Changes in Equity (APSC)

9 Months Ended

Sep. 30, 2011

Changes in Equity

9. Changes in Equity

The following tables show Pinnacle West’s changes in shareholders’ equity and changes in equity of noncontrolling interests for the three and nine months ended September 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended September 30, 2011									Three Months Ended September 30, 2010
	Common Shareholders			Noncontrolling Interests			Total			Common Shareholders			Noncontrolling Interests			Total
Beginning balance, July 1	$	3,613,705		$	101,905		$	3,715,610		$	3,479,548		$	113,455		$	3,593,003
Net income	255,359			7,426			262,785			233,920			5,119			239,039
Other comprehensive income (loss):
Net unrealized losses on derivative instruments (a)	(25,457		)	—			(25,457		)	(67,856		)	—			(67,856		)
Net reclassification of realized losses to income (b)	59,144			—			59,144			59,801			—			59,801
Reclassification of pension and other postretirement benefits to income	1,239			—			1,239			1,314			—			1,314
Net income tax benefit (expense) related to items of other comprehensive income (loss)	(13,795		)	—			(13,795		)	2,660			—			2,660
Total other comprehensive income (loss)	21,131			—			21,131			(4,081		)	—			(4,081		)
Total comprehensive income	276,490			7,426			283,916			229,839			5,119			234,958
Issuance of capital stock	3,789			—			3,789			2,506			—			2,506
Purchase of treasury stock, net of reissuances	537			—			537			577			—			577
Other (primarily stock compensation)	(424		)	—			(424		)	4,456			—			4,456
Dividends on common stock	(12		)	—			(12		)	—			—			—
Net capital activities by noncontrolling interests	—			(421		)	(421		)	—			(7,271		)	(7,271		)
Ending balance, September 30	$	3,894,085		$	108,910		$	4,002,995		$	3,716,926		$	111,303		$	3,828,229

	Nine Months Ended September 30, 2011									Nine Months Ended September 30, 2010
	Common Shareholders			Noncontrolling Interests			Total			Common Shareholders			Noncontrolling Interests			Total
Beginning balance, January 1	$	3,683,327		$	91,899		$	3,775,226		$	3,316,109		$	111,895		$	3,428,004
Net income	326,909			20,041			346,950			342,703			15,005			357,708
Other comprehensive income (loss):
Net unrealized losses on derivative instruments (a)	(40,792		)	—			(40,792		)	(168,110		)	—			(168,110		)
Net reclassification of realized losses to income (b)	99,278			—			99,278			102,130			—			102,130
Reclassification of pension and other postretirement benefits to income	3,718			—			3,718			4,069			—			4,069
Net unrealized gains (losses) related to pension and other postretirement benefits	974			—			974			(6,933		)	—			(6,933		)
Net income tax benefit (expense) related to items of other comprehensive income (loss)	(24,954		)	—			(24,954		)	27,171			—			27,171
Total other comprehensive income (loss)	38,224			—			38,224			(41,673		)	—			(41,673		)
Total comprehensive income	365,133			20,041			385,174			301,030			15,005			316,035
Issuance of capital stock	20,854			—			20,854			260,665			—			260,665
Purchase of treasury stock, net of reissuances	(2,993		)	—			(2,993		)	1,655			—			1,655
Other (primarily stock compensation)	(606		)	—			(606		)	4,598			—			4,598
Dividends on common stock	(171,630		)	—			(171,630		)	(167,131		)	—			(167,131		)
Net capital activities by noncontrolling interests	—			(3,030		)	(3,030		)	—			(15,597		)	(15,597		)
Ending balance, September 30	$	3,894,085		$	108,910		$	4,002,995		$	3,716,926		$	111,303		$	3,828,229

(a)These amounts primarily include unrealized losses on contracts used to hedge our forecasted electricity and natural gas requirements to serve Native Load.  These changes are primarily due to changes in forward natural gas prices and wholesale electricity prices.

(b) These amounts primarily include the reclassification of unrealized losses to realized losses for contracted commodities delivered during the period. In accordance with the PSA, certain of these amounts will be recorded as either a regulatory asset or liability and have no immediate effect on earnings.

ARIZONA PUBLIC SERVICE COMPANY

Changes in Equity

S-1.         Changes in Equity

The following tables show APS’s changes in shareholder equity and changes in equity of noncontrolling interests for the three and nine months ended September 30, 2011 and 2010 (dollars in thousands):

	Three Months Ended September 30, 2011								Three Months Ended September 30, 2010
	Shareholder Equity			Noncontrolling Interests		Total			Shareholder Equity			Noncontrolling Interests		Total
Beginning balance, July 1	$	3,746,067		$	101,128	$	3,847,195		$	3,605,292		$	88,944	$	3,694,236
Net income	246,333			7,435		253,768			226,648			5,128		231,776
Other comprehensive income (loss):
Net unrealized losses on derivative instruments (a)	(25,457		)	—		(25,457		)	(67,856		)	—		(67,856		)
Net reclassification of realized losses to income (b)	59,144			—		59,144			59,801			—		59,801
Reclassification of pension and other postretirement benefits to income	1,091			—		1,091			1,172			—		1,172
Net income tax benefit (expense) related to items of other comprehensive income (loss)	(13,740		)	—		(13,740		)	2,717			—		2,717
Total other comprehensive income (loss)	21,038			—		21,038			(4,166		)	—		(4,166		)
Total comprehensive income	267,371			7,435		274,806			222,482			5,128		227,610
Other	3			1		4			—			1		1
Ending balance, September 30	$	4,013,441		$	108,564	$	4,122,005		$	3,827,774		$	94,073	$	3,921,847

	Nine Months Ended September 30, 2011									Nine Months Ended September 30, 2010
	Shareholder Equity			Noncontrolling Interests			Total			Shareholder Equity			Noncontrolling Interests			Total
Beginning balance, January 1	$	3,824,953		$	91,084		$	3,916,037		$	3,445,355		$	82,324		$	3,527,679
Net income	321,962			20,089			342,051			327,852			15,034			342,886
Other comprehensive income (loss):
Net unrealized losses on derivative instruments (a)	(40,792		)	—			(40,792		)	(168,110		)	—			(168,110		)
Net reclassification of realized losses to income (b)	99,278			—			99,278			102,130			—			102,130
Reclassification of pension and other postretirement benefits to income	3,272			—			3,272			3,499			—			3,499
Net unrealized gains (losses) related to pension benefits	1,268			—			1,268			(6,863		)	—			(6,863		)
Net income tax benefit (expense) related to items of other comprehensive income (loss)	(24,900		)	—			(24,900		)	27,377			—			27,377
Total other comprehensive income (loss)	38,126			—			38,126			(41,967		)	—			(41,967		)
Total comprehensive income	360,088			20,089			380,177			285,885			15,034			300,919
Dividends on common stock	(171,600		)	—			(171,600		)	(156,300		)	—			(156,300		)
Equity infusion	—			—			—			252,833			—			252,833
Net capital activities by noncontrolling interests	—			(2,610		)	(2,610		)	—			—			—
Other	—			1			1			1			(3,285		)	(3,284		)
Ending balance, September 30	$	4,013,441		$	108,564		$	4,122,005		$	3,827,774		$	94,073		$	3,921,847

(a) These amounts primarily include unrealized losses on contracts used to hedge our forecasted electricity and natural gas requirements to serve Native Load.  These changes are primarily due to changes in forward natural gas prices and wholesale electricity prices.

(b) These amounts primarily include the reclassification of unrealized losses to realized losses for contracted commodities delivered during the period.