| 3 Mo. Ended September | 9 Mo. Ended September | |||||||||||||||||||||||||
| Line | 2008 | 2007 | Incr (Decr) | 2008 | 2007 | Incr (Decr) | ||||||||||||||||||||
EARNINGS CONTRIBUTION BY SUBSIDIARY ($ Millions) | ||||||||||||||||||||||||||
| 1 | Arizona Public Service | $ | 160 | $ | 204 | $ | (44 | ) | $ | 279 | $ | 284 | $ | (5 | ) | |||||||||||
| 2 | Pinnacle West Energy | — | — | — | — | — | — | |||||||||||||||||||
| 3 | APS Energy Services | (1 | ) | 2 | (3 | ) | (2 | ) | 1 | (3 | ) | |||||||||||||||
| 4 | SunCor | (7 | ) | (1 | ) | (6 | ) | (13 | ) | 9 | (22 | ) | ||||||||||||||
| 5 | El Dorado | (1 | ) | (3 | ) | 2 | (8 | ) | (5 | ) | (3 | ) | ||||||||||||||
| 6 | Parent Company | — | — | — | 4 | 8 | (4 | ) | ||||||||||||||||||
| 7 | Income From Continuing Operations | 151 | 202 | (51 | ) | 260 | 297 | (37 | ) | |||||||||||||||||
| Income (Loss) From Discontinued Operations — Net of Tax | ||||||||||||||||||||||||||
| 8 | Silverhawk | — | — | — | — | — | — | |||||||||||||||||||
| 9 | SunCor | 1 | 7 | (6 | ) | 21 | 7 | 14 | ||||||||||||||||||
| 10 | Other | — | — | — | — | — | — | |||||||||||||||||||
| 11 | Total | 1 | 7 | (6 | ) | 21 | 7 | 14 | ||||||||||||||||||
| 12 | Net Income | $ | 152 | $ | 209 | $ | (57 | ) | $ | 281 | $ | 304 | $ | (23 | ) | |||||||||||
EARNINGS PER SHARE BY SUBSIDIARY — DILUTED | ||||||||||||||||||||||||||
| 13 | Arizona Public Service | $ | 1.58 | $ | 2.03 | $ | (0.45 | ) | $ | 2.76 | $ | 2.82 | $ | (0.06 | ) | |||||||||||
| 14 | Pinnacle West Energy | — | — | — | — | — | — | |||||||||||||||||||
| 15 | APS Energy Services | (0.01 | ) | 0.01 | (0.02 | ) | (0.02 | ) | 0.01 | (0.03 | ) | |||||||||||||||
| 16 | SunCor | (0.07 | ) | (0.01 | ) | (0.06 | ) | (0.12 | ) | 0.09 | (0.21 | ) | ||||||||||||||
| 17 | El Dorado | (0.01 | ) | (0.03 | ) | 0.02 | (0.08 | ) | (0.05 | ) | (0.03 | ) | ||||||||||||||
| 18 | Parent Company | — | — | — | 0.04 | 0.08 | (0.04 | ) | ||||||||||||||||||
| 19 | Income From Continuing Operations | 1.49 | 2.00 | (0.51 | ) | 2.58 | 2.95 | (0.37 | ) | |||||||||||||||||
| Income (Loss) From Discontinued Operations — Net of Tax | ||||||||||||||||||||||||||
| 20 | Silverhawk | — | — | — | — | — | — | |||||||||||||||||||
| 21 | SunCor | 0.01 | 0.07 | (0.06 | ) | 0.20 | 0.07 | 0.13 | ||||||||||||||||||
| 22 | Other | — | — | — | — | — | — | |||||||||||||||||||
| 23 | Total | 0.01 | 0.07 | (0.06 | ) | 0.20 | 0.07 | 0.13 | ||||||||||||||||||
| 24 | Net Income | $ | 1.50 | $ | 2.07 | $ | (0.57 | ) | $ | 2.78 | $ | 3.02 | $ | (0.24 | ) | |||||||||||
| 25 | BOOK VALUE PER SHARE | $ | 35.84 | $ | 35.55 | $ | 0.29 | $ | 35.84 | $ | 35.55 | $ | 0.29 | |||||||||||||
COMMON SHARES OUTSTANDING (Thousands) | ||||||||||||||||||||||||||
| 26 | Average — Diluted | 101,018 | 100,829 | 189 | 100,911 | 100,767 | 144 | |||||||||||||||||||
| 27 | End of Period | 100,799 | 100,367 | 432 | 100,799 | 100,367 | 432 | |||||||||||||||||||
