    28,512       27,064       1,448       5.4 %     W  
Other expenses
    12,536       8,215       4,321       52.6 %     W  
Regulatory disallowance
    (4,655 )           (4,655 )     100.0 %     B  
 
                                 
Total
    608,885       611,475       (2,590 )     0.4 %     B  
 
                                 
Operating Income
    82,787       101,806       (19,019 )     18.7 %     W  
 
                                 
Other
                                       
Allowance for equity funds used during construction
    2,784       2,026       758       37.4 %     B  
Other income
    5,505       3,309       2,196       66.4 %     B  
Other expense
    (13,895 )     (7,066 )     (6,829 )     96.6 %     W  
 
                                 
Total
    (5,606 )     (1,731 )     (3,875 )     223.9 %     W  
 
                                 
Interest Expense
                                       
Interest charges
    42,267       48,463       (6,196 )     12.8 %     B  
Capitalized interest
    (1,884 )     (2,774 )     890       32.1 %     W  
 
                                 
Total
    40,383       45,689       (5,306 )     11.6 %     B  
 
                                 
Income From Continuing Operations Before Income Taxes
    36,798       54,386       (17,588 )     32.3 %     W  
Income Taxes
    13,029       16,666       (3,637 )     21.8 %     B  
 
                                 
Income From Continuing Operations
    23,769       37,720       (13,951 )     37.0 %     W  
Loss From Discontinued Operations Net of Income Taxes
    (2,422 )     (3,991 )     1,569       39.3 %     B  
 
                                 
Net Income
  $ 21,347     $ 33,729     $ (12,382 )     36.7 %     W  
 
                                 
Weighted-Average Common Shares Outstanding — Basic
    98,982       91,620       7,362       8.0 %        
Weighted-Average Common Shares Outstanding — Diluted
    99,050       91,779       7,271       7.9 %        
Earnings Per Weighted-Average Common Share Outstanding
                                       
Income From Continuing Operations — Basic
  $ 0.24     $ 0.41     $ (0.17 )     41.5 %     W  
Net Income — Basic
  $ 0.22     $ 0.37     $ (0.15 )     40.5 %     W  
Income From Continuing Operations — Diluted
  $ 0.24     $ 0.41     $ (0.17 )     41.5 %     W  
Net Income — Diluted
  $ 0.22     $ 0.37     $ (0.15 )     40.5 %     W  
Certain prior-year amounts have been reclassified to conform to the 2005 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)          
    2005     2004     Amount     Percent          
Operating Revenues
                                       
Regulated electricity segment
  $ 2,237,145     $ 2,035,247     $ 201,898       9.9 %     B  
Marketing and trading segment
    351,558       400,628       (49,070 )     12.2 %     W  
Real estate segment
    338,031       350,315       (12,284 )     3.5 %     W  
Other revenues
    61,221       42,816       18,405       43.0 %     B  
 
                                 
Total
    2,987,955       2,829,006       158,949       5.6 %     B  
 
                                 
Operating Expenses
                                       
Regulated electricity segment fuel and purchased power
    595,141       567,433       27,708       4.9 %     W  
Marketing and trading segment fuel and purchased power
    293,091       320,667       (27,576 )     8.6 %     B  
Operations and maintenance
    635,827       592,320       43,507       7.3 %     W  
Real estate segment operations
    278,366       284,194       (5,828 )     2.1 %     B  
Depreciation and amortization
    347,652       391,597       (43,945 )     11.2 %     B  
Taxes other than income taxes
    132,040       120,722       11,318       9.4 %     W  
Other expenses
    51,987       34,108       17,879       52.4 %     W  
Regulatory disallowance
    138,562             138,562       100.0 %     W  
 
                                 
Total
    2,472,666       2,311,041       161,625       7.0 %     W  
 
                                 
Operating Income
    515,289       517,965       (2,676 )     0.5 %     W  
 
                                 
Other
                                       
Allowance for equity funds used during construction
    11,191       4,885       6,306       129.1 %     B  
Other income
    23,360       53,289       (29,929 )     56.2 %     W  
Other expense
    (26,716 )     (21,340 )     (5,376 )     25.2 %     W  
 
