8-K

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):    June 30, 2003

PINNACLE WEST CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

Arizona	1-8962	86-0512431
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona
(Address of principal executive offices) 85072-3999
(Zip Code)

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

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

TABLE OF CONTENTS

	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
	Item 9. Regulation FD Disclosure (Information furnished pursuant to Item 12. Results of Operations and Financial Condition)
SIGNATURES
Index to Exhibits
Exhibit 99.1
Exhibit 99.2
Exhibit 99.3
Exhibit 99.4
Exhibit 99.5
Exhibit 99.6
Exhibit 99.7
Exhibit 99.8
Exhibit 99.9
Exhibit 99.10

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 (cover page and list of contents).
99.2	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended June 30, 2003 and 2002.
99.3	Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
99.4	Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
99.5	Pinnacle West Capital Corporation consolidated statistics by quarter for 2001.
99.6	Pinnacle West Capital Corporation consolidated statistics by quarter for 2000.
99.7	Pinnacle West Capital Corporation consolidated statistics by quarter for 1999.
99.8	Pinnacle West Capital Corporation earnings variance explanations for periods ended June 30, 2003 and 2002 and condensed consolidated statements of income for the three months, six months and twelve months ended June 30, 2003 and 2002.
99.9	Glossary of Terms.
99.10	Earnings News Release.

Item 9. Regulation FD Disclosure (Information furnished pursuant to Item 12. Results of Operations and Financial Condition)

          The Company is providing quarterly consolidated statistical summaries, earnings variance explanations, and a glossary of relevant terms (collectively, “Information”) to help interested parties better understand its business. This Information is concurrently being posted to the Company’s website at www.pinnaclewest.com. The Information may not represent all of the factors that could affect the Company’s operating or financial results for various periods. Some of the Information is preliminary in nature and could be subject to significant adjustment. Some of the Information is based on information received from third parties and may contain inaccuracies. The Company is not responsible for any such inaccuracies. Although the Company may update or correct the Information if it is aware that such Information has been

revised or is inaccurate, the Company assumes no obligation to update or correct the Information and reserves the right to discontinue the provision of all or any portion of the Information at any time or to change the type of Information provided. Certain of the Information relates to the Company’s results of operations for its fiscal quarter ended June 30, 2003. This Information is attached hereto as Exhibits 99.2, 99.3, and 99.8. Those exhibits are being furnished, but not filed, under Item 12 of this Report on Form 8-K.

          On July 28, 2003, the Company issued a press release regarding its results of operations for its fiscal quarter ended June 30, 2003. A copy of the press release is attached hereto as Exhibit 99.10. The press release is being furnished, but not filed, under Item 12 of this Report on Form 8-K.

2

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: July 25, 2003	By: /s/ Barbara M. Gomez
	Barbara M. Gomez Treasurer

3

Index to Exhibits

Exhibit
No.	Description
99.1	Pinnacle West Capital Corporation quarterly consolidated statistical summary (cover page and list of contents).
99.2	Pinnacle West Capital Corporation quarterly consolidated statistical summary for the periods ended June 30, 2003 and 2002.
99.3	Pinnacle West Capital Corporation consolidated statistics by quarter for 2003.
99.4	Pinnacle West Capital Corporation consolidated statistics by quarter for 2002.
99.5	Pinnacle West Capital Corporation consolidated statistics by quarter for 2001.
99.6	Pinnacle West Capital Corporation consolidated statistics by quarter for 2000.
99.7	Pinnacle West Capital Corporation consolidated statistics by quarter for 1999.
99.8	Pinnacle West Capital Corporation earnings variance explanations for periods ended June 30, 2003 and 2002 and condensed consolidated statements of income for the three months, six months and twelve months ended June 30, 2003 and 2002.
99.9	Glossary of Terms.
99.10	Earnings News Release.

EX-99.1 3 p68070exv99w1.htm EXHIBIT 99.1

Exhibit 99.1

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

List of Contents

2003 Second-Quarter Summary

2003 Year-to-Date

2002 by Quarter

2001 by Quarter

2000 by Quarter

1999 by Quarter

Quarters may not sum to totals due to rounding.

The definitions of terms used in this statistical summary are contained
in the “Glossary of Terms” on the Pinnacle West website at:
http://www.pinnaclewest.com/files/investors/2002Q3QuarStatsGloss.pdf

This statistical data may be graphed in various quarterly or annual comparisons
using the “Interactive Charts” tool on the Pinnacle West website at:
http://www.pinnaclewest.com/main/pnw/investors/financials/quarterly/landing.html

EX-99.2 4 p68070exv99w2.htm EXHIBIT 99.2

Exhibit 99.2

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

EARNINGS CONTRIBUTION
BY SUBSIDIARY ($ Millions)

				3 Mo. Ended June 30								6 Mo. Ended June 30
Line				2003		2002			Incr (Decr)			2003			2002			Incr (Decr)
1		Arizona Public Service		$	43	$	64		$	(21	)	$	59		$	96		$	(37	)
2		Pinnacle West Energy			2		1			1			8			2			6
3		APS Energy Services			5		11			(6	)		13			13			—
4		SunCor			2		2			—			4			3			1
5		El Dorado			2		(3	)		5			5			(3	)		8
6		Parent Company			1		(6	)		7			(14	)		11			(25	)
7			Income From Continuing Operations		55		69			(14	)		75			122			(47	)
8a		Income From Discontinued Operations - Net of Tax			1		6			(5	)		6			7			(1	)
8b		Cumulative Effect of Change in Accounting - Net of Tax			—		—			—			—			—			—
9			Net Income	$	56	$	75		$	(19	)	$	81		$	129		$	(48	)
	EARNINGS PER SHARE BY SUBSIDIARY - DILUTED
10		Arizona Public Service		$	0.47	$	0.76		$	(0.29	)	$	0.65		$	1.13		$	(0.48	)
11		Pinnacle West Energy			0.02		0.01			0.01			0.08			0.02			0.06
12		APS Energy Services			0.06		0.13			(0.07	)		0.14			0.16			(0.02	)
13		SunCor			0.02		0.02			—			0.04			0.04			—
14		El Dorado			0.02		(0.04	)		0.06			0.05			(0.04	)		0.09
15		Parent Company			0.01		(0.07	)		0.08			(0.14	)		0.13			(0.27	)
16			Income From Continuing Operations		0.60		0.81			(0.21	)		0.82			1.44			(0.62	)
17a		Income From Discontinued Operations - Net of Tax			0.01		0.08			(0.07	)		0.07			0.08			(0.01	)
17b		Cumulative Effect of Change in Accounting - Net of Tax			—		—			—			—			—			—
18			Net Income	$	0.61	$	0.89		$	(0.28	)	$	0.89		$	1.52		$	(0.63	)
19	BOOK VALUE PER SHARE			$	29.95	$	30.54		$	(0.59	)	$	29.95		$	30.54		$	(0.59	)
	COMMON SHARES OUTSTANDING - DILUTED (Thousands)
20		Average			91,450		84,926			6,524			91,402			84,910			6,492
21		End of Period			91,262		84,768			6,494			91,262			84,768			6,494

[Additional columns below]

[Continued from above table, first column(s) repeated]

				12 Mo. Ended June 30
Line				2003			2002			Incr (Decr)
1		Arizona Public Service		$	162			243		$	(81	)
2		Pinnacle West Energy			(13	)		19			(32	)
3		APS Energy Services			28			11			17
4		SunCor			10			6			4
5		El Dorado			(47	)		(3	)		(44	)
6		Parent Company			20			44			(24	)
7			Income From Continuing Operations		160			320			(160	)
8a		Income From Discontinued Operations - Net of Tax			8			7			1
8b		Cumulative Effect of Change in Accounting - Net of Tax			(66	)		(12	)		(54	)
9			Net Income	$	102		$	315		$	(213	)
	EARNINGS PER SHARE BY SUBSIDIARY - DILUTED
10		Arizona Public Service		$	1.84		$	2.86		$	(1.02	)
11		Pinnacle West Energy			(0.15	)		0.22			(0.37	)
12		APS Energy Services			0.31			0.13			0.18
13		SunCor			0.12			0.07			0.05
14		El Dorado			(0.54	)		(0.04	)		(0.50	)
15		Parent Company			0.22			0.53			(0.31	)
16			Income From Continuing Operations		1.80			3.77			(1.97	)
17a		Income From Discontinued Operations - Net of Tax			0.09			0.09			—
17b		Cumulative Effect of Change in Accounting - Net of Tax			(0.74	)		(0.15	)		(0.59	)
18			Net Income	$	1.15		$	3.71		$	(2.56	)
19	BOOK VALUE PER SHARE			$	29.95		$	30.54		$	(0.59	)
	COMMON SHARES OUTSTANDING - DILUTED (Thousands)
20		Average			88,276			84,888			3,388
21		End of Period			91,262			84,768			6,494

See Glossary of Terms.
	Page 2 of 43

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

ELECTRIC OPERATING REVENUES
(Dollars in Millions)
REGULATED ELECTRICITY SEGMENT

					3 Mo. Ended June 30									6 Mo. Ended June 30
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		Retail
22			Residential		$	233		$	226		$	7		$	401		$	397		$	4
23			Business			251			251			—			447			446			1
24				Total retail		484			477			7			848			843			5
		Wholesale revenue on delivered electricity
25			Traditional contracts			4			1			3			7			3			4
26			Retail load hedge management			8			11			(3	)		13			13			—
27		Transmission for others				5			6			(1	)		11			12			(1	)
28		Other miscellaneous services				6			2			4			13			6			7
29				Total regulated electricity		507			497			10			892			877			15
	MARKETING AND TRADING SEGMENT
		Delivered marketing and trading
30			Generation sales other than native load			20			2			18			64			10			54
31			Realized margins on electricity trading			2			14			(12	)		7			41			(34	)
32			Other delivered electricity (a)			147			39			108			269			73			196
33			Total delivered marketing and trading			169			55			114			340			124			216
	OTHER MARKETING AND TRADING
34		Realized margins on delivered commodities other than electricity (a)				(2	)		1			(3	)		(4	)		5			(9	)
35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				1			(8	)		9			(5	)		(22	)		17
36		Change in mark-to-market for future-period deliveries				(1	)		1			(2	)		(1	)		18			(19	)
37		Total other marketing and trading				(2	)		(6	)		4			(10	)		1			(11	)
38	Total marketing and trading					167			49			118			330			125			205
39	Total operating electric revenues				$	674		$	546		$	128		$	1,222		$	1,002		$	220
	ELECTRIC SALES (GWH)
	REGULATED ELECTRICITY SEGMENT
		Retail
40			Residential			2,543			2,441			102			4,647			4,582			65
41			Business			3,450			3,429			21			6,299			6,200			99
42				Total retail		5,993			5,870			123			10,946			10,782			164
		Wholesale electricity delivered
43			Traditional contracts			131			121			10			261			192			69
44			Retail load hedge management			205			230			(25	)		314			388			(74	)
45				Total regulated electricity		6,329			6,221			108			11,521			11,362			159
	MARKETING AND TRADING SEGMENT
		Delivered marketing and trading
46			Generation sales other than native load			476			73			403			1,468			449			1,019
47			Electricity trading			3,140			3,596			(456	)		7,050			6,705			345
48			Other delivered electricity			3,004			774			2,230			5,474			1,501			3,973
49			Total delivered marketing and trading			6,620			4,443			2,177			13,992			8,655			5,337
50	Total electric sales					12,949			10,664			2,285			25,513			20,017			5,496

[Additional columns below]

[Continued from above table, first column(s) repeated]

					12 Mo. Ended June 30
Line						2003			2002			Incr (Decr)
		Retail
22			Residential			$	910		$	905		$	5
23			Business				929			941			(12	)
24				Total retail			1,839			1,846			(7	)
		Wholesale revenue on delivered electricity
25			Traditional contracts				13			(5	)		18
26			Retail load hedge management				123			404			(281	)
27		Transmission for others					29			29			—
28		Other miscellaneous services					24			13			11
29				Total regulated electricity			2,028			2,287			(259	)
	MARKETING AND TRADING SEGMENT
		Delivered marketing and trading
30			Generation sales other than native load				104			20			84
31			Realized margins on electricity trading				15			74			(59	)
32			Other delivered electricity (a)				403			153			250
33			Total delivered marketing and trading				522			247			275
	OTHER MARKETING AND TRADING
34		Realized margins on delivered commodities other than electricity (a)					(1	)		8			(9	)
35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)					(10	)		(89	)		79
36		Change in mark-to-market for future-period deliveries					20			118			(98	)
37		Total other marketing and trading					9			37			(28	)
38	Total marketing and trading						531			284			247
39	Total operating electric revenues					$	2,559		$	2,571		$	(12	)
	ELECTRIC SALES (GWH)
	REGULATED ELECTRICITY SEGMENT
		Retail
40			Residential				10,509			10,328			181
41			Business				13,016			12,995			21
42				Total retail			23,525			23,323			202
		Wholesale electricity delivered
43			Traditional contracts				543			238			305
44			Retail load hedge management				2,568			2,617			(49	)
45				Total regulated electricity			26,636			26,178			458
	MARKETING AND TRADING SEGMENT
		Delivered marketing and trading
46			Generation sales other than native load				2,810			778			2,032
47			Electricity trading				17,270			14,086			3,184
48			Other delivered electricity				8,112			2,514			5,598
49			Total delivered marketing and trading				28,192			17,378			10,814
50	Total electric sales						54,828			43,556			11,272

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market loss of $1 million was transferred to “realized” for the second quarter of 2003. Lines 31 and 34 include amounts totaling $1 million of realized losses for the second quarter of 2003.

See Glossary of Terms.
	Page 3 of 43

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS
(Dollars in Millions)

					3 Mo. Ended June 30									6 Mo. Ended June 30									12 Mo. Ended June 30
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
	Realized and Mark-To-Market Components
	Current Period Effects
		Realized margin on delivered commodities
			Electricity
51				Generation sales other than native load	$	1		$	—		$	1		$	4		$	2		$	2		$	16		$	8		$	8
52				Other electricity marketing and trading (a)		21			24			(3	)		45			57			(12	)		87			127			(40	)
53				Total electricity		22			24			(2	)		49			59			(10	)		103			135			(32	)
54			Other commodities (a)			(2	)		1			(3	)		(4	)		5			(9	)		(1	)		8			(9	)
55			Total realized margin			20			25			(5	)		45			64			(19	)		102			143			(41	)
		Prior-period mark-to-market (gains) losses on contracts delivered during current period
56			Electricity (a)			(2	)		(9	)		7			(8	)		(17	)		9			(13	)		(73	)		60
57			Other commodities (a)			3			—			3			3			(5	)		8			3			(9	)		12
58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—			—			—			(8	)		8
59			Subtotal			1			(9	)		10			(5	)		(22	)		17			(10	)		(90	)		80
60		Total current period effects (b)				21			16			5			40			42			(2	)		92			53			39
	Change in mark-to-market gains (losses) for future period deliveries (b)
61		Electricity				1			10			(9	)		(4	)		27			(31	)		24			129			(105	)
62		Other commodities				(2	)		(7	)		5			3			(10	)		13			(4	)		(11	)		7
63		Subtotal				(1	)		3			(4	)		(1	)		17			(18	)		20			118			(98	)
64	Total gross margin				$	20		$	19		$	1		$	39		$	59		$	(20	)	$	112		$	171		$	(59	)

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of June 30, 2003, Pinnacle West had accumulated mark-to-market net gains of $35 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: remainder of 2003, $6 million; 2004, $7 million; 2005, $8 million; 2006 and thereafter, $14 million.