| See Glossary of Terms. | Page 2 of 31 |
| 3 Mo. Ended September | 9 Mo. Ended September | |||||||||||||||||||||||||
| Line | 2008 | 2007 | Incr (Decr) | 2008 | 2007 | Incr (Decr) | ||||||||||||||||||||
ELECTRIC OPERATING REVENUES (Dollars in Millions) | ||||||||||||||||||||||||||
REGULATED ELECTRICITY SEGMENT | ||||||||||||||||||||||||||
Retail | ||||||||||||||||||||||||||
| 28 | Residential | $ | 555 | $ | 574 | $ | (19 | ) | $ | 1,191 | $ | 1,155 | $ | 36 | ||||||||||||
| 29 | Business | 427 | 425 | 2 | 1,123 | 1,031 | 92 | |||||||||||||||||||
| 30 | Total retail | 982 | 999 | (17 | ) | 2,314 | 2,186 | 128 | ||||||||||||||||||
Wholesale revenue on delivered electricity | ||||||||||||||||||||||||||
| 31 | Traditional contracts | 23 | 12 | 11 | 58 | 27 | 31 | |||||||||||||||||||
| 32 | Off-system sales | 14 | 16 | (2 | ) | 68 | 33 | 35 | ||||||||||||||||||
| 33 | Transmission for others | 11 | 8 | 3 | 25 | 22 | 3 | |||||||||||||||||||
| 34 | Other miscellaneous services | 10 | 9 | 1 | 28 | 23 | 5 | |||||||||||||||||||
| 35 | Total regulated operating electricity revenues | 1,040 | 1,044 | (4 | ) | 2,493 | 2,291 | 202 | ||||||||||||||||||
MARKETING AND TRADING | ||||||||||||||||||||||||||
| 36 | Electricity and other commodity sales | 12 | 99 | (87 | ) | 120 | 264 | (144 | ) | |||||||||||||||||
| 37 | Total operating electric revenues | $ | 1,052 | $ | 1,143 | $ | (91 | ) | $ | 2,613 | $ | 2,555 | $ | 58 | ||||||||||||
ELECTRIC SALES (GWH) | ||||||||||||||||||||||||||
REGULATED ELECTRICITY SEGMENT | ||||||||||||||||||||||||||
Retail sales | ||||||||||||||||||||||||||
| 38 | Residential | 4,876 | 5,084 | (208 | ) | 10,762 | 11,105 | (343 | ) | |||||||||||||||||
| 39 | Business | 4,447 | 4,426 | 21 | 11,775 | 11,715 | 60 | |||||||||||||||||||
| 40 | Total retail | 9,323 | 9,510 | (187 | ) | 22,537 | 22,820 | (283 | ) | |||||||||||||||||
Wholesale electricity delivered | ||||||||||||||||||||||||||
| 41 | Traditional contracts | 335 | 296 | 39 | 876 | 733 | 143 | |||||||||||||||||||
| 42 | Off-system sales | 525 | 478 | 47 | 1,551 | 1,031 | 520 | |||||||||||||||||||
| 43 | Retail load hedge management | 486 | 529 | (43 | ) | 807 | 900 | (93 | ) | |||||||||||||||||
| 44 | Total regulated electricity | 10,669 | 10,813 | (144 | ) | 25,771 | 25,484 | 287 | ||||||||||||||||||
MARKETING AND TRADING | ||||||||||||||||||||||||||
| 45 | Wholesale sales of electricity | 320 | 3,146 | (2,826 | ) | 2,134 | 7,717 | (5,583 | ) | |||||||||||||||||
| 46 | Total electric sales | 10,989 | 13,959 | (2,970 | ) | 27,905 | 33,201 | (5,296 | ) | |||||||||||||||||
| See Glossary of Terms. | Page 3 of 31 |
| 3 Mo. Ended September | 9 Mo. Ended September | |||||||||||||||||||||||||
| Line | 2008 | 2007 | Incr (Decr) | 2008 | 2007 | Incr (Decr) | ||||||||||||||||||||
POWER SUPPLY ADJUSTOR (“PSA”) - - REGULATED ELECTRICITY SEGMENT (Dollars in Millions) | ||||||||||||||||||||||||||