                                 
Total
    7,835       36,834       (28,999 )     78.7 %     W  
 
                                 
Interest Expense
                                       
Interest charges
    185,087       183,527       1,560       0.9 %     W  
Capitalized interest
    (12,018 )     (11,460 )     (558 )     4.9 %     B  
 
                                 
Total
    173,069       172,067       1,002       0.6 %     W  
 
                                 
Income From Continuing Operations Before Income Taxes
    350,055       382,732       (32,677 )     8.5 %     W  
Income Taxes
    126,892       136,142       (9,250 )     6.8 %     B  
 
                                 
Income From Continuing Operations
    223,163       246,590       (23,427 )     9.5 %     W  
Loss From Discontinued Operations Net of Income Taxes
    (46,896 )     (3,395 )     (43,501 )     1281.3 %     W  
 
                                 
Net Income
  $ 176,267     $ 243,195     $ (66,928 )     27.5 %     W  
 
                                 
Weighted-Average Common Shares Outstanding — Basic
    96,484       91,397       5,087       5.6 %        
Weighted-Average Common Shares Outstanding — Diluted
    96,590       91,532       5,058       5.5 %        
Earnings Per Weighted-Average Common Share Outstanding
                                       
Income From Continuing Operations — Basic
  $ 2.31     $ 2.70     $ (0.39 )     14.4 %     W  
Net Income — Basic
  $ 1.83     $ 2.66     $ (0.83 )     31.2 %     W  
Income From Continuing Operations — Diluted
  $ 2.31     $ 2.69     $ (0.38 )     14.1 %     W  
Net Income — Diluted
  $ 1.82     $ 2.66     $ (0.84 )     31.6 %     W  
Certain prior-year amounts have been reclassified to conform to the 2005 presentation.
     B — Better
     W — Worse

 

EX-99.8 10 p71793exv99w8.htm EXHIBIT 99.8 exv99w8
 

Exhibit 99.8
Last updated 10/27/05
Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Glossary of Terms
     
Amounts Recovered Through Revenues
  Amounts recovered from retail customers through the power supply adjustor in the current period.
 
   
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 Value of Forward Sales
  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.
 
   
Deferred Fuel and Purchased Power Costs — Current Period
  Deferrals recorded in the period for recovery or refund to the extent actual retail fuel and purchased power costs vary from the amount included in base retail rates (currently $0.020743 per kWh).
 
   
Deferred Fuel and Purchased Power Regulatory Asset
  Balance of accumulated deferrals, net of amounts recovered through revenues, recorded for recovery or refund to the extent actual retail fuel and purchased power costs vary from the amount included in base retail rates (currently $0.020743 per kWh).
 
   
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.


 

- 2 -

     
 
   
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.
 
   
Electricity and Other Commodity Sales, Realized
  Marketing and trading gross margin related to electricity and other commodities that were delivered in the then-current period.
 
   
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 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.
 
   
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.
 
   
Mark-To-Market Reversals on Realized Sales
  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.
 
   
Megawatt (MW)
  One million watts.
 
   
Megawatt-hour (MWh)
  A unit of energy equivalent to 1,000 kilowatt-hours.
 
   
Native Load
  Retail and wholesale sales supplied under traditional cost-based rate regulation.
 
   
Off-System Sales
  Sales of electricity from generation owned or contracted by the company that is over and above the amount required to serve retail customers and traditional wholesale contracts.


 

- 4 -

     
 
   
Power Supply Adjustor (“PSA”)
  Power supply adjustor provides for recovery or refund of variations in actual fuel and purchased power costs compared with the amount included in base retail rates (currently $0.020743 per kWh) subject to certain specified parameters.
 
   
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 and Mark-to-Market Components
  Marketing and trading gross margin, before income taxes, for off-system sales 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.
 
   
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.
 
   
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.


 

- 5 -

     
 
   
Weather Normalized
  Adjusted to exclude the effects of abnormal weather patterns.
 
   
Wholesale Sales of Electricity
  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.

