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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)
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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, 2006
OR
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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)
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
TABLE OF CONTENTS
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FINANCIAL STATEMENTS: |
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3 |
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4-18 |
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SUPPLEMENTAL SCHEDULE: |
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19-22 |
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23 |
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NOTE: Supplemental schedules required by section 2520.103-10 of the Department of Labor’s
Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974, other than the schedules listed above, are omitted because of the absence of the
conditions under which they are required.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2006 and 2005, and the
related statement of changes in net assets available for benefits for the year ended December 31,
2006. 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 the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The
Plan is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements,
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, 2006 and 2005, and the changes in net assets
available for benefits for the year ended December 31, 2006 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 at end of year) as of December 31,
2006 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 2006 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
Phoenix, Arizona
June 21, 2007
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2006 AND 2005
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2006 |
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2005 |
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ASSETS: |
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Investments (Notes 2, 4 & 5) |
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833,989,830 |
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715,898,895 |
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RECEIVABLES: |
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Employer contributions |
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2,048,823 |
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Participant contributions |
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1,609,167 |
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Interest and other receivables |
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1,113,433 |
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62,257 |
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Total receivables |
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1,113,433 |
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3,720,247 |
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Total assets |
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835,103,263 |
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719,619,142 |
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LIABILITIES: |
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Securities purchased, net |
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58,101 |
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1,213,843 |
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NET ASSETS AT FAIR VALUE |
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835,045,162 |
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718,405,299 |
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Adjustment from fair value to contract value
for fully benefit-responsive investment
contracts |
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1,512,371 |
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2,682,961 |
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NET ASSETS AVAILABLE FOR BENEFITS |
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836,557,533 |
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$ |
721,088,260 |
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See Notes to Financial Statements.
2
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2006
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ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
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Contributions (Note 1): |
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Employer |
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14,395,915 |
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Participants |
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44,994,274 |
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Total contributions |
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59,390,189 |
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Investment income (Note 2): |
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Dividend,
interest and other income |
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20,307,751 |
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Net realized/unrealized appreciation in fair value of
investments (Note 5) |
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83,945,892 |
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Total investment income |
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104,253,643 |
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Total additions |
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163,643,832 |
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: |
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Benefit payments |
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47,976,570 |
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Administrative expenses |
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197,989 |
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Total deductions |
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48,174,559 |
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Increase in net assets |
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115,469,273 |
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NET ASSETS AVAILABLE FOR BENEFITS: |
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Beginning of year |
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721,088,260 |
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End of year |
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836,557,533 |
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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 document for a more
complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan sponsored by Pinnacle West Capital Corporation
(“Pinnacle West” or the “Company”). The Plan is made up of two component plans, a profit sharing
component with cash or deferred features and a stock bonus component which constitutes an Employee
Stock Ownership Plan (“ESOP”). The ESOP component of the Plan consists of Plan assets invested in
the Pinnacle West Stock Fund and the balance of all Plan assets constitutes the profit sharing
component. 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, as amended (“ERISA”). Wells Fargo Bank, Minnesota, N.A. (“Trustee”) served as the Trustee of
the Plan until March 28, 2007. See Note 8 for additional information.
Effective April 5, 2006 State Street Bank and Trust Company was appointed as investment
manager under the Plan to (1) manage the liquidity of the Pinnacle West Stock Fund, and (2) review
and direct the Trustee on voting proxies received for shares of Pinnacle West common stock (except
for those shares for which the Trustee receives participant directions) and nine mutual funds held
in the Plan.
Eligibility
Generally, most active full-time employees of Pinnacle West and its subsidiaries, including
Arizona Public Service Company, APS Energy Services Company, Inc., El Dorado Investment Company
and the active salaried employees of SunCor Development Company (collectively, the “Employer”), are
eligible to participate in (1) the pre-tax and after-tax features of the Plan on the first day of
the month following their attainment of age 18 and completion of thirty-one
consecutive days of employment and (2) the matching feature on the first day of the
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month following their attainment of age 18 and completion of six months of service. Eligible employees
hired in a classification other than regular full-time are eligible to participate upon attainment
of age 18 and completion of 1,000 hours of service during a 12-month period of employment beginning
on their date of hire or an anniversary of that date. 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
The Plan allows participants to contribute up to 50% of their base pay on a pre-tax basis or
after-tax basis, provided that in no event can the combined pre-tax and after-tax contributions
made by any participant in any year exceed 50% of their base pay. The Plan also allows
participants attaining the age of 50 before 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. The maximum allowable pre-tax contribution ($15,000 for 2006) and
catch—up contribution ($5,000 for 2006) will increase in future years based on the cost of living
index. See Note 8 for additional information.