(a)

The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 60 and in line 64 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the second quarter of 2003. A $2 million realized gain is included in the $21 million on line 52 for the second quarter of 2003.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms.
	Page 4 of 43

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS (continued)
(Dollars in Millions)

				3 Mo. Ended June 30									6 Mo. Ended June 30									12 Mo. Ended June 30
Line				2003			2002			Incr (Decr)			2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		By Commodity Sold or Traded
	65	Electricity		$	21		$	25		$	(4	)	$	38		$	70		$	(32	)	$	115		$	190		$	(75	)
	66	Natural gas			3			1			2			5			(4	)		9			3			2			1
	67	Coal			(1	)		(2	)		1			(2	)		(3	)		1			(1	)		(11	)		10
	68	Emission allowances			(3	)		(5	)		2			(3	)		(4	)		1			(6	)		(10	)		4
	69	Other			—			—			—			1			—			1			1			—			1
	70		Total Gross Margin	$	20		$	19		$	1		$	39		$	59		$	(20	)	$	112		$	171		$	(59	)
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	—		$	—		$	—		$	(2	)	$	1		$	(3	)	$	5		$	1		$	4
	72		Other marketing and trading		4			9			(5	)		8			43			(35	)		47			111			(64	)
		APS
	73		Generation sales other than native load		1			—			1			7			1			6			8			6			2
	74		Other marketing and trading		3			—			3			3			—			3			3			35			(32	)
		Pinnacle West Energy
	75		Generation sales other than native load		—			—			—			(1	)		—			(1	)		3			—			3
	76		Other marketing and trading		—			—			—			—			—			—			—			—			—
		APS ES
	77		Other marketing and trading		12			10			2			24			14			10			46			18			28
	78	Total gross margin before income taxes		$	20		$	19		$	1		$	39		$	59		$	(20	)	$	112		$	171		$	(59	)

See Glossary of Terms.

Page 5 of 43

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

					3 Mo. Ended June 30									6 Mo. Ended June 30
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			821,331			795,681			25,650			824,634			798,341			26,293
	80		Business			102,601			100,096			2,505			102,300			99,710			2,590
	81			Total		923,932			895,777			28,155			926,934			898,051			28,883
	82	Wholesale customers				66			67			(1	)		66			67			(1	)
	83			Total customers		923,998			895,844			28,154			927,000			898,118			28,882
	84	Customer Growth (% over prior year)				3.1	%		3.2	%		(0.1	)%		3.2	%		3.2	%		0.0	%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				2,516			2,443			73			4,751			4,551			200
	86	Business				3,494			3,411			83			6,374			6,166			208
	87			Total		6,010			5,854			156			11,125			10,717			408
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				3,096			3,068			28			5,635			5,739			(104	)
	89	Business				33,625			34,258			(633	)		61,569			61,839			(270	)
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				3,063			3,071			(8	)		5,761			5,701			60
	91	Business				34,058			34,075			(17	)		62,311			61,839			472
		ELECTRICITY DEMAND (MW)
	92	System peak demand				5,571			5,425			146			5,571			5,425			146

[Additional columns below]

[Continued from above table, first column(s) repeated]

					12 Mo. Ended June 30
Line					2003			2002			Incr (Decr)
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			814,948			789,096			25,852
	80		Business			101,524			99,231			2,293
	81			Total		916,472			888,327			28,145
	82	Wholesale customers				66			67			(1	)
	83			Total customers		916,538			888,394			28,144
	84	Customer Growth (% over prior year)				3.2	%		3.3	%		(0.1	)%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				10,527			9,987			540
	86	Business				13,089			12,683			406
	87			Total		23,616			22,670			946
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				12,895			13,088			(193	)
	89	Business				128,204			130,966			(2,762	)
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				12,918			12,657			261
	91	Business				128,921			127,816			1,105
		ELECTRICITY DEMAND (MW)
	92	System peak demand				5,803			5,687			116

See Glossary of Terms.

Page 6 of 43

Pinnacle West Capital Corporation

Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

					3 Mo. Ended June 30									6 Mo. Ended June 30
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			2,047			2,242			(195	)		4,353			4,499			(146	)
	94		Coal			2,823			2,703			120			5,593			5,593			—
	95		Gas, oil and other			1,572			659			913			2,860			996			1,864
	96			Total		6,442			5,604			838			12,806			11,088			1,718
		Purchased power
	97		Firm load			606			846			(240	)		591			916			(325	)
	98		Marketing and trading			6,349			4,599			1,750			12,838			8,592			4,246
	99			Total		6,955			5,445			1,510			13,429			9,508			3,921
	100			Total energy sources		13,397			11,049			2,348			26,235			20,596			5,639
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			86	%		95	%		(9	)%		92	%		95	%		(3	)%
	102		Coal			75	%		72	%		3	%		75	%		75	%		0	%
	103		Gas, oil and other			31	%		20	%		11	%		29	%		16	%		13	%
	104		System average			59	%		62	%		(3	)%		58	%		57	%		1	%
		Generation Capacity Out of Service and Replaced for
		Native Load (average MW/day)
	105		Nuclear			15			66			(51	)		23			64			(41	)
	106		Coal			373			279			94			310			225			85
	107		Gas			159			18			141			174			13			161
	108			Total		547			363			184			507			302			205
	109	Generation Fuel Cost ($/MWh)			$	16.80		$	11.89		$	4.91		$	17.70		$	11.73		$	5.97

[Additional columns below]

[Continued from above table, first column(s) repeated]

					12 Mo. Ended June 30
Line					2003			2002			Incr (Decr)
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			8,835			8,638			197
	94		Coal			12,056			12,019			37
	95		Gas, oil and other			6,233			2,727			3,506
	96			Total		27,124			23,384			3,740
		Purchased power
	97		Firm load			1,293			2,862			(1,569	)
	98		Marketing and trading			27,949			19,214			8,735
	99			Total		29,242			22,076			7,166
	100			Total energy sources		56,366			45,460			10,906
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			93	%		91	%		2	%
	102		Coal			80	%		80	%		0	%
	103		Gas, oil and other			31	%		23	%		8	%
	104		System average			60	%		64	%		(4	)%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			47			100			(53	)
	106		Coal			206			181			25
	107		Gas			127			31			96
	108			Total		380			312			68
	109	Generation Fuel Cost ($/MWh)			$	15.32		$	10.86		$	4.46

See Glossary of Terms.

Page 7 of 43

Pinnacle West Capital Corporation
Quarterly Consolidated Statistical Summary
Periods Ended June 30, 2003 and 2002

					3 Mo. Ended June 30									6 Mo. Ended June 30
Line					2003			2002			Incr (Decr)			2003			2002			Incr (Decr)
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	48.88		$	30.65		$	18.23		$	49.27		$	28.75		$	20.52
	111			SP15	$	50.73		$	31.51		$	19.22		$	52.54		$	29.98		$	22.56
			Off-Peak
	112			Palo Verde	$	25.48		$	14.10		$	11.38		$	30.79		$	18.13		$	12.66
	113			SP15	$	28.27		$	15.95		$	12.32		$	33.99		$	19.35		$	14.64
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			1,550			1,741			(191	)		1,626			1,830			(204	)
	115		Heating degree-days			17			—			17			366			472			(106	)
	116		Average humidity			18	%		16	%		2	%		31	%		22	%		9	%
		10-Year Averages
	117		Cooling degree-days			1,478			1,478			—			1,555			1,555			—
	118		Heating degree-days			34			34			—			580			580			—
	119		Average humidity			25	%		25	%		0	%		35	%		35	%		0	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b) (d)
	120		Single-family			10,065			9,445			620			17,300			16,556			744
	121		Multi-family			1,482			1,231			251			2,375			2,481			(106	)
	122			Total		11,547			10,676			871			19,675			19,037			638
		Arizona Job Growth (c) (d)
	123		Payroll job growth (% over prior year)			0.7	%		(0.5	)%		1.2	%		0.8	%		(0.7	)%		1.5	%
	124		Unemployment rate (%, seasonally adjusted)			5.9	%		6.2	%		(0.3	)%		5.8	%		6.2	%		(0.4	)%

[Additional columns below]

[Continued from above table, first column(s) repeated]

					12 Mo. Ended June 30
Line					2003			2002			Incr (Decr)
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	41.75		$	33.55		$	8.20
	111			SP15	$	45.16		$	33.49		$	11.67
			Off-Peak
	112			Palo Verde	$	26.64		$	20.46		$	6.18
	113			SP15	$	29.55		$	22.01		$	7.54
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			4,671			4,638			33
	115		Heating degree-days			694			1,200			(506	)
	116		Average humidity			32	%		37	%		(5	)%
		10-Year Averages
	117		Cooling degree-days			4,407			4,407			—
	118		Heating degree-days			1,015			1,015			—
	119		Average humidity			36	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b) (d)
	120		Single-family			35,128			32,321			2,807
	121		Multi-family			6,871			6,056			815
	122			Total		41,999			38,377			3,622
		Arizona Job Growth (c) (d)
	123		Payroll job growth (% over prior year)			0.6	%		(0.1	)%		0.7	%
	124		Unemployment rate (%, seasonally adjusted)			6.0	%		5.6	%		0.4	%

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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security
(d)	The economic indicators reflect three month, six month and twelve month ended May 2002 and May 2003.

See Glossary of Terms.

Page 8 of 43 EX-99.3 5 p68070exv99w3.htm EXHIBIT 99.3

Exhibit 99.3

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

															Increase
															(Decrease)
Line					1st Qtr			2nd Qtr		3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)
	1		Arizona Public Service		$	16		$	43			$	59		$	(37	)
	2		Pinnacle West Energy			5			2				8			6
	3		APS Energy Services			8			5				13			—
	4		SunCor			1			2				4			1
	5		El Dorado			3			2				5			8
	6		Parent Company			(13	)		1				(14	)		(25	)
	7			Income From Continuing Operations		20			55				75			(47	)
	8		Income From Discontinued Operations - Net of Tax			5			1				6			(1	)
	9			Net Income	$	25		$	56			$	81		$	(48	)
		EARNINGS PER SHARE BY SUBSIDIARY - DILUTED
	10		Arizona Public Service		$	0.17		$	0.47			$	0.65		$	(0.48	)
	11		Pinnacle West Energy			0.06			0.02				0.08			0.06
	12		APS Energy Services			0.08			0.06				0.14			(0.02	)
	13		SunCor			0.01			0.02				0.04			—
	14		El Dorado			0.03			0.02				0.05			0.09
	15		Parent Company			(0.13	)		0.01				(0.14	)		(0.27	)
	16			Income From Continuing Operations		0.22			0.60				0.82			(0.62	)
	17		Income From Discontinued Operations - Net of Tax			0.06			0.01				0.07			(0.01	)
	18			Net Income	$	0.28		$	0.61			$	0.89		$	(0.63	)
	19	BOOK VALUE PER SHARE			$	29.39		$	29.95			$	29.95		$	(0.59	)
		COMMON SHARES OUTSTANDING -
		DILUTED (Thousands)
	20		Average			91,359			91,450				91,402			6,492
	21		End of Period			91,257			91,262				91,262			6,494

See Glossary of Terms.

Page 9 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

ELECTRIC OPERATING REVENUES
          (Dollars in Millions)

																	Increase
																	(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		REGULATED ELECTRICITY SEGMENT
			Retail
	22			Residential		$	168		$	233				$	401			4
	23			Business			196			251					447			1
	24				Total retail		364			484					848			5
			Wholesale revenue on delivered electricity
	25			Traditional contracts			3			4					7			4
	26			Retail load hedge management			5			8					13			—
	27		Transmission for others				6			5					11			(1	)
	28		Other miscellaneous services				7			6					13			7
	29				Total regulated electricity		385			507					892			15
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			44			20					64			54
	31			Realized margins on electricity trading			5			2					7			(34	)
	32			Other delivered electricity (a)			122			147					269			196
	33			Total delivered marketing and trading			171			169					340			216
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(2	)		(2	)				(4	)		(9	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				(3	)		1					(5	)		17
	36		Change in mark-to-market for future-period deliveries				(3	)		(1	)				(1	)		(19	)
	37		Total other marketing and trading				(8	)		(2	)				(10	)		(11	)
	38	Total marketing and trading					163			167					330			205
	39	Total electric operating revenues				$	548		$	674				$	1,222		$	220
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			2,104			2,543					4,647			65
	41			Business			2,849			3,450					6,299			99
	42				Total retail		4,953			5,993					10,946			164
			Wholesale electricity delivered
	43			Traditional contracts			130			131					261			69
	44			Retail load hedge management			109			205					314			(74	)
	45				Total regulated electricity		5,192			6,329					11,521			159
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			992			476					1,468			1,019
	47			Electricity trading			3,910			3,140					7,050			345
	48			Other delivered electricity			2,470			3,004					5,474			3,973
	49			Total delivered marketing and trading			7,372			6,620					13,992			5,337
	50	Total electric sales					12,564			12,949					25,513			5,496

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market loss of $1 million was transferred to “realized” for the second quarter of 2003. Lines 31 and 34 include amounts totaling $1 million of realized losses for the second quarter of 2003.

See Glossary of Terms.

Page 10 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

MARKETING AND TRADING SEGMENT
      PRETAX GROSS MARGIN ANALYSIS
           (Dollars in Millions)

																	Increase
																	(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		Realized and Mark-To-Market Components
		Current Period Effects
			Realized margin on delivered commodities
				Electricity
	51				Generation sales other than native load	$	3		$	1				$	4		$	2
	52				Other electricity marketing and trading (a)		24			21					45			(12	)
	53				Total electricity		27			22					49			(10	)
	54			Other commodities (a)			(2	)		(2	)				(4	)		(9	)
	55			Total realized margin			25			20					45			(19	)
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			(5	)		(2	)				(8	)		9
	57			Other commodities (a)			2			3					3			8
	58			Charge related to trading activities with Enron and its affiliates			—			—					—			—
	59			Subtotal			(3	)		1					(5	)		17
	60		Total current period effects (b)				22			21					40			(2	)
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				(6	)		1					(4	)		(31	)
	62		Other commodities				3			(2	)				3			13
	63		Total future period effects				(3	)		(1	)				(1	)		(18	)
	64	Total gross margin				$	19		$	20				$	39		$	(20	)

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of June 30, 2003, Pinnacle West had accumulated mark-to-market net gains of $35 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: remainder of 2003, $6 million; 2004, $7 million; 2005, $8 million; 2006 and thereafter, $14 million.

(a)

The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 60 and in line 64 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the second quarter of 2003. A $2 million realized gain is included in the $21 million on line 52 for the second quarter of 2003.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms.

Page 11 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

MARKETING AND TRADING SEGMENT
      PRETAX GROSS MARGIN ANALYSIS (continued)
          (Dollars in Millions)

															Increase
															(Decrease)
Line				1st Qtr			2nd Qtr			3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		By Commodity Sold or Traded
	65	Electricity		$	17		$	21				$	38		$	(32	)
	66	Natural gas			2			3					5			9
	67	Coal			(1	)		(1	)				(2	)		1
	68	Emission allowances			—			(3	)				(3	)		1
	69	Other			1			—					1			1
	70		Total gross margin	$	19		$	20				$	39		$	(20	)
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	(2	)	$	—				$	(2	)	$	(3	)
	72		Other marketing and trading		4			4					8			(35	)
		APS
	73		Generation sales other than native load		6			1					7			6
	74		Other marketing and trading		—			3					3			3
		Pinnacle West Energy
	75		Generation sales other than native load		(1	)		—					(1	)		(1	)
	76		Other marketing and trading		—			—					—			—
		APS ES
	77		Other marketing and trading		12			12					24			10
	78	Total gross margin before income taxes		$	19		$	20				$	39		$	(20	)

See Glossary of Terms.