 

EX-99.9 11 p71793exv99w9.htm EXHIBIT 99.9 exv99w9
 

Exhibit 99.9
(NEWS REALEASE)
         
FOR IMMEDIATE RELEASE   February 1, 2006
Media Contacts:
  Alan Bunnell, (602) 250-3376   Page 1 of 2
Analyst Contacts:
  Rebecca Hickman, (602) 250-5668    
 
  Lisa Malagon, (602) 250-5671    
Web site:
  www.pinnaclewest.com    
PINNACLE WEST REPORTS 2005 EARNINGS
Lower Annual Earnings Due to Regulatory Disallowance and Higher Fuel Costs
PHOENIX — Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the year 2005 of $176.3 million, or $1.82 per diluted share of common stock. This result compares with $243.2 million, or $2.66 per share, for the year 2004.
“Our 2005 earnings reflect the deferral of the higher natural gas prices we experienced,” said Chairman Bill Post. “The Arizona Corporation Commission’s (ACC) action last week to start recovery of these deferrals is a positive step; however, the pending emergency rate case is critical to recover the higher fuels costs we are incurring to meet current customer demands today.”
Under the power supply adjustor (PSA) approved by the ACC in Arizona Public Service Company’s (APS) last rate case, 90 percent of the increases in the Company’s fuel and purchased power costs above current base rates are “deferred,” or set aside, for future recovery from customers. In accordance with generally accepted accounting principles, the deferrals positively impact earnings on a non-cash basis until the collection of such costs is approved by the ACC.
The year-to-year comparison was negatively impacted by the regulatory disallowance resulting from the ACC’s retail rate decision issued in April 2005; higher fuel and purchased power costs; a net loss from discontinued operations related to the sale of the Company’s interest in the Silverhawk Power Station; an increase in operating costs primarily related to customer service and generation; higher property taxes; lower contributions from the marketing and trading segment; and the 2004 gain on the sale of the Phoenix Suns. These factors were partially offset by the PSA deferrals; higher retail sales volumes at APS due to customer growth; higher retail electricity revenues resulting from the company’s first price increase in 14 years; improved results from the Company’s real estate operations; and lower depreciation and amortization expense.
APS reported lower net income for 2005 of $170.5 million, of which about 60 percent, or $105.5 million, was related to the PSA deferrals. This result compares with net income of $199.6 million for 2004. APS’ retail customer base grew 4.3 percent, more than three times the U.S. average, and its customers’ peak energy needs grew more than 9 percent. Moreover, in 2005, APS passed the one-million-customer mark as it added more than 41,000 new retail customers.

 


 

     
PINNACLE WEST REPORTS 2005 EARNINGS
  February 1, 2006
 
  Page 2 of 2
SunCor Development Co., Pinnacle West’s real estate subsidiary, delivered solid performance, reporting 2005 net income of $55.6 million, compared with net income of $44.7 million for 2004.
For the 2005 fourth quarter, the Company reported consolidated net income of $21.3 million, or $0.22 per diluted share of common stock. This result compares with consolidated net income of $33.7 million, or $0.37 per share, in last year’s corresponding period.
For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/financials.
Pinnacle West is a Phoenix-based company with consolidated assets of about $11 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.
Web cast and Conference Call
The Company will hold a conference call and live web cast at 4 p.m. (ET) today, Wednesday, February 1, 2006, to discuss its earnings and recent events. The web cast can be accessed at www.pinnaclewest.com/presentations and will be available for replay on the web site for 30 days. To access the live conference call by telephone, dial (877) 356-3961 and enter reservation number 3786864. A replay of the call also will be available until 11:55 p.m. (ET), Wednesday, February 8, 2006, 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,  
    2005     2004     2005     2004  
Operating Revenues
                               
Regulated electricity segment
  $ 488,035     $ 429,295     $ 2,237,145     $ 2,035,247  
Marketing and trading segment
    84,098       110,521       351,558       400,628  
Real estate segment
    105,081       163,553       338,031       350,315  
Other revenues
    14,458       9,912       61,221       42,816  
 
