Pinnacle West Capital (PNW) 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
	MARCH 31,				Increase (Decrease)
	2007		2006		Pretax			After Tax
RECONCILIATION OF REGULATED ELECTRICITY SEGMENT GROSS MARGIN
Operating Income (closest GAAP measure)	$	67,989	$	57,163	$	10,826		$	6,598
Plus:
Operations and maintenance		171,578		178,427		(6,849	)		(4,174	)
Real estate segment operations		61,443		71,330		(9,887	)		(6,026	)
Depreciation and amortization		89,621		87,621		2,000			1,219
Taxes other than income taxes		34,719		35,573		(854	)		(521	)
Other expenses		8,488		8,522		(34	)		(21	)
Marketing and trading fuel and purchased power		57,944		74,175		(16,231	)		(9,893	)
Less:
Real estate segment revenues		77,250		107,854		(30,604	)		(18,653	)
Other revenues		9,363		11,224		(1,861	)		(1,134	)
Marketing and trading revenues		72,471		85,002		(12,531	)		(7,638	)
Regulated electricity segment gross margin	$	332,698	$	308,731	$	23,967		$	14,607