Page 12 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																Increase
																(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			827,937			821,331					824,634			26,293
	80		Business			101,999			102,601					102,300			2,590
	81			Total		929,936			923,932					926,934			28,883
	82	Wholesale customers				65			66					66			(1	)
	83			Total customers		930,001			923,998					927,000			28,882
	84	Customer Growth (% over prior year)				3.3	%		3.1	%				3.2	%		0.0	%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				2,235			2,516					4,751			200
	86	Business				2,880			3,494					6,374			208
	87			Total		5,115			6,010					11,125			408
		RETAIL USAGE
		(KWh/Average Customer)
	88	Residential				2,541			3,096					5,635			(104	)
	89	Business				27,927			33,625					61,569			(270	)
		RETAIL USAGE - WEATHER NORMALIZED
		(KWh/Average Customer)
	90	Residential				2,700			3,063					5,761			60
	91	Business				28,236			34,058					62,311			472
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,569			5,571					5,571			146

See Glossary of Terms.

Page 13 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																Increase
																(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			2,306			2,047					4,353			(146	)
	94		Coal			2,770			2,823					5,593			—
	95		Gas, oil and other			1,288			1,572					2,860			1,864
	96			Total		6,364			6,442					12,806			1,718
		Purchased power
	97		Firm load			(15	)		606					591			(325	)
	98		Marketing and trading			6,489			6,349					12,838			4,246
	99			Total		6,474			6,955					13,429			3,921
	100			Total energy sources		12,838			13,397					26,235			5,639
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			98	%		86	%				92	%		(3	)%
	102		Coal			75	%		75	%				75	%		3	%
	103		Gas, oil and other			26	%		31	%				29	%		13	%
	104		System average			58	%		59	%				58	%		1	%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			31			15					23			(41	)
	106		Coal			247			373					310			85
	107		Gas			189			159					174			161
	108			Total		467			547					507			204
	109	Generation Fuel Cost ($/MWh)			$	15.89		$	16.80				$	17.70		$	5.97

See Glossary of Terms.

Page 14 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2003

																Increase
																(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr	4th Qtr	Year-To-Date			vs Prior YTD
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	49.66		$	48.88				$	49.27		$	20.52
	111			SP15	$	54.35		$	50.73				$	52.54		$	22.56
			Off-Peak
	112			Palo Verde	$	36.09		$	25.48				$	30.79		$	12.66
	113			SP15	$	39.70		$	28.27				$	33.99		$	14.64
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			76			1,550					1,626			(204	)
	115		Heating degree-days			349			17					366			(106	)
	116		Average humidity			44	%		18	%				31	%		9	%
		10-Year Averages
	117		Cooling degree-days			77			1,478					1,555			—
	118		Heating degree-days			546			34					580			—
	119		Average humidity			45	%		25	%				35	%		0	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b) (d)
	120		Single-family			8,030			6,992					15,022			816
	121		Multi-family			863			846					1,709			(203	)
	122			Total		8,893			7,838					16,731			613
		Arizona Job Growth (c) (d)
	123		Payroll job growth (% over prior year)			1.0	%		0.6	%				0.8	%		1.4	%
	124		Unemployment rate (%, seasonally adjusted)			5.7	%		6.0	%				5.8	%		(0.4	)%

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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security
(d)	The economic indicators reflect latest available data through periods ending May 2003.

See Glossary of Terms.

Page 15 of 43

EX-99.4 6 p68070exv99w4.htm EXHIBIT 99.4

Exhibit 99.4

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)

																					Increase
																					(Decrease)
Line							1st Qtr		2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
	1				Arizona Public Service		$	32	$	64		$	87		$	16		$	199		$	(82	)
	2				Pinnacle West Energy			1		1			10			(31	)		(19	)		(37	)
	3				APS Energy Services			2		11			7			8			28			38
	4				SunCor			1		2			(1	)		8			10			7
	5				El Dorado			—		(3	)		(15	)		(37	)		(55	)		(55	)
	6				Parent Company			17		(6	)		13			19			43			8
	7					Income From Continuing Operations		53		69			101			(17	)		206			(121	)
					Income From Discontinued Operations -
	8	a			Net of Tax			1		6			—			2			9			9
					Cumulative Effect of Change in Accounting -
	8	b			Net of Tax			—		—			—			(66	)		(66	)		(51	)
	9					Net Income	$	54	$	75		$	101		$	(81	)	$	149		$	(163	)
			EARNINGS PER SHARE BY SUBSIDIARY - DILUTED
	10				Arizona Public Service		$	0.37	$	0.76		$	1.02		$	0.19		$	2.35		$	(0.95	)
	11				Pinnacle West Energy			0.01		0.01			0.12			(0.37	)		(0.23	)		(0.44	)
	12				APS Energy Services			0.03		0.13			0.08			0.09			0.33			0.45
	13				SunCor			0.02		0.02			(0.01	)		0.09			0.11			0.07
	14				El Dorado			—		(0.04	)		(0.18	)		(0.43	)		(0.65	)		(0.65	)
	15				Parent Company			0.20		(0.07	)		0.16			0.24			0.51			0.09
	16					Income From Continuing Operations		0.63		0.81			1.19			(0.19	)		2.42			(1.43	)
					Income From Discontinued Operations -
	17	a			Net of Tax			—		0.08			—			0.02			0.11			0.11
					Cumulative Effect of Change in Accounting -
	17	b			Net of Tax			—		—			—			(0.78	)		(0.77	)		(0.60	)
	18					Net Income	$	0.63	$	0.89		$	1.19		$	(0.95	)	$	1.76		$	(1.92	)
	19		BOOK VALUE PER SHARE				$	30.06	$	30.54		$	31.39		$	29.40		$	29.40		$	(0.06	)
				COMMON SHARES OUTSTANDING - DILUTED (Thousands)
	20				Average			84,884		84,926			84,797			85,302			84,964			34
	21				End of Period			84,789		84,768			84,756			91,255			91,255			6,531

See Glossary of Terms.
	Page 16 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

ELECTRIC OPERATING REVENUES
(Dollars in Millions)

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		REGULATED ELECTRICITY SEGMENT
			Retail
	22			Residential		$	171		$	226		$	337		$	172		$	906		$	(9	)
	23			Business			195			251			270			212			928			(24	)
	24				Total retail		366			477			607			384			1,834			(33	)
			Wholesale revenue on delivered electricity
	25			Traditional contracts			2			1			3			3			9			(64	)
	26			Retail load hedge management			2			11			99			11			123			(455	)
	27		Transmission for others				6			6			6			12			30			4
	28		Other miscellaneous services				4			2			4			7			17			(1	)
	29				Total regulated electricity		380			497			719			417			2,013			(549	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			8			2			8			32			50			(98	)
	31			Realized margins on electricity trading			27			14			5			3			49			(13	)
	32			Other delivered electricity (a)			34			39			53			81			207			(122	)
	33			Total delivered marketing and trading			69			55			65			116			306			(233	)
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities
			other than electricity (a)				4			1			(3	)		6			8			22
	35		Prior period mark-to-market (gains) losses on
			contracts delivered during current period (a)				(22	)		(8	)		3			(8	)		(40	)		(39	)
	36		Change in mark-to-market for future-period deliveries				25			1			22			(1	)		52			(75	)
	37		Total other marketing and trading				7			(6	)		22			(3	)		20			(92	)
	38	Total marketing and trading					76			49			87			113			326			(325	)
	39	Total electric operating revenues				$	456		$	546		$	806		$	530		$	2,339		$	(874	)
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			2,141			2,441			3,806			2,056			10,444			109
	41			Business			2,771			3,429			3,681			3,036			12,917			(147	)
	42				Total retail		4,912			5,870			7,487			5,092			23,361			(38	)
			Wholesale electricity delivered
	43			Traditional contracts			71			121			142			140			474			(739	)
	44			Retail load hedge management			158			230			1,958			296			2,642			(398	)
	45				Total regulated electricity		5,141			6,221			9,587			5,528			26,477			(1,175	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			376			73			291			1,051			1,791			403
	47			Electricity trading			3,109			3,596			5,908			4,312			16,925			4,894
	48			Other delivered electricity			727			774			905			1,733			4,139			1,557
	49			Total delivered marketing and trading			4,212			4,443			7,104			7,096			22,855			6,854
	50	Total electric sales					9,353			10,664			16,691			12,624			49,332			5,679

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows (a) that a prior-period mark-to-market gain of $40 million was transferred to “realized” for the total year of 2002. Lines 31 and 34 include amounts totaling $40 million of realized revenues for the total year of 2002.

See Glossary of Terms.
	Page 17 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

MARKETING AND TRADING SEGMENT
      PRETAX GROSS MARGIN ANALYSIS
        (Dollars in Millions)

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		Realized and Mark-To-Market Components
		Current Period Effects
			Realized margin on delivered commodities
				Electricity
	51				Generation sales other than native load	$	2		$	—		$	3		$	9		$	14		$	(66	)
	52				Other electricity marketing and trading (a)		33			24			19			23			99			(18	)
	53				Total electricity		35			24			22			32			113			(84	)
	54			Other commodities (a)			4			1			(3	)		6			8			22
	55			Total realized margin			39			25			19			38			121			(62	)
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			(16	)		(9	)		(4	)		(4	)		(30	)		(19	)
	57			Other commodities (a)			(6	)		—			6			(4	)		(11	)		(36	)
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—			8
	59			Subtotal			(22	)		(9	)		2			(8	)		(41	)		(47	)
	60		Total current period effects (b)				17			16			21			30			80			(109	)
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				25			10			25			6			63			(83	)
	62		Other commodities				(2	)		(7	)		(2	)		(7	)		(11	)		7
	63		Total future period effects				23			3			23			(1	)		52			(76	)
	64	Total gross margin				$	40		$	19		$	44		$	29		$	132		$	(185	)

FUTURE MARKETING AND TRADING MARK-TO-MARKET REALIZATION

As of December 31, 2002, Pinnacle West had accumulated mark-to-market net gains of $41 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: 2003, $4 million; 2004, $10 million; 2005 and thereafter, $27 million.

(a)

The net effect on pretax gross margin from realization of prior-period mark-to-market included in line 60 and in line 64 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $30 million was transferred to “realized” for the total year 2002. A $30 million realized gain is included in the $99 million on line 52 for total year 2002.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms.
	Page 18 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS (continued)
(Dollars in Millions)

																			Increase
																			(Decrease)
Line				1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		By Commodity Sold or Traded
	65	Electricity		$	45		$	25		$	43		$	34		$	147		$	(181	)
	66	Natural gas			(5	)		1			3			(5	)		(6	)		2
	67	Coal			(1	)		(2	)		1			—			(2	)		(9	)
	68	Emission allowances			1			(5	)		(3	)		—			(7	)		3
	69	Other			—			—			—			—			—			—
	70		Total gross margin	$	40		$	19		$	44		$	29		$	132		$	(185	)
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	1		$	—		$	2		$	5		$	8		$	8
	72		Other marketing and trading		34			9			30			9			82			4
		APS
	73		Generation sales other than native load		1			—			1			—			2			(77	)
	74		Other marketing and trading		—			—			—			—			—			(156	)
		Pinnacle West Energy
	75		Generation sales other than native load		—			—			—			4			4			4
	76		Other marketing and trading		—			—			—			—			—			—
		APS ES
	77		Other marketing and trading		4			10			11			11			36			32
	78	Total gross margin before income taxes		$	40		$	19		$	44		$	29		$	132		$	(185	)

See Glossary of Terms.
	Page 19 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

																				Increase
																				(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			801,000			795,681			798,590			811,930			801,801			25,462
	80		Business			99,335			100,096			100,318			101,177			100,228			2,030
	81			Total		900,335			895,777			898,908			913,107			902,029			27,492
	82	Wholesale customers				67			67			67			67			67			1
	83			Total customers		900,402			895,844			898,975			913,174			902,096			27,493
	84	Customer Growth (% over prior year)				3.2	%		3.2	%		3.1	%		3.2	%		3.1	%		(0.5	)%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				2,162			2,443			3,647			2,130			10,382			615
	86	Business				2,774			3,411			3,691			3,023			12,899			81
	87			Total		4,936			5,854			7,338			5,153			23,281			696
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				2,673			3,068			4,766			2,532			13,025			(287	)
	89	Business				27,896			34,258			36,691			30,011			128,885			(4,152	)
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				2,699			3,071			4,566			2,623			12,947			366
	91	Business				27,926			34,075			36,795			29,878			128,698			(1,834	)
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,921			5,425			5,803			3,828			5,803			116

See Glossary of Terms.
	Page 20 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

																				Increase
																				(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			2,257			2,242			2,387			2,095			8,981			596
	94		Coal			2,890			2,703			3,280			3,183			12,056			(516	)
	95		Gas, oil and other			337			659			1,918			1,455			4,369			375
	96			Total		5,484			5,604			7,585			6,733			25,406			455
		Purchased power
	97		Firm load			70			846			859			(157	)		1,619			(1,342	)
	98		Marketing and trading			3,993			4,599			8,771			6,340			23,704			6,051
	99			Total		4,063			5,445			9,630			6,183			25,323			4,709
	100			Total energy sources		9,547			11,049			17,215			12,916			50,729			5,164
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			96	%		95	%		100	%		87	%		94	%		6	%
	102		Coal			78	%		72	%		87	%		84	%		80	%		(4	)%
	103		Gas, oil and other			12	%		20	%		38	%		29	%		27	%		(10	)%
	104		System average			62	%		62	%		69	%		60	%		63	%		(7	)%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			62			66			12			129			67			(60	)
	106		Coal			184			279			88			116			167			—
	107		Gas			12			18			106			54			48			16
	108			Total		258			363			206			299			282			(44	)
	109	Generation Fuel Cost ($/MWh)			$	11.57		$	11.89		$	14.84		$	13.05		$	13.01		$	(3.21	)

See Glossary of Terms.

Page 21 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2002

																				Increase
																				(Decrease)
Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year-To-Date			vs Prior YTD
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	26.86		$	30.65		$	35.45		$	36.18		$	32.28		$	(86.13	)
	111			SP15	$	28.46		$	31.51		$	35.55		$	41.35		$	34.22		$	(85.77	)
			Off-Peak
	112			Palo Verde	$	22.17		$	14.10		$	18.21		$	25.09		$	19.89		$	(41.68	)
	113			SP15	$	22.76		$	15.95		$	19.54		$	28.52		$	21.69		$	(51.79	)
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			89			1,741			2,647			398			4,875			(247	)
	115		Heating degree-days			472			—			—			328			800			(360	)
	116		Average humidity			28	%		16	%		27	%		38	%		27	%		(9	)%
		10-Year Averages
	117		Cooling degree-days			77			1,478			2,489			395			4,439			—
	118		Heating degree-days			546			34			—			433			1,013			—
	119		Average humidity			45	%		25	%		34	%		40	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b)
	120		Single-family			7,682			9,666			8,689			8,275			34,312			1,447
	121		Multi-family			1,249			2,005			2,662			1,158			7,074			(1,930	)
	122			Total		8,931			11,671			11,351			9,433			41,386			(483	)
		Arizona Job Growth (c)
	123		Payroll job growth (% over prior year)			(0.8	)%		(0.2	)%		0.1	%		0.9	%		0.0	%		(1.0	)%
	124		Unemployment rate (%, seasonally adjusted)			6.2	%		6.2	%		6.2	%		6.0	%		6.2	%		1.5	%

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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security

See Glossary of Terms.

