SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION
15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED].
For the transition period from __________ to __________
Commission file number 1-8962
The Savings Plan for Employees of
Pinnacle West Capital Corporation
(Full title of the plan)
Pinnacle West Capital Corporation
(Name of issuer)
400 East Van Buren
P.O. Box 52132
Phoenix, Arizona 85072
(Address of issuer's principal executive office)
<PAGE>
THE SAVINGS PLAN FOR EMPLOYEES
OF ARIZONA PUBLIC SERVICE COMPANY,
THE SAVINGS PLAN FOR UNION EMPLOYEES OF
ARIZONA PUBLIC SERVICE COMPANY
AND
THE SAVINGS PLAN FOR EMPLOYEES OF
PINNACLE WEST CAPITAL CORPORATION
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
Independent Auditors' Report 1
Combined Statements of Net Assets Available
for Benefits with Supplemental
Combining Information by fund as of
December 31, 1999 and 1998 2-3
Combined Statements of Changes in Net Assets
Available for Benefits for Each of the Three
Years in the Period Ended December 31, 1999 4
Notes to Combined Financial Statements 5-12
Exhibits Filed 13
<PAGE>
INDEPENDENT AUDITORS' REPORT
Pinnacle West Capital Corporation
Phoenix, Arizona
We have audited the accompanying combined statements of net assets available for
benefits of The Savings Plan for Employees of Arizona Public Service Company,
The Savings Plan for Union Employees of Arizona Public Service Company and The
Savings Plan for Employees of Pinnacle West Capital Corporation (the "Plans") as
of December 31, 1999 and 1998, and the related combined statements of changes in
net assets available for benefits for each of the three years in the period
ended December 31, 1999. These combined financial statements are the
responsibility of the Plans' management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such combined financial statements present fairly, in all
material respects, the net assets available for benefits of the Plans as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for each of the three years in the period ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
combined financial statements taken as a whole. The supplemental combining
information by fund is presented for the purpose of additional analysis of the
basic combined financial statements rather than to present information regarding
the net assets available for benefits and changes in net assets available for
benefits of the individual funds, and is not a required part of the basic
financial statements. This supplemental information is the responsibility of the
Plans' management. Such supplemental combining information by fund has been
subjected to the auditing procedures applied in our audits of the basic combined
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic combined financial statements
taken as a whole.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
June 27, 2000
-1-
<PAGE>
THE SAVINGS PLAN FOR EMPLOYEES OF ARIZONA PUBLIC SERVICE COMPANY,
THE SAVINGS PLAN FOR UNION EMPLOYEES OF ARIZONA PUBLIC SERVICE COMPANY AND
THE SAVINGS PLAN FOR EMPLOYEES OF PINNACLE WEST CAPITAL CORPORATION
--------------------------------------------------------------------------------
COMBINED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH SUPPLEMENTAL
COMBINING INFORMATION BY FUND DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL COMBINING INFORMATION BY FUND
----------------------------------------------------------
PINNACLE WEST FIXED AGGRESSIVE
COMBINED STOCK FUND INDEX FUND INCOME FUND EQUITY FUND
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value except
for Fixed Income Fund that is
at contract value which approximates
fair value (cost, Pinnacle West Stock
Fund, $82,672,476;
Index Fund, $68,947,046;
Fixed Income Fund, $69,024,641;
Aggressive Equity Fund, $54,005,663;
International Equity Fund, $5,709,494;
Lifestyle Conservative Fund, $3,711,074;
Lifestyle Moderate Fund, $10,871,587;
Lifestyle Aggressive Fund, $9,986,583;
Participant Loan Feature, $22,763,736) $502,218,041 $113,343,874 $170,238,041 $ 69,024,641 $ 89,443,463
Temporary investments (at cost which
approximates fair value) 12,196,055 3,989,784 8,164,779
Other receivables and interfund transfers 1,364,046 53,444 (483,815) 1,118,521
------------ ------------ ------------ ------------ ------------
Total assets 515,778,142 117,387,102 170,238,041 68,540,826 98,726,763
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $515,778,142 $117,387,102 $170,238,041 $ 68,540,826 $ 98,726,763
============ ============ ============ ============ ============
