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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, 2002
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 Pinnacle West Capital Corporation Savings Plan
(Full title of the plan)
Pinnacle West Capital Corporation
(Name of issuer)
400 North Fifth Street
P.O. Box 53999
Phoenix, Arizona 85072-3999
(Address of issuer's principal executive office)
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THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
TABLE OF CONTENTS
PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
as of December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2002 and 2001 3
Notes to Financial Statements 4 - 12
SUPPLEMENTAL SCHEDULE:
Form 5500, Schedule H Part IV, Line 4i Schedule of Assets Held
for Investment as of December 31, 2002 13
Exhibits Filed 14
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
The Pinnacle West Capital Corporation Savings Plan
Phoenix, Arizona
We have audited the accompanying statements of net assets available for benefits
of The Pinnacle West Capital Corporation Savings Plan (the "Plan") as of
December 31, 2002 and 2001, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's 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 financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2002 and 2001, and the changes in net assets available for benefits for the
years then ended 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
financial statements taken as a whole. The supplemental schedule of assets held
for investment as of December 31, 2002, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the responsibility of
the Plan's management. Such schedule has been subjected to the auditing
procedures applied in our audit of the basic 2002 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Phoenix, Arizona
June 19, 2003
1
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 and 2001
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2002 2001
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ASSETS:
Investments at fair value except for
Fixed Income Fund that is at
contract value which
approximates fair value (Note 5) $467,072,345 $520,394,373
Temporary investments (at cost
which approximates fair value) 2,185,204 4,004,697
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TOTAL INVESTMENTS 469,257,549 524,399,070
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RECEIVABLES:
Employer Contributions 351,956 --
Participant Contributions 1,173,847 --
Interest and other receivable 4,027 9,045
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Total Receivables 1,529,830 9,045
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TOTAL ASSETS 470,787,379 524,408,115
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LIABILITIES:
Securities purchased 1,241,948 524,850
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NET ASSETS AVAILABLE FOR BENEFITS $469,545,431 $523,883,265
============ ============
See notes to financial statements.
2
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2002 and 2001
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2002 2001
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions (Note 1):
Pinnacle West Capital Corporation $ 9,381,323 $ 8,760,678
Participants 33,477,122 30,821,858
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Total contributions 42,858,445 39,582,536
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Investment income (Note 2):
Dividends 5,888,600 5,984,220
Interest and other income 2,472,681 3,105,013
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Total investment income 8,361,281 9,089,233
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Net depreciation in fair value of investments (Note 5) (79,231,809) (64,849,899)
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Total investment loss (70,870,528) (55,760,666)
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Total net reduction (28,012,083) (16,178,130)
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefit payments 24,826,587 20,683,414
Administrative expenses 147,909 211,194
Participant loan activity 1,351,255 22,904
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Total deductions 26,325,751 20,917,512
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Decrease in Net Assets (54,337,834) (37,095,642)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 523,883,265 560,978,907
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End of year $ 469,545,431 $ 523,883,265
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See notes to financial statements.
3
THE PINNACLE WEST CAPITAL CORPORATION
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of The Pinnacle West Capital Corporation
Savings Plan (the "Plan") provides only general information. Participants
should refer to the plan agreement for a more complete description of the
Plan's provisions. In addition, see Note 8 for additional information.
GENERAL - The Plan is a defined contribution plan sponsored by
Pinnacle West Capital Corporation ("Pinnacle West," or "the Company").
Effective May 1, 2002 the Plan was amended to provide that it is made up of
two component plans, a profit sharing component with cash or deferred
features and a stock bonus component which will also constitute an Employee
Stock Ownership Plan ("ESOP"). The ESOP component of the Plan is comprised
of the Plan assets invested in the Pinnacle West Stock Fund, and the profit
sharing and cash or deferral arrangement is comprised of the remaining
balance of the Plan assets. The Plan is administered by a committee
appointed by the Pinnacle West Board of Directors. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended. Wells Fargo Bank, Minnesota, N.A. ("Trustee") serves
as the trustee of the Plan.