Page 22 of 43

EX-99.5 7 p68070exv99w5.htm EXHIBIT 99.5

Exhibit 99.5

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		$	108		$	39		$	281		$	(26	)
	2		Pinnacle West Energy			—			1			13			4			18			20
	3		APS Energy Services			(8	)		—			(3	)		—			(10	)		3
	4		SunCor			—			—			2			—			3			(8	)
	5		El Dorado			1			—			—			—			—			(2	)
	6		Parent Company			4			(4	)		42			(7	)		35			38
	7			Income Before Accounting Change		62			67			162			36			327			25
	8		Cumulative Effect of Change in Accounting - 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		$	0.76		$	0.82		$	1.27		$	0.46		$	3.30		$	(0.31	)
	11		Pinnacle West Energy			—			0.02			0.16			0.04			0.21			0.24
	12		APS Energy Services			(0.10	)		—			(0.03	)		—			(0.12	)		0.04
	13		SunCor			0.01			—			0.03			0.01			0.04			(0.10	)
	14		El Dorado			0.01			—			—			—			—			(0.02	)
	15		Parent Company			0.05			(0.05	)		0.49			(0.09	)		0.42			0.44
	16			Income Before Accounting Change		0.73			0.79			1.92			0.42			3.85			0.29
	17		Cumulative Effect of Change in Accounting - Net of Tax			(0.03	)		—			(0.15	)		—			(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		$	29.46		$	29.46		$	1.37
		COMMON SHARES OUTSTANDING - DILUTED (Thousands)
	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.

Page 23 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter

2001

ELECTRIC OPERATING REVENUES
     (Dollars in Millions)

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year			vs Prior Year
		REGULATED ELECTRICITY SEGMENT
			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
	27		Transmission for others				4			5			9			8			26			11
	28		Other miscellaneous services				6			5			6			1			18			(9	)
	29				Total regulated electricity		413			739			973			437			2,562			22
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			87			51			4			6			148			32
	31			Realized margin on electricity trading			12			17			(5	)		38			62			6
	32			Other delivered electricity (a)			111			138			51			29			329			87
	33			Total delivered marketing and trading			210			206			50			73			539			125
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(5	)		(12	)		(1	)		4			(14	)		(5	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				6			5			(37	)		(51	)		(1	)		1
	36		Change in mark-to-market for future-period deliveries				47			35			130			(9	)		127			113
	37		Total other marketing and trading				48			28			92			(56	)		112			109
	38	Total marketing and trading					258			234			142			17			651			234
	39	Total electric operating revenues				$	671		$	973		$	1,115		$	454		$	3,213		$	256
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			2,121			2,467			3,597			2,149			10,335			554
	41			Business			2,824			3,445			3,724			3,071			13,064			310
	42				Total retail		4,945			5,912			7,321			5,220			23,399			864
			Wholesale electricity delivered
	43			Traditional contracts			569			598			(37	)		83			1,213			(397	)
	44			Retail load hedge management			75			736			1,847			382			3,040			(3,634	)
	45				Total regulated electricity		5,589			7,246			9,131			5,685			27,652			(3,167	)
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			623			436			73			256			1,388			(106	)
	47			Electricity trading			2,291			2,359			3,553			3,828			12,031			2,772
	48			Other delivered electricity			759			810			267			746			2,582			(378	)
	49			Total delivered marketing and trading			3,673			3,605			3,893			4,830			16,001			2,288
	50	Total electric sales					9,263			10,851			13,024			10,515			43,653			(879	)

^(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $1 million was transferred to “realized” for the total year of 2001. Lines 31 and 34 include amounts totaling $1 million of realized revenues for the total year of 2001.

See Glossary of Terms.

Page 24 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter

2001

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS
(Dollars in Millions)

																					Increase
																					(Decrease)
Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year			vs Prior Year
		Realized and Mark-To-Market Components
		Current Period Effects
			Realized margin on delivered commodities
				Electricity
	51				Generation sales other than native load	$	48		$	26		$	3		$	3		$	80		$	26
	52				Other electricity marketing and trading (a)		4			43			14			56			117			48
	53				Total electricity		52			69			17			59			197			74
	54			Other commodities (a)			(5	)		(12	)		(1	)		4			(14	)		(5	)
	55			Total realized margin			47			57			16			63			183			69
			Prior-period mark-to-market (gains) losses on contracts delivered during current period
	56			Electricity (a)			1			—			(38	)		(38	)		(11	)		(9	)
	57			Other commodities (a)			12			5			1			(4	)		25			25
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			(8	)		(8	)		(8	)
	59			Subtotal			13			5			(37	)		(50	)		6			8
	60		Total current period effects (b)				60			62			(21	)		13			189			77
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				45			42			126			(2	)		146			139
	62		Other commodities				2			(6	)		3			(7	)		(18	)		(25	)
	63		Total future period effects				47			36			129			(9	)		128			114
	64	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 60 and in line 64 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $11 million was transferred to “realized” for the total year of 2001. A $11 million realized gain is included in the $117 million on line 52 for the total year of 2001.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms.

Page 25 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2001

MARKETING AND TRADING SEGMENT
      PRETAX GROSS MARGIN ANALYSIS (continued)
        (Dollars in Millions)

																			Increase
																			(Decrease)
Line				1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year			vs Prior Year
		By Commodity Sold or Traded
	65	Electricity		$	98		$	111		$	105		$	15		$	328		$	201
	66	Natural gas			(3	)		(12	)		9			(3	)		(8	)		(15	)
	67	Coal			14			2			(2	)		(6	)		7			10
	68	Emission allowances			(2	)		(3	)		(4	)		(2	)		(10	)		(5	)
	69	Other			—			—			—			—			—			—
	70		Total gross margin	$	107		$	98		$	108		$	4		$	317		$	191
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	—		$	—		$	—		$	—		$	—		$	—
	72		Other marketing and trading		7			3			74			(6	)		78			80
		APS
	73		Generation sales other than native load		48			26			2			3			79			25
	74		Other marketing and trading		53			68			32			3			156			82
		Pinnacle West Energy
	75		Generation sales other than native load		—			—			—			—			—			—
	76		Other marketing and trading		—			—			—			—			—			—
		APS ES
	77		Other marketing and trading		(1	)		1			—			4			4			4
	78	Total gross margin before income taxes		$	107		$	98		$	108		$	4		$	317		$	191

See Glossary of Terms.

Page 26 of 43

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
	79		Residential			775,317			770,335			773,321			786,382			776,339			27,054
	80		Business			97,222			98,065			98,874			98,631			98,198			4,070
	81			Total		872,539			868,400			872,195			885,013			874,537			31,124
	82	Wholesale customers				68			66			66			66			66			(1	)
	83			Total customers		872,607			868,466			872,261			885,079			874,603			31,123
	84	Customer Growth (% over prior year)				4.0	%		3.9	%		3.7	%		3.2	%		3.7	%		(0.4	)%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				2,037			2,238			3,354			2,138			9,767			208
	86	Business				2,825			3,339			3,633			3,021			12,818			126
	87			Total		4,862			5,577			6,987			5,159			22,585			334
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				2,737			3,203			4,651			2,733			13,312			259
	89	Business				29,047			35,130			37,666			31,136			133,037			(2,459	)
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				2,627			2,905			4,337			2,719			12,581			(177	)
	91	Business				29,057			34,049			36,747			30,629			130,532			(4,305	)
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,661			5,358			5,687			3,898			5,687			209

See Glossary of Terms.

Page 27 of 43

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
	93		Nuclear			2,261			1,985			2,320			1,819			8,385			(456	)
	94		Coal			2,901			3,245			3,223			3,203			12,572			63
	95		Gas, oil and other			1,007			1,256			1,157			574			3,994			1,210
	96			Total		6,169			6,486			6,700			5,596			24,951			817
		Purchased power
	97		Firm load			170			845			1,734			212			2,961			446
	98		Marketing and trading			3,126			3,905			5,667			4,955			17,653			(1,240	)
	99			Total		3,296			4,750			7,401			5,167			20,614			(794	)
	100			Total energy sources		9,465			11,236			14,101			10,763			45,565			23
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			96	%		84	%		97	%		76	%		88	%		(5	)%
	102		Coal			78	%		87	%		85	%		85	%		84	%		1	%
	103		Gas, oil and other			39	%		46	%		38	%		20	%		37	%		10	%
	104		System average			71	%		73	%		73	%		62	%		70	%		1	%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			57			180			26			246			127			47
	106		Coal			284			166			129			90			167			13
	107		Gas			36			52			24			16			32			10
	108			Total		376			398			179			352			326			70
	109	Generation Fuel Cost ($/MWh)			$	19.64		$	19.28		$	13.21		$	12.51		$	16.22		$	2.50

See Glossary of Terms. Page 28 of 43

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
	110			Palo Verde	$	214.21		$	182.71		$	49.80		$	26.89		$	118.41		$	6.98
	111			SP15	$	219.66		$	186.30		$	45.61		$	28.38		$	119.99		$	12.64
			Off-Peak
	112			Palo Verde	$	130.40		$	70.32		$	27.22		$	18.33		$	61.57		$	8.55
	113			SP15	$	159.80		$	84.78		$	28.92		$	20.41		$	73.48		$	12.74
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			106			1,733			2,663			620			5,122			539
	115		Heating degree-days			657			43			—			460			1,160			192
	116		Average humidity			50	%		25	%		31	%		39	%		36	%		2	%
		10-Year Averages
	117		Cooling degree-days			77			1,478			2,489			395			4,439			—
	118		Heating degree-days			546			34			—			433			1,013			—
	119		Average humidity			45	%		25	%		34	%		40	%		36	%		0	%
		ECONOMIC INDICATORS
		Building Permits — Metro Phoenix (b)
	120		Single-family			8,783			9,394			8,384			6,304			32,865			356
	121		Multi-family			3,925			1,833			2,514			732			9,004			(1,224	)
	122			Total		12,708			11,227			10,898			7,036			41,869			(868	)
		Arizona Job Growth (c)
	123		Payroll job growth (% over prior year)			2.4	%		1.5	%		0.8	%		(0.7	)%		1.0	%		(2.7	)%
	124		Unemployment rate (%, seasonally adjusted)			3.9	%		4.4	%		4.9	%		5.7	%		4.7	%		0.8	%

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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security

See Glossary of Terms. Page 29 of 43

EX-99.6 8 p68070exv99w6.htm EXHIBIT 99.6

Exhibit 99.6

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
	8		Cumulative Effect of Change in Accounting - 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		$	1.46		$	0.63		$	3.61
	11		Pinnacle West Energy			—			(0.01	)		(0.01	)		(0.01	)		(0.03	)
	12		APS Energy Services			(0.02	)		(0.03	)		—			(0.11	)		(0.16	)
	13		SunCor			0.06			0.01			0.03			0.04			0.14
	14		El Dorado			0.22			(0.04	)		(0.10	)		(0.06	)		0.02
	15		Parent Company			(0.01	)		—			(0.01	)		—			(0.02	)
	16			Income Before Accounting Change		0.64			1.06			1.37			0.49			3.56
	17		Cumulative Effect of Change in Accounting - Net of Tax			—			—			—			—			—
	18			Net Income	$	0.64		$	1.06		$	1.37		$	0.49		$	3.56
	19	BOOK VALUE PER SHARE			$	26.29		$	27.00		$	28.01		$	28.09		$	28.09
		COMMON SHARES OUTSTANDING - DILUTED (Thousands)
	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. Page 30 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2000

ELECTRIC OPERATING REVENUES
(Dollars in Millions)

Line						1st Qtr			2nd Qtr		3rd Qtr			4th Qtr			Total Year
		REGULATED ELECTRICITY SEGMENT
			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
	27		Transmission for others				3			4		4			4			15
	28		Other miscellaneous services				4			8		8			7			27
	29				Total regulated electricity		379			547		1,158			456			2,540
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			9			13		14			80			116
	31			Realized margins on electricity trading			3			11		32			10			56
	32			Other delivered electricity (a)			22			55		59			106			242
	33			Total delivered marketing and trading			34			79		105			196			414
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(5	)		1		(4	)		(1	)		(9	)
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				—			—		(17	)		(2	)		(2	)
	36		Change in mark-to-market for future-period deliveries				7			25		10			(11	)		14
	37		Total other marketing and trading				2			26		(11	)		(14	)		3
	38	Total marketing and trading					36			105		94			182			417
	39	Total electric operating revenues				$	415		$	652	$	1,252		$	638		$	2,957
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			1,877			2,370		3,506			2,028			9,781
	41			Business			2,736			3,379		3,674			2,965			12,754
	42				Total retail		4,613			5,749		7,180			4,993			22,535
			Wholesale electricity delivered
	43			Traditional contracts			331			391		537			351			1,610
	44			Retail load hedge management			232			585		5,155			702			6,674
	45				Total regulated electricity		5,176			6,725		12,872			6,046			30,819
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			396			215		163			720			1,494
	47			Electricity trading			1,294			1,803		4,073			2,089			9,259
	48			Other delivered electricity			735			601		665			960			2,960
	49			Total delivered marketing and trading			2,425			2,619		4,901			3,769			13,713
	50	Total electric sales					7,601			9,344		17,773			9,815			44,532

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the total year of 2000. Lines 31 and 34 include amounts totaling $2 million of realized revenues for the total year of 2000.

See Glossary of Terms. Page 31 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2000

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS
(Dollars in Millions)

Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		Realized and Mark-To-Market Components
		Current Period Effects
			Realized margin on delivered commodities
				Electricity
	51				Generation sales other than native load	$	2		$	6		$	7		$	39		$	54
	52				Other electricity marketing and trading (a)		3			28			33			5			69
	53				Total electricity		5			34			40			44			123
	54			Other commodities (a)			(5	)		1			(4	)		(1	)		(9	)
	55			Total realized margin			—			35			36			43			114
			Prior-period mark-to-market (gains) losses on contracts delivered during current period (b)
	56			Electricity (a)			—			—			(18	)		(2	)		(2	)
	57			Other commodities (a)			—			—			1			—			—
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—
	59			Subtotal			—			—			(17	)		(2	)		(2	)
	60		Total current period effects (b)				—			35			19			41			112
		Change in mark-to-market gains (losses) for future period deliveries (b)
	61		Electricity				2			27			6			(10	)		7
	62		Other commodities				5			(2	)		4			(1	)		7
	63		Total future period effects				7			25			10			(11	)		14
	64	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 60 and in line 64 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 56 are included in line 52. The opposites of amounts included in line 57 are included in line 54. For example, line 56 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the total year of 2000. A $2 million realized gain is included in the $69 million on line 52 for the total year of 2000.