SUPPLEMENTAL COMBINING INFORMATION BY FUND
-------------------------------------------------------------------------
LIFESTYLE LIFESTYLE LIFESTYLE
INTERNATIONAL CONSERVATIVE MODERATE AGGRESSIVE PARTICIPANT
EQUITY FUND FUND FUND FUND LOAN FEATURE
------------ ------------ ------------ ------------ ------------
ASSETS:
Investments at fair value except
for Fixed Income Fund that is
at contract value which approximates
fair value (cost, Pinnacle West Stock
Fund, $82,672,475;
Index Fund, $68,947,046;
Fixed Income Fund, $69,024,641;
Aggressive Equity Fund, $54,005,662;
International Equity Fund, $5,709,494;
Lifestyle Conservative Fund, $3,711,073;
Lifestyle Moderate Fund, $10,871,587;
Lifestyle Aggressive Fund, $9,986,583;
Participant Loan Feature, $22,763,736) $ 7,581,670 $ 3,993,053 $ 12,995,189 $ 12,834,374 $ 22,763,736
Temporary investments (at cost which
approximates fair value) 788 2,280 7,660 30,764
Other receivables and interfund transfers 90,958 321,779 263,159
------------ ------------ ------------ ------------ ------------
Total assets 7,582,458 4,086,291 13,316,968 13,105,193 22,794,500
------------ ------------ ------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 7,582,458 $ 4,086,291 $ 13,316,968 $ 13,105,193 $ 22,794,500
============ ============ ============ ============ ============
</TABLE>
See notes to combined financial statements.
-2-
<PAGE>
THE SAVINGS PLAN FOR EMPLOYEES OF ARIZONA PUBLIC SERVICE COMPANY,
THE SAVINGS PLAN FOR UNION EMPLOYEES OF ARIZONA PUBLIC SERVICE COMPANY AND
THE SAVINGS PLAN FOR EMPLOYEES OF PINNACLE WEST CAPITAL CORPORATION
--------------------------------------------------------------------------------
COMBINED STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH SUPPLEMENTAL
COMBINING INFORMATION BY FUND DECEMBER 31, 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL COMBINING INFORMATION BY FUND
---------------------------------------------------------------
PINNACLE WEST FIXED AGGRESSIVE
COMBINED STOCK FUND INDEX FUND INCOME FUND EQUITY FUND
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value except
for Fixed Income Fund that is at
contract value which approximates
fair value (cost, Pinnacle West Stock
Fund, $68,965,125;
Index Fund, $65,075,966;
Fixed Income Fund, $57,922,524;
Aggressive Equity Fund, $43,316,881;
International Equity Fund, $5,716,888;
Lifestyle Conservative Fund, $3,765,401;
Lifestyle Moderate Fund, $9,292,635;
Lifestyle Aggressive Fund, $9,022,549;
Participant Loan Feature, $21,693,553) $ 450,665,341 $ 141,857,042 $ 140,562,235 $ 57,922,524 $ 56,929,532
Temporary investments (at cost which
approximates fair value) 10,322,875 2,418,190 312,114 7,359,873 105,587
Other receivables and interfund transfers 336,682 121,128 (17,552) 476,093 (97,370)
------------- ------------- ------------- ------------- -------------
Total assets 461,324,898 144,396,360 140,856,797 65,758,490 56,937,749
------------- ------------- ------------- ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $ 461,324,898 $ 144,396,360 $ 140,856,797 $ 65,758,490 $ 56,937,749
============= ============= ============= ============= =============
SUPPLEMENTAL COMBINING INFORMATION BY FUND
--------------------------------------------------------------------------------
LIFESTYLE LIFESTYLE LIFESTYLE
INTERNATIONAL CONSERVATIVE MODERATE AGGRESSIVE PARTICIPANT
EQUITY FUND FUND FUND FUND LOAN FEATURE
------------- ------------- ------------- ------------- -------------
ASSETS:
Investments at fair value except
for Fixed Income Fund that is at
contract value which approximates
fair value (cost, Pinnacle West Stock
Fund, $68,965,125;
Index Fund, $65,075,966;
Fixed Income Fund, $57,922,524;
Aggressive Equity Fund, $43,316,881;
International Equity Fund, $5,716,888;
Lifestyle Conservative Fund, $3,765,401;
Lifestyle Moderate Fund, $9,292,635;
Lifestyle Aggressive Fund, $9,022,549;
Participant Loan Feature, $21,693,553) $ 5,920,928 $ 4,086,200 $ 10,826,419 $ 10,866,908 $ 21,693,553
Temporary investments (at cost
which approximates fair value) 34,356 31,833 60,138 784
Other receivables and interfund transfers 37,322 3,608 (68,545) (127,642) 9,640
------------- ------------- ------------- ------------- -------------
Total assets 5,992,606 4,121,641 10,818,012 10,740,050 21,703,193
------------- ------------- ------------- ------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS $ 5,992,606 $ 4,121,641 $ 10,818,012 $ 10,740,050 $ 21,703,193
============= ============= ============= ============= =============
</TABLE>
See notes to combined financial statements.
