-----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, Ogl/ZAP9M/zQvajbyn8eiHh7CDliMhkNCgxmkXSHXl7sJ/fvmNuzGJ6PfjFUCsgM Xg0Mahe8lbszMKfc48NdtQ== 0000950147-02-000111.txt : 20020414 0000950147-02-000111.hdr.sgml : 20020414 ACCESSION NUMBER: 0000950147-02-000111 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20011214 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20020128 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: 02518122 BUSINESS ADDRESS: STREET 1: 400 E VAN BUREN ST PO BOX 52132 STREET 2: P O BOX 52132 CITY: PHOENIX STATE: AZ ZIP: 85072-2132 BUSINESS PHONE: 6022501000 MAIL ADDRESS: STREET 1: 400 E VAN BUREN ST STREET 2: PO BOX 52132 CITY: PHOENIX STATE: AZ ZIP: 85072-2132 FORMER COMPANY: FORMER CONFORMED NAME: AZP GROUP INC DATE OF NAME CHANGE: 19870506 8-K 1 pinnwest_8k.htm CURRENT REPORT DATED 12/14/2001 Pinnacle West Capital Corporation
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 14, 2001


PINNACLE WEST CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)


Arizona     1-8962     86-0512431
(State or other jurisdiction   (Commission File Number)   (IRS Employer
of incorporation)           Identification Number)
 
 
400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona     85072-3999
(Address of principal executive offices)     (Zip Code)


(602) 250-1000
(Registrant's telephone number, including area code)


NONE
(Former name or former address, if changed since last report)




Item 5.  Other Events

Arizona Supreme Court Review of Settlement Agreement

As previously disclosed, Arizona Public Service Company ("APS"), a wholly-owned subsidiary of Pinnacle West Capital Corporation (the "Company"), entered into a comprehensive Settlement Agreement on May 14, 1999 (the "Settlement Agreement") with various parties relating to the implementation of retail electric competition. On September 23, 1999, the Arizona Corporation Commission (the "ACC") approved the Settlement Agreement with some modifications. On December 13, 1999, two parties filed lawsuits challenging the ACC's approval of the Settlement Agreement. The Arizona Court of Appeals affirmed the ACC's approval of the Settlement Agreement in both of these lawsuits. One of these decisions was not appealed and has become final. The other decision, however, was appealed to the Arizona Supreme Court. On October 5, 2001, the Arizona Supreme Court agreed to hear the appeal on the singular issue of whether the ACC could itself become a party to the Settlement Agreement by virtue of its approval of the Settlement Agreement. See "Arizona Supreme Court Review of Settlement Agreement" in Item 5 of the Company's Report on Form 8-K dated October 18, 2001 (the "October 8-K").

On December 14, 2001, the Arizona Supreme Court vacated its own October 5, 2001 order accepting jurisdiction and decided to dismiss the appeal. As a result, the judicial challenges to the Settlement Agreement have terminated. Consistent with its obligations under the Settlement Agreement, on January 7, 2002, APS and the ACC filed in Maricopa County Superior Court a stipulation to dismiss all of APS' litigation pending against the ACC. On January 15, 2002, a Maricopa County Superior Court judge issued an order dismissing such litigation.

Arizona Electric Industry Restructuring

As previously disclosed, in a filing with the ACC on October 18, 2001, APS requested the ACC to (a) grant APS a partial variance from an ACC rule that would obligate APS to acquire all of its customers' "standard offer" generation requirements from the competitive market (with at least 50% of that coming from a "competitive bidding" process) starting in 2003 and (b) approve as just and reasonable a long-term purchase power agreement ("PPA") between APS and the Company. See "ACC Filing Regarding Rule Waiver and Purchase Power Agreement" in Item 5 of the October 8-K.

By letter dated January 14, 2002, the Chairman of the ACC stated that "the [ACC's] Electric Competition Rules, along with the Settlement Agreements approved for APS and [Tucson Electric Power Company], establish the framework for a transition to a retail generation competitive market." The ACC Chairman then recommended that the ACC establish a new "generic" docket to "determine if changed circumstances require the [ACC] to take another look at electric restructuring in Arizona." Matters that would be addressed by the ACC in the new docket would include:

  • Whether the ACC should continue implementation of the retail electric competition rules adopted by the ACC in 1999 in their current form or with modifications;

  • Whether the ACC should "slow the pace of the implementation of the [rules] to provide an opportunity to consider the extent to which [rule] modification and variance is in the public interest, including changing the direction to retail electric competition"; and

  • Whether the ACC should "step back from electric industry restructuring until the [ACC] is convinced that there exists a viable competitive wholesale electric market to support retail electric competition in Arizona."

On January 22, 2002 the ACC's Chief Administrative Law Judge issued a procedural order by which a generic docket was opened. The order also indicated that any decision on whether to consolidate the generic docket with the APS request, as suggested in Chairman Mundell's letter, will be made at a later time.

APS is required to transfer its generation assets and competitive services to one or more corporate affiliates on or before December 31, 2002. Consistent with that requirement, APS has been addressing the legal and regulatory requirements necessary to complete the transfer of its generation assets to Pinnacle West Energy Corporation, another wholly-owned subsidiary of the Company, on or before that date. In anticipation of APS' transfer of generation assets, Pinnacle West Energy has completed, and is in the process of developing and planning, various generation expansion projects so that APS can reliably meet the energy requirements of its Arizona customers. A modification to the competition rules as a result of the generic docket could, among other things, adversely affect APS' ability to transfer its generation assets to Pinnacle West Energy by December 31, 2002. The Company cannot predict the outcome of the generic docket or its effect on APS' October 18, 2001 filing, the existing Arizona electric competition rules, or the Settlement Agreement, or what reponsive actions APS may take.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits

(c) Exhibits.

Exhibit No.       Description
99.1   Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended December 31, 2001 and 2000.
99.2   Pinnacle West Capital Corporation consolidated statistics by quarter for 2001.
99.3   Pinnacle West Capital Corporation consolidated statistics by quarter for 2000.
99.4   Pinnacle West Capital Corporation earnings variance explanations for the periods ended December 31, 2001 and 2000 and condensed consolidated statements of income for the three months and twelve months ended December 31, 2001 and 2000.
99.5   Glossary of Terms.

Item 9.  Regulation FD Disclosure

The Company is providing quarterly consolidated statistical summaries, earnings variance explanations, and a glossory of relevant terms ("Information") to help interested parties better understand its business. 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 the 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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
    PINNACLE WEST CAPITAL CORPORATION
                                  (Registrant)
   
       
   
Dated: January 25, 2002     By:  Barbara M. Gomez                                   
              Barbara M. Gomez
              Treasurer

PINNACLE WEST CAPITAL CORPORATION
Exhibit Index to Current Report on Form 8-K

99.1   Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended December 31, 2001 and 2000.
99.2   Pinnacle West Capital Corporation consolidated statistics by quarter for 2001.
99.3   Pinnacle West Capital Corporation consolidated statistics by quarter for 2000.
99.4   Pinnacle West Capital Corporation earnings variance explanations for the periods ended December 31, 2001 and 2000 and condensed consolidated statements of income for the three months and twelve months ended December 31, 2001 and 2000.
99.5   Glossary of Terms.
EX-99.1 3 ex99-1.htm QUARTERLY CONSOLIDATED STATISTICAL SUMMARY Pinnacle West Capital Corporation - Exhibit 99.1

Exhibit 99.1 

                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                    Periods Ended December 31, 2001 and 2000

                                List of Contents




                      2001 Year-End and 4th Quarter Summary

                                 2001 by Quarter

                                 2000 by Quarter




              Please see the Glossary of Terms on this website for
                   definitions of terms used in this summary.


                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                     Periods Ended December 31, 2001 and 2000

                                                                       3 Mo. Ended December 31               12 Mo. Ended December 31
                                                                  ----------------------------------    ----------------------------------
Line                                                                2001        2000     Incr (Decr)      2001        2000     Incr (Decr)
                                                                  --------    --------   -----------    --------    --------   -----------
       EARNINGS CONTRIBUTION BY SUBSIDIARY (DOLLARS IN MILLIONS)

1         Arizona Public Service                                  $     39    $     54    $    (15)     $    281    $    307    $    (26)
2         Pinnacle West Energy                                           3          (1)          4            18          (2)         20
3         APS Energy Services                                           --          (9)          9           (10)        (13)          3
4         SunCor                                                         1           3          (2)            3          11          (8)
5         El Dorado                                                     --          (5)          5            --           2          (2)
6         Parent Company                                                (7)         --          (7)           35          (3)         38
                                                                  --------    --------    --------      --------    --------    --------

7            Income Before Accounting Change                            36          42          (6)          327         302          25

          Cumulative Effect of a Change in Accounting -
8         Net of Tax                                                    --          --          --           (15)         --         (15)
                                                                  --------    --------    --------      --------    --------    --------

9            Net Income                                           $     36    $     42    $     (6)     $    312    $    302    $     10
                                                                  ========    ========    ========      ========    ========    ========