ELIGIBILITY - Generally, all active employees of Pinnacle West and its
subsidiaries, including, Arizona Public Service Company, Pinnacle West
Energy Corporation, APS Energy Services Company, Inc., El Dorado Investment
Company and the active salaried employees of SunCor Development Company,
(collectively, "Employer"), are eligible to participate in the pre-tax and
after-tax features of the Plan upon attaining age 21 and completing
thirty-one days of consecutive employment and are eligible to participate
in the matching feature upon attaining age 21 and completing one year of
service. The Plan provides credit for periods of employment with an
affiliate of Pinnacle West as if the service was performed for the
Employer. See Note 8 for additional information
CONTRIBUTIONS - Effective June 1, 2002, the Plan allows participants
to contribute up to 50% of their base pay on a pre-tax basis (not to exceed
$11,000) or after-tax basis, provided that in no event can the total
pre-tax and after-tax contributions made by any participant in any year
exceed 50% of his or her base pay. Prior to June 1, 2002, the Plan allowed
employees to contribute up to 16% of their base pay on a pre-tax basis,
after tax basis, or combination of both. Also effective June 1, 2002, the
Plan allows participants attaining the age of 50 or older by the end of the
calendar year to make catch-up contributions in accordance with the
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
("EGTRRA"). The maximum allowable base pay ($200,000) is linked to the cost
of living index and could change on an annual basis. The maximum allowable
pre-tax contribution ($11,000) and catch-up contribution ($1,000) will
4
increase $1,000 per year through 2006, and thereafter will be linked to the
cost of living index and could change on an annual basis.
Employer contributions are fixed at 50% of the first 6% of a
participant's pre-tax contribution (excluding catch-up contributions).
While the Employer contributions may be in cash, common stock or other
property acceptable to the Trustee, regardless of the form of contribution,
contributions are allocated to the Pinnacle West Stock Fund. Non cash
contributions are recorded at fair value. See Note 8 for additional
information.
The Plan allows rollover contributions from other qualified plans
subject to certain criteria.
If participants have Pinnacle West stock through the Plan, any
dividends paid are automatically reinvested in shares of Pinnacle West
stock. However, effective May 1, 2002, participants may elect to receive
dividends in the form of cash. If a participant does not elect to receive
the dividend in the form of cash prior to the dividend payable date for
that dividend, it is automatically reinvested in Pinnacle West Stock.
PARTICIPANT ACCOUNTS - Individual accounts are maintained for each
Plan participant. Each participant's account is credited with the
participant's pre-tax, after-tax, and rollover contributions, the
employer's matching contributions and Plan earnings. Each participant is
charged with withdrawals and an allocation of Plan losses. Allocation of
earnings and losses are based on participant account balances. The benefit
to which a participant is entitled is the benefit that can be provided from
the participant's vested account.
INVESTMENT CHOICES - Participants' contributions may be invested in
one or more of the following funds: Pinnacle West Stock Fund, Index Fund,
Fixed Income Fund, Large Cap Equity Fund, International Growth Fund,
Conservative, Moderate, and Aggressive Lifestyle Funds, and Small Cap
Equity Fund. On March 1, 2002 the Plan was amended to permit fully vested
participants to transfer amounts in their Employer contributions account
from the Pinnacle West Stock Fund to one or more of the other investment
options available under the Plan. The Plan consists of a salary reduction
arrangement, an employee after-tax contribution feature, and an employer
matching contribution feature. Investment transactions are recorded as of
the trade date. Interest income is recorded on the accrual basis. Dividend
income is recorded as of ex-dividend dates. See Note 8 for additional
information.
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 account.
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
5
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 shall be at least as
great as the interest rate charged by the Trustee to its individual clients
for an unsecured loan on the date the loan is made. The Trustee currently
charges 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 2002 ranged from 5.25% to 5.75%. Interest rates for
outstanding loans as of December 31, 2002 and 2001 ranged from 5.25% to
10.5% and 6.00% to 10.5%, respectively.
Loans are treated as an investment of the participant's accounts. To
fund the loan, transfers are made from the participant's investment funds
on a pro-rata basis. Loan repayments are invested in the participant's
investment funds based on the participant's current investment election.
Loan repayments, including interest, are generally made through irrevocable
semi-monthly payroll deductions.
VESTING - Each participant is fully vested as to the participant's
pre-tax, after-tax, and rollover contribution accounts (consisting of the
participant's contributions and related income and appreciation or
depreciation) and Employer transfer account. The participants become vested
in their Employer contribution account (consisting of Employer
contributions and related income and appreciation or depreciation) upon the
first of the following to occur: in the event of termination of service by
death, disability or retirement, upon attaining the age of sixty-five, upon
the completion of five years of service, upon termination of the Plan, 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
before retirement are permitted from a participant's Employer transfer
account. No withdrawals before retirement 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 January 1, 1989. Generally,
participants who are fully vested and who have participated in the Plan for
five complete plan years may withdraw the amount in their Employer
contribution account. When the participant's employment with the Employer
is terminated, the participant generally can elect to receive, as soon as
administratively possible, a distribution of the vested portion of his or
her Employer contribution account together with the participant's
contribution accounts and Employer transfer account. See Note 8 for
additional information.