-3-
<PAGE>
THE SAVINGS PLAN FOR EMPLOYEES OF ARIZONA PUBLIC SERVICE COMPANY,
THE SAVINGS PLAN FOR UNION EMPLOYEES OF ARIZONA PUBLIC SERVICE COMPANY AND
THE SAVINGS PLAN FOR EMPLOYEES OF PINNACLE WEST CAPITAL CORPORATION
--------------------------------------------------------------------------------
COMBINED STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (Note 1):
Dividends $ 6,796,651 $ 9,528,178 $ 7,934,514
Interest/other income 6,477,059 5,968,437 5,610,801
Realized gain on sale of investments 17,123,583 10,084,967 11,404,543
Unrealized appreciation of investments (Note 4) 8,631,925 29,495,440 55,797,490
------------ ------------ ------------
Total investment income 39,029,218 55,077,022 80,747,348
------------ ------------ ------------
Contributions (Note 2):
Employers 7,927,434 7,539,003 7,068,458
Participants 26,371,512 24,947,630 22,670,941
------------ ------------ ------------
Total contributions 34,298,946 32,486,633 29,739,399
------------ ------------ ------------
Total additions 73,328,164 87,563,655 110,486,747
------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefit payments 18,854,234 21,457,929 36,772,690
Administrative expenses 20,686 44,975 52,027
------------ ------------ ------------
Total deductions 18,874,920 21,502,904 36,824,717
------------ ------------ ------------
Net increase 54,453,244 66,060,751 73,662,030
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 461,324,898 395,264,147 321,602,117
------------ ------------ ------------
End of year $515,778,142 $461,324,898 $395,264,147
============ ============ ============
</TABLE>
See notes to combined financial statements.
-4-
<PAGE>
THE SAVINGS PLAN FOR EMPLOYEES
OF ARIZONA PUBLIC SERVICE COMPANY,
THE SAVINGS PLAN FOR UNION EMPLOYEES
OF ARIZONA PUBLIC SERVICE COMPANY
AND
THE SAVINGS PLAN FOR EMPLOYEES OF
PINNACLE WEST CAPITAL CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND METHOD OF ACCOUNTING - The financial
statements in this report reflect the combined assets, liabilities and net
assets available for benefits and charge therein of The Savings Plan for
Employees of Arizona Public Service Company (the "APS Savings Plan"), The
Savings Plan for Union Employees of Arizona Public Service Company (the
"APS Union Plan"), and The Savings Plan for Employees of Pinnacle West
Capital Corporation (the "Pinnacle West Plan"). The APS Savings Plan, the
APS Union Plan, and the Pinnacle West Plan are collectively referred to as
the "Plans." The combined financial statements have been prepared on the
accrual basis of accounting. Investment transactions are recorded as of the
trade date. Dividend income is recorded as of ex-dividend dates. All the
outstanding shares of Arizona Public Service Company ("APS") stock are
owned by Pinnacle West Capital Corporation ("Pinnacle West").