       EARNINGS PER SHARE BY SUBSIDIARY - DILUTED

10        Arizona Public Service                                  $   0.46    $   0.64    $  (0.18)     $   3.31    $   3.61    $  (0.30)
11        Pinnacle West Energy                                        0.04       (0.01)       0.05          0.21       (0.02)       0.23
12        APS Energy Services                                           --       (0.11)       0.11         (0.12)      (0.15)       0.03
13        SunCor                                                      0.01        0.04       (0.03)         0.04        0.13       (0.09)
14        El Dorado                                                     --       (0.06)       0.06            --        0.02       (0.02)
15        Parent Company                                             (0.09)         --       (0.09)         0.41       (0.03)       0.44
                                                                  --------    --------    --------      --------    --------    --------

16           Income Before Accounting Change                          0.42        0.50       (0.08)         3.85        3.56        0.29

          Cumulative Effect of a Change in Accounting -
17        Net of Tax                                                    --          --          --         (0.17)         --       (0.17)
                                                                  --------    --------    --------      --------    --------    --------

18           Net Income                                           $   0.42    $   0.50    $  (0.08)     $   3.68    $   3.56    $   0.12
                                                                  ========    ========    ========      ========    ========    ========

19     BOOK VALUE PER SHARE                                       $  29.41    $  28.09    $   1.32      $  29.41    $  28.09    $   1.32

       COMMON SHARES OUTSTANDING - DILUTED
20        Average                                                   84,824      85,015        (191)       84,930      84,935          (5)
21        End of Period                                             84,724      84,715           9        84,724      84,715           9

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                    Periods Ended December 31, 2001 and 2000

                                                                         3 Mo. Ended December 31              12 Mo. Ended December 31
                                                                    ----------------------------------   ----------------------------------
Line                                                                  2001        2000     Incr (Decr)     2001        2000     Incr (Decr)
                                                                    --------    --------   -----------   --------    --------   -----------
       ELECTRIC OPERATING REVENUES
          (DOLLARS IN  MILLIONS)
       Retail
22        Residential                                               $    180    $    172    $      8     $    915    $    881    $     34
23        Business                                                       219         211           8          952         935          17
                                                                    --------    --------    --------     --------    --------    --------
24           Total retail                                                399         383          16        1,867       1,816          51
                                                                    --------    --------    --------     --------    --------    --------
       Wholesale revenue on delivered electricity
25        Traditional contracts                                            2          16         (14)          73         121         (48)
26        Retail load hedge management                                    27          46         (19)         578         561          17
          Marketing and trading -- delivered
27           Generation other than native load                             6          80         (74)         148         116          32
28           Other delivered electricity marketing and trading (a)       297         276          21        1,560         874         686
                                                                    --------    --------    --------     --------    --------    --------
29           Total delivered marketing and trading                       303         356         (53)       1,708         990         718
                                                                    --------    --------    --------     --------    --------    --------
30        Total delivered wholesale electricity                          332         418         (86)       2,359       1,672         687
                                                                    --------    --------    --------     --------    --------    --------
       Other marketing and trading
31        Realized margins on delivered commodities
             other than electricity (a)                                    4          (1)          5          (14)         (9)         (5)
32        Prior period mark-to-market (gains) losses realized
             upon delivery of commodities (a)                            (51)         (2)        (49)          (1)         (2)          1
33        Change in mark-to-market for future-period deliveries           (9)        (11)          2          127          14         113
                                                                    --------    --------    --------     --------    --------    --------
34        Total other marketing and trading                              (56)        (14)        (42)         112           3         109
                                                                    --------    --------    --------     --------    --------    --------
35     Transmission for others                                             8           4           4           26          15          11
36     Miscellaneous services                                              1           7          (6)          18          26          (8)
                                                                    --------    --------    --------     --------    --------    --------
37           Net electric operating revenues                        $    684    $    798    $   (114)    $  4,382    $  3,532    $    850
                                                                    ========    ========    ========     ========    ========    ========

       ELECTRIC SALES (GWH)

       Retail sales
38        Residential                                                  2,149       2,028         121       10,336       9,781         555
39        Business                                                     3,071       2,964         107       13,064      12,754         310
                                                                    --------    --------    --------     --------    --------    --------
40           Total retail                                              5,220       4,992         228       23,400      22,535         865
                                                                    --------    --------    --------     --------    --------    --------
       Wholesale electricity delivered
41        Traditional contracts                                           83         351        (268)       1,213       1,611        (398)
42        Retail load hedge management                                   382         702        (320)       3,040       6,674      (3,634)
          Marketing and trading -- delivered
43           Generation other than native load                           256         720        (464)       1,388       1,494        (106)
44           Other delivered electricity marketing and trading         4,473       2,735       1,738       14,141      11,735       2,406
                                                                    --------    --------    --------     --------    --------    --------
45           Total delivered marketing and trading                     4,729       3,455       1,274       15,529      13,229       2,300
                                                                    --------    --------    --------     --------    --------    --------
46        Total delivered wholesale electricity                        5,194       4,508         686       19,782      21,514      (1,732)
                                                                    --------    --------    --------     --------    --------    --------
47           Total electric sales                                     10,414       9,500         914       43,182      44,049        (867)
                                                                    ========    ========    ========     ========    ========    ========

(a)  The net effect on net electric operating revenues from realization of
     prior-period mark-to-market included in line 37 is zero. Realization of
     prior-period mark-to-market relates to cash flow recognition, not revenue
     recognition. The arithmetic opposites of amounts included in line 32 are
     included in lines 28 and 31. For example, line 32 shows that a prior-period
     mark-to-market gain of $1 million was transferred to "realized" for the
     total year 2001. Lines 28 and 31 include amounts totaling $1 million of
     realized revenues for the year 2001.

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                    Periods Ended December 31, 2001 and 2000

                                                                       3 Mo. Ended December 31             12 Mo. Ended December 31
                                                                   --------------------------------    --------------------------------
Line                                                                2001       2000     Incr (Decr)     2001       2000     Incr (Decr)
                                                                   -------    -------   -----------    -------    -------   -----------
       MARKETING AND TRADING PRETAX GROSS MARGIN ANALYSIS
          (DOLLARS IN  MILLIONS)
       GROSS MARGIN BY COMMODITY - PRETAX

48     Electricity                                                 $    15    $    32     $   (17)     $   329    $   128     $   201
49     Natural gas                                                      (3)         3          (6)         (10)         5         (15)
50     Coal                                                             (6)        --          (6)           8         (2)         10
51     Emission allowances                                              (2)        (5)          3          (10)        (5)         (5)
52     Other                                                            --         --          --           --         --          --
                                                                   -------    -------     -------      -------    -------     -------
53           Total                                                 $     4    $    30     $   (26)     $   317    $   126     $   191
                                                                   =======    =======     =======      =======    =======     =======

       GROSS MARGIN COMPONENTS - PRETAX

       Current Period Effects
          Realized margin on delivered commodities
             Electricity
54              Generation other than native load                  $     2    $    39     $   (37)     $    79    $    54     $    25
55              Other electricity marketing and trading (a)             58          5          53          119         69          50
                                                                   -------    -------     -------      -------    -------     -------
56              Total electricity                                       60         44          16          198        123          75
57           Other commodities (a)                                       4         (1)          5          (14)        (9)         (5)
                                                                   -------    -------     -------      -------    -------     -------
58           Total realized margin                                      64         43          21          184        114          70
          Prior-period mark-to-market (gains) losses transferred
             to "realized" upon delivery of commodities
59              Electricity (a)                                        (43)        (2)        (41)         (15)        (2)        (13)
60              Other commodities (a)                                   (8)        --          (8)          21         --          21
                                                                   -------    -------     -------      -------    -------     -------
61              Subtotal                                               (51)        (2)        (49)           6         (2)          8
                                                                   -------    -------     -------      -------    -------     -------
62        Total current period effects                                  13         41         (28)         190        112          78
                                                                   -------    -------     -------      -------    -------     -------
       Change in mark-to-market gains (losses) for future
          period deliveries
63           Electricity                                                (2)       (10)          8          146          7         139
64           Other commodities                                          (7)        (1)         (6)         (19)         7         (26)
                                                                   -------    -------     -------      -------    -------     -------
65           Subtotal                                                   (9)       (11)          2          127         14         113
                                                                   -------    -------     -------      -------    -------     -------
66     Total gross margin                                          $     4    $    30     $   (26)     $   317    $   126     $   191
                                                                   =======    =======     =======      =======    =======     =======

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of December 31, 2001, Pinnacle West had accumulated mark-to-market net gains
of $138.0 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: 2002, $43.0 million; 2003,
$22.6 million; 2004, $23.6 million; 2005 and thereafter, $48.8 million.

(a)  The net effect on pretax gross margin from realization of prior-period
     mark-to-market included in line 62 and in line 66 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 59 are
     included in line 55. The opposites of amounts included in line 60 are
     included in line 57. For example, line 59 shows that a prior-period
     mark-to-market gain of $15 million was transferred to "realized" for the
     total year 2001. A $15 million realized gain is included in the $119
     million on line 55 for the total year 2001.