FORFEITURES - Forfeitures of nonvested Employer contributions will
occur upon the earlier of distribution following termination of employment
with the Employer or the end of the fifth calendar year following the
6
calendar year in which the participant terminated employment. However, if a
former participant who received a distribution becomes reemployed prior to
the end of the fifth calendar year following the calendar year in which the
participant's earlier termination of employment occurred, the forfeited
Employer contributions will be restored to the participant's Employer
contribution account; however, the forfeiture is restored only if the
participant repays the full amount previously distributed to him or her
within five years of his or her date of reemployment or, if earlier, the
last day of the fifth calendar year following the calendar year in which
the distribution occurred. At December 31, 2002 forfeited nonvested
accounts totaled $24,430. Forfeitures are used to reduce future Employer
contributions to the Plan. During the year ended December 31, 2002,
employer contributions were reduced by $21,500 from forfeited nonvested
accounts.
TERMINATION OF THE PLAN - It is the Company's present expectation that
the Plan and the payment of Employer contributions will be continued
indefinitely. However, continuance of any feature of the Plan is not
assumed as a contractual obligation. The Company, at its discretion, may
terminate the Plan and distribute net assets, subject to the provisions set
forth in ERISA. In this event, the balance credited to the accounts of
participants at the date of termination shall be fully vested and
nonforfeitable.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
INVESTMENTS - The investment choices for the Plan 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 of common stocks maintained by
the Trustee as part of a commingled fund. The fund is a Standard &
Poor's ("S&P") 500 and 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
benefit-responsive guaranteed investment contracts with varying rates
of interest and maturities maintained by Gartmore Morley Financial.
The fund, including guaranteed investment contracts, is stated at
contract value.
Large Cap 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.
7
International Growth Fund -- As of April 1, 2002 the
International Equity Fund maintained by Deutsche Asset International
was replaced with the Putnam International Growth Fund-Class A, which
is maintained by Putnam Investments. The fund consists primarily of
stocks outside the United States. It is stated at fair value generally
based on the last reported sales price on the last business day of the
calendar year.
Conservative, Moderate and Aggressive Lifestyle Funds -- These
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. The funds are stated at fair
market value (marked to market) as of the market close each day.
Small Cap Equity Fund--This fund is the Merrill Lynch Small Cap
Equity Fund and consists primarily of common stock of relatively small
companies and emerging growth companies regardless of size. The fund
is stated at fair market value (marked to market) as of the market
close each day.
Temporary investments - Temporary investments represent cash or
other cash equivalents that are held until investments in other funds
can be made. All highly liquid debt instruments purchased with an
initial maturity of three months or less are treated as cash
equivalents. The fund is stated at cost, which approximates fair
value.
ADMINISTRATIVE EXPENSES - Substantially all costs of administration of
the Plan, except for loan administration fees, have been paid by the
Company.
PAYMENT OF BENEFITS - Benefit payments to participants are recorded
upon distribution.
USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires Plan management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits and changes therein. Actual results could differ from those
estimates.
RISKS AND UNCERTAINTIES - The Plan utilizes various investment
instruments including mutual funds and investment contracts. Investment
securities, in general, are exposed to various risks, such as interest rate
risk, credit risk, and overall market volatility. Due to the level of risk
associated with certain investment securities, it is reasonably possible
that changes in the values of investment securities will occur in the near
term and that such changes could materially affect the amounts reported in
the financial statements.
RECLASSIFICATIONS - Certain prior year balances have been reclassified
to conform to current year presentation.
8
3. FEDERAL INCOME TAX STATUS
A determination letter dated March 12, 2002 has been received from the
Internal Revenue Service indicating that the Plan has been determined to be
a qualified plan under the provisions of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter, and on June
3, 2002, the Company filed a letter with the Internal Revenue Service
requesting a favorable determination letter relating to the Fifth
Amendment. However, the Company's management and the plan administrator
believe that the Plan is currently designed and operated in compliance with
the applicable requirements of the Internal Revenue Code, and the Plan and
related trust continue to be tax-exempt (See Note 8 for additional
information). Therefore, no provision for income taxes has been included in
the Plan's financial statements.
4. GUARANTEED INVESTMENT CONTRACTS
Under the benefit-responsive contracts, interest rates on guaranteed
investment contracts ("GICs") vary within the Fixed Income Fund. The
contracts held in the Plan have a weighted average crediting interest rate
of 5.27% and 6.03% at December 31, 2002 and 2001, respectively. The average
yield for 2002 and 2001 approximated the weighted average crediting
interest rate. The crediting 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. The benefit-responsive contracts are reported at contract value.