(b)

Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms. Page 32 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
2000

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS (continued)
(Dollars in Millions)

Line				1st Qtr		2nd Qtr			3rd Qtr			4th Qtr			Total Year
		By Commodity Sold or Traded
	65	Electricity			7		61			28			31			127
	66	Natural gas			—		(1	)		3			4			6
	67	Coal			—		—			(2	)		—			(2	)
	68	Emission allowances			—		—			—			(5	)		(5	)
	69	Other			—		—			—			—			—
	70		Total gross margin	$	7	$	60		$	29		$	30		$	126
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	—	$	—		$	—		$	—		$	—
	72		Other marketing and trading		—		—			—			(2	)		(2	)
		APS
	73		Generation sales other than native load		2		6			7			39			54
	74		Other marketing and trading		5		54			22			(7	)		74
		Pinnacle West Energy
	75		Generation sales other than native load		—		—			—			—			—
	76		Other marketing and trading		—		—			—			—			—
		APS ES
	77		Other marketing and trading		—		—			—			—			—
	78	Total gross margin before income taxes		$	7	$	60		$	29		$	30		$	126

See Glossary of Terms. Page 33 of 43

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
	79		Residential			746,528			742,485			746,742			761,386			749,285
	80		Business			92,667			93,343			94,479			96,024			94,128
	81			Total		839,195			835,828			841,221			857,410			843,413
	82	Wholesale customers				67			67			67			67			67
	83			Total customers		839,262			835,895			841,288			857,477			843,480
	84	Customer Growth (% over prior year)				4.0	%		4.1	%		4.1	%		4.2	%		4.1	%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				1,933			2,253			3,439			1,934			9,559
	86	Business				2,737			3,297			3,644			3,014			12,692
	87			Total		4,670			5,550			7,083			4,948			22,251
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				2,514			3,192			4,695			2,664			13,054
	89	Business				29,525			36,200			38,887			30,878			135,496
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				2,589			3,034			4,605			2,540			12,757
	91	Business				29,536			35,321			38,569			31,388			134,838
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,315			5,095			5,478			4,331			5,478

See Glossary of Terms. Page 34 of 43

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
	93		Nuclear			2,325			2,090			2,348			2,078			8,841
	94		Coal			2,828			3,163			3,343			3,175			12,509
	95		Gas, oil and other			323			526			1,046			889			2,784
	96			Total		5,476			5,779			6,737			6,142			24,134
		Purchased power
	97		Firm load			51			819			1,550			95			2,515
	98		Marketing and trading			2,261			2,989			9,893			3,750			18,893
	99			Total		2,312			3,808			11,443			3,845			21,408
	100			Total energy sources		7,788			9,587			18,180			9,987			45,542
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			98	%		88	%		98	%		87	%		93	%
	102		Coal			76	%		85	%		88	%		84	%		83	%
	103		Gas, oil and other			13	%		21	%		40	%		34	%		27	%
	104		System average			63	%		67	%		77	%		70	%		69	%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			27			129			21			143			80
	106		Coal			223			124			85			187			155
	107		Gas			8			43			16			20			22
	108			Total		258			296			122			350			257
	109	Generation Fuel Cost ($/MWh)			$	10.65		$	12.69		$	14.77		$	16.28		$	13.72

See Glossary of Terms.
Page 35 of 43

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
	110			Palo Verde	$	30.52		$	90.49		$	170.40		$	154.33		$	111.44
	111			SP15	$	31.40		$	82.67		$	152.74		$	162.59		$	107.35
			Off-Peak
	112			Palo Verde	$	22.97		$	31.91		$	61.48		$	95.72		$	53.02
	113			SP15	$	24.52		$	32.45		$	66.28		$	119.72		$	60.74
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			71			1,712			2,547			253			4,583
	115		Heating degree-days			459			9			—			500			968
	116		Average humidity			37	%		23	%		29	%		46	%		34	%
		10-Year Averages
	117		Cooling degree-days			77			1,478			2,489			395			4,439
	118		Heating degree-days			546			34			—			433			1,013
	119		Average humidity			45	%		25	%		34	%		40	%		36	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b)
	120		Single-family			8,163			9,605			8,331			6,410			32,509
	121		Multi-family			3,208			2,651			2,417			1,952			10,228
	122			Total		11,371			12,256			10,748			8,362			42,737
		Arizona Job Growth (c)
	123		Payroll job growth (% over prior year)			4.4	%		3.8	%		3.4	%		3.2	%		3.7	%
	124		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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security

See Glossary of Terms.
Page 36 of 43

EX-99.7 9 p68070exv99w7.htm EXHIBIT 99.7

Exhibit 99.7

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions)
	1		Arizona Public Service		$	33		$	70		$	130		$	34		$	267
	2		Pinnacle West Energy			—			—			—			—			—
	3		APS Energy Services			(2	)		(2	)		(2	)		(3	)		(9	)
	4		SunCor			1			3			—			2			6
	5		El Dorado			—			—			—			11			11
	6		Parent Company			(1	)		(2	)		(2	)		—			(5	)
	7			Income From Continuing Operations		31			69			126			44			270
	8a		Income Tax Benefit From Discontinued Operations			—			—			38			—			38
	8b		Extraordinary Charge - Net of Income Tax			—			—			(140	)		—			(140	)
	9			Net Income	$	31		$	69		$	24		$	44		$	168
		EARNINGS PER SHARE BY SUBSIDIARY — DILUTED
	10		Arizona Public Service		$	0.38		$	0.82		$	1.52		$	0.42		$	3.14
	11		Pinnacle West Energy			—			—			—			—			—
	12		APS Energy Services			(0.02	)		(0.02	)		(0.02	)		(0.05	)		(0.11	)
	13		SunCor			0.01			0.03			(0.01	)		0.03			0.07
	14		El Dorado			—			—			—			0.13			0.14
	15		Parent Company			(0.01	)		(0.02	)		(0.01	)		—			(0.07	)
	16			Income From Continuing Operations		0.36			0.81			1.48			0.53			3.17
	17a		Income Tax Benefit From Discontinued Operations			—			—			0.45			—			0.45
	17b		Extraordinary Charge - Net of Income Tax			—			—			(1.65	)		—			(1.65	)
	18			Net Income	$	0.36		$	0.81		$	0.28		$	0.53		$	1.97
	19	BOOK VALUE PER SHARE			$	25.49		$	25.58		$	25.84		$	26.00		$	26.00
		COMMON SHARES OUTSTANDING - DILUTED (Thousands)
	20		Average			85,176			85,093			84,989			84,894			85,009
	21		End of Period			84,645			84,771			84,735			84,750			84,750

See Glossary of Terms.
Page 37 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

ELECTRIC OPERATING REVENUES
                (Dollars in Millions)

Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		REGULATED ELECTRICITY SEGMENT
			Retail
	22			Residential		$	157		$	189		$	295		$	164		$	805
	23			Business			190			237			269			216			912
	24				Total retail		347			426			564			380			1,717
			Wholesale revenue on delivered electricity
	25			Traditional contracts			11			16			21			13			61
	26			Retail load hedge management			—			—			108			—			108
	27		Transmission for others				3			3			3			3			11
	28		Other miscellaneous services				3			4			6			5			18
	29				Total regulated electricity		364			449			702			401			1,915
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	30			Generation sales other than native load			7			6			6			11			30
	31			Realized margins on electricity trading			4			(2	)		5			3			10
	32			Other delivered electricity (a)			17			22			45			27			111
	33			Total delivered marketing and trading			28			26			56			41			151
		OTHER MARKETING AND TRADING
	34		Realized margins on delivered commodities other than electricity (a)				(1	)		—			(2	)		5			2
	35		Prior period mark-to-market (gains) losses on contracts delivered during current period (a)				—			—			—			—			—
	36		Change in mark-to-market for future-period deliveries				—			6			(1	)		(4	)		1
	37		Total other marketing and trading				(1	)		6			(3	)		1			3
	38	Total marketing and trading					27			32			53			42			154
	39	Total electric operating revenues				$	391		$	481		$	755		$	442		$	2,069
		ELECTRIC SALES (GWH)
		REGULATED ELECTRICITY SEGMENT
			Retail sales
	40			Residential			1,796			1,939			3,160			1,880			8,775
	41			Business			2,665			3,239			3,464			2,932			12,300
	42				Total sales		4,461			5,178			6,624			4,812			21,075
			Wholesale electricity delivered
	43			Traditional contracts			309			351			441			321			1,422
	44			Retail load hedge management			—			—			631			—			631
	45				Total regulated electricity		4,770			5,529			7,696			5,133			23,128
		MARKETING AND TRADING SEGMENT
			Delivered marketing and trading
	46			Generation sales other than native load			348			254			171			494			1,267
	47			Electricity trading			1,286			1,198			2,165			1,029			5,678
	48			Other delivered electricity			902			1,192			2,937			1,664			6,695
	49			Total delivered marketing and trading			2,536			2,644			5,273			3,187			13,640
	50	Total electric sales					7,306			8,173			12,969			8,320			36,768

(a) The net effect on net electric operating revenues from realization of prior-period mark-to-market included in line 39 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 35 are included in lines 31 and 34. For example, line 35 shows that a prior-period mark-to-market gain of $0 million was transferred to “realized” for the total year of 1999. Lines 31 and 34 include amounts totaling $0 million of realized revenues for the total year of 1999.

See Glossary of Terms.
Page 38 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

MARKETING AND TRADING SEGMENT
      PRETAX GROSS MARGIN ANALYSIS
            (Dollars in Millions)

Line						1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		Realized and Mark-To-Market Components
		Current Period Effects
			Realized margin on delivered commodities
				Electricity
	51				Generation sales other than native load	$	2		$	1		$	2		$	2		$	7
	52				Other electricity marketing and trading (a)		6			(2	)		3			—			7
	53				Total electricity		8			(1	)		5			2			14
	54			Other commodities (a)			(1	)		—			(2	)		6			3
	55			Total realized margin			7			(1	)		3			8			17
			Prior-period mark-to-market (gains) losses on contracts delivered during current period (a)
	56			Electricity			—			—			—			—			—
	57			Other commodities			—			—			—			—			—
	58			Charge related to trading activities with Enron and its affiliates			—			—			—			—			—
	59			Subtotal			—			—			—			—			—
	60		Total current period effects				7			(1	)		3			8			17
		Change in mark-to-market gains (losses) for future period deliveries
	61		Electricity				(1	)		4			(1	)		—			2
	62		Other commodities				1			2			—			(4	)		(1	)
	63		Total future period effects				—			6			(1	)		(4	)		1
	64	Total gross margin				$	7		$	5		$	2		$	4		$	18

(a) Quarterly amounts do not total to the annual amounts because of intra-year mark-to-market eliminations.

See Glossary of Terms.
Page 39 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

MARKETING AND TRADING SEGMENT
PRETAX GROSS MARGIN ANALYSIS (continued)
(Dollars in Millions)

Line				1st Qtr			2nd Qtr		3rd Qtr			4th Qtr		Total Year
		By Commodity Sold or Traded
	65	Electricity		$	7		$	3	$	4		$	2	$	16
	66	Natural gas			(1	)		—		—			1		—
	67	Coal			—			—		—			—		—
	68	Emission allowances			1			2		(2	)		1		2
	69	Other			—			—		—			—		—
	70		Total gross margin	$	7		$	5	$	2		$	4	$	18
		By Pinnacle West Entity
		Parent company marketing and trading division
	71		Generation sales other than native load	$	—		$	—	$	—		$	—	$	—
	72		Other marketing and trading		—			—		—			—		—
		APS
	73		Generation sales other than native load		2			1		2			2		7
	74		Other marketing and trading		5			4		—			2		11
		Pinnacle West Energy
	75		Generation sales other than native load		—			—		—			—		—
	76		Other marketing and trading		—			—		—			—		—
		APS ES
	77		Other marketing and trading		—			—		—			—		—
	78	Total gross margin before income taxes		$	7		$	5	$	2		$	4	$	18

See Glossary of Terms. Page 40 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		AVERAGE ELECTRIC CUSTOMERS
		Retail customers
	79		Residential			717,540			713,259			717,204			731,092			719,774
	80		Business			89,046			89,949			91,076			91,914			90,496
	81			Total		806,586			803,208			808,280			823,006			810,270
	82	Wholesale customers				67			67			71			73			70
	83			Total customers		806,653			803,275			808,351			823,079			810,340
	84	Customer Growth (% over prior year)				4.2	%		4.3	%		4.2	%		4.0	%		4.2	%
		RETAIL SALES (GWH) - WEATHER NORMALIZED
	85	Residential				1,859			1,984			3,166			1,924			8,933
	86	Business				2,669			3,280			3,461			2,893			12,303
	87			Total		4,528			5,264			6,627			4,817			21,236
		RETAIL USAGE (KWh/Average Customer)
	88	Residential				2,503			2,719			4,406			2,571			12,191
	89	Business				29,928			36,009			38,034			31,899			135,918
		RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer)
	90	Residential				2,591			2,782			4,414			2,632			12,411
	91	Business				29,973			36,465			38,001			31,475			135,951
		ELECTRICITY DEMAND (MW)
	92	System peak demand				3,343			4,885			4,935			3,881			4,935

See Glossary of Terms. Page 41 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		ENERGY SOURCES (GWH)
		Generation production
	93		Nuclear			2,295			2,080			2,397			2,077			8,849
	94		Coal			2,677			2,764			3,230			3,204			11,875
	95		Gas, oil and other			241			477			557			484			1,759
	96			Total		5,213			5,321			6,184			5,765			22,483
		Purchased power
	97		Firm load			170			753			1,470			87			2,480
	98		Marketing and trading			2,189			2,390			5,734			2,693			13,006
	99			Total		2,359			3,143			7,204			2,780			15,486
	100			Total energy sources		7,572			8,464			13,388			8,545			37,969
		POWER PLANT PERFORMANCE
		Capacity Factors
	101		Nuclear			98	%		88	%		100	%		87	%		93	%
	102		Coal			72	%		74	%		85	%		85	%		79	%
	103		Gas, oil and other			9	%		18	%		21	%		18	%		17	%
	104		System average			61	%		61	%		71	%		66	%		65	%
		Generation Capacity Out of Service and Replaced for Native Load (average MW/day)
	105		Nuclear			36			135			3			152			82
	106		Coal			337			368			177			172			264
	107		Gas			—			—			—			—			—
	108			Total		373			503			180			324			345
	109	Generation Fuel Cost ($/MWh)			$	10.00		$	10.96		$	11.02		$	11.33		$	10.85

See Glossary of Terms. Page 42 of 43

Pinnacle West Capital Corporation

Consolidated Statistics By Quarter
1999

Line					1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Total Year
		ENERGY MARKET INDICATORS (a)
		Electricity Average Daily Spot Prices ($/MWh)
			On-Peak
	110			Palo Verde	$	21.57		$	29.02		$	38.46		$	33.31		$	30.59
	111			SP15	$	21.26		$	27.17		$	35.01		$	33.84		$	29.32
			Off-Peak
	112			Palo Verde	$	13.94		$	15.33		$	20.73		$	22.26		$	18.07
	113			SP15	$	13.68		$	14.47		$	20.60		$	25.06		$	18.45
		WEATHER INDICATORS
		Actual
	114		Cooling degree-days			71			1,312			2,353			589			4,325
	115		Heating degree-days			459			112			—			359			930
	116		Average humidity			34	%		27	%		40	%		28	%		32	%
		10-Year Averages
	117		Cooling degree-days			77			1,478			2,489			395			4,439
	118		Heating degree-days			546			34			—			433			1,013
	119		Average humidity			45	%		25	%		34	%		40	%		36	%
		ECONOMIC INDICATORS
		Building Permits – Metro Phoenix (b)
	120		Single-family			8,873			9,299			8,223			6,855			33,250
	121		Multi-family			2,337			2,396			1,861			3,011			9,605
	122			Total		11,210			11,695			10,084			9,866			42,855
		Arizona Job Growth (c)
	123		Payroll job growth (% over prior year)			3.9	%		4.4	%		4.6	%		4.2	%		4.3	%
	124		Unemployment rate (%, seasonally adjusted)			4.4	%		4.4	%		4.3	%		4.3	%		4.4	%

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 W.P. Carey College of Business
(c)	Arizona Department of Economic Security

See Glossary of Terms. Page 43 of 43

EX-99.1

exv99w1

EX-99.2

exv99w2

EX-99.3

exv99w3

EX-99.4

exv99w4

EX-99.5

exv99w5

EX-99.6

exv99w6

EX-99.7

exv99w7

EX-99.8

Exhibit 99.8

Pinnacle West Capital Corporation
Earnings Variance Explanations
For Periods Ended June 30, 2003 and 2002

     This discussion explains the changes in our consolidated earnings for the three, six and twelve month periods ended June 30, 2003 and 2002. Condensed Consolidated Statements of Income for the three, six and twelve months ended June 30, 2003 and 2002 follow this discussion. We will file our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 on or before August 14, 2003. We suggest this section be read in connection with the Pinnacle West Capital Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003. We have reclassified certain prior period amounts to conform to our current period presentation. Additional operating and financial statistics and a glossary of terms are available on our website (www.pinnaclewest.com).