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                    Periods Ended December 31, 2001 and 2000

                                                              3 Mo. Ended December 31            12 Mo. Ended December 31
                                                          --------------------------------    --------------------------------
Line                                                       2001       2000     Incr (Decr)     2001       2000     Incr (Decr)
                                                          -------    -------   -----------    -------    -------   -----------
       AVERAGE ELECTRIC CUSTOMERS

       Retail customers
67        Residential                                     786,382    761,386      24,996      776,339    749,285      27,054
68        Business                                         98,631     96,024       2,607       98,198     94,128       4,070
                                                          -------    -------     -------      -------    -------     -------
69           Total                                        885,013    857,410      27,603      874,537    843,413      31,124
70     Wholesale customers                                     66         67          (1)          66         67          (1)
                                                          -------    -------     -------      -------    -------     -------
71           Total customers                              885,079    857,477      27,602      874,603    843,480      31,123
                                                          =======    =======     =======      =======    =======     =======

72     Customer Growth (% over prior year)                    3.2%       4.2%       (1.0)%        3.7%       4.1%       (0.4)%

       RETAIL ELECTRIC SALES (GWH) - WEATHER NORMALIZED

73     Residential                                          2,103      1,920         183        9,909      9,517         392
74     Business                                             3,019      3,004          15       12,779     12,685          94
                                                          -------    -------     -------      -------    -------     -------
75           Total                                          5,122      4,924         198       22,688     22,202         486
                                                          =======    =======     =======      =======    =======     =======

       RETAIL ELECTRICITY USAGE
          (KWH/AVERAGE CUSTOMER)

76     Residential                                          2,733      2,664          69       13,314     13,054         260
77     Business                                            31,139     30,867         272      133,037    135,496      (2,459)

       RETAIL ELECTRICITY USAGE - WEATHER NORMALIZED
          (KWH/AVERAGE CUSTOMER)

78     Residential                                          2,674      2,522         152       12,764     12,701          63
79     Business                                            30,616     31,284        (668)     130,139    134,763      (4,624)

       ELECTRICITY DEMAND (MW)

80     System peak demand                                   3,898      4,331        (433)       5,687      5,478         209

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                    Periods Ended December 31, 2001 and 2000

                                                                 3 Mo. Ended December 31             12 Mo. Ended December 31
                                                             --------------------------------    --------------------------------
                                                              2001       2000     Incr (Decr)     2001       2000     Incr (Decr)
                                                             -------    -------   -----------    -------    -------   -----------
       ENERGY SOURCES (GWH)

       Generation production
81        Nuclear                                              1,818      2,078        (260)       8,384      8,841        (457)
82        Coal                                                 3,203      3,175          28       12,572     12,509          63
83        Gas, oil and other                                     583        889        (306)       4,003      2,784       1,219
                                                             -------    -------     -------      -------    -------     -------
84           Total                                             5,604      6,142        (538)      24,959     24,134         825
                                                             -------    -------     -------      -------    -------     -------
       Purchased power
85        Firm load                                              570        455         115        3,165      3,086          79
86        Marketing and trading                                4,854      3,642       1,212       17,608     18,892      (1,284)
                                                             -------    -------     -------      -------    -------     -------
87           Total                                             5,424      4,097       1,327       20,773     21,978      (1,205)
                                                             -------    -------     -------      -------    -------     -------
88           Total energy sources                             11,028     10,239         789       45,732     46,112        (380)
                                                             =======    =======     =======      =======    =======     =======

       POWER PLANT PERFORMANCE

       Capacity Factors
89        Nuclear                                                 76%        87%        (11)%         88%        93%         (5)%
90        Coal                                                    85%        84%          1%          84%        83%          1%
91        Gas, oil and other                                      20%        34%        (14)%         37%        27%         10%
92        System average                                          62%        70%         (8)%         70%        69%          1%

       Generation Capacity Out of Service (average MW/day)
93        Nuclear                                                246        143         103          127         80          47
94        Coal                                                    90        187         (97)         167        155          12
95        Gas                                                     16         20          (4)          32         22          10
96           Total                                               352        350           2          326        257          69

97     Generation Fuel Cost ($/MWh)                          $ 12.51    $ 16.28     $ (3.77)     $ 16.22    $ 13.72     $  2.50

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                   Quarterly Consolidated Statistical Summary
                    Periods Ended December 31, 2001 and 2000

                                                            3 Mo. Ended December 31             12 Mo. Ended December 31
                                                       ---------------------------------    ---------------------------------
Line                                                    2001        2000     Incr (Decr)     2001        2000     Incr (Decr)
                                                       -------     -------   -----------    -------     -------   -----------
       ENERGY MARKET INDICATORS (A)

       Electricity Average Daily Spot Prices ($/MWh)
          On-Peak
98           Palo Verde                                $ 26.89     $154.33     $(127.44)    $118.41     $111.43     $  6.98
99           SP15                                      $ 28.38     $162.59     $(134.21)    $119.99     $107.35     $ 12.64
          Off-Peak
100          Palo Verde                                $ 18.33     $ 95.72     $ (77.39)    $ 61.57     $ 53.02     $  8.55
101          SP15                                      $ 20.41     $119.72     $ (99.31)    $ 73.48     $ 60.74     $ 12.74

       WEATHER INDICATORS

       Actual
102       Cooling degree-days                              620         253         367        5,122       4,583         539
103       Heating degree-days                              460         500         (40)       1,160         968         192
104       Average humidity                                  39%         46%         (7)%         36%         34%          2%
       10-Year Averages
105       Cooling degree-days                              387         387          --        4,290       4,290          --
106       Heating degree-days                              449         449          --        1,031       1,031          --
107       Average humidity                                  39%         39%          0%          36%         35%          1%

       ECONOMIC INDICATORS

       Building Permits -- Metro Phoenix (b)
108       Single-family                                  6,240       6,410        (170)      32,455      32,509         (54)
109       Multi-family                                     717       1,952      (1,235)       8,969      10,228      (1,259)
                                                       -------     -------     -------      -------     -------     -------
110          Total                                       6,957       8,362      (1,405)      41,424      42,737      (1,313)
                                                       =======     =======     =======      =======     =======     =======
       Arizona Job Growth (c)
111       Payroll job growth (% over prior year)          (1.0)%       3.4%       (4.4)%        0.9%        3.9%       (3.0)%
112       Unemployment rate (%, seasonally adjusted)       5.4%        3.7%        1.7%         4.5%        3.9%        0.6%

Sources:

(a)  This price is an average of daily prices obtained and used with permission
     from Dow Jones & Company, Inc.
(b)  Arizona Real Estate Center, Arizona State University College of Business
(c)  Arizona Department of Economic Security

See Glossary of Terms.
EX-99.2 4 ex99-2.htm 2001 CONSOLIDATED STATISTICS Pinnacle West Capital Corporation - Exhibit 99.2

Exhibit 99.2 

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2001

                                                                                                                            Increase
                                                                                                                           (Decrease)
Line                                                      1st Qtr      2nd Qtr      3rd Qtr      4th Qtr     Total Year   vs Prior Year
                                                          --------     --------     --------     --------    ----------   -------------
       EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS)

1         Arizona Public Service                          $     65     $     70     $    107     $     39     $    281       $    (26)
2         Pinnacle West Energy                                  --            1           14            3           18             20
3         APS Energy Services                                   (8)          --           (2)          --          (10)             3
4         SunCor                                                --           --            2            1            3             (8)
5         El Dorado                                             --           --           --           --           --             (2)
6         Parent Company                                         5           (4)          41           (7)          35             38
                                                          --------     --------     --------     --------     --------       --------

7            Income Before Accounting Change                    62           67          162           36          327             25

          Cumulative Effect of a Change in Accounting -
8         Net of Tax                                            (3)          --          (12)          --          (15)           (15)
                                                          --------     --------     --------     --------     --------       --------

9            Net Income                                   $     59     $     67     $    150     $     36     $    312       $     10
                                                          ========     ========     ========     ========     ========       ========

       EARNINGS PER SHARE BY SUBSIDIARY - DILUTED

10        Arizona Public Service                          $   0.77     $   0.82     $   1.26     $   0.46     $   3.31       $  (0.30)
11        Pinnacle West Energy                                  --         0.02         0.15         0.04         0.21           0.23
12        APS Energy Services                                (0.10)          --        (0.02)          --        (0.12)          0.03
13        SunCor                                                --           --         0.03         0.01         0.04          (0.09)
14        El Dorado                                             --           --           --           --           --          (0.02)
15        Parent Company                                      0.06        (0.05)        0.49        (0.09)        0.41           0.44
                                                          --------     --------     --------     --------     --------       --------

16           Income Before Accounting Change                  0.73         0.79         1.91         0.42         3.85           0.29

17        Cumulative Effect of a Change in Accounting -
          Net of Tax                                         (0.03)          --        (0.14)          --        (0.17)         (0.17)
                                                          --------     --------     --------     --------     --------       --------

18           Net Income                                   $   0.70     $   0.79     $   1.77     $   0.42     $   3.68       $   0.12
                                                          ========     ========     ========     ========     ========       ========


19     BOOK VALUE PER SHARE                               $  28.83     $  28.17     $  29.37     $  29.41     $  29.41       $   1.32

       COMMON SHARES OUTSTANDING - DILUTED
20        Average                                           84,966       85,042       84,909       84,824       84,930             (5)
21        End of Period                                     84,718       84,713       84,663       84,724       84,724              9

