Arizona Public Service 8-K Results of Operations and Financial Condition

Exhibit 99.10

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

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

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

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