Earnings Contributions By Subsidiary And Business Segment

     We have three principal business segments (determined by products, services and the regulatory environment):

• our regulated electricity segment, which consists of regulated traditional retail and wholesale electricity businesses and related activities and includes electricity generation, transmission and distribution;

• our marketing and trading segment, which consists of our competitive energy business activities, including wholesale marketing and trading and APS Energy Services’ commodity-related energy services; and

• our real estate segment, which consists of SunCor’s real estate development and investment activities.

     The following tables summarize net income and segment details for the three, six and twelve months ended June 30, 2003 and the comparable prior periods for Pinnacle West and each of our subsidiaries (dollars in millions):

											Marketing and
	Total					Regulated Electricity					Trading					Real Estate (a)				Other
Three months ended
June 30,	2003		2002			2003		2002			2003		2002			2003		2002		2003			2002
Arizona Public Service (b)	$	43	$	64		$	41	$	64		$	2	$	—		$	—	$	—	$	—		$	—
Pinnacle West Energy (b)		2		1			2		1			—		—			—		—		—			—
APS Energy Services (c)		5		11			—		—			4		10			—		—		1			1
SunCor		2		2			—		—			—		—			2		2		—			—
El Dorado (c)		2		(3	)		—		—			—		—			—		—		2			(3	)
Parent company (c)		1		(6	)		—		(4	)		2		(1	)		—		—		(1	)		(1	)
Income (loss) from continuing operations		55		69			43		61			8		9			2		2		2			(3	)
Income from discontinued operations – net of tax		1		6			—		—			—		—			1		6		—			—
Net income (loss)	$	56	$	75		$	43	$	61		$	8	$	9		$	3	$	8	$	2		$	(3	)

													Marketing and
	Total						Regulated Electricity						Trading				Real Estate (a)				Other
Six months ended
June 30,	2003			2002			2003			2002			2003		2002		2003		2002		2003			2002
Arizona Public Service (b)	$	59		$	96		$	53		$	96		$	6	$	—	$	—	$	—	$	—		$	—
Pinnacle West Energy (b)		8			2			8			2			—		—		—		—		—			—
APS Energy Services (c)		13			13			—			—			10		11		—		—		3			2
SunCor		4			3			—			—			—		—		4		3		—			—
El Dorado (c)		5			(3	)		—			—			—		—		—		—		5			(3	)
Parent company (c)		(14	)		11			(12	)		(5	)		1		18		—		—		(3	)		(2	)
Income (loss) from continuing operations		75			122			49			93			17		29		4		3		5			(3	)
Income from discontinued operations – net of tax		6			7			—			—			—		—		6		7		—			—
Net income (loss)	$	81		$	129		$	49		$	93		$	17	$	29	$	10	$	10	$	5		$	(3	)

													Marketing and
	Total						Regulated Electricity						Trading						Real Estate (a)				Other (d)
Twelve months ended
June 30,	2003			2002			2003			2002			2003			2002			2003		2002		2003			2002
Arizona Public Service (b)	$	162		$	243		$	156		$	218		$	6		$	25		$	—	$	—	$	—		$	—
Pinnacle West Energy (b) (e)		(13	)		19			(15	)		19			2			—			—		—		—			—
APS Energy Services (c)		28			11			—			—			23			9			—		—		5			2
SunCor		10			6			—			—			—			—			10		6		—			—
El Dorado (c)		(47	)		(3	)		—			—			—			—			—		—		(47	)		(3	)
Parent company (c)		20			44			(15	)		(6	)		17			52			—		—		18			(2	)
Income (loss) from continuing operations		160			320			126			231			48			86			10		6		(24	)		(3	)
Income from discontinued operations – net of tax		8			7			—			—			—			—			8		7		—			—
Cumulative effect of change in accounting - net of tax (f) (g)		(66	)		(12	)		—			—			(66	)		(12	)		—		—		—			—
Net income (loss)	$	102		$	315		$	126		$	231		$	(18	)	$	74		$	18	$	13	$	(24	)	$	(3	)

(a)	See “Real Estate Activities” discussion below.
(b)	Consistent with APS’ October 2001 ACC filing, APS entered into contracts with its affiliates to buy power through June 2003. The contracts reflect a price based on the fully-dispatchable dedication of the Pinnacle West Energy generating assets to APS’ Native Load customers (customers receiving power under traditional cost-based rate regulation). Under the ACC Track B order, APS was required to solicit bids for certain estimated capacity and energy requirements for periods beginning July 1, 2003. Pinnacle West Energy bid on and entered into a contract to supply most of these purchase power requirements in summer months through September 2006.
(c)	APS Energy Services’ net income prior to 2003 and El Dorado’s net income are primarily reported before income taxes. The income tax expense or benefit for these subsidiaries was recorded at the parent company.
(d)	Primarily includes activities related to El Dorado in the twelve months ended June 30, 2003, principally El Dorado’s investment in NAC Holding Inc. (NAC). For the twelve months ended June 30, 2003, we recorded a pretax loss of $47 million related to NAC contracts with two customers.
(e)	In the fourth quarter of 2002, Pinnacle West Energy recorded a charge related to the cancellation of Redhawk Units 3 and 4 of approximately $30 million after income taxes ($49 million pretax).
(f)	We recorded a $66 million after tax charge as of October 1, 2002 for the cumulative effect of a change in accounting for trading activities, for the early adoption of EITF 02-3, “Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities.”
(g)	APS recorded a $12 million after tax charge in July 2001 for the cumulative effect of a change in accounting for derivatives related to the adoption of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”

2

Results of Operations

     General

     Throughout the following explanations of our results of operations, we refer to “gross margin.” With respect to our regulated electricity segment and our marketing and trading segment, gross margin refers to electric operating revenues less purchased power and fuel costs. Our real estate segment gross margin refers to real estate revenues less real estate operations costs of SunCor. Other gross margin refers to other operating revenues less other operating expenses, which includes El Dorado’s investment in NAC, which we began consolidating in our financial statements in July 2002. Other gross margin also includes amounts related to APS Energy Services’ energy consulting services.

     Operating Results – Three-month period ended June 30, 2003 compared with three-month period ended June 30, 2002

     Our consolidated net income for the three months ended June 30, 2003 was $56 million compared with $75 million for the prior year. The period-to-period decrease of $19 million was primarily due to (amounts after tax):

• $13 million of higher purchased power and fuel costs primarily due to higher hedged gas and power prices;

• $5 million of higher depreciation, operations and maintenance and net interest expense, net of decreased purchased power costs and increased generation sales other than Native Load, related to new power plants in service;

• $5 million of lower SunCor earnings contributions primarily due to the sale of a retail center in the prior year period which was reported as discontinued operations on the Condensed Consolidated Statements of Income, see “Real Estate Activities” below for further discussion;

• a $4 million earnings decrease due to a retail electricity price reduction;

• $4 million of higher operating costs primarily related to higher pension and other benefit costs;

• $3 million of higher depreciation expense primarily related to increased plant assets in service; and

• $1 million of miscellaneous factors, net.

     The above decreases were partially offset by (amounts after tax):

• $8 million of higher retail sales primarily due to customer growth, excluding weather effects;

• $4 million of lower regulatory asset amortization; and

• $4 million of higher income as a result of the absence of NAC losses in 2003.

3

     For additional details, see the following discussion.

     The major factors that increased (decreased) net income were as follows
(dollars in millions):

			Increase
			(Decrease)
Regulated electricity segment gross margin:
	Increased purchased power and fuel costs primarily due to higher hedged gas and power prices		$	(22	)
	Retail electricity price reduction effective July 1, 2002			(7	)
	Effects of weather on retail sales			(1	)
	Higher retail sales primarily due to customer growth, excluding weather effects			14
	Decreased purchased power costs due to new power plants in service			6
		Net decrease in regulated electricity segment gross margin		(10	)
Marketing and trading segment gross margin:
	Lower realized wholesale margins primarily due to lower unit margins, partially offset by higher volumes			(6	)
	Lower mark-to-market gains for future delivery due to lower market liquidity			(4	)
	Higher revenues related to the adoption of EITF 02-3			8
	Increased competitive retail sales in California by APS Energy Services			2
	Increase in generation sales other than Native Load due to higher sales volumes			1
		Net increase in marketing and trading segment gross margin		1
Net decrease in regulated electricity and marketing and trading segments’ gross margins				(9	)
Higher operations and maintenance expense related to increased pension and other benefit costs, new power plants in service and prior period reversal of APS Energy Services’ California reserve				(13	)
Higher interest expense and lower capitalized interest related to new power plants in service				(7	)
Higher depreciation and amortization primarily related to new power plants and increased plant assets, partially offset by lower regulatory asset amortization				(5	)
Higher income primarily related to the absence of NAC losses in 2003				7
Miscellaneous items, net				3
	Net decrease in income from continuing operations before income taxes			(24	)
Lower income taxes primarily due to lower income				10
	Net decrease in income from continuing operations			(14	)
Decrease in income from discontinued operations related to SunCor – net of income tax (see “Real Estate Activities” below)				(5	)
	Net decrease in net income		$	(19	)

4

Regulated Electricity Segment Gross Margin

     Regulated electricity segment revenues related to our regulated retail and wholesale electricity businesses were $10 million higher in the three months ended June 30, 2003, compared with the same period in the prior year as a result of:

• a $7 million decrease in retail revenues related to a reduction in retail electricity prices;

• a $20 million increase in retail revenues related to customer growth, excluding weather effects;

• a $2 million decrease in retail revenues related to weather; and

• a $1 million net decrease due to other miscellaneous factors.

     Regulated electricity segment purchased power and fuel costs were $20 million higher in the three months ended June 30, 2003, compared with the same period in the prior year as a result of:

• a $22 million increase in purchased power and fuel costs primarily due to higher hedged gas and power prices;

• a $6 million increase related to customer growth, excluding weather effects;

• a $1 million decrease related to the effects of weather on retail sales;

• a $6 million decrease in purchased power costs due to new power plants in service; and

• a $1 million decrease due to other miscellaneous factors.

Marketing and Trading Segment Gross Margin

     Marketing and trading segment revenues were $118 million higher in the three months ended June 30, 2003, compared with the same period in the prior year as a result of:

• $77 million of higher realized wholesale revenues primarily due to higher volumes and higher prices;

• $2 million in lower mark-to-market gains for future delivery primarily as a result of lower market liquidity;

• $8 million of higher revenues related to the adoption of EITF 02-3;

• a $17 million increase from higher competitive retail sales in California by APS Energy Services; and

• an $18 million increase from generation sales other than Native Load primarily due to higher sales volumes and higher prices.

     Marketing and trading segment purchased power and fuel costs were $117 million higher in the three months ended June 30, 2003, compared to the same period in the prior year as a result of:

• an $83 million increase in purchased power costs related to other realized marketing activities in the current period primarily due to higher volumes and higher prices;

• a $2 million increase in mark-to-market fuel costs for future delivery;

• a $15 million increase in purchased power costs related to higher competitive retail sales in California by APS Energy Services; and

• a $17 million increase in fuel costs related to generation sales other than Native Load primarily because of higher natural gas prices and higher sales volumes.

5

Other Income Statement Items

     The increase in operations and maintenance expense of $13 million was due to increased pension and other benefit costs, new power plants in service, a prior period reversal of APS Energy Services’ California reserve and other costs.

     Net interest expense increased $7 million primarily because of higher debt balances and lower capitalized interest related to our generation construction program, including completion of Redhawk Units 1 and 2 in mid-2002.

     The increase in depreciation and amortization expense of $5 million primarily related to increased plant assets and new power plants, partially offset by lower regulatory asset amortization.

     The increase in other gross margin of $2 million was primarily due to increased NAC gross margins.

     The decrease in other expense of $8 million primarily related to the absence of NAC losses of $6 million in 2003 and lower other expenses.

     The increase in real estate segment gross margin of $2 million was primarily due to higher home sales. In addition, in the 2003 period, discontinued operations of $1 million after tax primarily related to SunCor’s sale of its water utility company. In the 2002 period, discontinued operations of $6 million after tax primarily related to SunCor’s sale of a retail center (see “Real Estate Activities” below).

     Operating Results – Six-month period ended June 30, 2003 compared with six-month period ended June 30, 2002

     Our consolidated net income for the six months ended June 30, 2003 was $81 million compared with $129 million for the prior year. Both periods include income from discontinued operations related to our real estate segment. The period-to-period decrease of $48 million was primarily due to (amounts after tax):

• $20 million of lower earnings contributions from our marketing and trading activities, reflecting lower liquidity and higher price volatility in the wholesale power markets in the western United States, partially offset by higher revenues related to the adoption of EITF 02-3;

• $16 million of higher depreciation, operations and maintenance and net interest expense, net of decreased purchased power costs and increased generation sales other than Native Load, related to new power plants in service;

• $14 million of higher purchased power and fuel costs primarily due to higher hedged gas and power prices;

• $8 million of higher operating costs primarily related to higher pension and other benefit costs;

6

• a $7 million earnings decrease due to a retail electricity price reduction;

• $7 million of higher depreciation expense related to increased plant assets in service;

• $4 million from the effects of weather on retail sales; and

• $6 million of miscellaneous factors, net.

     The above decreases were partially offset by (amounts after tax):

• $13 million of higher retail sales primarily due to customer growth, excluding weather effects;

• $8 million of lower regulatory asset amortization;

• $7 million related to the absence of NAC losses in 2003 and the current period settlement of an NAC contract dispute; and

• $6 million in higher competitive retail sales in California by APS Energy Services.

     For additional details, see the following discussion.

7

     The major factors that increased (decreased) net income were as follows
(dollars in millions):

			Increase
			(Decrease)
Regulated electricity segment gross margin:
	Increased purchased power and fuel costs primarily due to higher hedged gas and power prices		$	(23	)
	Retail electricity price reduction effective July 1, 2002			(12	)
	Effects of milder weather on retail sales			(7	)
	Higher retail sales volumes due to customer growth, excluding weather effects			21
	Decreased purchased power costs due to new power plants in service			3
		Net decrease in regulated electricity segment gross margin		(18	)
Marketing and trading segment gross margin:
	Lower realized wholesale margins primarily due to lower unit margins, partially offset by higher volumes			(30	)
	Lower mark-to-market gains for future delivery due to lower market liquidity and higher price volatility			(18	)
	Higher revenues related to the adoption of EITF 02-3			16
	Increased competitive retail sales in California by APS Energy Services			10
	Increase in generation sales other than Native Load due to higher sales volumes			2
		Net decrease in marketing and trading segment gross margin		(20	)
Net decrease in regulated electricity and marketing and trading segments’ gross margins				(38	)
Higher operations and maintenance expense related to increased pension and other benefit costs, new power plants in service and increased customer service costs				(28	)
Higher interest expense and lower capitalized interest primarily related to new power plants in service				(14	)
Higher depreciation and amortization primarily related to new power plants and increased plant assets, partially offset by lower regulatory asset amortization				(11	)
Higher income primarily related to the absence of NAC losses in 2003 and NAC’s settlement of a contract dispute recorded in the first quarter of 2003				11
	Miscellaneous factors, net			1
	Net decrease in income from continuing operations before income taxes			(79	)
Lower income taxes primarily due to lower income				32
	Net decrease in income from continuing operations			(47	)
Decrease in income from discontinued operations related to SunCor – net of income tax (see “Real Estate Activities” below)				(1	)
	Net decrease in net income		$	(48	)

8

Regulated Electricity Segment Gross Margin

     Regulated electricity segment revenues related to our regulated retail and wholesale electricity businesses were $15 million higher in the six months ended June 30, 2003, compared with the same period in the prior year as a result of:

• a $4 million increase related to traditional wholesale sales as a result of higher sales volumes and higher prices;

• a $12 million decrease in retail revenues related to a reduction in retail electricity prices;

• a $13 million decrease in retail revenues related to milder weather;

• a $34 million increase in retail revenues related to customer growth, excluding weather effects; and

• a $2 million net increase due to other miscellaneous factors.