INVESTMENTS - The Plans consist of a salary reduction arrangement and
an employer matching contribution feature. The investment programs for the
Plans consist of:
Pinnacle West Stock Fund -- The fund consists primarily of common
stock of Pinnacle West. The common stock is stated at fair value based
on quoted market prices in an active market.
Index Fund -- The fund consists primarily of common stocks
maintained by the Trustee (defined below) as part of a commingled
fund. The fund is stated at fair value generally based on the last
reported sales price on the last business day of the calendar year.
Fixed Income Fund -- The fund consists primarily of several
guaranteed investment contracts with varying rates of interest and
varying maturities. The fund is stated at contract value which
approximates fair value.
-5-
<PAGE>
Aggressive Equity Fund -- The fund consists primarily of common
stocks maintained by Putnam Investments as part of the Putnam Voyager
Fund, Class A. The fund is stated at fair value generally based on the
last reported sales price on the last business day of the calendar
year.
International Equity Fund -- The fund consists primarily of
stocks outside the United States and is maintained by Deutsche Asset
Management as of December 1, 1998. Prior to December 1, 1998, the fund
was maintained by Franklin Templeton as part of the Templeton Foreign
Trust. The fund is stated at fair value generally based on the last
reported sales price on the last business day of the calendar year.
The APS Union Plan does not participate in the International Equity
Fund.
Conservative, Moderate and Aggressive Lifestyle Funds -- The
funds consist primarily of cash, domestic stocks, international
stocks, and domestic bonds and are maintained by the Vanguard Group as
part of the Lifestrategy Portfolios: Conservative Growth Portfolio,
Moderate Growth Portfolio, and Growth Portfolio. The funds are stated
at fair value generally based on the last reported sales price on the
last business day of the calendar year. The APS Union Plan does not
participate in the Conservative and Aggressive Lifestyle Funds.
BENEFITS - Benefits are recorded when paid.
REALIZED GAIN (LOSS) AND UNREALIZED APPRECIATION (DEPRECIATION) -
Realized gains (losses) are determined based on the average historical
cost. Unrealized appreciation (depreciation) is determined based on the
fair value of assets at the beginning of the Plan year.
USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America necessarily requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
2. DESCRIPTION OF THE PLANS
GENERAL - The APS Savings Plan and APS Union Plan (collectively, the
"APS Plans") are administered by a committee appointed by the APS Board of
Directors. The Pinnacle West Plan is administered by a committee appointed
by the Pinnacle West Board of Directors. The Plans are subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"). Effective July 1, 1999, the Plans entered into a Trust Agreement
with Norwest Bank Minnesota, National Association (the "Trustee") which
changed its name to Wells Fargo Minnesota, N.A. effective January 1, 2000.
Prior to July 1, 1999, State Street Bank and Trust Company was the Trustee
for the Plans.
-6-
<PAGE>
ELIGIBILITY - All employees of APS and salaried employees of Pinnacle
West (collectively, the "Companies" or the "Employer") are eligible to
participate in the pre-tax and after-tax features of the Plans upon
attaining age 21 and completing thirty-one days of consecutive employment
for the APS Plans and thirty days of consecutive employment for the
Pinnacle West Plan, and are eligible to participate in the matching feature
upon attaining age 21 and completing one year of service. The Pinnacle West
Plan allows participation by employees of a company that becomes an
affiliate of Pinnacle West if such employees were formerly participants in
a certain type of qualified plan sponsored by their employer, regardless of
whether they have satisfied the Pinnacle West Plan's other eligibility
requirements.
CONTRIBUTIONS - Participants in the APS Union Plan may direct APS to
contribute any whole percentage from 1% to 10% of the participants' base
pay as their tax deferred contribution to the Plan. In addition to or in
lieu of making tax deferred contributions to the APS Union Plan,
participants may elect to make contributions of up to 10% of their base pay
as a voluntary contribution on an after tax basis, provided that in no
event can the total tax deferred and voluntary contributions made by any
participant in any year exceed 16% of his or her base pay. The APS Savings
Plan and the Pinnacle West Plan allow employees to contribute up to 16% of
their base pay on a pre-tax basis and up to 16% of their base pay on an
after tax basis, provided that in no event would the total tax deferred and
voluntary contributions made by any participant in any year exceed 16% of
his or her base pay. The maximum allowable base pay ($160,000) and tax
deferred contribution ($10,000 in 1999) are linked to the cost of living
index and could change on an annual basis.