| 47 | Deferred fuel and purchased power regulatory asset — beginning balance | $ | 23 | $ | 137 | $ | (114 | ) | $ | 111 | 160 | $ | (49 | ) | ||||||||||||
| 48 | Deferred fuel and purchased power costs — current period | 79 | 69 | 10 | 103 | 198 | (95 | ) | ||||||||||||||||||
| 49 | Regulatory disallowance | — | — | — | — | (14 | ) | 14 | ||||||||||||||||||
| 50 | Interest on deferred fuel | — | 2 | (2 | ) | 2 | 5 | (3 | ) | |||||||||||||||||
| 51 | Amounts recovered through revenues | (44 | ) | (58 | ) | 14 | (158 | ) | (199 | ) | 41 | |||||||||||||||
| 52 | Deferred fuel and purchased power regulatory asset — ending balance | $ | 58 | $ | 150 | $ | (92 | ) | $ | 58 | $ | 150 | $ | (92 | ) | |||||||||||
MARKETING AND TRADING PRETAX GROSS MARGIN ANALYSIS (Dollars in Millions) | ||||||||||||||||||||||||||
Realized and Mark-To-Market Components | ||||||||||||||||||||||||||
| 53 | Electricity and other commodity sales, realized (a) | $ | 4 | $ | 6 | $ | (2 | ) | $ | 14 | $ | 46 | $ | (32 | ) | |||||||||||
| 54 | Mark-to-market reversals on realized sales (a) (b) | (2 | ) | (3 | ) | 1 | — | (13 | ) | 13 | ||||||||||||||||
| 55 | Change in mark-to-market value of forward sales | — | 2 | (2 | ) | — | 5 | (5 | ) | |||||||||||||||||
| 56 | Total gross margin | $ | 2 | $ | 5 | $ | (3 | ) | $ | 14 | $ | 38 | $ | (24 | ) | |||||||||||
By Pinnacle West Entity | ||||||||||||||||||||||||||
| 57 | APS | $ | — | $ | — | $ | — | $ | — | $ | 6 | $ | (6 | ) | ||||||||||||
| 58 | Pinnacle West | 3 | 1 | 2 | 14 | 22 | (8 | ) | ||||||||||||||||||
| 59 | APS Energy Services | (1 | ) | 4 | (5 | ) | — | 10 | (10 | ) | ||||||||||||||||
| 60 | Pinnacle West Energy | — | — | — | — | — | — | |||||||||||||||||||
| 61 | Total gross margin | $ | 2 | $ | 5 | $ | (3 | ) | $ | 14 | $ | 38 | $ | (24 | ) | |||||||||||
| (a) | Net effect on pretax gross margin from realization of prior-period mark-to-market included in line 53 and in line 54 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 53 are included in line 54. For example, line 54 shows that a prior-period mark-to-market gain of $2 million was transferred to “realized” for the third quarter of 2008. A $2 million realized gain is included in the $4 million on line 53 for the third quarter of 2008. | |
| (b) | Quarterly amounts do not total to annual amounts because of intra-year mark-to-market eliminations. |
| See Glossary of Terms. | Page 4 of 31 |
| 3 Mo. Ended September | 9 Mo. Ended September | |||||||||||||||||||||||||
| Line | 2008 | 2007 | Incr (Decr) | 2008 | 2007 | Incr (Decr) | ||||||||||||||||||||
AVERAGE ELECTRIC CUSTOMERS | ||||||||||||||||||||||||||
Retail customers | ||||||||||||||||||||||||||
| 62 | Residential | 973,455 | 963,874 | 9,581 | 977,169 | 963,799 | 13,370 | |||||||||||||||||||
| 63 | Business | 124,329 | 120,918 | 3,411 | 123,655 | 119,786 | 3,869 | |||||||||||||||||||
| 64 | Total | 1,097,784 | 1,084,792 | 12,992 | 1,100,824 | 1,083,585 | 17,239 | |||||||||||||||||||