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2001

                                                                                                                                Increase
                                                                                                                               (Decrease)
Line                                                               1st Qtr     2nd Qtr     3rd Qtr     4th Qtr    Total Year  vs Prior Year
                                                                   --------    --------    --------    --------   ----------  -------------
       ELECTRIC OPERATING REVENUES
          (DOLLARS IN  MILLIONS)
       Retail
22        Residential                                              $    173    $    234    $    328    $    180    $    915      $     34
23        Business                                                      199         258         276         219         952            17
                                                                   --------    --------    --------    --------    --------      --------
24           Total retail                                               372         492         604         399       1,867            51
                                                                   --------    --------    --------    --------    --------      --------
       Wholesale revenue on delivered electricity
25        Traditional contracts                                          26          55         (10)          2          73           (48)
26        Retail load hedge management                                    5         182         364          27         578            17
          Marketing and trading -- delivered
27           Generation other than native load                           87          51           4           6         148            32
28           Other delivered electricity marketing and trading (a)      359         443         461         297       1,560           686
                                                                   --------    --------    --------    --------    --------      --------
28           Total delivered marketing and trading                      446         494         465         303       1,708           718
                                                                   --------    --------    --------    --------    --------      --------
30        Total delivered wholesale electricity                         477         731         819         332       2,359           687
                                                                   --------    --------    --------    --------    --------      --------
       Other marketing and trading
31        Realized margins on delivered commodities
             other than electricity (a)                                  (5)        (12)         (1)          4         (14)           (5)
32        Prior period mark-to-market (gains) losses realized
             upon delivery of commodities (a)                             6           5         (37)        (51)         (1)            1
33        Change in mark-to-market for future-period deliveries          47          35         130          (9)        127           113
                                                                   --------    --------    --------    --------    --------      --------
34        Total other marketing and trading                              48          28          92         (56)        112           109
                                                                   --------    --------    --------    --------    --------      --------
35     Transmission for others                                            4           5           9           8          26            11
36     Miscellaneous services                                             5           5           7           1          18            (8)
                                                                   --------    --------    --------    --------    --------      --------
37           Net electric operating revenues                       $    906    $  1,261    $  1,531    $    684    $  4,382      $    850
                                                                   ========    ========    ========    ========    ========      ========

       ELECTRIC SALES (GWH)

       Retail sales
38        Residential                                                 2,122       2,468       3,597       2,149      10,336           555
39        Business                                                    2,823       3,446       3,724       3,071      13,064           310
                                                                   --------    --------    --------    --------    --------      --------
40           Total retail                                             4,945       5,914       7,321       5,220      23,400           865
                                                                   --------    --------    --------    --------    --------      --------
       Wholesale electricity delivered
41        Traditional contracts                                         569         598         (37)         83       1,213          (398)
42        Retail load hedge management                                   75         736       1,847         382       3,040        (3,634)
          Marketing and trading -- delivered
43           Generation other than native load                          623         436          73         256       1,388          (106)
44           Other delivered electricity marketing and trading        2,853       3,072       3,743       4,473      14,141         2,406
                                                                   --------    --------    --------    --------    --------      --------
45           Total delivered marketing and trading                    3,476       3,508       3,816       4,729      15,529         2,300
                                                                   --------    --------    --------    --------    --------      --------
46        Total delivered wholesale electricity                       4,120       4,842       5,626       5,194      19,782        (1,732)
                                                                   --------    --------    --------    --------    --------      --------
47           Total electric sales                                     9,065      10,756      12,947      10,414      43,182          (867)
                                                                   ========    ========    ========    ========    ========      ========

(a)  The net effect on net electric operating revenues from realization of
     prior-period mark-to-market included in line 37 is zero. Realization of
     prior-period mark-to-market relates to cash flow recognition, not revenue
     recognition. The arithmetic opposites of amounts included in line 32 are
     included in lines 28 and 31. For example, line 32 shows that a prior-period
     mark-to-market gain of $1 million was transferred to "realized" for the
     total year 2001. Lines 28 and 31 include amounts totaling $1 million of
     realized revenues for the year 2001.

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2001

                                                                                                                             Increase
                                                                                                                            (Decrease)
Line                                                               1st Qtr    2nd Qtr    3rd Qtr    4th Qtr   Total Year   vs Prior Year
                                                                   -------    -------    -------    -------   ----------   -------------
       MARKETING AND TRADING PRETAX GROSS MARGIN ANALYSIS
          (Dollars in  Millions)
       Gross Margin by Commodity - Pretax

48     Electricity                                                 $    98    $   111    $   105    $    15     $   329       $   201
49     Natural gas                                                      (3)       (13)         9         (3)        (10)          (15)
50     Coal                                                             14          2         (2)        (6)          8            10
51     Emission allowances                                              (2)        (2)        (4)        (2)        (10)           (5)
52     Other                                                            --         --         --         --          --            --
                                                                   -------    -------    -------    -------     -------       -------
53        Total                                                    $   107    $    98    $   108    $     4     $   317       $   191
                                                                   =======    =======    =======    =======     =======       =======

       Gross Margin Components - Pretax

       Current Period Effects
          Realized margin on delivered commodities
             Electricity
54              Generation other than native load                  $    48    $    26    $     3    $     2     $    79       $    25
55              Other electricity marketing and trading (a)              4         43         14         58         119            50
                                                                   -------    -------    -------    -------     -------       -------
56              Total electricity                                       52         69         17         60         198            75
57           Other commodities (a)                                      (5)       (12)        (1)         4         (14)           (5)
                                                                   -------    -------    -------    -------     -------       -------
58           Total realized margin                                      47         57         16         64         184            70
          Prior-period mark-to-market (gains) losses transferred
             to "realized" upon delivery of commodities (b)
59              Electricity (a)                                          1         --        (38)       (43)        (15)          (13)
60              Other commodities (a)                                   12          5          1         (8)         21            21
                                                                   -------    -------    -------    -------     -------       -------
61              Subtotal                                                13          5        (37)       (51)          6             8
                                                                   -------    -------    -------    -------     -------       -------
62        Total current period effects (b)                              60         62        (21)        13         190            78
                                                                   -------    -------    -------    -------     -------       -------
       Change in mark-to-market gains (losses) for future
          period deliveries (b)
63           Electricity                                                45         42        126         (2)        146           139
64           Other commodities                                           2         (6)         3         (7)        (19)          (26)
                                                                   -------    -------    -------    -------     -------       -------
65           Subtotal                                                   47         36        129         (9)        127           113
                                                                   -------    -------    -------    -------     -------       -------
66     Total gross margin                                          $   107    $    98    $   108    $     4     $   317       $   191
                                                                   =======    =======    =======    =======     =======       =======

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of December 31, 2001, Pinnacle West had accumulated mark-to-market net gains
of $138.0 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: 2002, $43.0 million; 2003,
$22.6 million; 2004, $23.6 million; 2005 and thereafter, $48.8 million.

(a)  The net effect on pretax gross margin from realization of prior-period
     mark-to-market included in line 62 and in line 66 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 59 are
     included in line 55. The opposites of amounts included in line 60 are
     included in line 57. For example, line 59 shows that a prior-period
     mark-to-market gain of $15 million was transferred to "realized" for the
     total year 2001. A $15 million realized gain is included in the $119
     million on line 55 for the total year 2001.

(b)  Quarterly amounts do not total to the annual amounts because of intrayear
     mark-to-market eliminations.

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2001

                                                                                                                             Increase
                                                                                                                            (Decrease)
Line                                                      1st Qtr      2nd Qtr      3rd Qtr      4th Qtr     Total Year    vs Prior Year
                                                          --------     --------     --------     --------    ----------    -------------
       AVERAGE ELECTRIC CUSTOMERS

       Retail customers
67        Residential                                      775,317      770,335      773,321      786,382      776,339          27,054
68        Business                                          97,222       98,065       98,874       98,631       98,198           4,070
                                                          --------     --------     --------     --------     --------        --------
69           Total                                         872,539      868,400      872,195      885,013      874,537          31,124
70     Wholesale customers                                      68           66           66           66           66              (1)
                                                          --------     --------     --------     --------     --------        --------
71           Total customers                               872,607      868,466      872,261      885,079      874,603          31,123
                                                          ========     ========     ========     ========     ========        ========

72     Customer Growth (% over prior year)                     4.0%         3.9%         3.7%         3.2%         3.7%           (0.4)%

       RETAIL ELECTRIC SALES (GWH) - WEATHER NORMALIZED

73     Residential                                           2,039        2,324        3,443        2,103        9,909             392
74     Business                                              2,826        3,315        3,619        3,019       12,779              94
                                                          --------     --------     --------     --------     --------        --------
75           Total                                           4,865        5,639        7,062        5,122       22,688             486
                                                          ========     ========     ========     ========     ========        ========

       RETAIL ELECTRICITY USAGE
          (KWH/AVERAGE CUSTOMER)

76     Residential                                           2,737        3,205        4,652        2,733       13,314             260
77     Business                                             29,036       35,135       37,669       31,139      133,037          (2,459)

       RETAIL ELECTRICITY USAGE - WEATHER NORMALIZED
          (KWH/AVERAGE CUSTOMER)

78     Residential                                           2,630        3,017        4,452        2,674       12,764              63
79     Business                                             29,067       33,796       36,607       30,616      130,139          (4,624)

       ELECTRICITY DEMAND (MW)

80     System peak demand                                    3,661        5,358        5,687        3,898        5,687             209