See note 5 for additional information.
Twelve of the benefit-responsive GICs are managed synthetic investment
contracts. The contract value and fair value of these assets at December
31, 2002 is $97,356,302 and $94,462,597, respectively.
5. INVESTMENTS AND UNITS OF PARTICIPATION
In accordance with the provisions of the Plan, the Trustee maintains
separate units of participation in the Plan and related net asset value per
unit for the Pinnacle West Stock Fund, Index Fund, Fixed Income Fund, Large
Cap Equity Fund, International Growth Fund, Conservative, Moderate and
Aggressive Lifestyle Funds, and Small Cap Equity Fund. The number of units
and the related value of the Plan's net assets available for benefits as of
December 31, 2002 and 2001 are as follows:
Number
2002 of Units Value
---- ---------- ------------
Pinnacle West Stock Fund 3,384,097 $115,326,780
Index Fund 3,551,254 93,155,840
Fixed Income Fund 10,392,854 126,833,515
Large Cap Equity Fund 3,605,486 45,921,583
International Growth Fund 359,068 5,918,242
Conservative Lifestyle Fund 465,007 5,966,399
Moderate Lifestyle Fund 886,680 12,308,289
Aggressive Lifestyle Fund 970,468 13,949,707
Small Cap Equity Fund 1,455,685 26,445,017
Participant Loans 21,246,973
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Total $467,072,345
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9
Number
2001 of Units Value
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Pinnacle West Stock Fund 3,680,950 $153,618,604
Index Fund 3,839,465 128,940,333
Fixed Income Fund 7,302,346 84,689,385
Large Cap Equity Fund 4,114,563 70,966,542
International Equity Fund 647,249 6,705,967
Conservative Lifestyle Fund 414,655 5,834,649
Moderate Lifestyle Fund 854,844 13,635,275
Aggressive Lifestyle Fund 839,757 14,634,077
Small Cap Equity Fund 716,956 17,841,964
Participant Loans 23,527,577
------------
Total $520,394,373
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The Plan's investments (including gains and losses on investments
purchased and sold, as well as held during the year) appreciated/
(depreciated) in value as follows for the years ended December 31, 2002 and
2001:
2002 2001
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Guaranteed Investment Contracts $ 5,432,561 $ 4,233,132
Mutual Funds (62,083,046) (48,047,919)
Pinnacle West Stock Fund (22,581,324) (21,035,112)
------------ ------------
Net depreciation in fair value of investments $(79,231,809) $(64,849,899)
============ ============
6. NON PARTICIPANT DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the non participant directed investments
is as follows as of and for the years ended December 31, 2002 and 2001:
2002 2001
------------ ------------
Pinnacle West Stock Fund Non Participant
Directed Net Assets, beginning of year $ 99,652,898 $107,966,421
Changes in net assets during the year:
Net depreciation in value (11,528,755) (9,648,818)
Employer contributions 9,381,323 8,760,678
Benefits paid to participants (5,790,693) (7,431,303)
Transfers to participant directed investments (22,581,105) 5,920
------------ ------------
Net Change (30,519,230) (8,313,523)
------------ ------------
Pinnacle West Stock Fund Non Participant
Directed Net Assets, end of year $ 69,133,668 $ 99,652,898
============ ============
10
While the Employer contributions may be in cash, common stock or other
property acceptable to the Trustee, regardless of the form of contribution,
contributions are allocated to the Pinnacle West Stock Fund. Fully vested
participants are permitted to direct investment of all their company
contributions.
7. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of a mutual fund managed by the
Trustee as defined by the Plan. Therefore, these transactions qualify as
party-in-interest transactions. In addition, certain Plan investments are
Pinnacle West common stock, qualifying these transactions as
party-in-interest transactions. Pinnacle West pays all administrative
expenses except participant loan administrative fees. At December 31, 2002
and 2001, the Plan held 3,384,097 and 3,680,950 units, respectively, of
common stock of Pinnacle West Capital Corporation, the sponsoring employer,
with a cost basis of $86,077,595 and $90,837,528, respectively. During the
years ended December 31, 2002 and 2001, the plan recorded dividend income
from Pinnacle West Stock of $5,573,150 and $5,423,045, respectively.
8. SUBSEQUENT EVENTS
The following changes were implemented to the Plan effective January
1, 2003:
Three new investment options were introduced. The additional options
are as follows:
Intermediate Bond Fund--This fund is the PIMCO Total Return Fund that
seeks to achieve its investment objective by investing at least 65% of its
total assets in a diversified portfolio of fixed income instruments of
varying maturities. The fund invests primarily in investment grade debt
securities, but may invest a limited amount of total assets in high yield
debt securities.