| 65 | Wholesale customers | 51 | 61 | (10 | ) | 52 | 62 | (10 | ) | |||||||||||||||||
| 66 | Total customers | 1,097,835 | 1,084,853 | 12,982 | 1,100,876 | 1,083,647 | 17,229 | |||||||||||||||||||
| 67 | Customer growth (% over prior year) | 1.2 | % | 3.2 | % | (2.0 | )% | 1.6 | % | 3.5 | % | (1.9 | )% | |||||||||||||
RETAIL SALES (GWH) - WEATHER NORMALIZED | ||||||||||||||||||||||||||
| 68 | Residential | 4,893 | 4,810 | 83 | 10,834 | 10,687 | 147 | |||||||||||||||||||
| 69 | Business | 4,448 | 4,368 | 80 | 11,782 | 11,573 | 209 | |||||||||||||||||||
| 70 | Total | 9,341 | 9,178 | 163 | 22,616 | 22,260 | 356 | |||||||||||||||||||
RETAIL USAGE (KWh/Average Customer) | ||||||||||||||||||||||||||
| 71 | Residential | 5,009 | 5,275 | (266 | ) | 11,013 | 11,522 | (509 | ) | |||||||||||||||||
| 72 | Business | 35,768 | 36,601 | (833 | ) | 95,225 | 97,799 | (2,574 | ) | |||||||||||||||||
RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer) | ||||||||||||||||||||||||||
| 73 | Residential | 5,027 | 4,990 | 37 | 11,087 | 11,088 | (1 | ) | ||||||||||||||||||
| 74 | Business | 35,777 | 36,126 | (349 | ) | 95,279 | 96,614 | (1,335 | ) | |||||||||||||||||
ELECTRICITY DEMAND (MW) | ||||||||||||||||||||||||||
| 75 | Native load peak demand | 7,026 | 7,128 | (102 | ) | 7,026 | 7,128 | (102 | ) | |||||||||||||||||
| See Glossary of Terms. | Page 5 of 31 |
| 3 Mo. Ended September | 9 Mo. Ended September | |||||||||||||||||||||||||
| Line | 2008 | 2007 | Incr (Decr) | 2008 | 2007 | Incr (Decr) | ||||||||||||||||||||
ENERGY SOURCES (GWH) | ||||||||||||||||||||||||||
Generation production | ||||||||||||||||||||||||||
| 76 | Nuclear | 2,454 | 2,218 | 236 | 6,626 | 6,363 | 263 | |||||||||||||||||||
| 77 | Coal | 3,611 | 3,563 | 48 | 9,744 | 9,992 | (248 | ) | ||||||||||||||||||
| 78 | Gas, oil and other | 2,357 | 2,480 | (123 | ) | 5,022 | 5,149 | (127 | ) | |||||||||||||||||
| 79 | Total generation production | 8,422 | 8,261 | 161 | 21,392 | 21,504 | (112 | ) | ||||||||||||||||||
Purchased power | ||||||||||||||||||||||||||
| 80 | Firm load | 2,047 | 2,521 | (474 | ) | 4,390 | 4,475 | (85 | ) | |||||||||||||||||
| 81 | Marketing and trading | 1,239 | 3,993 | (2,754 | ) | 3,865 | 9,218 | (5,353 | ) | |||||||||||||||||
| 82 | Total purchased power | 3,286 | 6,514 | (3,228 | ) | 8,255 | 13,693 | (5,438 | ) | |||||||||||||||||
| 83 | Total energy sources | 11,708 | 14,775 | (3,067 | ) | 29,647 | 35,197 | (5,550 | ) | |||||||||||||||||
POWER PLANT PERFORMANCE | ||||||||||||||||||||||||||
Capacity Factors | ||||||||||||||||||||||||||
| 84 | Nuclear | 97 | % | 89 | % | 8 | % | 88 | % | 86 | % | 2 | % | |||||||||||||
| 85 | Coal | 94 | % | 93 | % | 1 | % | 85 | % | 88 | % | (3 | )% | |||||||||||||
| 86 | Gas, oil and other | 32 | % | 34 | % | (2 | )% | 23 | % | 24 | % | (1 | )% | |||||||||||||
| 87 | System average | 61 | % | 61 | % | 0 | % | 52 | % | 53 | % | (1 | )% | |||||||||||||