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2001

                                                                                                                            Increase
                                                                                                                           (Decrease)
Line                                                         1st Qtr     2nd Qtr     3rd Qtr     4th Qtr    Total Year    vs Prior Year
                                                             -------     -------     -------     -------    ----------    -------------
       ENERGY SOURCES (GWH)

       Generation production
81        Nuclear                                              2,261       1,985       2,320       1,818        8,384           (457)
82        Coal                                                 2,901       3,245       3,223       3,203       12,572             63
83        Gas, oil and other                                   1,007       1,256       1,157         583        4,003          1,219
                                                             -------     -------     -------     -------      -------        -------
84           Total                                             6,169       6,486       6,700       5,604       24,959            825
                                                             -------     -------     -------     -------      -------        -------
       Purchased power
85        Firm load                                              381         635       1,579         570        3,165             79
86        Marketing and trading                                3,232       4,018       5,504       4,854       17,608         (1,284)
                                                             -------     -------     -------     -------      -------        -------
87           Total                                             3,613       4,653       7,083       5,424       20,773         (1,205)
                                                             -------     -------     -------     -------      -------        -------
88           Total energy sources                              9,782      11,139      13,783      11,028       45,732           (380)
                                                             =======     =======     =======     =======      =======        =======

       POWER PLANT PERFORMANCE

       Capacity Factors
89        Nuclear                                                 96%         84%         97%         76%          88%            (5)%
90        Coal                                                    78%         87%         85%         85%          84%             1%
91        Gas, oil and other                                      39%         46%         38%         20%          37%            10%
92        System average                                          71%         73%         73%         62%          70%             1%

       Generation Capacity Out of Service (average MW/day)
93        Nuclear                                                 57         180          26         246          127             47
94        Coal                                                   284         166         129          90          167             12
95        Gas                                                     36          52          24          16           32             10
96           Total                                               376         398         179         352          326             69

97     Generation Fuel Cost ($/MWh)                          $ 19.64     $ 19.28     $ 13.21     $ 12.51      $ 16.22        $  2.50

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2001

                                                                                                                            Increase
                                                                                                                           (Decrease)
Line                                                   1st Qtr      2nd Qtr      3rd Qtr       4th Qtr      Total Year    vs Prior Year
                                                       --------     --------     --------      --------     ----------    -------------
       ENERGY MARKET INDICATORS (a)

       Electricity Average Daily Spot Prices ($/MWh)
          On-Peak
98           Palo Verde                                $ 214.21     $ 182.71     $  49.80      $  26.89      $ 118.41       $   6.98
99           SP15                                      $ 219.66     $ 186.30     $  45.61      $  28.38      $ 119.99       $  12.64
          Off-Peak
100          Palo Verde                                $ 130.40     $  70.32     $  27.22      $  18.33      $  61.57       $   8.55
101          SP15                                      $ 159.80     $  84.78     $  28.92      $  20.41      $  73.48       $  12.74

       WEATHER INDICATORS

       Actual
102       Cooling degree-days                               106        1,733        2,663           620         5,122            539
103       Heating degree-days                               657           43           --           460         1,160            192
104       Average humidity                                   50%          25%          31%           39%           36%           2.0%
       10-Year Averages
105       Cooling degree-days                                73        1,405        2,425           387         4,290             --
106       Heating degree-days                               549           33           --           449         1,031             --
107       Average humidity                                   44%          24%          34%           39%           36%            --

       ECONOMIC INDICATORS

       Building Permits -- Metro Phoenix (b)
108       Single-family                                   8,681        9,270        8,264         6,240        32,455            (54)
109       Multi-family                                    3,918        1,820        2,514           717         8,969         (1,259)
                                                       --------     --------     --------      --------      --------       --------
110          Total                                       12,599       11,090       10,778         6,957        41,424         (1,313)
                                                       ========     ========     ========      ========      ========       ========

       Arizona Job Growth (c)
111       Payroll job growth (% over prior year)            2.8%         1.4%         0.2%         (1.0)%         0.9%          (3.0)%
112       Unemployment rate (%, seasonally adjusted)        4.1%         4.3%         4.3%          5.4%          4.5%           0.6%

Sources:

(a)  This price is an average of daily prices  obtained and used with permission
     from Dow Jones & Company, Inc.
(b)  Arizona Real Estate Center, Arizona State University College of Business
(c)  Arizona Department of Economic Security

See Glossary of Terms.
EX-99.3 5 ex99-3.htm 2000 CONSOLIDATED STATISTICS Pinnacle West Capital Corporation - Exhibit 99.3

Exhibit 99.3 

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2000

Line
                                                           1st Qtr       2nd Qtr       3rd Qtr       4th Qtr     Total Year
                                                          ---------     ---------     ---------     ---------    ----------
       EARNINGS CONTRIBUTION BY SUBSIDIARY ($ MILLIONS)

1         Arizona Public Service                          $      33     $      96     $     124     $      54     $     307
2         Pinnacle West Energy                                   --            (1)           --            (1)           (2)
3         APS Energy Services                                    (2)           (2)           --            (9)          (13)
4         SunCor                                                  5             1             2             3            11
5         El Dorado                                              19            (3)           (9)           (5)            2
6         Parent Company                                         (1)           (1)           (1)           --            (3)
                                                          ---------     ---------     ---------     ---------     ---------

7            Income Before Accounting Change                     54            90           116            42           302

          Cumulative Effect of a Change in Accounting -
8         Net of Tax                                             --            --            --            --            --
                                                          ---------     ---------     ---------     ---------     ---------

9            Net Income                                   $      54     $      90     $     116     $      42     $     302
                                                          =========     =========     =========     =========     =========

       EARNINGS PER SHARE BY SUBSIDIARY - DILUTED

10        Arizona Public Service                          $    0.39     $    1.13     $    1.45     $    0.64     $    3.61
11        Pinnacle West Energy                                   --         (0.01)           --         (0.01)        (0.02)
12        APS Energy Services                                 (0.02)        (0.02)           --         (0.11)        (0.15)
13        SunCor                                               0.06          0.01          0.02          0.04          0.13
14        El Dorado                                            0.22         (0.04)        (0.10)        (0.06)         0.02
15        Parent Company                                      (0.01)        (0.01)        (0.01)           --         (0.03)
                                                          ---------     ---------     ---------     ---------     ---------

16           Income Before Accounting Change                   0.64          1.06          1.36          0.50          3.56

          Cumulative Effect of a Change in Accounting -
17        Net of Tax                                             --            --            --            --            --
                                                          ---------     ---------     ---------     ---------     ---------

18           Net Income                                   $    0.64     $    1.06     $    1.36     $    0.50     $    3.56
                                                          =========     =========     =========     =========     =========

19     BOOK VALUE PER SHARE                               $   26.29     $   27.00     $   28.01     $   28.09     $   28.09

       COMMON SHARES OUTSTANDING - DILUTED
20        Average                                            84,834        84,891        85,012        85,015        84,935
21        End of Period                                      84,723        84,727        84,779        84,715        84,715

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2000

Line
                                                                     1st Qtr      2nd Qtr      3rd Qtr      4th Qtr     Total Year
                                                                     --------     --------     --------     --------    ----------
       ELECTRIC OPERATING REVENUES
          (DOLLARS IN  MILLIONS)
       Retail
22        Residential                                                $    157     $    228     $    324     $    172     $    881
23        Business                                                        196          253          275          211          935
                                                                     --------     --------     --------     --------     --------
24           Total retail                                                 353          481          599          383        1,816
                                                                     --------     --------     --------     --------     --------
       Wholesale revenue on delivered electricity
25        Traditional contracts                                            12           18           75           16          121
26        Retail load hedge management                                      7           36          472           46          561
          Marketing and trading -- delivered
27           Generation other than native load                              9           13           14           80          116
28           Other delivered electricity marketing and trading (a)         56          134          408          276          874
                                                                     --------     --------     --------     --------     --------
29           Total delivered marketing and trading                         65          147          422          356          990
                                                                     --------     --------     --------     --------     --------
30        Total delivered wholesale electricity                            84          201          969          418        1,672
                                                                     --------     --------     --------     --------     --------
       Other marketing and trading
31        Realized margins on delivered commodities
             other than electricity (a)                                    (5)           1           (4)          (1)          (9)
32        Prior period mark-to-market (gains) losses realized
             upon delivery of commodities (a)                              --           --          (17)          (2)          (2)
33        Change in mark-to-market for future-period deliveries             7           25           10          (11)          14
                                                                     --------     --------     --------     --------     --------
34        Total other marketing and trading                                 2           26          (11)         (14)           3
                                                                     --------     --------     --------     --------     --------
35     Transmission for others                                              3            4            4            4           15
36     Miscellaneous services                                               4            8            7            7           26
                                                                     --------     --------     --------     --------     --------
37           Net electric operating revenues                         $    446     $    720     $  1,568     $    798     $  3,532
                                                                     ========     ========     ========     ========     ========

       ELECTRIC SALES (GWH)

       Retail sales
38        Residential                                                   1,876        2,371        3,506        2,028        9,781
39        Business                                                      2,737        3,379        3,674        2,964       12,754
                                                                     --------     --------     --------     --------     --------
40           Total retail                                               4,613        5,750        7,180        4,992       22,535
                                                                     --------     --------     --------     --------     --------
       Wholesale electricity delivered
41        Traditional contracts                                           331          391          538          351        1,611
42        Retail load hedge management                                    232          585        5,155          702        6,674
          Marketing and trading -- delivered
43           Generation other than native load                            396          215          163          720        1,494
44           Other delivered electricity marketing and trading          1,995        2,717        4,288        2,735       11,735
                                                                     --------     --------     --------     --------     --------
45           Total delivered marketing and trading                      2,391        2,932        4,451        3,455       13,229
                                                                     --------     --------     --------     --------     --------
46        Total delivered wholesale electricity                         2,954        3,908       10,144        4,508       21,514
                                                                     --------     --------     --------     --------     --------
47           Total electric sales                                       7,567        9,658       17,324        9,500       44,049
                                                                     ========     ========     ========     ========     ========

(a)  The net effect on net electric operating revenues from realization of
     prior-period mark-to-market included in line 37 is zero. Realization of
     prior-period mark-to-market relates to cash flow recognition, not revenue
     recognition. The arithmetic opposites of amounts included in line 32 are
     included in lines 28 and 31. For example, line 32 shows that a prior-period
     mark-to-market gain of $2 million was transferred to "realized" for the
     total year 2000. Lines 28 and 31 include amounts totaling $2 million of
     realized revenues for the year 2000.