Large Cap Value Fund--This fund is the T Rowe Price Equity Income Fund
that seeks to provide dividend income, as well as long term capital through
investments in the common stocks of established companies. The fund
normally invests at least 80% of the Fund's net assets in common stocks,
with 65% of this amount invested in the common stocks of well-established
companies paying above-average dividends.
11
Mid-Cap Core Equity Fund--This fund is the AIM Mid Cap Core Equity
Fund that seeks long term capital growth. The fund invests at least 80% of
the Fund's assets in equity securities of mid-capitalization companies, and
has a blend of both growth and value investments.
The Plan was amended to change the graduated vesting schedule for
Employer match contributions from years of plan participation to years of
service. Upon attaining five years of service with the Employer,
participants are fully vested in their Employer contribution account.
The Plan was amended to change the age of eligibility for
participation in the Plan from age 21 to age 18. All other eligibility
requirements remain the same.
The Plan was amended to allow participants age 59-1/2 or older to
withdraw or rollover all or part of his or her pre-tax contributions
(including any earnings on these contributions) and rollover contribution
account for any reason while employed without penalties. A maximum of two
Age 59-1/2 withdrawals may be requested each plan year.
The Plan was amended to change eligibility for the Employer
contribution from the first day of the month following one year of service
to the first day of the month following six months of service. Any employee
who, as of January 1, 2003, had at least six months of service
automatically began to receive employer contributions on the first of the
month following his or her anniversary as long as pre-tax contributions to
the Plan are being made.
During the period from April 1, 2003 through June 30, 2003 employees
electing to participate in the Retirement Account Balance under the
Pinnacle West Capital Corporation Retirement Plan (the "Retirement Plan")
and employees rehired on or after January 1, 2003 will receive an employer
match of 100% on the first 6% he or she contributes on a pre-tax basis to
the Plan. Effective July 1, 2003, the employer match will be 75% of the
first 6% he or she contributes to the Plan. Employees hired on or after
January 1, 2003 will receive the 75% employer match on the first 6% he or
she contributes to the Plan. Employees not electing the Retirement Account
Balance under the Retirement Plan will continue to receive an Employer
contribution of 50% of the first 6% of his or her pre-tax contribution to
the Plan.
12
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
FORM 5500, SCHEDULE H: PART IV, LINE 4i SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 2002
--------------------------------------------------------------------------------
Identity of Issuer, Borrower, Description of Current
Lessor or Similar Party Investment Cost Value
---------------------------------------------------------------------------------------------------------
*Pinnacle West Capital Shares of company $ 86,077,595 $ 115,326,780
Corporation Stock Fund common stock
Wells Fargo S&P 500 Index Fund Shares of mutual fund ** 93,155,840
investments
Gartmore Morley Financial Guaranteed investment ** 126,833,515
Fixed Income Fund contracts, interest
rates, 4.17% - 7.10%
Putnam Investments as a Shares of mutual fund ** 45,921,583
part of the Putnam Voyager investments
Fund, Class A
Putnam International Shares of mutual fund ** 5,918,242
Growth Fund investments
Vanguard Lifestrategy Shares of mutual fund ** 5,966,399
Conservative Growth Fund investments
Vanguard Lifestrategy Shares of mutual fund ** 12,308,289
Moderate Growth Fund investments
Vanguard Lifestrategy Shares of mutual fund ** 13,949,707
Aggressive Growth Fund investments
Merrill Lynch Small Cap Shares of mutual fund ** 26,445,017
Equity Fund investments
Participant Loans Interest rates, 5.25% - 10.5%. ** 21,246,973
Maturity Dates 10/15/2002-3/15/2017
Wells Fargo Short Term Money Market Fund ** 2,185,204
Investments
-------------
Total Assets Held for Investment Purposes $ 469,257,549
=============
** Cost information not provided as investments are participant-directed.
* Related Party
13
EXHIBITS FILED.
Exhibit No. Description
----------- -----------
23.1 Independent Auditors' Consent
99.1 Certification of Armando B. Flores, the Chairman of the
Administrative Committee and Executive Vice President,
Corporate Business Services Pinnacle West Capital
Corporation, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
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SIGNATURES
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 PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
(Name of Plan)
Date: June 27, 2003 By Armando B. Flores
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Armando B. Flores
Chairman of the Administrative Committee and
Executive Vice President, Corporate Business
Services Pinnacle West Capital Corporation
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