PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2012			2011			2010

Operating revenues	$	6,133		$	1,034		$	2,810
Operating expenses	12,125			8,811			9,880

Operating loss	(5,992		)	(7,777		)	(7,070		)

Other
Equity in earnings of subsidiaries	391,528			335,859			358,527
Other expense	(2,001		)	(1,481		)	(588		)
Total	389,527			334,378			357,939

Interest expense	4,868			8,053			14,346

Income from continuing operations	378,667			318,548			336,523
Income tax benefit	(7,079		)	(8,938		)	(9,596		)

Income from continuing operations — net of income taxes	385,746			327,486			346,119
Income (loss) from discontinued operations — net of income taxes	(4,204		)	11,987			3,934

Net income attributable to common shareholders	$	381,542		$	339,473		$	350,053

Other comprehensive income (loss) — attributable to common shareholders	38,155			7,605			(28,180		)
Total comprehensive income — attributable to common shareholders	$	419,697		$	347,078		$	321,873

See Notes to Pinnacle West’s Consolidated Financial Statements.

PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEETS

(in thousands)

	December 31,
	2012			2011
ASSETS

Current assets
Cash and cash equivalents	$	22,679		$	12,710
Customer and other receivables	92,906			62,418
Current deferred income taxes	77,771			19,068
Income tax receivable	3,350			1,804
Other current assets	25			55
Total current assets	196,731			96,055

Investments and other assets
Investments in subsidiaries	4,223,301			4,026,289
Deferred income taxes	—			27,220
Other assets	13,833			16,898
Total investments and other assets	4,237,134			4,070,407

Total Assets	$	4,433,865		$	4,166,462

LIABILITIES AND EQUITY

Current liabilities
Accounts payable	$	5,735		$	4,811
Accrued taxes	8,239			9,795
Common dividends payable	59,789			—
Other current liabilities	41,000			28,295
Total current liabilities	114,763			42,901

Long-term debt less current maturities	125,000			125,000

Deferred credits and other
Deferred income taxes	17,395			—
Pension and other postretirement liabilities	41,199			32,513
Other	33,219			35,462
Total deferred credits and other	91,813			67,975

Common stock equity
Common stock	2,462,712			2,439,530
Accumulated other comprehensive loss	(114,008		)	(152,163		)
Retained earnings	1,624,102			1,534,483
Total Pinnacle West Shareholders’ equity	3,972,806			3,821,850
Noncontrolling interests	129,483			108,736
Total Equity	4,102,289			3,930,586
Total Liabilities and Equity	$	4,433,865		$	4,166,462

See Notes to Pinnacle West’s Consolidated Financial Statements.

PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY

SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2012			2011			2010

Cash flows from operating activities
Net income	$	381,542		$	339,473		$	350,053
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries — net	(391,528		)	(335,859		)	(358,527		)
Depreciation and amortization	94			97			143
Gain on sale of energy-related business	—			(10,404		)	—
Deferred income taxes	(15,135		)	7,387			40,342
Customer and other receivables	28,763			(24,201		)	(18,175		)
Accounts payable	879			(2,677		)	7,468
Accrued taxes and income tax receivables — net	(3,103		)	7,512			59,640
Dividends received from subsidiaries	222,200			228,900			207,000
Other	(4,589		)	19,270			423
Net cash flow provided by operating activities	219,123			229,498			288,367

Cash flows from investing activities
Investments in subsidiaries	—			—			(183,544		)
Repayments of loans from subsidiaries	996			61,143			98,406
Proceeds from sale of energy-related products and services business	—			45,111			—
Advances of loans to subsidiaries	(1,200		)	(64,970		)	(119,293		)
Proceeds from sale of life insurance policies	—			9,357			—
Net cash flow provided by (used for) investing activities	(204		)	50,641			(204,431		)

Cash flows from financing activities
Issuance of long-term debt	125,000			175,000			—
Short-term borrowings and payments — net	—			(16,600		)	(132,487		)
Dividends paid on common stock	(225,075		)	(221,728		)	(216,979		)
Repayment of long-term debt	(125,000		)	(225,000		)	—
Common stock equity issuance	15,955			15,841			255,971
Other	170			(2,667		)	—
Net cash flow used for financing activities	(208,950		)	(275,154		)	(93,495		)

Net increase (decrease) in cash and cash equivalents	9,969			4,985			(9,559		)

Cash and cash equivalents at beginning of year	12,710			7,725			17,284

Cash and cash equivalents at end of year	$	22,679		$	12,710		$	7,725

See Notes to Pinnacle West’s Consolidated Financial Statements.