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Previous: IDS LIFE MANAGED FUND INC, 40-17F2, 1998-02-27 |
Next: SMITH BARNEY INCOME FUNDS, 497, 1998-02-27 |
Adopted November 9, 1939 File No. 69-306
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2
Statement by Holding Company
Claiming Exemption under Rule U-2
from the Provisions of the
Public Utility Holding Company Act of 1935
To Be Filed Annually Prior to March 1
Pinnacle West Capital Corporation
------------------------------------------------
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and submits the following
information:
<PAGE>
1. Name, state of organization, location and nature of business of
Claimant and every subsidiary thereof, other than any exempt wholesale
generator (EWG) or foreign utility company in which Claimant directly
or indirectly holds an interest.
Pinnacle West Capital Corporation ("Claimant"), having been
incorporated on February 20, 1985 under the laws of the State of Arizona, and
having its principal executive offices at 400 East Van Buren, Suite 700,
Phoenix, Arizona 85004, was organized principally to acquire and hold securities
of other corporations for investment purposes. Claimant currently holds stock in
the following subsidiaries:
a. Arizona Public Service Company ("APS" or the "Company"), is engaged
principally in serving electricity in the State of Arizona.
Incorporated in 1920 under the laws of the State of Arizona and having
its principal executive offices at 400 North Fifth Street, Phoenix,
Arizona 85004, APS became a subsidiary of the Claimant pursuant to a
corporate restructuring plan approved by the Company's shareholders on
April 18, 1985.
(1) AXIOM Power Solutions, Inc. ("AXIOM") -- an Arizona
corporation having been incorporated on October 29, 1996 and
having its principal executive offices at 400 E. Van Buren,
Phoenix, Arizona 85004, was organized primarily to sell
security and energy management products and services. AXIOM is
a wholly-owned subsidiary of APS.
(2) Bixco, Inc. ("Bixco") -- an Arizona corporation having
been incorporated on June 4, 1971 and having its principal
executive offices at 400 North Fifth Street, Phoenix, Arizona
85004, was organized primarily to conduct exploration
activities for energy resources and other valuable minerals.
Subsequent to the sale of its oil and natural gas properties
in 1981, Bixco has been inactive. Bixco is a wholly-owned
subsidiary of APS.
b. SunCor Development Company ("SunCor") -- an Arizona corporation
having been incorporated on June 30, 1965 and having its principal
executive offices at 3838 North Central Avenue, Suite 1500, Phoenix,
Arizona 85012, is a wholly-owned subsidiary of Claimant engaged
primarily in the owning, holding and development of real property.
2
<PAGE>
(1) SunCor Resort & Golf Management, Inc. ("Resort & Golf
Management") (previously named "SunCor Resort Management,
Inc." and "SunCor Farms, Inc.") -- an Arizona corporation
having been incorporated on December 31, 1986 and having its
principal executive offices at 3838 North Central Avenue,
Suite 1500, Phoenix, Arizona 85012 operates and manages hotel,
golf, food and beverage for the Wigwam Resort and Country
Club, Sedona Golf Resort, SunRidge Canyon Golf Club, Real del
Mar Golf Club, and Palm Valley Golf Club. Resort & Golf
Management is a wholly-owned subsidiary of SunCor.
(2) Litchfield Park Service Company ("LPSCO") -- an Arizona
corporation having been incorporated on September 21, 1954 and
having its principal executive offices at 501 East Plaza
Circle, Suite B, Litchfield Park, Arizona 85340, is a
regulated public utility engaged in providing water and sewer
services to commercial and residential customers. LPSCO became
a wholly-owned subsidiary of SunCor on December 31, 1986.
(3) Golden Heritage Homes, Inc.. ("Golden Heritage Homes") --
(previously named "SunCor Homes, Inc.", LGR, Inc. and "WGP
Realty, Inc.") an Arizona corporation having been incorporated
on May 14, 1986 and having its principal executive offices at
3838 North Central Avenue, Suite 1500, Phoenix, Arizona 85012,
was organized to provide brokerage and realty services in the
sale of commercial and residential real property. Golden
Heritage Homes is a wholly-owned subsidiary of SunCor.
(i) Golden Heritage Construction, Inc. ("GH
Construction") -- an Arizona corporation having been
incorporated on December 30, 1993 and having its
principal executive offices at 7975 North Hayden Rd.
Suite D-280, Scottsdale, Arizona 85258, was organized
to serve as a general residential contractor. GH
Construction became a wholly-owned subsidiary of
Golden Heritage Homes, Inc. on January 1, 1996.
(4) SCM, Inc. ("SCM") -- an Arizona corporation having been
incorporated on May 14, 1991 and having its principal
executive offices at 3838 North Central Avenue, Suite 1500,
Phoenix, Arizona 85012, was organized to
3
<PAGE>
participate in real estate joint ventures and other real
estate related activities. SCM is a wholly-owned subsidiary of
SunCor.
(5) Golf de Mexico, S.A. DE C.V. ("Golf de Mexico") -- a
Mexican variable capital corporation having been incorporated
on February 8, 1992 in Tijuana, Baja California, Mexico, and
having its principal executive offices at 3838 North Central
Avenue, Suite 1500, Phoenix, Arizona 85012, was organized to
operate and manage the Real del Mar Golf Course in Mexico.
Golf de Mexico has been inactive.
(6) SunCor Realty & Management Company ("SunCor Realty") --
(previously named Russell Ranch Development Company) an
Arizona corporation having been incorporated on April 1, 1994
and having its principal executive offices at 3838 North
Central Avenue, Suite 1500, Phoenix, Arizona 85012 was
organized to participate in real estate joint ventures and
other real estate related activities. SunCor Realty is a
wholly-owned subsidiary of SunCor.
(7) Palm Valley Golf Club, Inc. ("Palm Valley Golf") -- an
Arizona corporation having been incorporated on January 23,
1996 and having its principal executive offices at 3838 North
Central Avenue, Suite 1500, Phoenix, Arizona 85012 was
organized to hold title to the Palm Valley Golf Course. Palm
Valley Golf is a wholly-owned subsidiary of SunCor.
(8) Rancho Viejo de Santa Fe, Inc. ("Rancho Viejo") -- a New
Mexico corporation having been incorporated on March 18, 1996
and having its principal executive offices at 3838 North
Central Avenue, Suite 1500, Phoenix, Arizona 85012 was
organized to engage in real estate development in New Mexico.
Rancho Viego is a wholly-owned subsidiary of SunCor.
(9) Ranchland Utility Company ("Ranchland") - - A New Mexico
Corporation having been incorporated on September 5, 1997 and
having its principal executive offices at 1590-B Pacheco
Street, Santa Fe, New Mexico 87505 is a waste water utility.
Ranchland is a wholly-owned subsidiary of Rancho Viejo.
4
<PAGE>
c. El Dorado Investment Company -- an Arizona corporation having been
incorporated on July 27, 1983 and having its principal executive
offices at 400 East Van Buren, Suite 800, Phoenix, Arizona 85004, is a
wholly-owned subsidiary of Claimant engaged primarily in the
acquisition and holding of stocks and securities of other companies for
investment purposes.
5
<PAGE>
2. A brief description of the properties of Claimant and each of its
subsidiary public utility companies used for the generation,
transmission and distribution of electric energy for sale, or for the
production, transmission and distribution of natural or manufactured
gas, indicating the location of principal generating plants,
transmission lines, producing fields, gas manufacturing plants and
electric and gas distribution facilities, including all such properties
which are outside the state in which Claimant and its subsidiaries are
organized and all transmission or pipelines which deliver or receive
electric energy or gas at the borders of such state.
Neither the Claimant nor any of its subsidiaries own property used for
the production, transmission and distribution of natural or manufactured gas.
APS, a "public utility company" as that term is defined in the Public Utility
Holding Company Act of 1935, is the only one of Claimant's subsidiaries that
owns property used for the generation, transmission and distribution of electric
energy for sale.
6
<PAGE>
Exhibit D attached hereto shows the location of APS' major generating
plants (including those owned jointly with others), principal transmission lines
(including those operated for others) and interconnections of transmission lines
with out-of-state utilities at state lines. All of such facilities, except the
Four Corners Generating Station ("Four Corners"), and all of APS' distribution
facilities, are located within the State of Arizona. Four Corners is a
mine-mouth power plant, located in the northwest corner of New Mexico, near the
city of Farmington, approximately 40 miles east of the Arizona-New Mexico
border.