     Regulated electricity segment purchased power and fuel costs were $33 million higher in the six months ended June 30, 2003, compared with the same period in the prior year as a result of:

• a $4 million increase related to traditional wholesale sales as a result of higher sales volumes and higher prices;

• a $23 million increase in purchased power and fuel costs primarily due to higher hedged gas and power prices;

• a $6 million decrease related to the effects of milder weather on retail sales;

• a $13 million increase related to customer growth, excluding weather effects;

• a $3 million decrease in purchased power costs due to new power plants in service; and

• a $2 million net increase due to other miscellaneous factors.

Marketing and Trading Segment Gross Margin

     Marketing and trading segment revenues were $205 million higher in the six months ended June 30, 2003, compared with the same period in the prior year as a result of:

• $19 million in lower mark-to-market gains for future delivery primarily as a result of lower market liquidity and higher price volatility;

• $106 million of higher realized wholesale revenues primarily due to higher volumes;

• $16 million of higher revenues related to the adoption of EITF 02-3;

• a $48 million increase from higher competitive retail sales in California by APS Energy Services; and

• a $54 million increase from generation sales other than Native Load primarily due to higher prices and higher sales volumes.

     Marketing and trading segment purchased power and fuel costs were $225 million higher in the six months ended June 30, 2003, compared to the same period in the prior year as a result of:

• a $1 million decrease in mark-to-market fuel costs for future delivery;

• a $136 million increase in purchased power costs related to other realized marketing activities in the current period primarily due to higher volumes and higher prices;

9

• a $38 million increase in purchased power costs related to higher competitive retail sales in California by APS Energy Services; and

• a $52 million increase in fuel costs related to generation sales other than Native Load primarily because of higher natural gas prices and higher sales volumes.

Other Income Statement Items

     The increase in operations and maintenance expense of $28 million was due to increased pension and other benefit costs, new power plants in service and increased customer service costs.

     Net interest expense increased $14 million primarily because of higher debt balances and lower capitalized interest related to our generation construction program, including completion of Redhawk Units 1 and 2 in mid-2002.

     The increase in depreciation and amortization expense of $11 million primarily related to new power plants and increased plant assets, partially offset by lower regulatory asset amortization.

     The increase in other gross margin of $8 million was primarily due to NAC’s $5 million reversal of loss reserves related to the settlement of a contract.

     The decrease in other expense of $7 million primarily related to prior period NAC losses.

     Operating Results – Twelve-month period ended June 30, 2003 compared with twelve-month period ended June 30, 2002

     Our consolidated net income for the twelve months ended June 30, 2003 was $102 million compared with $315 million for the prior year. The period-to-period decrease of $213 million was primarily due to (amounts after tax):

• a $66 million charge for the cumulative effect of a change in accounting for trading activities for the early adoption of EITF 02-3 on October 1, 2002;

• $61 million of lower earnings contributions from our marketing and trading activities, reflecting lower liquidity and lower price volatility in the wholesale power markets in the western United States, partially offset by higher revenues related to the adoption of EITF 02-3;

• $37 million of higher purchased power and fuel prices primarily due to higher hedged gas and power prices;

• $34 million of higher operations and maintenance expenses related to the Redhawk Units 3 and 4 cancellation charge and 2002 severance costs, partially offset by lower generation reliability costs;

• $25 million in losses related to our investment in NAC;

• $19 million of higher depreciation, operations and maintenance and net interest expense, net of decreased purchased power costs and increased generation sales other than Native Load, related to new power plants in service;

10

• a $16 million earnings decrease due to two retail electricity price reductions;

• $14 million from the effects of milder weather on retail sales;

• $12 million of depreciation expense related to increased plant assets in service;

• $11 million of higher pension and other benefit costs; and

• $3 million of miscellaneous factors, net.

     The above decreases were partially offset by (amounts after tax):

• $26 million of higher retail sales primarily due to customer growth, excluding weather effects;

• $17 million in higher competitive retail sales in California by APS Energy Services;

• $17 million of lower regulatory asset amortization;

• $13 million of 2001 charges related to Enron and its affiliates; and

• a $12 million charge for the cumulative effect of a change in accounting for derivatives, as required by SFAS No. 133, recorded in the twelve months ended June 30, 2002.

     For additional details, see the following discussion.

11

     The major factors that increased (decreased) net income were as follows (dollars in millions):

			Increase
			(Decrease)
Regulated electricity segment gross margin:
	Increased purchased power and fuel costs primarily due to higher hedged gas and power prices		$	(61	)
	Retail electricity price reductions effective July 1, 2001 and July 1, 2002			(27	)
	Effects of milder weather on retail sales			(23	)
	Higher retail sales volumes due to customer growth, excluding weather effects			44
	Decreased purchased power due to new power plants in service			20
	2001 charges related to purchase power contracts with Enron			13
	Miscellaneous factors, net			5
		Net decrease in regulated electricity segment gross margin		(29	)
Marketing and trading segment gross margin:
	Lower mark-to-market gains for future delivery due to lower market liquidity and lower price volatility			(98	)
	Lower realized wholesale margins due to lower unit margins, partially offset by higher volumes			(30	)
	Increased competitive retail sales in California by APS Energy Services			28
	Higher revenues related to the adoption of EITF 02-3			25
	Increase in generation sales other than Native Load primarily due to higher sales volumes			8
	Change in prior period mark-to-market value related to trading with Enron			8
		Net decrease in marketing and trading segment gross margin		(59	)
Net decrease in regulated electricity and marketing and trading segments’ gross margins				(88	)
Higher operations and maintenance expense related primarily to a $47 million write-off of Redhawk Units 3 and 4, 2002 severance costs of approximately $36 million, increased pension and other benefit costs and new power plants in service, partially offset by lower generation reliability costs				(94	)
Lower income primarily related to NAC losses				(41	)
Higher interest expense and lower capitalized interest primarily related to new power plants in service				(30	)
Higher depreciation and amortization primarily related to new power plants and increased plant assets, partially offset by lower regulatory asset amortization				(17	)
Higher taxes other than income taxes due to increased property taxes on higher property balances				(6	)
Lower real estate segment gross margin primarily due to lower commercial and property management sales, partially offset by higher home sales				(4	)
Lower other expense primarily related to prior period non-operating costs				11
	Net decrease in income from continuing operations before income taxes			(269	)
Lower income taxes primarily due to lower income				109
	Net decrease in income from continuing operations			(160	)
Increase in income from discontinued operations related to SunCor – net of income tax (see “Real Estate Activities” below)				1
Increase due to cumulative effect of a change in accounting for derivatives – net of income tax				12
Decrease due to cumulative effect of a change in accounting for trading activities – net of income tax				(66	)
	Net decrease in net income		$	(213	)

12

Regulated Electricity Segment Gross Margin

     Regulated electricity segment revenues related to our regulated retail and wholesale electricity businesses were $259 million lower in the twelve months ended June 30, 2003, compared with the same period in the prior year as a result of:

• an $18 million increase related to traditional wholesale sales as a result of higher prices and higher sales volumes;

• a $281 million decrease related to retail load hedge management wholesale sales primarily as a result of lower prices and lower sales volumes;

• a $27 million decrease in retail revenues related to reductions in retail electricity prices;

• a $37 million decrease in retail revenues related to milder weather;

• a $63 million increase in retail revenues related to customer growth and higher average usage, excluding weather effects; and

• a $5 million net increase due to other miscellaneous factors.

     Regulated electricity segment purchased power and fuel costs were $230 million lower in the twelve months ended June 30, 2003, compared with the same period in the prior year as a result of:

• an $18 million increase related to traditional wholesale sales as a result of higher prices and higher sales volumes;

• a $257 million decrease related to retail load hedge management wholesale sales primarily as a result of lower prices and lower sales volumes;

• a $37 million increase in purchased power and fuel costs due to higher hedged gas and power prices;

• a $14 million decrease related to the effects of milder weather on retail sales;

• a $19 million increase related to customer growth, excluding weather effects;

• a $13 million net decrease for charges in 2001 related to purchased power contracts with Enron and its affiliates; and

• a $20 million decrease in purchased power costs due to new power plants in service.

Marketing and Trading Segment Gross Margin

     Marketing and trading segment revenues were $247 million higher in the twelve months ended June 30, 2003, compared with the same period in the prior year as a result of:

• $98 million in lower mark-to-market gains for future delivery primarily as a result of lower market liquidity and lower price volatility;

• $117 million of higher realized wholesale revenues primarily due to higher volumes, partially offset by lower prices;

• a $111 million increase from higher competitive retail sales in California by APS Energy Services;

• $25 million of higher revenues related to the adoption of EITF 02-3;

• an $84 million increase from generation sales other than Native Load primarily due to higher sales volumes and higher prices; and

• an $8 million increase due to the 2001 write-off of prior period mark-to-market value related to trading with Enron and its affiliates.

13

     Marketing and trading segment purchased power and fuel costs were $306 million higher in the twelve months ended June 30, 2003, compared to the same period in the prior year as a result of:

• a $147 million increase in purchased power costs related to other realized marketing activities in the current period primarily due to higher volumes and higher prices;

• an $83 million increase in purchased power costs related to higher competitive retail sales in California by APS Energy Services; and

• a $76 million increase in fuel costs related to generation sales other than Native Load primarily because of higher sales volumes and higher natural gas prices.

Other Income Statement Items

     The increase in operations and maintenance expense of $94 million was due to a $47 million write-off related to the cancellation of Redhawk Units 3 and 4, severance costs of $36 million related to a 2002 voluntary workforce reduction, increased pension and other benefit costs of $17 million, new power plants in service of $17 million and other costs of $1 million, partially offset by lower costs related to generation reliability of $25 million.

     The decrease in other gross margin of $37 million was primarily due to losses on El Dorado’s investment in NAC, partially offset by increased margin on APS Energy Services’ non-commodity sales. Total NAC losses for the twelve month period ended June 30, 2003 totaled approximately $47 million on a pretax basis and were primarily related to contracts with two customers. We reversed $5 million of loss reserves in the first quarter of 2003 related to NAC’s settlement of one of those contracts. We believe we have reserved our exposure with respect to these contracts in all material respects and, as a result, we consider these charges to be non-recurring.

     The decrease in other expense of $7 million is primarily related to the absence of NAC losses of $4 million in 2003 recorded as other expense and prior period non-operating costs.

     Net interest expense increased $30 million primarily because of higher debt balances related to our generation construction program and lower capitalized interest on our generation construction program due to completion of Redhawk Units 1 and 2 in mid-2002.

     The increase in depreciation and amortization expense of $17 million primarily related to new power plants and increased plant assets, partially offset by lower regulatory amortization.

     The increase in taxes other than income taxes of $6 million is primarily due to increased property taxes on higher property balances.

     The decrease in real estate segment gross margin of $4 million was primarily due to lower commercial and property management sales, partially offset by higher home sales activities. In addition, as discussed in “Real Estate Activities” below, SunCor had a $14 million ($8 million after tax) gain on the sale of its water utility company included in discontinued operations for the twelve months ended June 30, 2003 and a $12 million ($7 million after tax) gain related primarily to the sale of a retail center included in discontinued operations in the twelve months ended June 30, 2002.

14

Real Estate Activities

     As discussed in our 2002 10-K, we have undertaken an aggressive effort to accelerate asset sales activities to approximately double SunCor’s annual earnings in 2003 to 2005 compared with the $19 million in earnings recorded in 2002.

     Certain components of SunCor’s real estate sales activities, which are included in the real estate segment, may be required to be reported as discontinued operations on our Condensed Consolidated Statements of Income in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Among other things, SFAS No. 144 prescribes accounting for discontinued operations and defines certain real estate activities as discontinued operations. We adopted SFAS No. 144 effective January 1, 2002 and determined that activities that would have required discontinued operations reporting in 2002, 2001 and 2000 were immaterial. We currently estimate that 15% to 30% of SunCor’s net income in 2003 will be reported in discontinued operations; however, this ultimately depends on the specific properties sold.

     In the first quarter of 2003, SunCor sold its water utility company, which resulted in an after tax gain of $5 million ($8 million pretax). The gain on the sale and operating income in the current and prior periods are classified as discontinued operations on our Condensed Consolidated Statements of Income.

     In the second quarter of 2002, SunCor sold a retail center, but maintained a significant continuing involvement through a management contract. In the first quarter of 2003, this management contract was canceled. As a result, the gain on the 2002 sale and the operating income related to this property have been reclassified as discontinued operations. The income from discontinued operations in the three, six and twelve months ended June 30, 2002 primarily reflects this sale.

     The following chart provides a summary of SunCor’s earnings (after income taxes) for the three, six and twelve months ended June 30, 2003 and the comparable prior periods (dollars in millions):

	Three Months				Six Months				Twelve Months
	Ended				Ended				Ended
	June 30,				June 30,				June 30,
	2003		2002		2003		2002		2003		2002
Income from continuing operations	$	2	$	2	$	4	$	3	$	10	$	6
Income from discontinued operations		1		6		6		7		8		7
Net income	$	3	$	8	$	10	$	10	$	18	$	13

Forward-Looking Statements

     This document contains forward-looking statements based on current expectations and we assume no obligation to update these statements or make any further statements on any of these issues, except as required by applicable law. These forward-looking statements are often identified by words such as “hope,” “may,” “believe,” “anticipate,” “plan,” “expect,” “require,” “intend,”

15

“assume” and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by us. These factors include, but are not limited to, the ongoing restructuring of the electric industry, including the introduction of retail electric competition in Arizona and decisions impacting wholesale competition; the outcome of regulatory and legislative proceedings relating to the restructuring; state and federal regulatory and legislative decisions and actions, including the outcome of the rate case we filed with the ACC on June 27, 2003 and the wholesale electric price mitigation plan adopted by the FERC; regional economic and market conditions, including the results of litigation and other proceedings resulting from the California energy situation, volatile purchased power and fuel costs and the completion of generation and transmission construction in the region, which could affect customer growth and the cost of power supplies; the cost of debt and equity capital and access to capital markets; weather variations affecting local and regional customer energy usage; conservation programs; power plant performance; the successful completion of our generation construction program; regulatory issues associated with generation construction, such as permitting and licensing; our ability to compete successfully outside traditional regulated markets (including the wholesale market); our ability to manage our marketing and trading activities and the use of derivative contracts in our business; technological developments in the electric industry; the performance of the stock market, which affects the amount of our required contributions to our pension plan and nuclear decommissioning trust funds; the strength of the real estate market in SunCor’s market areas, which include Arizona, New Mexico and Utah; and other uncertainties, all of which are difficult to predict and many of which are beyond our control.