                       
Total
    691,672       713,281       2,987,955       2,829,006  
 
                       
 
                               
Operating Expenses
                               
Regulated electricity segment fuel and purchased power
    152,609       125,024       595,141       567,433  
Marketing and trading segment fuel and purchased power
    77,744       88,151       293,091       320,667  
Operations and maintenance
    168,706       157,732       635,827       592,320  
Real estate segment operations
    87,811       108,634       278,366       284,194  
Depreciation and amortization
    85,622       96,655       347,652       391,597  
Taxes other than income taxes
    28,512       27,064       132,040       120,722  
Other expenses
    12,536       8,215       51,987       34,108  
Regulatory disallowance
    (4,655 )           138,562        
 
                       
Total
    608,885       611,475       2,472,666       2,311,041  
 
                       
 
                               
Operating Income
    82,787       101,806       515,289       517,965  
 
                       
 
                               
Other
                               
Allowance for equity funds used during construction
    2,784       2,026       11,191       4,885  
Other income
    5,505       3,309       23,360       53,289  
Other expense
    (13,895 )     (7,066 )     (26,716 )     (21,340 )
 
                       
Total
    (5,606 )     (1,731 )     7,835       36,834  
 
                       
 
                               
Interest Expense
                               
Interest charges
    42,267       48,463       185,087       183,527  
Capitalized interest
    (1,884 )     (2,774 )     (12,018 )     (11,460 )
 
                       
Total
    40,383       45,689       173,069       172,067  
 
                       
 
                               
Income From Continuing Operations Before Income Taxes
    36,798       54,386       350,055       382,732  
 
                               
Income Taxes
    13,029       16,666       126,892       136,142  
 
                       
 
                               
Income From Continuing Operations
    23,769       37,720       223,163       246,590  
 
                               
Loss From Discontinued Operations
                               
Net of Income Taxes
    (2,422 )     (3,991 )     (46,896 )     (3,395 )
 
                       
 
                               
Net Income
  $ 21,347     $ 33,729     $ 176,267     $ 243,195  
 
                       
 
                               
Weighted-Average Common Shares Outstanding — Basic
    98,982       91,620       96,484       91,397  
 
                               
Weighted-Average Common Shares Outstanding — Diluted
    99,050       91,779       96,590       91,532  
 
                               
Earnings Per Weighted-Average Common Share Outstanding
                               
Income From Continuing Operations — Basic
  $ 0.24     $ 0.41     $ 2.31     $ 2.70  
Net Income — Basic
  $ 0.22     $ 0.37     $ 1.83     $ 2.66  
Income From Continuing Operations — Diluted
  $ 0.24     $ 0.41     $ 2.31     $ 2.69  
Net Income — Diluted
  $ 0.22     $ 0.37     $ 1.82     $ 2.66  
Certain prior-year amounts have been reclassified to conform to the 2005 presentation.

EX-99.10 12 p71793exv99w10.htm EXHIBIT 99.10 exv99w10
 

Exhibit 99.10
PINNACLE WEST CAPITAL CORPORATION
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME
(GAAP MEASURE) TO GROSS MARGIN (NON-GAAP FINANCIAL MEASURE)

(in thousands)
                                 
    THREE MONTHS ENDED        
    DECEMBER 31,     Increase (Decrease)  
    2005     2004     Pretax     After Tax  
RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN
                               
Operating Income (closest GAAP measure)
  $ 82,787     $ 101,806     $ (19,019 )   $ (11,596 )
Plus:
                               
Operations and maintenance
    168,706       157,732       10,974       6,691  
Real estate segment operations
    87,811       108,634       (20,823 )     (12,696 )
Depreciation and amortization
    85,622       96,655       (11,033 )     (6,727 )
Taxes other than income taxes
    28,512       27,064       1,448       883  
Other expenses
    12,536       8,215       4,321       2,635  
Regulatory disallowance
    (4,655 )           (4,655 )     (2,838 )
Marketing and trading segment fuel and purchased power
    77,744       88,151       (10,407 )     (6,345 )
Less:
                               