APS' present generating facilities have an accredited capacity
aggregating 4,006,109 kilowatts, comprised as follows:
Capacity
Coal: --------
Units 1, 2 and 3 at Four Corners,
aggregating............................ 560,000 kw
15% owned Units 4 and 5 at Four Corners,
representing........................... 222,000
Units 1, 2, and 3 at the Cholla Plant,
aggregating............................ 615,000
14% owned Units 1, 2 and 3 at the Navajo
Plant, representing.................... 315,000
---------
1,712,000 kw
=========
Gas or Oil:
Two steam units at Ocotillo, two steam
units at Saguaro aggregating......... 435,000 kw(1)
Eleven combustion turbine units,
aggregating.......................... 493,000
Three combined cycle units,
aggregating.......................... 255,000
---------
1,183,000 kw
=========
Nuclear:
29.1% owned or leased Units 1, 2 and 3
at Palo Verde, representing
1,105,509 kw
---------
Other (Hydro) 5,600 kw
=========
- --------------------------
(1)West Phoenix steam units (96,300 kw) are currently mothballed.
7
<PAGE>
APS' transmission facilities consist of approximately 4,544 pole miles
of overhead lines and approximately 9,587 miles of underground lines, all of
which are located within the State of Arizona. APS' distribution facilities
consist of approximately 11,197 pole miles of overhead lines and approximately
9,587 miles of underground lines, all of which are located within the State of
Arizona.
3. The following information for the last calendar year with respect to
Claimant and each of its subsidiary public utility companies:
a. Number of kwh of electric energy sold at retail or
wholesale.
Claimant APS
None 29,050,500,000 kwh of electric energy sold at
wholesale or retail
b. Number of kwh of electric energy distributed at retail
outside the state in which each such company is organized.
Claimant APS
None 59,405,000 kwh of electric energy distributed
at retail outside Arizona
c. Number of kwh of electric energy sold at wholesale outside
the state in which each such company is organized, or at the state
line.
Claimant APS
None 926,900 kwh of electric energy sold at
wholesale outside Arizona or at state line
d. Number of kwh of electric energy purchased outside the
state in which each such company is organized or at the state line.
Claimant APS
None 0 kwh of electric energy purchased outside
Arizona or at state line
8
<PAGE>
4. The following information for the reporting period with respect to
Claimant and each interest it holds directly or indirectly in an EWG or
a foreign utility company, stating monetary amounts in United States
dollars:
The Claimant holds no interest, direct or indirect, in an EWG or a
foreign utility company.
a. Name, location, business address and description of the
facilities used by the EWG or foreign utility company for the
generation, transmission and distribution of electric energy for sale
or for the distribution at retail of natural or manufactured gas.
Not applicable.
b. Name of each system company that holds an interest in such
EWG or foreign utility company; and description of the interest held.
Not applicable.
c. Type and amount of capital invested, directly or
indirectly, by the holding company claiming exemption; any direct or
indirect guarantee of the security of the EWG or foreign utility
company by the holding company claiming exemption; and any debt or
other financial obligation for which there is recourse, directly or
indirectly, to the holding company claiming exemption or another system
company, other than the EWG or foreign utility company.
Not applicable.
d. Capitalization and earnings of the EWG or foreign utility
company during the reporting period.
Not applicable.
e. Identify any service, sales or construction contract(s)
between the EWG or foreign utility company and a system company, and
describe the services to be rendered or goods sold and fees or revenues
under such agreement(s).
Not applicable.
9
<PAGE>
EXHIBIT A
A consolidating statement of income and surplus of the Claimant and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of Claimant and its subsidiary companies as of the close of such
calendar year.
Exhibit A hereto includes consolidating statements of income and
consolidating balance sheets for the Claimant and the following of its
subsidiaries: Arizona Public Service Company, SunCor Development Company and El
Dorado Investment Company. Subsidiaries have been consolidated for financial
reporting purposes in accordance with Statement of Financial Accounting
Standards No. 94, Consolidation of All Majority-Owned Subsidiaries. Also
included are consolidating statements of income and consolidating balance sheets
for SunCor Development Company and its subsidiaries.
10
<PAGE>
EXHIBIT B FINANCIAL DATA STATEMENT
If, at the time a report on this form is filed, the registrant is required to
submit this report and any amendments thereto electronically via EDGAR, the
registrant shall furnish a Financial Data Schedule. The Schedule shall set forth
the financial and other data specified below that are applicable to the
registrant on a consolidated basis.
1. Total Assets.
2. Total Operating Revenues.
3. Net Income.
See Exhibit B hereto.
<PAGE>
EXHIBIT B Financial Data Schedule
The Claimant submits the following consolidated financial information:
1. Total Assets: $6,850,417,000
2. Total Operating Revenues: $1,995,026,000
3. Net Income: $235,856,000
<PAGE>
EXHIBIT C
An organizational chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding-company system.
Not applicable.
<PAGE>
EXHIBIT D
Exhibit D is a map of the state of Arizona showing the following:
APS Service Area;
Major APS Power Plants, including joint ownership;
Principal APS Transmission Lines; and
Transmission Lines Operated for Others.
<PAGE>
The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 27th day of February, 1998.
Pinnacle West Capital Corporation
---------------------------------
(Name of Claimant)
By /s/ Michael S. Ash
--------------------------------
Michael S. Ash
Corporate Counsel
[CORPORATE SEAL]
Attest:
/s/Suzanne Debes
- -------------------------
Suzanne Debes
Associate Secretary
Name, title and address of officer to whom notices and correspondence concerning
this statement should be addressed:
Michael S. Ash Corporate Counsel (Name) (Title)
- -------------- ---------------------------------------
400 East Van Buren, Suite 700, Phoenix, Arizona 85004 (Address)
- ---------------------------------------------------------
<PAGE>
PINNACLE WEST CAPITAL CORPORATION
CONSOLIDATING BALANCE SHEET
31-Dec-97
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
PWCC APS SUNCOR ELDO
---------- ---------- ---------- ----------
A S S E T S
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 7,322 $ 12,552 $ 5,108 $ 2,502
Customer and other receivables - net 1,023 170,997 4,507 10,072
Accrued utility revenue 58,559
Materials and supplies 70,634
Fossil fuel 9,621
Deferred income taxes 53,601 3,496 790
Other current assets 52 24,529 16,955 --
-------------------------------------------------
Total current assets 61,998 350,388 26,570 13,364
-------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Real estate investments, net 365,799
Other assets 2,201,006 164,906 6,721 21,152
-------------------------------------------------
Total investments and other 2,201,006 164,906 372,520 21,152
-------------------------------------------------
UTILITY PLANT
Electric plant in service and held for future use 7,009,059
Less accumulated depreciation and amortization 2,620,607
-------------------------------------------------
Total 4,388,452
Construction work in progress 237,492
Nuclear Fuel 51,624
-------------------------------------------------
Net Utility Plant 4,677,568
-------------------------------------------------
DEFERRED DEBITS
Regulatory asset for income taxes -- 458,369
Rate synchronization deferral 358,871
Other deferred debits 9,288 321,040 4,465 --
-------------------------------------------------
Total deferred debits 9,288 1,138,280 4,465 --
-------------------------------------------------
TOTAL ASSETS $2,272,292 $6,331,142 $ 403,555 $ 34,516
=================================================
<CAPTION>
*ELIMINATIONS AND ADJUSTING ENTRIES*
DEBIT CREDIT TOTAL
---------- ---------- ----------
A S S E T S
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 27,484
Customer and other receivables - net 3,092(b,h) 183,507
Accrued utility revenue 58,559
Materials and supplies 70,634
Fossil fuel 9,621
Deferred income taxes 57,887
Other current assets 128(c) 41,408
---------- ---------- ----------
Total current assets 3,220 449,100
---------- ---------- ----------
INVESTMENTS AND OTHER ASSETS
Real estate investments, net 6,892(e) 6,770(d) 365,921
Other assets 2,069(h) 2,180,827(a,e) 215,027