Employer contributions to the Plans are fixed at 50% of the first 6%
of an employee's pre-tax contributions. The Employer contributions may be
in cash, common stock or other property acceptable to the Trustee.
The Plans allow rollover contributions from another qualified plan or
individual retirement rollover account, subject to certain criteria.
INVESTMENT PROGRAMS - Participants' contributions may be invested in
one or more of the following funds: Pinnacle West Stock Fund, Index Fund,
Fixed Income Fund, Aggressive Equity Fund, International Equity Fund,
Lifestyle Conservative Fund, Lifestyle Moderate Fund, and Lifestyle
Aggressive Fund. Participants in the APS Union Plan may not invest in the
International Equity Fund, Lifestyle Conservative Fund, or Lifestyle
Aggressive Fund. The balance of non-participant-directed contributions and
related earnings represents approximately $69,138,017 and $89,484,743 of
the net assets available for benefits in the Pinnacle West Stock and Fixed
Income Funds for 1999 and 1998, respectively.
-7-
<PAGE>
LOAN FEATURE - Participants may borrow money from their pre-tax
contributions account, vested Employer contributions account and rollover
account (if any). Participants may not borrow against their Employer
transfer account or their after-tax contributions accounts.
The minimum participant loan available is $1,000, and the maximum
available is 50% of the participant's vested account balance, up to
$50,000, reduced by the participant's highest outstanding loan balance in
the 12-month period ending on the day before the loan is made. Only one
loan per participant may be outstanding at any one time. Loan terms range
from six months to five years, or up to 15 years for the purchase of a
principal residence. An administrative fee is charged to the participant's
account for each loan.
The interest rate is determined at the time the loan is requested and
is fixed for the life of the loan. The interest rate is prime interest rate
plus one percent, determined as of the first business day of the month in
which the loan is issued. Interest rates for loans issued during 1999
ranged from 8.75% to 9.50%.
Loans are treated as transfers from the participant's investment funds
on a pro-rata basis to the Participant Loan Feature. Loan repayments are
treated as transfers from the Loan Feature to the participant's investment
funds, based on the participant's current investment election. Loan
repayments, including interest, are generally made through irrevocable
semi-monthly (for the APS Plans) or bi-weekly (for the Pinnacle West Plan)
payroll deductions.
VESTING - Each participant is fully vested as to the participant's
contribution account (consisting of the participant's contributions and
related income and appreciation or depreciation). The participants become
vested in their Employer contribution account (consisting of Employer
contributions and related income and appreciation or depreciation) in the
event of termination of service by death, disability or retirement, upon
attaining the age of sixty-five, upon completion of five years of service,
upon termination of the Plans, or upon complete discontinuance of Employer
contributions; otherwise, participants vest in graduated amounts with 100
percent vesting in five years of Plan participation, beginning with the
first Plan year of Employee participation.
WITHDRAWALS AND DISTRIBUTIONS - A participant may at any time make a
full or partial withdrawal of the balance in the participant's after-tax
contribution account and rollover contribution account. No withdrawals are
permitted from a participant's transfer account. No withdrawals are
permitted from the participant's pre-tax contribution account, except under
certain limited circumstances relating to financial hardship. If an
employee withdraws pre-tax contributions, the only earnings on those
contributions that can be withdrawn are those credited prior to 1989.
Generally, participants who are fully vested and who have participated in
the Plans for five complete Plan years may withdraw the amount in their
Employer contribution account. When the participant's
-8-
<PAGE>
employment with the Companies is terminated, the participant generally can
elect to receive a distribution, as soon as administratively possible, of
the vested portion of his or her Employer contribution account together
with the participant's contribution accounts.