Real estate segment revenues
    105,081       163,553       (58,472 )     (35,650 )
Other revenues
    14,458       9,912       4,546       2,772  
Marketing and trading segment revenues
    84,098       110,521       (26,423 )     (16,110 )
 
                       
Regulated electricity segment gross margin
  $ 335,426     $ 304,271     $ 31,155     $ 18,995  
 
                       
RECONCILIATION OF MARKETING AND TRADING SEGMENT GROSS MARGIN
                               
Operating Income (closest GAAP measure)
  $ 82,787     $ 101,806     $ (19,019 )   $ (11,596 )
Plus:
                               
Operations and maintenance
    168,706       157,732       10,974       6,691  
Real estate segment operations
    87,811       108,634       (20,823 )     (12,696 )
Depreciation and amortization
    85,622       96,655       (11,033 )     (6,727 )
Taxes other than income taxes
    28,512       27,064       1,448       883  
Other expenses
    12,536       8,215       4,321       2,635  
Regulatory disallowance
    (4,655 )           (4,655 )     (2,838 )
Regulated electricity segment fuel and purchased power
    152,609       125,024       27,585       16,819  
Less:
                               
Real estate segment revenues
    105,081       163,553       (58,472 )     (35,650 )
Other revenues
    14,458       9,912       4,546       2,772  
Regulated electricity segment revenues
    488,035       429,295       58,740       35,814  
 
                       
Marketing and trading segment gross margin
  $ 6,354     $ 22,370     $ (16,016 )   $ (9,765 )
 
                       

 


 

PINNACLE WEST CAPITAL CORPORATION
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME
(GAAP MEASURE) TO GROSS MARGIN (NON-GAAP FINANCIAL MEASURE)

(in thousands)
                                 
    TWELVE MONTHS ENDED        
    DECEMBER 31,     Increase (Decrease)  
    2005     2004     Pretax     After Tax  
RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN
                               
Operating Income (closest GAAP measure)
  $ 515,289     $ 517,965     $ (2,676 )   $ (1,632 )
Plus:
                               
Operations and maintenance
    635,827       592,320       43,507       26,526  
Real estate segment operations
    278,366       284,194       (5,828 )     (3,553 )
Depreciation and amortization
    347,652       391,597       (43,945 )     (26,793 )
Taxes other than income taxes
    132,040       120,722       11,318       6,901  
Other expenses
    51,987       34,108       17,879       10,901  
Regulatory disallowance
    138,562             138,562       84,481  
Marketing and trading segment fuel and purchased power
    293,091       320,667       (27,576 )     (16,813 )
Less:
                               
Real estate segment revenues
    338,031       350,315       (12,284 )     (7,490 )
Other revenues
    61,221       42,816       18,405       11,222  
Marketing and trading segment revenues
    351,558       400,628       (49,070 )     (29,918 )
 
                       
Regulated electricity segment gross margin
  $ 1,642,004     $ 1,467,814     $ 174,190     $ 106,204  
 
                       
RECONCILIATION OF MARKETING AND TRADING SEGMENT GROSS MARGIN
                               
Operating Income (closest GAAP measure)
  $ 515,289     $ 517,965     $ (2,676 )   $ (1,632 )
Plus:
                               
Operations and maintenance
    635,827       592,320       43,507       26,526  
Real estate segment operations
    278,366       284,194       (5,828 )     (3,553 )
Depreciation and amortization
    347,652       391,597       (43,945 )     (26,793 )
Taxes other than income taxes
    132,040       120,722       11,318       6,901  
Other expenses
    51,987       34,108       17,879       10,901  
Regulatory disallowance
    138,562             138,562       84,481  
Regulated electricity segment fuel and purchased power
    595,141       567,433       27,708       16,894  
Less:
                               
Real estate segment revenues
    338,031       350,315       (12,284 )     (7,490 )
Other revenues
    61,221       42,816       18,405       11,222  
Regulated electricity segment revenues
    2,237,145       2,035,247       201,898       123,097  
 
                       
Marketing and trading segment gross margin
  $ 58,467     $ 79,961     $ (21,494 )   $ (13,104 )
 
                       

 

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