---------- ---------- ----------
Total investments and other 8,961 2,187,597 580,948
---------- ---------- ----------
UTILITY PLANT
Electric plant in service and held for future use 7,009,059
Less accumulated depreciation and amortization 2,620,607
---------- ---------- ----------
Total 4,388,452
Construction work in progress 237,492
Nuclear Fuel 51,624
---------- ---------- ----------
Net Utility Plant 4,677,568
---------- ---------- ----------
DEFERRED DEBITS
Regulatory asset for income taxes 458,369
Rate synchronization deferral 358,871
Other deferred debits 9,232(f) 325,561
---------- ---------- ----------
Total deferred debits 9,232 1,142,801
---------- ---------- ----------
TOTAL ASSETS $ 8,961 $2,200,049 $6,850,417
========== ========== ==========
</TABLE>
<PAGE>
PINNACLE WEST CAPITAL CORPORATION
CONSOLIDATING BALANCE SHEET
31-Dec-97
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
PWCC APS SUNCOR ELDO
----------- ----------- ----------- -----------
L I A B I L I T I E S A N D E Q U I T Y
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 2,089 $ 107,423 $ 7,786 $ 131
Accrued taxes -- 85,886 --
Accrued interest 829 31,660 485 --
Commerical paper, net -- 130,750
Current maturities of long-term debt -- 104,068 4,627
Customer Deposits 29,116 1,556
Other current liabilities (420) 19,588 511 6
-------------------------------------------------------
Total current liabilities 2,498 508,491 14,965 137
-------------------------------------------------------
LONG-TERM DEBT LESS CURRENT MATURITIES 205,000 1,953,162 86,086 --
DEFERRED CREDITS AND OTHER
Deferred income taxes 17,008 1,345,177
Deferred investment tax credit 60,093
Unamortized gain-sale of utility plant 82,363
Other deferred credits 20,350 361,371 5,502
-------------------------------------------------------
Total deferred credits 37,358 1,849,004 5,502 --
-------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE)
MINORITY INTERESTS:
Non-Redeemable preferred stock of APS 142,051
Redeemable preferred stock of APS 29,110
Scottsdale Mountain of SunCor 6,770
COMMON STOCK EQUITY:
Common stock 2,026,872 1,320,526 406,391 50,046
Retained earnings 564 528,798 (116,159) (15,667)
-------------------------------------------------------
Total 2,027,436 1,849,324 290,232 34,379
-------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 2,272,292 $ 6,331,142 $ 403,555 $ 34,516
=======================================================
<CAPTION>
*ELIMINATIONS AND ADJUSTING ENTRIES*
DEBIT CREDIT TOTAL
---------- ---------- ----------
L I A B I L I T I E S A N D E Q U I T Y
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 117,429
Accrued taxes 1,276(g) 84,610
Accrued interest 32,974
Commerical paper, net 130,750
Current maturities of long-term debt 108,695
Customer Deposits 30,672
Other current liabilities 1,151(b,c) 18,534
---------- ---------- ----------
Total current liabilities 2,427 -- 523,664
---------- ---------- ----------
LONG-TERM DEBT LESS CURRENT MATURITIES -- -- 2,244,248
DEFERRED CREDITS AND OTHER
Deferred income taxes 1,276(g) 1,363,461
Deferred investment tax credit 9,232(f) 50,861
Unamortized gain-sale of utility plant 82,363
Other deferred credits 387,223
---------- ---------- ----------
Total deferred credits 9,232 1,276 1,883,908
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (NOTE)
MINORITY INTERESTS:
Non-Redeemable preferred stock of APS 142,051
Redeemable preferred stock of APS 29,110
Scottsdale Mountain of SunCor 6,770(d) --
COMMON STOCK EQUITY:
Common stock 2,250,064(a) 1,553,771
Retained earnings 76,129(a) 473,665
---------- ---------- ----------
Total 2,250,064 76,129 2,027,436
---------- ---------- ----------
TOTAL LIABILITIES AND EQUITY $2,268,493 $ 77,405 $6,850,417
========== ========== ==========
</TABLE>
<PAGE>
PINNACLE WEST CAPITAL CORPORATION
CONSOLIDATING BALANCE SHEET
ELIMINATING AND ADJUSTING ENTRIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(a) Common stock $2,250,064
Accumulated deficit $76,129
Other assets 2,173,935
To eliminate PNW investment in subsidiaries
Common Earnings/
Stock Dividends Total
---------- --------- ----------
APS $1,793,627 $55,697 $1,849,324
SunCor 406,391 (116,159) 290,232
El Dorado 50,046 (15,667) 34,379
---------- --------- ----------
Total $2,250,064 ($76,129) $2,173,935
========== ========= ==========
(b) Other current liabilities $1,023
Customer and other receivables - net $1,023
To eliminate intercompany receivables/payables
A/R A/P
PNW Subs Books
---------- ----------
APS $636 $636
SunCor 381 381
El Dorado 6 6
---------- ---------
Total $ 1,023 $ 1,023
========== =========
(c) Other current liabilities $128
Other current assets $128
To eliminate PNW payable to APS
(d) Minority interest-Suncor $6,770
Real estate investments - net $6,770
To eliminate minority interest of Suncor JV partners
(e) Real estate investments - net $6,892
Other - assets $6,892
To reclass PNW capitalized interest related to SunCor
(f) Deferred investment tax credit $9,232
Other deferred debits $9,232
To relcass PNW ITC
(g) Accrued taxes $1,276
Deferred income taxes $1,276
To relcass PNW accrued taxes
(h) Other assets $2,069
Customer and other receivables - net $2,069
To reclass ELD Unity Note & interest to long term.
</TABLE>
<PAGE>
PINNACLE WEST CAPITAL CORPORATION
CONSOLIDATING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
PWCC APS SUNCOR ELDO
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $ 1,878,553
Real Estate 116,473
--------------------------------------------------------
Total -- 1,878,553 116,473 --
--------------------------------------------------------
FUEL EXPENSES:
Fuel for electric generation 201,341
Purchased power 235,286
--------------------------------------------------------
Total -- 436,627 -- --
--------------------------------------------------------
OPERATING EXPENSES:
Utility operations and maintenance 399,434
Real estate operations 111,112
Depreciation and amortization 268 365,671 2,346 --
Taxes other than income taxes 120,259
--------------------------------------------------------
Total 268 885,364 113,458 --
--------------------------------------------------------
OPERATING INCOME (268) 556,562 3,015 --
--------------------------------------------------------
OTHER INCOME (DEDUCTIONS):
Allowance for equity funds used during construction --
Interest on long-term debt (17,318) (140,931) (4,197) --
Other interest (1,478) (17,195) -- --
Capital interest 16,208
Preferred stock dividend requirements (12,803)
Other - net 252,170 (9,827) 6,516 7,897
--------------------------------------------------------
Total 233,374 (164,548) 2,319 7,897
--------------------------------------------------------
INCOME BEFORE INCOME TAXES 233,106 392,014 5,334 7,897
Income Tax Expense (Benefit) (2,750) 153,324 (293)
--------------------------------------------------------
NET INCOME (L0SS) $ 235,856 $ 238,690 $ 5,334 $ 8,190
========================================================
<CAPTION>
* E L I M I N A T I O N S *
DEBIT CREDIT TOTAL
<S> <C> <C> <C>
OPERATING REVENUES:
Electric $ 1,878,553
Real Estate 116,473
----------- ----------- -----------
Total -- -- 1,995,026
----------- ----------- -----------
FUEL EXPENSES:
Fuel for electric generation 201,341
Purchased power 235,286
----------- ----------- -----------
Total -- -- 436,627
----------- ----------- -----------
OPERATING EXPENSES:
Utility operations and maintenance 399,434
Real estate operations 1,776(b) 1,260(d) 111,628
Depreciation and amortization 368,285
Taxes other than income taxes 1,287(c,d) 121,546
----------- ----------- -----------
Total 3,063 1,260 1,000,893
----------- ----------- -----------
OPERATING INCOME (3,063) (1,260) 557,506
----------- ----------- -----------
OTHER INCOME (DEDUCTIONS):
Allowance for equity funds used during construction --
Interest on long-term debt 1,776(b) (160,670)
Other interest (18,673)
Capital interest 16,208
Preferred stock dividend requirements (12,803)
Other - net 252,214(a) 27(c) 4,569
----------- ----------- -----------
Total 252,214 1,803 (171,369)
----------- ----------- -----------
INCOME BEFORE INCOME TAXES 255,277 543 386,137
Income Tax Expense (Benefit) 150,281
----------- ----------- -----------
NET INCOME (L0SS) $ 255,277 $ 543 $ 235,856
=========== =========== ===========
</TABLE>
<PAGE>
PINNACLE WEST CAPITAL CORPORATION
CONSOLIDATING INCOME STATEMENT
ELIMINATING ENTRIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(a) Other - net (Subsiary income) $252,214
Retained Earnings $252,214
To eliminate PWCC Equity in earnings from subsidiairies
PWCC
APS 238,690
SunCor 5,334
El Dorado 8,190
--------------
Total 252,214
--------------
(b) Real Estate Operations $1,776
Interest on long term debt $1,776
To reclass Capitalized Interest for SunCor Land Sales.