16

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

			THREE MONTHS ENDED
			June 30,						Increase (Decrease)
			2003			2002			Amount			Percent
Operating Revenues
	Regulated electricity segment		$	506,632		$	496,838		$	9,794			2.0	%	B
	Marketing and trading segment			167,475			49,503			117,972			238.3	%	B
	Real estate segment			57,189			44,294			12,895			29.1	%	B
	Other revenues			26,187			2,881			23,306			809.0	%	B
		Total		757,483			593,516			163,967			27.6	%	B
Operating Expenses
	Regulated electricity segment purchased power and fuel			124,108			104,591			19,517			18.7	%	W
	Marketing and trading segment purchased power and fuel			147,698			30,479			117,219			384.6	%	W
	Operations and maintenance			141,519			128,996			12,523			9.7	%	W
	Real estate operations segment			53,942			42,532			11,410			26.8	%	W
	Depreciation and amortization			107,076			101,786			5,290			5.2	%	W
	Taxes other than income taxes			28,149			27,632			517			1.9	%	W
	Other expenses			22,509			1,668			20,841			1249.5	%	W
		Total		625,001			437,684			187,317			42.8	%	W
Operating Income				132,482			155,832			(23,350	)		15.0	%	W
Other
	Other income			2,698			3,987			(1,289	)		32.3	%	W
	Other expense			(5,157	)		(13,020	)		7,863			60.4	%	B
		Total		(2,459	)		(9,033	)		6,574			72.8	%	B
Interest Expense
	Interest charges			51,117			46,764			4,353			9.3	%	W
	Capitalized interest			(11,231	)		(13,908	)		2,677			19.2	%	W
		Total		39,886			32,856			7,030			21.4	%	W
Income From Continuing Operations Before Income Taxes				90,137			113,943			(23,806	)		20.9	%	W
Income Taxes				35,248			45,140			(9,892	)		21.9	%	B
Income From Continuing Operations				54,889			68,803			(13,914	)		20.2	%	W
Income From Discontinued Operations - Net of Income Tax Expense				1,253			6,562			(5,309	)		80.9	%	W
Net Income			$	56,142		$	75,365		$	(19,223	)		25.5	%	W
Weighted-Average Common Shares Outstanding - Basic				91,258			84,794			6,464			7.6	%
Weighted-Average Common Shares Outstanding - Diluted				91,450			84,926			6,524			7.7	%
Earnings Per Weighted-Average Common Share Outstanding
	Income From Continuing Operations - Basic		$	0.60		$	0.81		$	(0.21	)		25.9	%	W
	Net Income - Basic		$	0.62		$	0.89		$	(0.27	)		30.3	%	W
	Income From Continuing Operations - Diluted		$	0.60		$	0.81		$	(0.21	)		25.9	%	W
	Net Income - Diluted		$	0.61		$	0.89		$	(0.28	)		31.5	%	W

Certain prior year amounts have been restated to conform to the 2003 presentation.

          B — Better

          W — Worse

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

		SIX MONTHS ENDED
		June 30,						Increase (Decrease)
		2003			2002			Amount			Percent
Operating Revenues
	Regulated electricity segment	$	891,592		$	877,079		$	14,513			1.7	%	B
	Marketing and trading segment		330,218			125,318			204,900			163.5	%	B
	Real estate segment		97,877			83,805			14,072			16.8	%	B
	Other revenues		41,758			7,158			34,600			483.4	%	B
	Total		1,361,445			1,093,360			268,085			24.5	%	B
Operating Expenses
	Regulated electricity segment purchased power and fuel		198,779			166,122			32,657			19.7	%	W
	Marketing and trading segment purchased power and fuel		291,343			66,264			225,079			339.7	%	W
	Operations and maintenance		274,636			246,426			28,210			11.4	%	W
	Real estate operations segment		94,101			79,178			14,923			18.8	%	W
	Depreciation and amortization		212,474			201,442			11,032			5.5	%	W
	Taxes other than income taxes		56,645			54,390			2,255			4.1	%	W
	Other expenses		31,730			4,970			26,760			538.4	%	W
	Total		1,159,708			818,792			340,916			41.6	%	W
Operating Income			201,737			274,568			(72,831	)		26.5	%	W
Other
	Other income		8,353			7,113			1,240			17.4	%	B
	Other expense		(9,288	)		(16,074	)		6,786			42.2	%	B
	Total		(935	)		(8,961	)		8,026			89.6	%	B
Interest Expense
	Interest charges		98,968			91,283			7,685			8.4	%	W
	Capitalized interest		(21,210	)		(27,767	)		6,557			23.6	%	W
	Total		77,758			63,516			14,242			22.4	%	W
Income From Continuing Operations Before Income Taxes			123,044			202,091			(79,047	)		39.1	%	W
Income Taxes			48,002			80,037			(32,035	)		40.0	%	B
Income From Continuing Operations			75,042			122,054			(47,012	)		38.5	%	W
Income From Discontinued Operations - Net of Income Tax Expense			6,398			7,068			(670	)		9.5	%	W
Net Income		$	81,440		$	129,122		$	(47,682	)		36.9	%	W
Weighted-Average Common Shares Outstanding - Basic			91,257			84,769			6,488			7.7	%
Weighted-Average Common Shares Outstanding - Diluted			91,402			84,910			6,492			7.6	%
Earnings Per Weighted-Average Common Share Outstanding
	Income From Continuing Operations - Basic	$	0.82		$	1.44		$	(0.62	)		43.1	%	W
	Net Income - Basic	$	0.89		$	1.52		$	(0.63	)		41.4	%	W
	Income From Continuing Operations - Diluted	$	0.82		$	1.44		$	(0.62	)		43.1	%	W
	Net Income - Diluted	$	0.89		$	1.52		$	(0.63	)		41.4	%	W

Certain prior year amounts have been restated to conform to the 2003 presentation.

          B — Better

          W — Worse

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

		TWELVE MONTHS ENDED
		June 30,						Increase (Decrease)
		2003			2002			Amount			Percent
Operating Revenues
	Regulated electricity segment	$	2,027,536		$	2,287,043		$	(259,507	)		11.3	%	W
	Marketing and trading segment		530,831			284,412			246,419			86.6	%	B
	Real estate segment		215,153			187,924			27,229			14.5	%	B
	Other revenues		96,537			15,733			80,804			513.6	%	B
	Total		2,870,057			2,775,112			94,945			3.4	%	B
Operating Expenses
	Regulated electricity segment purchased power and fuel		532,200			762,536			(230,336	)		30.2	%	B
	Marketing and trading segment purchased power and fuel		419,118			113,332			305,786			269.8	%	W
	Operations and maintenance		612,748			519,132			93,616			18.0	%	W
	Real estate operations segment		200,848			169,195			31,653			18.7	%	W
	Depreciation and amortization		435,114			418,435			16,679			4.0	%	W
	Taxes other than income taxes		110,207			104,693			5,514			5.3	%	W
	Other expenses		131,719			13,854			117,865			850.8	%	W
	Total		2,441,954			2,101,177			340,777			16.2	%	W
Operating Income			428,103			673,935			(245,832	)		36.5	%	W
Other
	Other income		14,937			16,230			(1,293	)		8.0	%	W
	Other expense		(25,656	)		(33,146	)		7,490			22.6	%	B
	Total		(10,719	)		(16,916	)		6,197			36.6	%	B
Interest Expense
	Interest charges		195,197			180,533			14,664			8.1	%	W
	Capitalized interest		(37,192	)		(52,675	)		15,483			29.4	%	W
	Total		158,005			127,858			30,147			23.6	%	W
Income Before Continuing Operations Before Income Taxes			259,379			529,161			(269,782	)		51.0	%	W
Income Taxes			100,193			208,802			(108,609	)		52.0	%	B
Income From Continuing Operations			159,186			320,359			(161,173	)		50.3	%	W
Income From Discontinued Operations - Net of Income Tax Expense			8,285			7,068			1,217			17.2	%	B
Cumulative Effect of a Change in Accounting for Derivatives - Net of Income Tax Benefit			—			(12,446	)		12,446			100.0	%	B
Cumulative Effect of a Change in Accounting for Trading Activities - Net of Income Tax Benefit			(65,745	)		—			(65,745	)		100.0	%	W
Net Income		$	101,726		$	314,981		$	(213,255	)		67.7	%	W
Weighted-Average Common Shares Outstanding - Basic			88,121			84,734			3,387			4.0	%
Weighted-Average Common Shares Outstanding - Diluted			88,276			84,888			3,388			4.0	%
Earnings Per Weighted-Average Common Share Outstanding
	Income From Continuing Operations - Basic	$	1.81		$	3.78		$	(1.97	)		52.1	%	W
	Net Income - Basic	$	1.15		$	3.72		$	(2.57	)		69.1	%	W
	Income From Continuing Operations - Diluted	$	1.80		$	3.77		$	(1.97	)		52.3	%	W
	Net Income - Diluted	$	1.15		$	3.71		$	(2.56	)		69.0	%	W

Certain prior year amounts have been restated to conform to the 2003 presentation.
	B — Better
	W — Worse

EX-99.9 11 p68070exv99w9.htm EXHIBIT 99.9

Exhibit 99.9

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 Gains (Losses) 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 on contracts delivered during 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°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°F for the month. Average temperatures greater than the base temperature are ignored.

- 2 -

Electricity Marketing and Trading – Delivered	All wholesale sales of electricity not accounted for in sales under traditional contracts or retail load hedge management. These sales are made to other electric companies, power marketers, or public entities for the purpose of resale. Measured in gigawatt-hours.
Electricity Spot Prices — Palo Verde – Off-Peak	Electricity average daily spot prices at Palo Verde substation during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Electricity Spot Prices — Palo Verde – On-Peak	Electricity average daily spot prices at Palo Verde substation during on-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Electricity Spot Prices — SP15 – Off-Peak	Electricity average daily spot prices at SP15, a region of California substations, during off-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Electricity Spot Prices — SP15 – On-Peak	Electricity average daily spot prices at SP15, a region of California substations, during on-peak hours. It measures electric prices at the producer level and is the result of real time prices used for benchmarking, price comparisons, and establishing price contracts. Measured in dollars per megawatt-hour.
Generation Capacity Out of Service and Replaced for Native Load	Total capacity required and economic, yet unavailable for retail customers and traditional wholesale contracts due to scheduled or unscheduled outages. Measured in megawatts per day.
Generation Sales 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.

- 3 -

Generation Production — Gas/Oil/Other	Amount of net energy predominately produced by natural gas and oil-fueled generators. A small amount of energy from hydroelectric and solar power plants is also included. Measured in gigawatt-hours.
Generation Production — Nuclear	Amount of net energy produced by nuclear-fueled generators. Measured in gigawatt-hours.
Gigawatt-hour (GWH)	A unit of energy equivalent to 1,000 megawatt-hours or 1,000,000 kilowatt-hours.
Marketing and Trading Gross Margin – Pretax	Revenues from marketing and trading activities (other than retail sales, traditional wholesale sales and retail load hedge management) less the costs of the related commodities, with mark-to-market gains or losses, before income taxes.
Marketing and Trading Gross Margin by Commodity — Pretax	Marketing and trading gross margin, before income taxes, for generation sales 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.
Realized and Mark-to-Market Components	Marketing and trading gross margin, before income taxes, for generation sales other than native load and for sales and purchases of electricity and other commodities by the company in the wholesale market, summarized by the period of delivery and whether the margin is realized or mark-to-market. Realized margins relate to commodities that have been delivered. Mark-to-market margins relate to commodities that have delivery dates in future periods.
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.

- 4 -

Prior Period Mark-To-Market (Gains) Losses on Contracts Delivered During Current Period	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.

- 5-

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.

EX-99.10 12 p68070exv99w10.htm EXHIBIT 99.10

FOR IMMEDIATE RELEASE		July 28, 2003
Media Contact:	Alan Bunnell, (602) 250-3376	Page 1 of 2
Analyst Contacts:	Rebecca Hickman, (602) 250-5668 Lisa Malagon, (602) 250-5671
Website:	www.pinnaclewest.com

PINNACLE WEST REPORTS LOWER SECOND QUARTER EARNINGS;
REDUCES 2003 EARNINGS GUIDANCE

PHOENIX – Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the quarter ended June 30, 2003, of $56.1 million or $0.61 per diluted share of common stock. The result compares with net income of $75.4 million or $0.89 per share for the same quarter a year ago.

The lower earnings were primarily the result of higher natural gas and purchased power costs at Arizona Public Service (APS) to serve retail electricity customers. Compared with the second quarter of 2002, for instance, the cost of natural gas to run the Company’s plants increased from $15 million to $30 million – a 100 percent increase.

“While clearly not desirable earnings, the results include the cost of gas hedges purchased in early 2001 during the western energy crisis,” Chairman Bill Post said. “In addition to the higher gas prices, our gas plants produced more than twice their output of a year ago to meet the growing electricity needs of our customers.”

In order to meet Arizona’s growth of three times the national average, the Company has built several new plants and added about 3,000 miles of transmission and distribution lines over the last several years – all designed to meet growing customer demand with the highest level of reliable service.

Other factors affecting the quarterly comparison included a $5 million increase in expenses, net of the benefit of reduced purchased power, related to three new power plant units placed into service in mid-2002; an increase of $4 million in pension and other related benefit costs; and $4 million for a 1.5 percent retail electricity price decrease related to the Company’s 1999 regulatory settlement agreement. These factors were partially offset by 3.1 percent retail customer growth of $8 million; and lower regulatory asset amortization of $4 million.

A substantial deterioration in the western wholesale power market over the last few months has caused the Company to reduce its 2003 earnings estimate to a range of $2.55 to $2.85 per share. This deterioration was driven by a 15 to 20 percent reduction in margins (known in the industry as “spark spreads”), and by a reduction in market liquidity attributable to fewer creditworthy counterparties and the decision of several key

Pinnacle West 2003 Second Quarter Earnings July 28, 2003
Page 2 of 2

market participants to reduce their activities or exit the market entirely. The Company’s revised earnings estimate assumes 2003 power marketing and trading contributions, although still profitable, will be down 75 percent from 2002 levels.

For 2004, the Company anticipates earnings to be in the range of $2.85 to $3.15 per share, reflecting a return to earnings growth related to the scheduled completion of regulatory asset amortization, and continuing customer growth of about three times the national average. Marketing and trading contributions in 2004 are expected to be comparable to the levels assumed in the Company’s 2003 earnings estimate.

All dollar amounts included in this release are reported after income tax effects. For more information on Pinnacle West’s operating and financial statistics, please visit www.pinnaclewest.com/investor/default_opstats.asp.

Pinnacle West is a Phoenix-based company with consolidated assets of approximately $9 billion. Through its subsidiaries, the Company generates, sells and delivers electricity and sells energy-related products and services to retail and wholesale customers in the western United States. It also develops residential, commercial, and industrial real estate projects.

Webcast and Conference Call
The Company will hold a conference call and live webcast at 12:00 noon (ET) today, Monday, July 28 to discuss its earnings and recent developments. The webcast will be at www.pinnaclewest.com/investor/presentations and will be available for replay on the website for 30 days. To access the conference call by telephone dial (877) 356-3961 and enter reservation number 1571133. A replay of the call also will be available until 12:00 midnight (ET), Monday, August 4, 2003, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same reservation number.

This press release contains forward-looking statements based on current expectations, and the Company assumes no obligation to update these statements or make any further statements on any of these issues, except as required by applicable law. These forward-looking statements are often identified by words such as “hope,” “may,” “believe,” “anticipate,” “plan,” “expect,” “require,” “intend,” “assume,” and similar words. Because actual results may differ materially from expectations, the Company cautions readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by the Company. These factors include the ongoing restructuring of the electric industry, including the introduction of retail electric competition in Arizona and decisions impacting wholesale competition; the outcome of regulatory and legislative proceedings relating to the restructuring, including the outcome of the rate case APS filed with the Arizona Corporation Commission on June 27, 2003 and the wholesale electric price mitigation plan adopted by the FERC; state and federal regulatory and legislative decisions and actions, including price caps and other market constraints imposed by the FERC; regional economic and market conditions, including the results of litigation and other proceedings resulting from the California energy situation, volatile purchased power and fuel costs, and the completion of generation and transmission construction in the region, which could affect customer growth and the cost of power supplies; the cost of debt and equity capital and access to capital markets; energy usage; weather variations affecting local and regional customer energy usage; conservation programs; power plant performance; the successful completion of our generation construction program; regulatory issues associated with generation construction , such as permitting and licensing; our ability to compete successfully outside traditional regulated markets (including the wholesale market);our ability to manage our marketing and trading activities and the use of derivative contracts in our business; technological developments in the electric industry; the performance of the stock market, which affects the amount of our required contributions to our pension plan and nuclear decommissioning trust funds; the strength of the real estate market in SunCor’s market areas, which include Arizona, New Mexico and Utah; and other uncertainties, all of which are difficult to predict and many of which are beyond our control.

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