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2000

Line
                                                                   1st Qtr     2nd Qtr     3rd Qtr     4th Qtr    Total Year
                                                                   -------     -------     -------     -------    ----------
       MARKETING AND TRADING PRETAX GROSS MARGIN ANALYSIS
          (DOLLARS IN  MILLIONS)
       GROSS MARGIN BY COMMODITY - PRETAX

48     Electricity                                                 $     7     $    61     $    28     $    32      $   128
49     Natural gas                                                      --          (1)          3           3            5
50     Coal                                                             --          --          (2)         --           (2)
51     Emission allowances                                              --          --          --          (5)          (5)
52     Other                                                            --          --          --          --           --
                                                                   -------     -------     -------     -------      -------
53        Total                                                    $     7     $    60     $    29     $    30      $   126
                                                                   =======     =======     =======     =======      =======

       GROSS MARGIN COMPONENTS - PRETAX

       Current Period Effects
          Realized margin on delivered commodities
             Electricity
54             Generation other than native load                   $     2     $     6     $     7     $    39      $    54
55             Other electricity marketing and trading (a)               3          28          33           5           69
                                                                   -------     -------     -------     -------      -------
56             Total electricity                                         5          34          40          44          123
57           Other commodities (a)                                      (5)          1          (4)         (1)          (9)
                                                                   -------     -------     -------     -------      -------
58           Total realized margin                                      --          35          36          43          114
          Prior-period mark-to-market (gains) losses transferred
             to "realized" upon delivery of commodities (b)
59           Electricity (a)                                            --          --         (18)         (2)          (2)
60           Other commodities (a)                                      --          --           1          --           --
                                                                   -------     -------     -------     -------      -------
61           Subtotal                                                   --          --         (17)         (2)          (2)
                                                                   -------     -------     -------     -------      -------
62        Total current period effects (b)                              --          35          19          41          112
                                                                   -------     -------     -------     -------      -------
       Change in mark-to-market gains (losses) for future
          period deliveries (b)
63        Electricity                                                    2          27           6         (10)           7
64        Other commodities                                              5          (2)          4          (1)           7
                                                                   -------     -------     -------     -------      -------
65        Subtotal                                                       7          25          10         (11)          14
                                                                   -------     -------     -------     -------      -------
66     Total gross margin                                          $     7     $    60     $    29     $    30      $   126
                                                                   =======     =======     =======     =======      =======

(a)  The net effect on pretax gross margin from realization of prior-period
     mark-to-market included in line 62 and in line 66 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 59 are
     included in line 55. The opposites of amounts included in line 60 are
     included in line 57. For example, line 59 shows that a prior-period
     mark-to-market gain of $2 million was transferred to "realized" for the
     total year 2000. A $2 million realized gain is included in the $69
     million on line 55 for the total year 2000.

(b)  Quarterly amounts do not total to the annual amounts because of intrayear
     mark-to-market eliminations.

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2000

Line
                                                          1st Qtr     2nd Qtr     3rd Qtr     4th Qtr    Total Year
                                                          -------     -------     -------     -------    ----------
       AVERAGE ELECTRIC CUSTOMERS

       Retail customers
67        Residential                                     746,528     742,485     746,742     761,386      749,285
68        Business                                         92,667      93,343      94,479      96,024       94,128
                                                          -------     -------     -------     -------      -------
69           Total                                        839,195     835,828     841,221     857,410      843,413
70     Wholesale customers                                     67          67          67          67           67
                                                          -------     -------     -------     -------      -------
71           Total customers                              839,262     835,895     841,288     857,477      843,480
                                                          -------     -------     -------     -------      -------

72     Customer Growth (% over prior year)                    4.0%        4.1%        4.1%        4.2%         4.1%

       RETAIL ELECTRIC SALES (GWH) - WEATHER NORMALIZED

73     Residential                                          1,986       2,253       3,358       1,920        9,517
74     Business                                             2,741       3,320       3,620       3,004       12,685
                                                          -------     -------     -------     -------      -------
75           Total                                          4,727       5,573       6,978       4,924       22,202
                                                          -------     -------     -------     -------      -------

       RETAIL ELECTRICITY USAGE
          (KWH/AVERAGE CUSTOMER)

76     Residential                                          2,513       3,193       4,695       2,664       13,054
77     Business                                            29,536      36,200      38,887      30,867      135,496

       RETAIL ELECTRICITY USAGE - WEATHER NORMALIZED
          (KWH/AVERAGE CUSTOMER)

78     Residential                                          2,660       3,034       4,497       2,522       12,701
79     Business                                            29,579      35,568      38,315      31,284      134,763

       ELECTRICITY DEMAND (MW)

80     System peak demand                                   3,315       5,095       5,478       4,331        5,478

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2000

Line
                                                             1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Total Year
                                                             -------     -------     -------     -------     ----------
       ENERGY SOURCES (GWH)

       Generation production
81        Nuclear                                              2,325       2,090       2,348       2,078         8,841
82        Coal                                                 2,828       3,163       3,343       3,175        12,509
83        Gas, oil and other                                     323         526       1,046         889         2,784
                                                             -------     -------     -------     -------       -------
84           Total                                             5,476       5,779       6,737       6,142        24,134
                                                             -------     -------     -------     -------       -------
       Purchased power
85        Firm load                                              263         819       1,549         455         3,086
86        Marketing and trading                                2,206       3,184       9,860       3,642        18,892
                                                             -------     -------     -------     -------       -------
87           Total                                             2,469       4,003      11,409       4,097        21,978
                                                             -------     -------     -------     -------       -------
88           Total energy sources                              7,945       9,782      18,146      10,239        46,112
                                                             -------     -------     -------     -------       -------

       POWER PLANT PERFORMANCE

       Capacity Factors
89        Nuclear                                                 98%         88%         98%         87%           93%
90        Coal                                                    76%         85%         88%         84%           83%
91        Gas, oil and other                                      13%         21%         40%         34%           27%
92        System average                                          63%         67%         77%         70%           69%

       Generation Capacity Out of Service (average MW/day)
93        Nuclear                                                 27         129          21         143            80
94        Coal                                                   223         124          85         187           155
95        Gas                                                      8          43          16          20            22
96           Total                                               258         296         122         350           257

97     Generation Fuel Cost ($/MWh)                          $ 10.65     $ 12.69     $ 14.77     $ 16.28       $ 13.72

See Glossary of Terms.

                        Pinnacle West Capital Corporation

                       Consolidated Statistics By Quarter
                                      2000

Line
                                                       1st Qtr     2nd Qtr     3rd Qtr     4th Qtr    Total Year
                                                       -------     -------     -------     -------    ----------
       ENERGY MARKET INDICATORS (a)

       Electricity Average Daily Spot Prices ($/MWh)
          On-Peak
98           Palo Verde                                $ 30.52     $ 90.49     $170.40     $154.33      $111.43
99           SP15                                      $ 31.40     $ 82.67     $152.74     $162.59      $107.35
          Off-Peak
100          Palo Verde                                $ 22.97     $ 31.91     $ 61.48     $ 95.72      $ 53.02
101          SP15                                      $ 24.52     $ 32.45     $ 66.28     $119.72      $ 60.74

       WEATHER INDICATORS

       Actual
102       Cooling degree-days                               71       1,712       2,547         253        4,583
103       Heating degree-days                              459           9          --         500          968
104       Average humidity                                  37%         23%         29%         46%          34%
       10-Year Averages
105       Cooling degree-days                               73       1,405       2,425         387        4,290
106       Heating degree-days                              549          33          --         449        1,031
107       Average humidity                                  44%         24%         34%         39%          35%

       ECONOMIC INDICATORS

       Building Permits -- Metro Phoenix (b)
108       Single-family                                  8,163       9,605       8,331       6,410       32,509
109       Multi-family                                   3,208       2,651       2,417       1,952       10,228
                                                       -------     -------     -------     -------      -------
110          Total                                      11,371      12,256      10,748       8,362       42,737
                                                       -------     -------     -------     -------      -------

       Arizona Job Growth (c)
111       Payroll job growth (% over prior year)           4.4%        4.0%        3.9%        3.4%         3.9%
112       Unemployment rate (%, seasonally adjusted)       4.1%        3.9%        3.8%        3.7%         3.9%

Sources:

(a)  This price is an average of daily prices  obtained and used with permission
     from Dow Jones & Company, Inc.
(b)  Arizona Real Estate Center, Arizona State University College of Business
(c)  Arizona Department of Economic Security

See Glossary of Terms.
EX-99.4 6 ex99-4.htm EARNINGS VARIANCE EXPLANATIONS Pinnacle West Capital Corporation - Exhibit 99.4

Exhibit 99.4 

                        Pinnacle West Capital Corporation
                         Earnings Variance Explanations
                  For Periods Ended December 31, 2001 and 2000

     This discussion explains the changes in our earnings for the three and
twelve months ended December 31, 2001 and 2000. We suggest this section be read
along with the Pinnacle West Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 30, 2001, June 30, 2001 and March 31, 2001, and the
Pinnacle West Annual Report on Form 10-K for the fiscal year ended December 31,
2000. Consolidated income statements for the three and twelve months ended
December 31, 2001 and 2000 follow this discussion. Additional operating and
financial statistics and a definition of terms are available on the Company's
website.