(c) Taxes other than income taxes $27
Other - net $27
To reclass PNW property taxes
(d) Taxes other than income taxes $1,260
Real estate operations $1,260
To reclass SunCor property taxes
</TABLE>
<PAGE>
SUNCOR DEVELOPMENT COMPANY
CONSOLIDATING BALANCE SHEET
FOR THE MONTH ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
SUNCOR SUNCOR SUNCOR
ACCOUNT DESCRIPTION CORPORATE LPSCO FARMING SMLP PVGC HOMES PALM VALLEY
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
CURRENT ASSETS
CASH AND SHORT TERM INVESTMENTS 3,847,842 316,271 100,708 864,098 (1,583) (173,224) 406,000
1 ACCOUNTS RECEIVABLE 297,492 110,197 78,866 350,872 29,467 1,154,192
INTERCOMPANY ACCOUNTS:
1 SASI 95
1 LPSCO 91,260
1 SMLP 18,788
1 KABUTO JV
1 PVGC 4,090,907
1 SCM & GH - 129 (3,616,182)
1 WWOS 12,397
1 GOLDEN HERITAGE - GENERAL 421,643
1 SCM-GENERAL 4,626,804
1 HOMEBUILDING I/C INTEREST 1,345,579 (1,345,580)
1 HOMEBUILDING CASH ADVANCES 8,996,796
1 SUNRIDGE - DEVELOPMENT 86,771
1 SUNRIDGE - GOLF 123,139
1 SEDONA - DEVELOPMENT 23,754
1 SEDONA - GOLF 92,155
1 WIGWAM RESORT 302,257
1 INTEREST RECEIVABLE 354,540 2,921
NOTES RECEIVABLE 334,939 307,749 0
2 INVENTORIES 68,300
2 PREPAID EXPENSES 38,272 21,863 46,503 2,028
HOME INVENTORY 7,356 18,674,570
------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 21,021,877 448,331 179,574 1,522,719 4,233,594 14,693,776 410,948
------------------------------------------------------------------------------------
<CAPTION>
SUNCOR
ACCOUNT DESCRIPTION WWOS KABUTO JV COMMERCIAL H HILLS R VIEJO
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
CURRENT ASSETS
CASH AND SHORT TERM INVESTMENTS 31,769 250 (326,546) 42,820
1 ACCOUNTS RECEIVABLE 96,566 122,241
INTERCOMPANY ACCOUNTS:
1 SASI
1 LPSCO
1 SMLP
1 KABUTO JV
1 PVGC
1 SCM & GH - 129
1 WWOS
1 GOLDEN HERITAGE - GENERAL
1 SCM-GENERAL
1 HOMEBUILDING I/C INTEREST
1 HOMEBUILDING CASH ADVANCES
1 SUNRIDGE - DEVELOPMENT
1 SUNRIDGE - GOLF
1 SEDONA - DEVELOPMENT
1 SEDONA - GOLF
1 WIGWAM RESORT
1 INTEREST RECEIVABLE 5,605 223
NOTES RECEIVABLE 915,763
2 INVENTORIES 33,892
2 PREPAID EXPENSES 0
HOME INVENTORY
------------------------------------------------------
TOTAL CURRENT ASSETS 128,335 250 750,955 0 43,042
------------------------------------------------------
<CAPTION>
ELIMINATIONS
-----------------------------------
ACCOUNT DESCRIPTION REF DEBIT REF CREDIT CONSOLIDATED
------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
CURRENT ASSETS
CASH AND SHORT TERM INVESTMENTS 5,108,404
1 ACCOUNTS RECEIVABLE J 158,000 2,081,894
INTERCOMPANY ACCOUNTS:
1 SASI K 95 0
1 LPSCO H 114,257 (22,997)
1 SMLP J 18,788 0
1 KABUTO JV 0
1 PVGC N 4,090,907 0
1 SCM & GH - 129 A 4,797,280 A 1,181,097 (0)
1 WWOS Q 12,397 0
1 GOLDEN HERITAGE - GENERAL A 421,643 0
1 SCM-GENERAL A 4,626,804 0
1 HOMEBUILDING I/C INTEREST C 1,345,580 C 1,345,580 (0)
1 HOMEBUILDING CASH ADVANCES B 8,996,796 0
1 SUNRIDGE - DEVELOPMENT 86,771
1 SUNRIDGE - GOLF 123,139
1 SEDONA - DEVELOPMENT 23,754
1 SEDONA - GOLF 92,155
1 WIGWAM RESORT 302,257
1 INTEREST RECEIVABLE P 101,480 261,807
NOTES RECEIVABLE 1,558,451
2 INVENTORIES 102,192
2 PREPAID EXPENSES 108,666
HOME INVENTORY E 1,938,311 16,743,614
----------- ------------- ------------
TOTAL CURRENT ASSETS 6,142,859 23,006,155 26,570,106
----------- ------------- ------------
</TABLE>
<TABLE>
<CAPTION>
SUNCOR SUNCOR SUNCOR
ACCOUNT DESCRIPTION CORPORATE LPSCO FARMING SMLP PVGC HOMES PALM VALLEY
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LONG-TERM ASSETS
DEVELOPMENT PROJECTS
HIDDEN HILLS
RANCHO VIEJO
PALM VALLEY 177,275,730
LITCHFIELD GREENS 2,277,974
KABUTO JV
SCOTTSDALE MTN 8,838,343
MARKETPLACE - AUTOPLEX
TATUM RANCH 31,750,234
TALAVI
WIGWAM OUTLET STORES
GOLDEN HERITAGE LAND 895,891
BILTMORE ESTATES 41,893
EQUITY INVESTMENTS:
EQUITY IN CTRPT ASSOC-LLP 22,843,447
INVEST IN KYRENE ASSOCIATES LLC
INVEST IN PV APARTMENTS 1,368,213
INVESTMENT IN SUNRIDGE CANYON LLC 11,218,584
INVESTMENT IN SEDONA GOLF LC 6,620,633
INVESTMENT IN PLUMCOR REALTY LLC
INVEST IN TALAVI ASSOCIATES LLC
CONSOLIDATED ELIMINATING ENTITIES:
INVEST IN KABUTO JV 5,797,485
INVESTMENT IN WIGWAM OUTLET LLC 4,455,629
INVEST IN SCOTTS MTN LTD PART 7,086,924
INVEST IN GOLDEN HERITAGE 151,062
GOLDEN HERITAGE DUE DILIGENCE 7,001
INVESTMENT IN SCM 483,214
6 INVESTMENT IN LPSCO 8,368,589
INVESTMENT IN SASI 64,415
INVESTMENT IN PALM VALLEY 181,041,431
<CAPTION>
SUNCOR
ACCOUNT DESCRIPTION WWOS KABUTO JV COMMERCIAL H HILLS R VIEJO
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LONG-TERM ASSETS
DEVELOPMENT PROJECTS
HIDDEN HILLS 478,017
RANCHO VIEJO 2,437,315
PALM VALLEY 15,327,464
LITCHFIELD GREENS
KABUTO JV 12,617,550
SCOTTSDALE MTN
MARKETPLACE - AUTOPLEX 17,125,079
TATUM RANCH
TALAVI 3,492,629
WIGWAM OUTLET STORES 17,370,149
GOLDEN HERITAGE LAND
BILTMORE ESTATES
EQUITY INVESTMENTS:
EQUITY IN CTRPT ASSOC-LLP
INVEST IN KYRENE ASSOCIATES LLC 1,446,636
INVEST IN PV APARTMENTS
INVESTMENT IN SUNRIDGE CANYON LLC
INVESTMENT IN SEDONA GOLF LC
INVESTMENT IN PLUMCOR REALTY LLC 847,741
INVEST IN TALAVI ASSOCIATES LLC 2,325,106
CONSOLIDATED ELIMINATING ENTITIES:
INVEST IN KABUTO JV
INVESTMENT IN WIGWAM OUTLET LLC
INVEST IN SCOTTS MTN LTD PART
INVEST IN GOLDEN HERITAGE
GOLDEN HERITAGE DUE DILIGENCE
INVESTMENT IN SCM
6 INVESTMENT IN LPSCO
INVESTMENT IN SASI
INVESTMENT IN PALM VALLEY
<CAPTION>
ELIMINATIONS
--------------------------------------
ACCOUNT DESCRIPTION REF DEBIT REF CREDIT CONSOLIDATED
----------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM ASSETS
DEVELOPMENT PROJECTS
HIDDEN HILLS 478,017
RANCHO VIEJO 2,437,315
PALM VALLEY 192,603,194
LITCHFIELD GREENS 2,277,974
KABUTO JV 12,617,550
SCOTTSDALE MTN 8,838,343
MARKETPLACE - AUTOPLEX 17,125,079
TATUM RANCH 31,750,234
TALAVI 3,492,629
WIGWAM OUTLET STORES 17,370,149
GOLDEN HERITAGE LAND 895,891
BILTMORE ESTATES 41,893
EQUITY INVESTMENTS:
EQUITY IN CTRPT ASSOC-LLP 22,843,447
INVEST IN KYRENE ASSOCIATES LLC 1,446,636
INVEST IN PV APARTMENTS 1,368,213
INVESTMENT IN SUNRIDGE CANYON LLC 11,218,584
INVESTMENT IN SEDONA GOLF LC 6,620,633
INVESTMENT IN PLUMCOR REALTY LLC 847,741
INVEST IN TALAVI ASSOCIATES LLC 2,325,106
CONSOLIDATED ELIMINATING ENTITIES: 0
INVEST IN KABUTO JV R 8,768,265 (2,970,780)