FORFEITURES - Forfeitures of nonvested Employer contributions will
occur upon distribution following termination of employment with the
Companies. However, if a former participant again becomes an employee of
the Companies prior to the end of the fifth calendar year following the
calendar year in which the participant's earlier termination of employment
occurred (and, in the case of the APS Plans, only if the participant, upon
reemployment, repays in full the amount previously distributed from the APS
Plans), the forfeited Employer contributions will be restored to the
participant's Employer contribution account. Forfeitures are used to reduce
future Employer contributions to the Plans.
TERMINATION OF THE PLANS - It is the Companies' present expectation
that these Plans and the payment of Employer contributions will be
continued indefinitely. However, continuance of any feature of the Plans is
not assumed as a contractual obligation. The Companies, at their
discretion, may terminate their respective plans and distribute net assets.
In this event, the balance credited to the accounts of participants at the
date of termination shall be fully vested and nonforfeitable.
CHANGES TO PLANS - In June 1999, the Board of Directors of Pinnacle
West and in July 1999, the Board of Directors of APS approved the merger of
the APS Plans into the Pinnacle West Plan as of December 31, 1999.
Effective January 1, 2000, Pinnacle West will be the sponsor of the
resulting plan.
3. INCOME TAX STATUS
The Plans have been determined by the Internal Revenue Service to be
qualified plans under the provisions of the Internal Revenue Code. As long
as the Plans continue to be so qualified, under present Federal income tax
laws and regulations: (a) participants will not be currently taxed on
Employer contributions, on their own pre-tax contributions (see Note 2), or
on investment earnings on any contributions at the time such investment
earnings are received by the Trustee, but will be subject to tax thereon at
such time as they receive actual benefits from the Plans; and (b) the Plans
will not be taxed on their dividend and interest income or any capital
gains realized by them or on any unrealized appreciation of investments.
-9-
<PAGE>
4. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Changes in unrealized appreciation (depreciation) of investments for
each of the three years in the period ended December 31, 1999 were as
follows:
Unrealized Appreciation (Depreciation)
Beginning of Year End of Year Change
----------------- ----------- ------
1999
Pinnacle West Stock Fund $ 72,891,916 $ 30,671,398 $(42,220,518)
Index Fund 75,486,268 101,290,995 25,804,727
Aggressive Equity Fund 13,612,651 35,437,800 21,825,149
International Equity Fund 204,040 1,872,176 1,668,136
Lifestyle Conservative Fund 320,799 281,979 (38,820)
Lifestyle Moderate Fund 1,533,783 2,123,602 589,819
Lifestyle Aggressive Fund 1,844,359 2,847,791 1,003,432
------------ ------------ ------------
Total $165,893,816 $174,525,741 $ 8,631,925
============ ============ ============
1998
Pinnacle West Stock Fund $ 76,201,672 $ 72,891,916 $ (3,309,756)
Index Fund 51,023,616 75,486,268 24,462,652
Aggressive Equity Fund 8,268,413 13,612,651 5,344,238
International Equity Fund (434,352) 204,040 638,392
Lifestyle Conservative Fund 109,456 320,799 211,343
Lifestyle Moderate Fund 598,497 1,533,783 935,286
Lifestyle Aggressive Fund 631,074 1,844,359 1,213,285
------------ ------------ ------------
Total $136,398,376 $165,893,816 $ 29,495,440
============ ============ ============
1997
Pinnacle West Stock Fund $ 46,821,429 $ 76,201,672 $ 29,380,243
Index Fund 30,111,786 51,023,616 20,911,830
Aggressive Equity Fund 3,373,451 8,268,413 4,894,962
International Equity Fund 109,796 (434,352) (544,148)
Lifestyle Conservative Fund (13,017) 109,456 122,473
Lifestyle Moderate Fund 90,799 598,497 507,698
Lifestyle Aggressive Fund 106,642 631,074 524,432
------------ ------------ ------------
Total $ 80,600,886 $136,398,376 $ 55,797,490
============ ============ ============
5. GUARANTEED INVESTMENT CONTRACTS
Under the contracts, interest rates on guaranteed investment contracts
(GICs) vary within the Fixed Income Fund. The contracts have a weighted
average crediting interest rate at December 31, 1999, 1998, and 1997 of
6.42%, 6.65%, and 6.82%, respectively. The average yield for 1999
approximated the weighted average interest
-10-
<PAGE>
rate. The interest rates on the GICs may be reset on a quarterly or
semi-annual basis, or may be fixed, based on the terms of the contract.