Operating Results

     The following table summarizes net income for the three and twelve months
ended December 31, 2001 and the comparable prior year periods for Pinnacle West
and each of its subsidiaries (dollars in millions):

                                        3 Months Ended         12 Months Ended
                                          December 31,           December 31,
                                       -----------------      -----------------
                                        2001       2000        2001       2000
                                       ------     ------      ------     ------
Arizona Public Service (APS)           $   39     $   54      $  281     $  307
Pinnacle West Energy                        3         (1)         18         (2)
APS Energy Services                        --         (9)        (10)       (13)
SunCor                                      1          3           3         11
El Dorado                                  --         (5)         --          2
Parent Company (a)                         (7)        --          35         (3)
                                       ------     ------      ------     ------
Income before accounting change            36         42         327        302
Cumulative effect of a change
  in accounting - net of
  income taxes                             --         --         (15)        --
                                       ------     ------      ------     ------
Net income                             $   36     $   42      $  312     $  302
                                       ======     ======      ======     ======

(a) The 2001 amount primarily includes trading activities.

     Operating Results - Three-month period ended December 31, 2001 compared
     with three-month period ended December 31, 2000

     Our consolidated net income for the three months ended December 31, 2001
was $36 million compared with $42 million for the same period in the prior year.
The quarter-to-quarter decrease reflects charges related to Enron and its
affiliates; lower market prices and lower volumes for wholesale generation
sales; and a retail electricity price decrease. The sum of these items more than
offset the effects of increased electricity trading, lower replacement power
costs for plant outages, the absence of investment losses at El Dorado and a
credit reserve in the prior-year fourth quarter related to the California energy
situation. The major factors that increased (decreased) consolidated net income
were as follows (dollars in millions):

                                                                              Increase/(Decrease)
                                                                              -------------------
Increases(decreases) in electric revenues, net of purchased power and fuel
expense due to:
    Marketing and trading activities:
        Decrease from generation sales other than native load due to
            lower market prices and lower sales volumes                              $ (37)
        Increase in other realized marketing and trading in current period
            primarily due to more transactions with higher margins                      58
        Change in prior period mark-to-market value for gains transferred
            to realized margin in current period                                       (41)(a)
        Change in prior period mark-to-market value transferred to
            realized margin related to trading with Enron and its
            affiliates                                                                  (8)(b)
        Increase in mark-to-market value related to future periods                       2 (a)
                                                                                     -----
                Net decrease in marketing and trading gross margin                     (26)
    Charges related to purchased power contracts with Enron and its affiliates         (13)(b)
    Retail price reductions effective July 1, 2001                                      (6)
    Higher retail sales primarily related to customer growth                             9
    Lower replacement power costs for plant outages due to lower market
        prices                                                                          24
    Miscellaneous revenues                                                              (2)
                                                                                     -----
Total decrease in revenues, net of purchased power and fuel expense                    (14)
Lower other net expense                                                                  8
Miscellaneous items, net                                                                (2)
                                                                                     -----
    Decrease in income before income taxes                                              (8)
Lower income taxes primarily due to lower income                                         2
                                                                                     -----
    Decrease in net income                                                           $  (6)
                                                                                     =====

(a)  Essentially all of our marketing and trading activities are structured
     activities, meaning our portfolio of forward sales positions is hedged with
     a portfolio of forward purchases that protects the economic value of the
     sales transactions.
(b)  We recorded charges totaling $21 million for exposure to Enron and its
     affiliates in the fourth quarter of 2001.

     Electric operating revenues decreased approximately $114 million primarily
because of:

*    changes in marketing and trading revenues ($95 million, net decrease):
     -    decreased revenues related to generation sales other than native load
          due to lower market prices and lower sales volumes ($74 million);
     -    increased realized revenues related to other realized marketing and
          trading in current period primarily due to more transactions ($26
          million);
     -    decreased prior period mark-to-market value transferred to realized
          margin related to trading with Enron and its affiliates ($8 million);
     -    decreased prior period mark-to-market value for gains transferred to
          realized margin in current period ($41 million);
     -    increased mark-to-market value for future periods ($2 million);
*    decreased revenues related to other wholesale sales and miscellaneous
     revenues primarily as a result of lower sales volumes ($35 million);
*    increased retail revenues primarily related to higher sales volumes due to
     customer growth and higher average usage per customer ($22 million) and;
*    decreased retail revenues related to a reduction in retail electricity
     prices ($6 million).

     Purchased power and fuel expenses decreased approximately $100 million
primarily because of:

*    changes in marketing and trading purchased power and fuel costs ($69
     million, net decrease) due to:
     -    decreased fuel costs related to generation sales other than native
          load primarily as a result of lower fuel prices and sales volumes ($37
          million);
     -    decreased purchased power costs related to other realized marketing
          and trading in current period primarily due to lower market prices
          ($32 million);
*    decreased costs related to other wholesale sales as a result of lower sales
     volumes ($33 million);
*    charges related to purchased power contracts with Enron and its affiliates
     ($13 million);
*    decreased plant outage replacement power costs due to lower market prices
     ($24 million);
*    increased costs primarily related to higher retail sales volumes due to
     customer growth and higher average usage per customer ($13 million).

     The increase in operations and maintenance expenses of $3 million primarily
related to increased employee benefit and other costs ($8 million) partially
offset by a provision for credit exposure related to the California energy
situation ($5 million) which was recorded in the fourth quarter of 2000.

     Net other expense decreased $8 million primarily because of a change in the
market value of El Dorado's investment in a technology-related venture capital
partnership in the prior-year period and a decrease in environmental remediation
costs, partially offset with other non-operating costs.

     Operating Results - Twelve-month period ended December 31, 2001 compared
     with twelve-month period ended December 31, 2000

     Our consolidated net income for the twelve months ended December 31, 2001
was $312 million compared with $302 million for the same period in the prior
year. In 2001, we recognized a $15 million after-tax loss in net income as a
cumulative effect of a change in accounting for derivatives, as required by SFAS
No.133.

     Income before accounting change for the twelve months ended December 31,
2001 was $327 million compared with $302 million for the same period in the
prior year. The year-to-year comparison benefited from strong power marketing
results including significant benefits in the 2001 third quarter from structured
trading activities, and retail customer growth. These factors were partially
offset by higher purchased power and fuel costs, due in part to increased power
plant maintenance; generation reliability measures; continuing retail
electricity price decreases; and a charge related to Enron and its affiliates.
The major factors that increased (decreased) income before accounting change
were as follows (dollars in millions):

                                                                              Increase/(Decrease)
                                                                              -------------------
Increases(decreases) in electric revenues, net of purchased power and fuel
expense due to:
    Marketing and trading activities:
        Increase from generation sales other than native load due to higher
            market prices                                                            $  25
        Increase in other realized marketing and trading in current period
            primarily due to more transactions                                          45
        Change in prior period mark-to-market value for gains transferred to
            realized margin in current period                                           16 (a)
        Change in prior period mark-to-market value for losses  transferred
            to realized margin related to trading with Enron and its
            affiliates                                                                  (8)(b)
        Increase in mark-to-market value related to future periods                     113 (a)
                                                                                     -----
                Net increase in marketing and trading                                  191
    Higher replacement power costs for plant outages related to higher market
        prices                                                                         (70)
    Retail price reductions effective July 1, 2001                                     (27)
    Charges related to purchased power contracts with Enron and its affiliates         (13)(b)
    Higher retail sales primarily related to customer growth                            35
    Miscellaneous revenues                                                               3
                                                                                     -----
Total increase in revenues, net of purchased power and fuel expense                    119
Higher operations and maintenance expense related to 2001 generation reliability
    program                                                                            (42)
Higher operations and maintenance expense related primarily to employee benefit,
    plant outage and maintenance and other costs                                       (38)
Lower net interest expense primarily due to higher capitalized interest                 17
Higher other net expense                                                                (5)
Miscellaneous items, net                                                                (7)
                                                                                     -----
    Net increase in income before income taxes                                          44
Higher income taxes primarily due to higher income                                     (19)
                                                                                     -----
    Net increase in income before accounting change                                  $  25
                                                                                     =====

(a)  Essentially all of our marketing and trading activities are structured
     activities, meaning our portfolio of forward sales positions is hedged with
     a portfolio of forward purchases that protects the economic value of the
     sales transactions.
(b)  We recorded charges totaling $21 million for exposure to Enron and its
     affiliates in the fourth quarter of 2001.