INVESTMENT IN WIGWAM OUTLET LLC O 17,498,042 O 23,026,125 (1,072,454)
INVEST IN SCOTTS MTN LTD PART I 10,764,769 I 17,905,448 (53,755)
INVEST IN GOLDEN HERITAGE D 151,062 0
GOLDEN HERITAGE DUE DILIGENCE 7,001
INVESTMENT IN SCM D 483,214 0
6 INVESTMENT IN LPSCO F 8,368,589 0
INVESTMENT IN SASI L 650,000 L 714,415 0
INVESTMENT IN PALM VALLEY V 181,041,431 0
</TABLE>
<TABLE>
<CAPTION>
SUNCOR SUNCOR
ACCOUNT DESCRIPTION CORPORATE LPSCO FARMING SMLP PVGC
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT IN PALM VALLEY GOLF 6,359,255
1 PALM VALLEY GOLF CONTRIB. CAP (4,090,907)
PROJECT 2000:
INVESTMENT IN FIDDLESTICKS-SCOTTS 394,249
INVESTMENT IN FIDDLESTICKS-TEMPE 2,544,985
INVESTMENT IN FUNTASTICKS 3,444,214
INVESTMENT IN GENERAL COMM OPS 50,453,138
INVESTMENT IN PV MARKETPLACE 920,669
INVESTMENT IN PV PAVILIONS 671,963
INVESTMENT IN PV CROSSING (151,342)
INVESTMENT IN AUTOPLEX (244,933)
INVESTMENT IN TALAVI (92,150)
INVESTMENT IN METROCENTER 123,793
INVESTMENT IN RESTORATION PLACE (29,982)
INVESTMENT IN LITCHFIELD PARK OPS 30,064
INVESTMENT IN RANCHO VIEJO 2,420,586
INVESTMENT IN HIDDEN HILLS 477,117
COMMERCIAL PROPERTIES 0 5,431,977
LONG-TERM NOTES RECEIVABLE 4,462,797
SDC PHASE I LAND NOTE TO WWOS 1,484,153
SDC PAYOFF OF WWOS RLC 10,000,000
SDC LOAN TO LPSCO 300,000
PROPERTY & EQUIPMENT, NET 605,533 36,696 1,082 102,799
3 DEFERRED ASSETS 2,621,179 885,811 230,331
WATER, SEWER UTILITY PROP (NET) 9,768,026
3 DEPOSITS
------------------------------------------------------------------------
TOTAL LONG-TERM ASSETS 362,570,507 10,653,837 36,696 8,839,425 5,765,107
------------------------------------------------------------------------
TOTAL ASSETS 383,592,384 11,102,168 216,270 10,362,144 9,998,701
========================================================================
<CAPTION>
SUNCOR SUNCOR
ACCOUNT DESCRIPTION HOMES PALM VALLEY WWOS KABUTO JV COMMERCIAL
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT IN PALM VALLEY GOLF
1 PALM VALLEY GOLF CONTRIB. CAP
PROJECT 2000:
INVESTMENT IN FIDDLESTICKS-SCOTTS
INVESTMENT IN FIDDLESTICKS-TEMPE
INVESTMENT IN FUNTASTICKS
INVESTMENT IN GENERAL COMM OPS
INVESTMENT IN PV MARKETPLACE
INVESTMENT IN PV PAVILIONS
INVESTMENT IN PV CROSSING
INVESTMENT IN AUTOPLEX
INVESTMENT IN TALAVI
INVESTMENT IN METROCENTER
INVESTMENT IN RESTORATION PLACE
INVESTMENT IN LITCHFIELD PARK OPS
INVESTMENT IN RANCHO VIEJO
INVESTMENT IN HIDDEN HILLS
COMMERCIAL PROPERTIES 18,090,608
LONG-TERM NOTES RECEIVABLE 459,833
SDC PHASE I LAND NOTE TO WWOS
SDC PAYOFF OF WWOS RLC
SDC LOAN TO LPSCO
PROPERTY & EQUIPMENT, NET 955,170 71,604 16,691
3 DEFERRED ASSETS 145,380 236,504 187,249
WATER, SEWER UTILITY PROP (NET)
3 DEPOSITS 158,805
------------------------------------------------------------------------------
TOTAL LONG-TERM ASSETS 2,009,866 181,663,150 17,623,344 12,617,550 58,842,513
------------------------------------------------------------------------------
TOTAL ASSETS 16,703,642 182,074,098 17,751,680 12,617,800 59,593,467
==============================================================================
<CAPTION>
ELIMINATIONS
------------------------------------------
ACCOUNT DESCRIPTION H HILLS R VIEJO REF DEBIT REF CREDIT CONSOLIDATED
---------------------------------------------------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT IN PALM VALLEY GOLF M 6,359,255 0
1 PALM VALLEY GOLF CONTRIB. CAP N 4,090,907 0
PROJECT 2000: 0
INVESTMENT IN FIDDLESTICKS-SCOTTS S 1,428,266 S 1,822,515 0
INVESTMENT IN FIDDLESTICKS-TEMPE S 2,544,985 0
INVESTMENT IN FUNTASTICKS S 3,444,214 0
INVESTMENT IN GENERAL COMM OPS S 890,859 S 51,343,998 0
INVESTMENT IN PV MARKETPLACE S 920,669 0
INVESTMENT IN PV PAVILIONS S 671,963 0
INVESTMENT IN PV CROSSING S 151,342 0
INVESTMENT IN AUTOPLEX S 244,933 0
INVESTMENT IN TALAVI S 92,150 0
INVESTMENT IN METROCENTER S 123,793 0
INVESTMENT IN RESTORATION PLACE S 29,982 0
INVESTMENT IN LITCHFIELD PARK OPS S 30,064 0
INVESTMENT IN RANCHO VIEJO U 23,942 U 2,444,528 0
INVESTMENT IN HIDDEN HILLS T 1,567 T 478,683 0
COMMERCIAL PROPERTIES 23,522,585
LONG-TERM NOTES RECEIVABLE 4,922,630
SDC PHASE I LAND NOTE TO WWOS P 1,484,153 0
SDC PAYOFF OF WWOS RLC P 10,000,000 0
SDC LOAN TO LPSCO G 300,000 0
PROPERTY & EQUIPMENT, NET 8,298 1,797,872
3 DEFERRED ASSETS 4,306,454
WATER, SEWER UTILITY PROP (NET) 9,768,026
3 DEPOSITS 158,805
---------------------- ----------- ----------- -----------
TOTAL LONG-TERM ASSETS 478,017 2,445,613 35,866,759 322,427,370 376,985,014
---------------------- ----------- ----------- -----------
TOTAL ASSETS 478,017 2,488,655 42,009,619 345,433,525 403,555,121
====================== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
SUNCOR SUNCOR
ACCOUNT DESCRIPTION CORPORATE LPSCO FARMING SMLP PVGC
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES:
CURRENT LIABILITIES
4 A/P & RETENTION 38,723 104,211 30,761 13,467 32,464
4 ACCRUED LIABILITIES 1,926,954 120,572 61,648 146,177 56,920
INTERCOMPANY ACCOUNTS:
4 LPSCO - SDC 114,257
4 SMLP - SDC 18,788
4 SCM-SDC CASH ADVANCES 267
4 GH-SDC INTERCO CAPITAL 265
4 WWOS-SDC
4 KABUTO JV-SDC
INTEREST PAYABLE 484,591
S/T NOTES PAYABLE OTHER
$45 MILLION TERM LOAN 3,005,169
$55 MILLION RLC
GOLDEN HERITAGE (PEW)
TEXTRON LOAN
5 DEFERRED PROFIT 1,938,311 5,350 107,796
PWCC INTERCO PAYABLE 236,126
CUSTOMER DEPOSITS 0
-------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 7,629,874 339,040 97,759 286,228 89,384
-------------------------------------------------------------------------------
LONG-TERM LIABILITIES
LONG-TERM NOTES PAYABLE
WWOS OWES SDC PH I LAND NOTE
WWOS RLC PAYOFF BY SDC
CORPORATE TERM NOTE $41,994,831
CORPORATE RLC 40,600,000
LPSCO OWES SDC 300,000
GOLDEN HERITAGE (PEW)
TEXTRON LOAN 3,550,062
6 OTHER ACCRUED LIABILITIES 3,124,805 585,186 54,096
6 DEFERRED TAXES 238,404
6 LONG-TERM CUSTOMER DEPOSITS 479,788
6 CONTRIB PROPERTY AIA 999,073
DEFERRED CREDIT 11,000
-------------------------------------------------------------------------------
TOTAL L/T LIABILITIES 85,730,636 2,602,451 54,096 0 3,550,062
-------------------------------------------------------------------------------
TOTAL LIABILITIES 93,360,510 2,941,491 151,855 286,228 3,639,446
-------------------------------------------------------------------------------