Eleven of the GICs are managed synthetic investment contracts. The
fair value of the trust assets related to these contracts is $31,145,273.
The contract value of the trust assets is $33,553,421.
6. PARTICIPATING EMPLOYEES
As of December 31, 1999 and 1998, the aggregate number of employees
participating in the Plans was 5,350 and 5,093, respectively.
7. NET ASSET VALUE PER UNIT
In accordance with the provisions of the Plans, the Trustee maintains
separate units of participation in the Plans and related net asset value
per unit for the Pinnacle West Stock, Index, Fixed Income, Aggressive
Equity, International Equity, and Lifestyle Conservative, Moderate and
Aggressive Funds. The number of units and related net asset value per unit
at December 31 are:
Net Asset Value
Per Unit Number of Units
--------------- ---------------
1999
Pinnacle West Stock Fund $ 15.25 7,698,376
Index Fund 41.99 4,054,252
Fixed Income Fund 10.30 6,654,449
Aggressive Equity Fund 34.17 2,889,001
International Equity Fund 18.41 411,873
Lifestyle Conservative 15.45 264,439
Lifestyle Moderate 18.63 714,805
Lifestyle Aggressive 21.86 599,456
1998
Pinnacle West Stock Fund $ 23.89 6,044,778
Index Fund 26.16 5,385,002
Fixed Income Fund 5.65 11,649,599
Aggressive Equity Fund 104.63 544,207
International Equity Fund 40.79 146,906
Lifestyle Conservative 21.62 190,621
Lifestyle Moderate 30.79 351,399
Lifestyle Aggressive 40.30 266,513
-11-
<PAGE>
8. RELATED PARTY TRANSACTIONS
COSTS OF ADMINISTRATION - Substantially all costs of administration of
the Plans have been paid by the Companies except for loan administration
fees.
Pinnacle West Stock Fund
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Shares of Pinnacle West common stock held by the Plans 3,708,593 3,347,659 3,328,704
Employer cash contributions $ 7,927,434 $7,539,003 $ 7,068,458
Purchases by the Plans in Pinnacle West common stock $14,433,399 $6,816,758 $ 5,675,942
Sales made by the Plans of Pinnacle West common stock $ 1,361,502 $5,862,863 $14,390,546
Aggregate cost of Pinnacle West common stock sold $ 726,050 $2,703,784 $ 8,663,385
Index Fund
1999 1998 1997
------------ ------------ ------------
Purchases by the Plans in Trustee's Index Fund $19,377,247 $15,840,086 $17,339,038
Sales made by the Plans of Trustee's Index Fund $19,546,004 $12,514,603 $ 9,092,627
Aggregate cost of Trustee's Index Fund sold $15,506,166 $ 6,320,752 $ 4,926,370
Temporary Investments in Funds Managed by the Trustee
1999 1998 1997
------------ ------------ ------------
Purchases by the Plans in temporary investment funds $114,185,293 $53,891,371 $50,617,593
Sales made by the Plans of temporary investment funds $104,867,886 $51,658,594 $58,245,727
</TABLE>
The temporary investments are bought and sold at par.
-12-
<PAGE>
EXHIBITS FILED.
Exhibit No. Description
----------- -----------
23.1 Independent Auditors' Consent
-13-
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Committee has duly caused this annual report to be signed by the
undersigned hereunto duly authorized.
THE SAVINGS PLAN FOR EMPLOYEES OF
PINNACLE WEST CAPITAL CORPORATION
(Name of Plan)
Date: June 28, 2000 By Armando B. Flores
-------------------------------------
Armando B. Flores
Chairman of the Administrative Committee
and Executive Vice President,
Corporate Business Services
Pinnacle West Capital Corporation