Generation Capacity Out of Service and Replaced for Native Load (average MW/day) (a) | ||||||||||||||||||||||||||
| 88 | Nuclear | 27 | 76 | (49 | ) | 111 | 131 | (20 | ) | |||||||||||||||||
| 89 | Coal | 64 | 79 | (15 | ) | 177 | 156 | 21 | ||||||||||||||||||
| 90 | Gas | 76 | 147 | (71 | ) | 200 | 273 | (73 | ) | |||||||||||||||||
| 91 | Total | 167 | 302 | (135 | ) | 488 | 560 | (72 | ) | |||||||||||||||||
| (a) | Includes planned and unplanned outages |
| See Glossary of Terms. | Page 6 of 31 |
| 3 Mo. Ended September | 9 Mo. Ended September | |||||||||||||||||||||||||
| Line | 2008 | 2007 | Incr (Decr) | 2008 | 2007 | Incr (Decr) | ||||||||||||||||||||
ENERGY MARKET INDICATORS (a) | ||||||||||||||||||||||||||
Electricity Average Daily Spot Prices ($/MWh) | ||||||||||||||||||||||||||
On-Peak | ||||||||||||||||||||||||||
| 92 | Palo Verde | $ | 80.43 | $ | 69.26 | $ | 11.17 | $ | 80.10 | $ | 62.84 | $ | 17.26 | |||||||||||||
| 93 | SP15 | $ | 86.34 | $ | 68.84 | $ | 17.50 | $ | 87.62 | $ | 65.87 | $ | 21.75 | |||||||||||||
Off-Peak | ||||||||||||||||||||||||||
| 94 | Palo Verde | $ | 53.47 | $ | 37.03 | $ | 16.44 | $ | 56.35 | $ | 40.18 | $ | 16.17 | |||||||||||||
| 95 | SP15 | $ | 59.33 | $ | 41.23 | $ | 18.10 | $ | 62.80 | $ | 44.41 | $ | 18.39 | |||||||||||||
WEATHER INDICATORS | ||||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||||
| 96 | Cooling degree-days | 2,533 | 2,686 | (153 | ) | 4,178 | 4,566 | (388 | ) | |||||||||||||||||
| 97 | Heating degree-days | — | — | — | 583 | 597 | (14 | ) | ||||||||||||||||||
| 98 | Average humidity | 33 | % | 30 | % | 3 | % | 30 | % | 28 | % | 2 | % | |||||||||||||
10-Year Averages | ||||||||||||||||||||||||||
| 99 | Cooling degree-days | 2,544 | 2,544 | — | 4,194 | 4,194 | — | |||||||||||||||||||
| 100 | Heating degree-days | — | — | — | 545 | 545 | — | |||||||||||||||||||
| 101 | Average humidity | 32 | % | 32 | % | 0 | % | 32 | % | 32 | % | 0 | % | |||||||||||||
ECONOMIC INDICATORS | ||||||||||||||||||||||||||
Building Permits — Metro Phoenix (b) (d) | ||||||||||||||||||||||||||
| 102 | Single-family | 1,974 | 3,812 | (1,838 | ) | 8,684 | 18,276 | (9,592 | ) | |||||||||||||||||
| 103 | Multi-family | 1,441 | 2,178 | (737 | ) | 5,686 | 9,888 | (4,202 | ) | |||||||||||||||||
| 104 | Total | 3,415 | 5,990 | (2,575 | ) | 14,370 | 28,164 | (13,794 | ) | |||||||||||||||||
Arizona Job Growth (c) (d) | ||||||||||||||||||||||||||
| 105 | Payroll job growth (% over prior year) | (1.8 | )% | 1.0 | % | (2.8 | )% | (0.7 | )% | 1.7 | % | (2.4 | )% | |||||||||||||
| 106 | Unemployment rate (%, seasonally adjusted) | 5.4 | % | 3.7 | % | 1.7 | % | 4.5 | % | 3.7 | % | 0.8 | % | |||||||||||||
| Sources: | ||
| (a) | 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) | Economic indicators reflect periods ended August 31, 2008 (latest available data) and August 31, 2007. | |
| See Glossary of Terms. | Page 7 of 31 |