<CAPTION>
SUNCOR SUNCOR
ACCOUNT DESCRIPTION HOMES PALM VALLEY WWOS KABITO JV COMMERCIAL
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES:
CURRENT LIABILITIES
4 A/P & RETENTION 2,110,634 748,284 625,567 244,648
4 ACCRUED LIABILITIES 410,842 122,084 15,000 1,066,471
INTERCOMPANY ACCOUNTS:
4 LPSCO - SDC
4 SMLP - SDC
4 SCM-SDC CASH ADVANCES 267 8,996,796
4 GH-SDC INTERCO CAPITAL 265 1,432,265
4 WWOS-SDC 12,397
4 KABUTO JV-SDC
INTEREST PAYABLE 0 101,480
S/T NOTES PAYABLE OTHER
$45 MILLION TERM LOAN
$55 MILLION RLC
GOLDEN HERITAGE (PEW) 1,562,863
TEXTRON LOAN
5 DEFERRED PROFIT 162,299
PWCC INTERCO PAYABLE
CUSTOMER DEPOSITS 1,555,966
-----------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 16,069,366 1,032,667 739,444 15,000 1,311,120
-----------------------------------------------------------------------------------------
LONG-TERM LIABILITIES
LONG-TERM NOTES PAYABLE
WWOS OWES SDC PH I LAND NOTE 1,484,153
WWOS RLC PAYOFF BY SDC 10,000,000
CORPORATE TERM NOTE
CORPORATE RLC
LPSCO OWES SDC
GOLDEN HERITAGE (PEW)
TEXTRON LOAN
6 OTHER ACCRUED LIABILITIES 0 217,679
6 DEFERRED TAXES
6 LONG-TERM CUSTOMER DEPOSITS
6 CONTRIB PROPERTY AIA
DEFERRED CREDIT
-----------------------------------------------------------------------------------------
TOTAL L/T LIABILITIES 0 0 11,484,153 0 217,679
-----------------------------------------------------------------------------------------
TOTAL LIABILITIES 16,069,366 1,032,667 12,223,597 15,000 1,528,799
-----------------------------------------------------------------------------------------
<CAPTION>
ELIMINATIONS
-------------------------------------
ACCOUNT DESCRIPTION H HILLS R VIEJO REF DEBIT REF CREDIT CONSOLIDATED
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES:
CURRENT LIABILITIES
4 A/P & RETENTION 900 32,301 J,K,A 158,095 3,823,866
4 ACCRUED LIABILITIES 35,768 3,962,437
INTERCOMPANY ACCOUNTS:
4 LPSCO - SDC H 114,257 0
4 SMLP - SDC J 18,788 0
4 SCM-SDC CASH ADVANCES 267 B 8,996,796 0
4 GH-SDC INTERCO CAPITAL 265 A 1,432,265 0
4 WWOS-SDC Q 12,397 0
4 KABUTO JV-SDC 0
INTEREST PAYABLE P 101,480 484,591
S/T NOTES PAYABLE OTHER
$45 MILLION TERM LOAN 3,005,169
$55 MILLION RLC 0
GOLDEN HERITAGE (PEW) 1,562,863
TEXTRON LOAN * 58,445 58,445
5 DEFERRED PROFIT E 1,938,311 275,445
PWCC INTERCO PAYABLE 236,126
CUSTOMER DEPOSITS 1,555,966
------------------------- ----------- ---------- --------------
X TOTAL CURRENT LIABILITIES 900 68,069 12,772,389 58,445 14,964,908
------------------------- ----------- ---------- --------------
LONG-TERM LIABILITIES
LONG-TERM NOTES PAYABLE
WWOS OWES SDC PH I LAND NOTE P 1,484,153 0
WWOS RLC PAYOFF BY SDC P 10,000,000 0
CORPORATE TERM NOTE 41,994,831
CORPORATE RLC 40,600,000
LPSCO OWES SDC G 300,000 0
GOLDEN HERITAGE (PEW) 0
TEXTRON LOAN * 58,445 3,491,617
6 OTHER ACCRUED LIABILITIES 3,981,766
6 DEFERRED TAXES F 207,912 30,492
6 LONG-TERM CUSTOMER DEPOSITS 479,788
6 CONTRIB PROPERTY AIA 999,073
DEFERRED CREDIT 11,000
------------------------- ----------- ---------- --------------
TOTAL L/T LIABILITIES 0 0 12,050,510 0 91,588,567
------------------------- ----------- ---------- --------------
TOTAL LIABILITIES 900 68,069 24,822,899 58,445 106,553,475
------------------------- ----------- ---------- --------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUNCOR SUNCOR
ACCOUNT DESCRIPTION CORPORATE LPSCO FARMING SMLP PVGC
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MINORITY INTEREST
EQUITY:
SDC COMMON STOCK 1,022,000
SDC ADDITIONAL PAID IN CAPITAL 405,368,522
SDC EARNED SURPLUS-BEGINNING (121,492,825)
SDC EARNED SURPLUS-CURRENT 5,334,177
SUBSIDIARY EARNINGS-CURRENT 29,982 (85,522) 2,907,509 (194,675)
SUBSIDIARY EQUITY:
LPSCO 8,130,695
SASI 149,937
SMLP #3500 7,168,407
PVGC 6,553,929
HOMEBUILDING
PALM VALLEY #5500
WWOS #4400
KABUTO JV #3000
COMMERCIAL PROPERTIES #2000
HIDDEN HILLS #3300
RANCHO SANTE FE #6600
---------------------------------------------------------------------------------
TOTAL EQUITY 290,231,874 8,160,677 64,415 10,075,916 6,359,255
---------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY 383,592,384 11,102,168 216,270 10,362,144 9,998,701
=================================================================================
<CAPTION>
SUNCOR SUNCOR
ACCOUNT DESCRIPTION HOMES PALM VALLEY WWOS KABITO JV COMMERCIAL
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MINORITY INTEREST
EQUITY:
SDC COMMON STOCK
SDC ADDITIONAL PAID IN CAPITAL
SDC EARNED SURPLUS-BEGINNING
SDC EARNED SURPLUS-CURRENT
SUBSIDIARY EARNINGS-CURRENT 1,809,835 3,496,839 (831,462) 0 749,681
SUBSIDIARY EQUITY:
LPSCO
SASI
SMLP #3500
PVGC
HOMEBUILDING (1,175,560)
PALM VALLEY #5500 177,544,592
WWOS #4400 6,359,545
KABUTO JV #3000 12,602,800
COMMERCIAL PROPERTIES #2000 57,314,987
HIDDEN HILLS #3300
RANCHO SANTE FE #6600
-----------------------------------------------------------------------------------------
TOTAL EQUITY 634,276 181,041,431 5,528,083 12,602,800 58,064,668
-----------------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY 16,703,642 182,074,098 17,751,680 12,617,800 59,593,467
=========================================================================================
<CAPTION>
ELIMINATIONS
-----------------------------------------------
ACCOUNT DESCRIPTION H HILLS R VIEJO REF DEBIT REF CREDIT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MINORITY INTEREST I,R 6,769,772
-----------
EQUITY:
SDC COMMON STOCK
SDC ADDITIONAL PAID IN CAPITAL
SDC EARNED SURPLUS-BEGINNING
SDC EARNED SURPLUS-CURRENT
SUBSIDIARY EARNINGS-CURRENT (1,567) (10,049)D,F,I,M,S,V 8,799,172 L,O,T,U 928,599
SUBSIDIARY EQUITY:
LPSCO F 8,130,695
SASI L 799,937 L 650,000
SMLP #3500 I 23,244,640 I 16,076,233
PVGC M 6,553,929
HOMEBUILDING D 1,175,560
PALM VALLEY #5500 V 177,544,592
WWOS #4400 O 23,026,125 O 16,666,580
KABUTO JV #3000 R 12,602,800
COMMERCIAL PROPERTIES #2000 S 57,572,855 S 257,868
HIDDEN HILLS #3300 478,683 T 478,683
RANCHO SANTE FE #6600 2,430,635 U 2,444,528 U 13,893
------------------------- ------------------ -----------
TOTAL EQUITY 477,117 2,420,586 321,197,958 35,768,733
------------------------- ------------------ -----------
TOTAL LIABILITIES AND EQUITY 478,017 2,488,655 346,020,857 42,596,951