     Electric operating revenues increased approximately $850 million because
of:

*    changes in marketing and trading revenues ($827 million, net increase):
     -    increased revenues related to generation sales other than native load
          as a result of higher average market prices ($32 million);
     -    increased realized revenues related to other marketing and trading in
          current period primarily due to more transactions ($681 million);
     -    decreased prior period mark-to-market value transferred to realized
          margin related to trading with Enron and its affiliates ($8 million);
     -    increased prior period mark-to-market value for losses transferred to
          realized margin in current period ($9 million);
     -    increased mark-to-market value for future periods primarily as a
          result of more forward sales volume ($113 million);
*    decreased revenues related to other wholesale sales and miscellaneous
     revenues as a result of sales volumes ($28 million);
*    increased retail revenues primarily related to higher sales volumes
     primarily due to customer growth ($78 million) and;
*    decreased retail revenues related to reductions in retail electricity
     prices ($27 million).

     Purchased power and fuel expenses increased approximately $731 million
primarily because of:

*    changes in marketing and trading purchased power and fuel costs ($636
     million, net increase) due to:
     -    increased fuel costs related to generation sales other than native
          load as a result of higher fuel prices ($7 million);
     -    increased fuel and purchased power costs related to other realized
          marketing and trading in current period primarily due to more
          transactions ($636 million);
     -    decreased mark-to-market fuel costs related to SFAS No. 133 ($7
          million);
*    decreased costs related to other wholesale sales as a result of lower
     volumes ($31 million);
*    higher replacement power costs primarily from higher market prices and
     increased plant outages ($70 million), including costs of $12 million
     related to the Palo Verde outage extension to replace fuel control element
     assemblies;
*    higher costs related to retail sales volumes due to customer growth
     ($43 million) and;
*    charges related to purchased power contracts with Enron and its affiliates
     ($13 million).

     The increase in operations and maintenance expenses of $80 million
primarily related to the 2001 generation summer reliability programs (the
addition of generating capability to enhance reliability for the summer of 2001
($42 million)) and increased employee benefit, plant outage and maintenance, and
other costs ($38 million). The comparison reflects the Company's $10 million
provision for the credit exposure related to the California energy situation, $5
million of which was recorded in the fourth quarter of 2000 and $5 million of
which was recorded in the first quarter of 2001.

     Net other expense increased $5 million primarily because of a change in the
market value of El Dorado's investment in a technology-related venture capital
partnership in the prior year period and other non-operating costs partially
offset by an insurance recovery of environmental remediation costs.

     Interest expense decreased by $17 million primarily because of increased
capitalized interest resulting from our generation expansion plan partially
offset with higher interest expense due to higher debt balances.

                        PINNACLE WEST CAPITAL CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                (dollars in thousands, except per share amounts)

                                                          Three Months Ended
                                                             December 31,
                                                       ------------------------
                                                         2001           2000
                                                       ---------      ---------
Operating Revenues
  Electric                                             $ 683,608      $ 797,448
  Real estate                                             61,095         40,706
                                                       ---------      ---------
    Total                                                744,703        838,154
                                                       ---------      ---------

Operating Expenses
  Purchased power and fuel                               339,601        439,256
  Operations and maintenance                             121,790        118,901
  Real estate operations                                  52,214         33,048
  Depreciation and amortization                          109,061        105,836
  Taxes other than income taxes                           20,967         23,137
                                                       ---------      ---------
    Total                                                643,633        720,178
                                                       ---------      ---------
Operating Income                                         101,070        117,976

Other Income (Expense)                                    (6,334)       (14,032)
                                                       ---------      ---------

Income Before Interest and Income Taxes                   94,736        103,944
                                                       ---------      ---------

Interest Expense
  Interest charges                                        46,719         43,162
  Capitalized interest                                   (12,458)        (7,763)
                                                       ---------      ---------
    Total                                                 34,261         35,399
                                                       ---------      ---------

Income Before Income Taxes                                60,475         68,545
Income Taxes                                              24,669         26,233
                                                       ---------      ---------

Net Income                                             $  35,806      $  42,312
                                                       =========      =========

Average Common Shares Outstanding - Basic                 84,679         84,728

Average Common Shares Outstanding - Diluted               84,824         85,015

Earnings Per Average Common Share Outstanding
  Net Income - Basic                                   $    0.42      $    0.50
  Net Income - Diluted                                      0.42           0.50

Certain prior year amounts have been restated to conform with the 2001
presentation.

                        PINNACLE WEST CAPITAL CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                (dollars in thousands, except per share amounts)

                                                                 Twelve Months Ended
                                                                     December 31,
                                                              -----------    -----------
                                                                 2001           2000
                                                              -----------    -----------
Operating Revenues
  Electric                                                    $ 4,382,465    $ 3,531,810
  Real estate                                                     168,908        158,365
                                                              -----------    -----------
    Total                                                       4,551,373      3,690,175
                                                              -----------    -----------

Operating Expenses
  Purchased power and fuel                                      2,664,218      1,932,792
  Operations and maintenance                                      530,095        450,205
  Real estate operations                                          153,462        134,422
  Depreciation and amortization                                   427,903        431,229
  Taxes other than income taxes                                   101,068         99,780
                                                              -----------    -----------
    Total                                                       3,876,746      3,048,428
                                                              -----------    -----------
Operating Income                                                  674,627        641,747

Other Income (Expense)                                             (5,765)          (406)
                                                              -----------    -----------

Income Before Interest and Income Taxes                           668,862        641,341
                                                              -----------    -----------

Interest Expense
  Interest charges                                                175,822        166,447
  Capitalized interest                                            (47,862)       (21,638)
                                                              -----------    -----------
    Total                                                         127,960        144,809
                                                              -----------    -----------

Income Before Income Taxes                                        540,902        496,532
Income Taxes                                                      213,535        194,200
                                                              -----------    -----------
Income Before Accounting Change                                   327,367        302,332

Cumulative Effect of a Change in Accounting for Derivatives
- - Net of Income Tax Benefit of $9,892                             (15,201)            --
                                                              -----------    -----------

Net Income                                                    $   312,166    $   302,332
                                                              ===========    ===========

Average Common Shares Outstanding - Basic                          84,718         84,733

Average Common Shares Outstanding  - Diluted                       84,930         84,935

Earnings Per Average Common Share Outstanding
  Income Before Accounting Change - Basic                     $      3.86    $      3.57
  Net Income - Basic                                                 3.68           3.57
  Income Before Accounting Change - Diluted                          3.85           3.56
  Net Income - Diluted                                               3.68           3.56

Certain prior year amounts have been restated to conform with the 2001
presentation.
EX-99.5 7 ex99-5.htm GLOSSARY OF TERMS Pinnacle West Capital Corporation - Exhibit 99.5

Exhibit 99.5

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Glossary of Terms

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 For Future-Period Deliveries   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.
Current Period Effects   The net effect of the total revenue or gross margins realized on delivery of commodities in the period being measured, and the amount of prior-period mark-to-market (gains) losses transferred to realized upon delivery of the related commodities in the period. The net effect of transferring prior-period mark-to-market to realized does not affect total revenues, gross margin or earnings.
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(degree)F for the month. Average temperatures less than the base temperature are ignored.
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(degree)F for the month. Average temperatures greater than the base temperature are ignored.
Electricity Marketing and Trading - Delivered   All wholesale sales of electricity not accounted for in sales under traditional contracts, retail load hedge management or sales of generation other than native load. These sales are served by electricity purchased from the wholesale market and are made to other electric companies, power marketers, or public entities for the purpose of resale. Measured in gigawatt-hours.
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   Total capacity required and economic yet unavailable due to scheduled or unscheduled outages. Measured in megawatts per day.
Generation Other Than Native Load   Sales of electricity from generation owned by the company that is over and above the amount required to serve retail customers and traditional wholesale contracts.
Generation Production -- Coal   Amount of net energy produced by coal-fueled generators. Measured in gigawatt-hours.
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.
Marketing and Trading Gross Margin by Commodity - Pretax   Marketing and trading gross margin, before income taxes, for sales of generation other than native load and for sales and purchases of electricity and other commodities by the company in the wholesale market, summarized by the underlying commodities.
Marketing and Trading Gross Margin Components - Pretax   Marketing and trading gross margin, before income taxes, for sales of generation other than native load and for sales and purchase 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.
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.
Megawatt (MW)   One million watts.
Megawatt-hour (MWh)   A unit of energy equivalent to 1,000 kilowatt-hours.
Prior Period Mark-To-Market (Gains) Losses
Realized Upon Delivery of Commodities		   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.
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 Margin on Delivered Commodities   Marketing and trading gross margin related to electricity and other commodities that were delivered in the then-current period.
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.
Weather Normalized   Adjusted to exclude the effects of abnormal weather patterns.
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