========================= ================== ===========
<CAPTION>
ACCOUNT DESCRIPTION CONSOLIDATED
---------------------------------------------------
<S> <C>
MINORITY INTEREST 6,769,772
------------
EQUITY:
SDC COMMON STOCK 1,022,000
SDC ADDITIONAL PAID IN CAPITAL 405,368,522
SDC EARNED SURPLUS-BEGINNING (121,492,825)
SDC EARNED SURPLUS-CURRENT 5,334,177
SUBSIDIARY EARNINGS-CURRENT 0
SUBSIDIARY EQUITY:
LPSCO 0
SASI 0
SMLP #3500 0
PVGC 0
HOMEBUILDING 0
PALM VALLEY #5500 0
WWOS #4400 0
KABUTO JV #3000 (0)
COMMERCIAL PROPERTIES #2000 0
HIDDEN HILLS #3300 0
RANCHO SANTE FE #6600 (0)
-------------
TOTAL EQUITY 290,231,874
-------------
TOTAL LIABILITIES AND EQUITY 403,555,121
=============
</TABLE>
* TO RECLASS CURRENT PORTION OF PVGC LOAN AS OF 12/31/97
<PAGE>
SUNCOR DEVELOPMENT COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 1997 CONSOLIDATING & ELIMINATING ENTRIES
<TABLE>
<CAPTION>
DEBIT CREDIT
<S> <C> <C>
A. SCM INTERCO A/P TO SDC $4,797,280
GH INTERCO CAPITAL FROM SDC - ACQUISITION $1,432,265
GH INTERCO A/P TO SDC $1,181,097
SDC A/R FROM GH $421,643
SDC A/R FROM SCM $4,626,804
B. HOMEBUILDING CASH ADVANCES FROM SDC $8,996,796
SDC CASH ADVANCES TO HOMEBUILDING $8,996,796
C. SCM INTERCO CAPPED INTEREST $1,345,580
SDC INTERCO INTEREST A/R FROM SCM $1,345,580
TO ELIMINATE INTERCO RECEIVABLES/PAYABLES BETWEEN HOMEBUILDING AND SDC
D. SDC INVESTMENT IN GH $151,062
SDC DUE DILIGENCE COSTS - GHH ACQUISITION --
SDC INVESTMENT IN SCM $483,214
HOMEBUILDING CURRENT YEAR INCOME $1,809,835
HOMEBUILDING ACCUMULATED LOSSES $1,175,560
TO ELIMINATE INVESTMENT IN GH & SCM ON SDC BOOKS
E. DEFERRED INTERCO PROFIT $1,938,311
HOME INVENTORY $1,938,311
TO ELIMINATE B/S GROSS UP ON INTERCO LOT SALES BETWEEN SDC AND HOMEBUILDING
F. LPSCO COMMON STOCK $78,200
LPSCO PAID IN CAPITAL $7,417,170
LPSCO EARNINGS - PRIOR $635,325
SDC DEFERRED TAXES DIFFERENTIAL $207,912
LPSCO EARNINGS - CURRENT YEAR $29,982
SDC INVESTMENT IN LPSCO - CONTRIB CAPITAL $7,495,370
SDC INVESTMENT IN LPSCO - EARNINGS $665,307
SDC INVESTMENT IN LPSCO - DEFERRED TAXES DIFFERENTIAL $207,912
ELIMINATE SDC INVESTMENT IN LPSCO
G. LPSCO LONG-TERM NOTES PAYABLE $300,000
SDC LONG-TERM NOTES RECEIVABLE $300,000
ELIMINATE LPSCO INTERCOMPANY NOTE WITH SDC
H. LPSCO ACCOUNTS PAYABLE $114,257
SDC ACCOUNTS RECEIVABLE $114,257
ELIMINATE LPSCO INTERCOMPANY A/R WITH SDC
I. SMLP CONTRIBUTED CAPITAL-MINORITY INT $5,311,464
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEBIT CREDIT
<S> <C> <C>
SMLP CONTRIBUTED CAPITAL-SDC GP $490,147
SMLP DISTRIBUTED CAPITAL-SDC GP $6,059,112
SMLP CONTRIBUTED CAPITAL-SDC LP $2,100,000
SMLP DISTRIBUTED CAPITAL-SDC LP $4,705,657
SMLP EARNINGS - PRIOR $20,654,493
SMLP EARNINGS - CURRENT YEAR $2,907,509
MINORITY INTEREST CONTRIBUTED CAPITAL $5,311,464
MINORITY INTEREST - PRIOR (35%) $7,229,073
MINORITY INTEREST - CURRENT YEAR (35%) $1,017,628
SDC INVESTMENT IN SMLP-LP $2,100,000
SDC DISTRIBUTIONS FROM SMLP-LP $4,705,657
SDC INVESTMENT IN SMLP-GP $490,147
SDC DISTRIBUTIONS FROM SMLP -GP $6,059,112
SDC INVESTMENT IN SMLP - EARNINGS $15,315,301
SDC LAND BASIS DIFFERENTIAL --
ELIMINATE SDC INVESTMENT IN SMLP #3500
J. SMLP ACCOUNTS PAYABLE $18,788
SDC ACCOUNTS RECEIVABLE $18,788
GH ACCOUNTS PAYABLE $158,000
SMLP ACCOUNTS RECEIVABLE $158,000
ELIMINATE SMLP INTERCOMPANY A/R WITH SDC AND HOMEBUILDING (PREMIUMS)
K. SASI ACCOUNTS PAYABLE $95
SDC ACCOUNTS RECEIVABLE $95
ELIMINATE SASI INTERCOMPANY A/R WITH SDC
L. SASI CONTRIBUTED CAPITAL $339,023
SASI CAPITAL DISTRIBUTIONS $650,000
SASI EARNINGS - PRIOR $460,914
SASI EARNINGS - CURRENT YEAR $85,522
PV INVESTMENT IN SASI - CONTRIB CAPITAL $339,023
PV INVESTMENT IN SASI - DISTRIBUTIONS $650,000
PV INVESTMENT IN SASI - EARNINGS $375,392
ELIMINATE PALM VALLEY INVESTMENT IN SASI
M. PVGC CONTRIBUTED CAPITAL $6,158,173
PVGC EARNINGS - PRIOR $395,756
PVGC EARNINGS - CURRENT YEAR ($194,675)
SDC INVESTMENT IN PVGC - EARNINGS $201,082
SDC INVESTMENT IN PVGC - CONTRIB CAPITAL $6,158,173
ELIMINATE SDC INVESTMENT IN PALM VALLEY GOLF
N. SDC CONTRIB. CAPITAL TO PVGC $4,090,907
PVGC ACCOUNTS RECEIVABLE $4,090,907
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEBIT CREDIT
<S> <C> <C>
ELIMINATE PVGC INTERCOMPANY A/R WITH SDC
O. WWOS CONTRIBUTED CAPITAL-PHASE 1 $9,500,000
WWOS CONTRIBUTED CAPITAL-PHASE 2 $13,526,125
WWOS EARNINGS - PRIOR $1,101,590
WWOS EARNINGS - CURRENT YEAR $831,462
WWOS CAPITAL DISTRIBUTIONS-PHASE 1 $9,500,000
WWOS CAPITAL DISTRIBUTIONS-PHASE 2 $4,967,126
WWOS PREFERRED RETURN-PHASE 1 $287,568
WWOS PREFERRED RETURN-PHASE 2 $810,296
SDC INVESTMENT IN WWOS -PHASE 1 $9,500,000
SDC INVESTMENT IN WWOS -PHASE 2 $13,526,125
SDC INVESTMENT IN WWOS - EARNINGS $1,933,052
SDC DISTRIBUTIONS FROM WWOS-PHASE 1 $9,500,000
SDC DISTRIBUTIONS FROM WWOS-PHASE 2 $4,967,126
SDC PREFERRED RETURN -PHASE 1 $287,568
SDC PREFERRED RETURN -PHASE 2 $810,296
SDC BASIS DIFFERENTIAL PH I BUILDINGS --
SDC BASIS DIFFERENTIAL PH I LAND --
SDC BASIS DIFFERENTIAL PH II LAND --
SDC 1994 CAPPED INTEREST ON WWOS --
SDC 1995 DEVELOPMENT FEES --
ELIMINATE SDC INVESTMENT IN WIGWAM OUTLET STORES #4400
P. WWOS INTEREST PAYABLE $33,668
WWOS INTEREST PAYABLE $67,813
SDC INTEREST RECEIVABLE $33,668
SDC INTEREST RECEIVABLE $67,813
WWOS NOTES PAYABLE $1,484,153
SDC NOTES RECEIVABLE $1,484,153
WWOS NOTES PAYABLE $10,000,000
SDC NOTES RECEIVABLE $10,000,000
ELIMINATE WWOS INTERCOMPANY NOTES AND INTEREST WITH SDC
Q. WWOS ACCOUNTS PAYABLE $12,397
SDC ACCOUNTS RECEIVABLE $12,397
ELIMINATE WWOS INTERCOMPANY A/R WITH SDC
R. KABUTO CONTRIBUTED CAPITAL - SDC $8,768,265
KABUTO CONTRIBUTED CAPITAL - KABUTO $3,834,535
MINORITY INTEREST $3,834,535
SDC INVESTMENT IN KABUTO - CONTR CAPITAL $5,914,509
BALANCING PLUG $2,853,757
SDC BASIS DIFFERENTIAL IN LAND --
SDC DEVELOPMENT COSTS --
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEBIT CREDIT
<S> <C> <C>
ELIMINATE SDC INVESTMENT IN KABUTO JV #3000
S. COMMERCIAL OPS CONTRIBUTED CAPITAL $57,572,855
COMMERCIAL EARNINGS - PRIOR $257,868
COMMERCIAL EARNINGS - CURRENT YEAR $749,681
SDC INVEST IN GEN COMMERCIAL OPS - EARNINGS $890,859
SDC INVEST IN GEN COMMERCIAL OPS - CONT CAPITAL $51,343,998
SDC INVESTMENT IN OUTER LIMITS - PURCHASE $1,822,515
SDC INVESTMENT IN FIDDLE (SCOTTS) - CONT CAPITAL $1,090,059
SDC INVESTMENT IN FIDDLE (SCOTTS) - EARNINGS $338,207
SDC INVESTMENT IN FUNTASTICKS - CONT CAPITAL $3,282,433
SDC INVESTMENT IN FUNTASTICKS - EARNINGS $161,781
SDC INVESTMENT IN FIDDLE (TEMPE) - CONT CAPITAL $2,213,969
SDC INVESTMENT IN FIDDLE (TEMPE) - EARNINGS $331,016
SDC INVESTMENT IN PV MARKETPLACE - EARNINGS $920,669
SDC INVESTMENT IN PV PAVILIONS - EARNINGS $671,963
SDC INVESTMENT IN PV CROSSING - EARNINGS $151,342
SDC INVESTMENT IN METROCENTER - EARNINGS $123,793
SDC INVESTMENT IN REST PLACE - EARNINGS $29,982
SDC INVESTMENT IN LITCHFIELD OTHER - EARNINGS $30,064
SDC INVESTMENT IN AUTOPLEX - EARNINGS $244,933
SDC INVESTMENT IN TALAVI - EARNINGS $92,150
ELIMINATE SDC INVESTMENT IN COMMERCIAL OPERATIONS #2000
T. HIDDEN HILLS CONTRIBUTED CAPITAL $478,683
HIDDEN HILLS EARNINGS - PRIOR $0
HIDDEN HILLS EARNINGS - CURRENT YEAR $1,567
SDC INVESTMENT IN HIDDEN HILLS - EARNINGS $1,567
SDC INVESTMENT IN HIDDEN HILLS - CONT CAPITAL $478,683
ELIMINATE SDC INVESTMENT IN HIDDEN HILLS JV #3300
U. SDC INVESTMENT IN RANCHO VIEJO - EARNINGS $23,942
SDC INVESTMENT IN RANCHO VIEJO - CAPITAL $2,444,528
RANCHO VIEJO CONTRIBUTED CAPITAL $2,444,528
RANCHO VIEJO EARNINGS - PRIOR $13,893
RANCHO VIEJO EARNINGS - CURRENT YEAR $10,049
ELIMINATE SDC INVESTMENT IN RANCHO VIEJO JV #6600
V. PV CONTRIBUTED CAPITAL $177,544,592
PV EARNINGS - PRIOR $0
PV EARNINGS - CURRENT YEAR $3,496,839
SDC INVESTMENT IN PALM VALLEY - EARNINGS $3,496,839
SDC INVESTMENT IN PALM VALLEY - DEVELOP $177,544,592
ELIMINATE SDC INVESTMENT IN PALM VALLEY #5500
TOTAL $372,755,514 $372,755,514
</TABLE>
<PAGE>
SUNCOR DEVELOPMENT COMPANY
CONSOLIDATING INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 1997
<TABLE>
<CAPTION>
ACCOUNT DESCRIPTION SUNCOR LPSCO SCTS MTN PVGC G H HOMES WWOS
---------------------------- ----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
SALE OF ASSETS $6,000,000 - - - - -
DEFERRED PROFIT - - 279,896 - - -
LAND SALES 40,827,538 - 4,876,887 - - -
HOME SALES - - - - 58,111,924 -
COMMERCIAL PROPERTIES 5,975,257 - - 2,194,091 - 2,322,774
UTILITY SALES - 1,618,907 - - - -
MANAGEMENT FEES 1,149,442 - - - - -
----------- ----------- ------------ ----------- ----------- -----------
TOTAL OPERATING REVENUES 53,952,237 1,618,907 5,156,783 2,194,091 58,111,924 2,322,774
----------- ----------- ------------ ----------- ----------- -----------
OPERATING EXPENSES
COST OF ASSETS SOLD 5,043,300 - - - - -
COST OF LAND SOLD 33,564,613 - 2,079,251 - - -
COST OF HOMES SOLD (2,322,193) - - - 50,970,298 -
LAND PROJECT COSTS 2,118,718 - 239,337 - - -
COMMERCIAL PROPERTIES 4,498,370 - - 1,725,179 - 1,072,563
GENERAL & ADMINISTRATIVE 9,882,277 - 204,301 - 4,909,682 -
UTILITY EXPENSE - 1,397,097 - - - -
RESORT OPERATIONS 10,202 - - - - -
DEPRECIATION & AMORTIZATION 716,227 178,950 563 158,207 336,901 954,720
----------- ----------- ------------ ----------- ----------- -----------
TOTAL OPERATING EXPENSES 53,511,514 1,576,047 2,523,452 1,883,386 56,216,881 2,027,283
----------- ----------- ------------ ----------- ----------- -----------
NET OPERATING INCOME 440,723 42,860 2,633,331 310,705 1,895,043 295,491
----------- ----------- ------------ ----------- ----------- -----------
OTHER INCOME AND GAINS:
EQUITY IN JOINT VENTURES 3,182,361 - - - - -
INTEREST INCOME 857,924 14,466 281,535 - - 19,422
OTHER - - - - 49,269 -
----------- ----------- ------------ ----------- ----------- -----------
TOTAL OTHER INCOME AND GAINS 4,040,285 14,466 281,535 - 49,269 19,422
----------- ----------- ------------ ----------- ----------- -----------
INTEREST EXPENSE
INTEREST EXPENSE 5,870,928 27,340 7,357 505,378 134,477 1,146,375
LESS: CAPITALIZED INTEREST (3,494,746) - - - - -
----------- ----------- ------------ ----------- ----------- -----------
TOTAL INTEREST EXPENSE 2,376,182 27,340 7,357 505,378 134,477 1,146,375
----------- ----------- ------------ ----------- ----------- -----------
NET INCOME BEFORE MINORITY INTEREST 2,104,825 29,986 2,907,509 (194,673) 1,809,835 (831,462)
MINORITY INTEREST 480,231 - - - - -
----------- ----------- ------------ ----------- ----------- -----------
NET INCOME/(LOSS) $1,624,594 $29,986 $2,907,509 ($194,673) $1,809,835 ($831,462)
=========== =========== ============ =========== =========== ===========
<CAPTION>
HIDDEN RANCHO ELIMINATING CONSOLIDATED
ACCOUNT DESCRIPTION HILLS VIEJO ENTRIES INCOME
---------------------------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
SALE OF ASSETS - - - $6,000,000
DEFERRED PROFIT - - - 279,896
LAND SALES - 265,847 - 45,970,272
HOME SALES - - - 58,111,924
COMMERCIAL PROPERTIES - - - 10,492,122
UTILITY SALES - - - 1,618,907
MANAGEMENT FEES - - - 1,149,442
---------- ---------- ----------- ------------
TOTAL OPERATING REVENUES - 265,847 - 123,622,563
---------- ---------- ----------- ------------
OPERATING EXPENSES
COST OF ASSETS SOLD - - - 5,043,300
COST OF LAND SOLD - 220,328 - 35,864,192
COST OF HOMES SOLD - - - 48,648,105
LAND PROJECT COSTS 290 60,945 - 2,419,290
COMMERCIAL PROPERTIES - - - 7,296,112
GENERAL & ADMINISTRATIVE 1,277 - - 15,057,115
UTILITY EXPENSE - - - 1,337,519
RESORT OPERATIONS - - - 10,202
DEPRECIATION & AMORTIZATION - 398 - 2,345,966
---------- ---------- ----------- ------------
TOTAL OPERATING EXPENSES 1,567 281,671 - 118,021,801
---------- ---------- ----------- ------------
NET OPERATING INCOME (1,567) (15,824) - 5,600,762
---------- ---------- ----------- ------------
OTHER INCOME AND GAINS:
EQUITY IN JOINT VENTURES - - - 3,182,361
INTEREST INCOME - 5,775 - 1,179,122
OTHER - - - 49,269
---------- ---------- ----------- ------------
TOTAL OTHER INCOME AND GAINS - 5,775 - 4,410,752
---------- ---------- ----------- ------------
INTEREST EXPENSE
INTEREST EXPENSE - - - 7,691,855
LESS: CAPITALIZED INTEREST - - - (3,494,746)
---------- ---------- ----------- ------------
TOTAL INTEREST EXPENSE - - - 4,197,109
---------- ---------- ----------- ------------
NET INCOME BEFORE MINORITY INTEREST (1,567) (10,049) - 5,814,405
MINORITY INTEREST - - - 480,231
---------- ---------- ----------- ------------
NET INCOME/(LOSS) ($1,567) ($10,049) - $5,334,174
========== ========== =========== ============
</TABLE>
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