Employer contributions are fixed at 75% of the first 6% of base pay that a participant
contributes to the Plan on a pre-tax basis (excluding catch-up contributions) for participants
(excluding active salaried employees of SunCor Development Company) hired on or after January 1,
2003, for active salaried employees of SunCor Development Company hired on or after January 1, 2006
and for participants electing to participate in the Retirement Account Balance Plan feature of the
Pinnacle West Capital Corporation Retirement Plan. Participants hired prior to January 1, 2003,
and active salaried employees of SunCor Development Company hired
prior to January 1, 2006, not
electing to participate in the Retirement Account Balance Plan feature of the Pinnacle West Capital
Corporation Retirement Plan receive an employer match of 50% on the first 6% of base pay they
contribute to the Plan on a pre-tax basis (excluding catch-up contributions).
While the Employer contributions may be in cash, common stock, or other property acceptable to
the Trustee, from January 1, 2006 through March 2007, Employer contributions
were in cash and were allocated to the Pinnacle West Stock Fund. Non-cash contributions are
recorded at fair value. See Note 8 for additional information.
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The Plan allows rollover contributions from other qualified plans subject to certain criteria.
See Note 8 for additional information.
Participants may elect to receive dividends on Pinnacle West stock in their account 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 the Pinnacle West
Stock Fund.
Participant Accounts
Individual accounts are maintained for each Plan participant. Each participant has separate
accounts (sources of money) that are credited with the participant’s pre-tax, after-tax, rollover
contributions (if any), the Employer’s matching contributions and an allocation of Plan earnings.
Each participant’s account is charged with withdrawals and an allocation of Plan losses.
Allocations of earnings and losses are based on participant account balances. The benefit to which
a participant is entitled is the portion of the participant’s account that has vested, as defined
below.
Investment Choices
Participants direct their contributions into one or more of the following investment options:
Fixed Income Fund, Intermediate Bond Fund, Conservative, Moderate and Aggressive LifeStyle Funds,
Index Fund, Large Cap Value Fund, Large Cap Growth Fund, Mid Cap Core Fund, Small Cap Core Fund,
International Fund, and the Pinnacle West Stock Fund. Employer contributions were automatically
invested in the Pinnacle West Stock Fund through March 2007.
Effective January 1, 2007, the Plan permits all participants to
transfer amounts in their Employer contributions account or Employer transfer account from the Pinnacle West Stock
Fund to one or more of the other investment options available under the Plan. See Notes 6 and 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. See Note 8 for
additional information.
The minimum participant loan allowed is $1,000. The maximum participant loan allowed is 50% of
the participant’s vested account balance, up to $50,000, reduced by the participant’s
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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 are up 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 interest at the 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 2006 ranged from 8.25% to
9.25%. Interest rates for outstanding loans as of December 31, 2006 and 2005 ranged from 5% to
10.5%.
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 payroll deductions. Loans
are secured by the participant’s account balance.
Vesting
Each participant is fully vested in the participant’s pre-tax, after-tax, and rollover
contribution (if any) accounts (consisting of the participant’s contributions and related income
and appreciation or depreciation) and Employer transfer account. Effective April 1, 2006, active
employee participants became 100 percent vested in their Employer contributions account. Former
participants become vested in their Employer contributions account (consisting of Employer
contributions and related income and appreciation or depreciation) upon the first of the following
to occur: termination of service by death; disability or retirement; attaining the age of
sixty-five or, if later, completing five years of participation in the Plan; termination of the
Plan; or complete discontinuance of Employer contributions. Otherwise, such former participants
vested in graduated amounts with 100 percent vesting after five years of service, beginning with the
employee’s date of hire.
7
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 (if any). No
withdrawals prior to termination of service are permitted from a participant’s Employer transfer
account. No withdrawals prior to termination of service 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. Participants who are fully
vested and who have participated in the Plan for five complete plan years may withdraw the amount
in their Employer contributions account. When the participant’s employment with the Employer is
terminated, the participant can elect to receive, as soon as administratively possible, a
distribution of the vested portion of their Employer contributions account together with the
participant’s contribution accounts and Employer transfer account. Participants at least age
59-1/2 may withdraw or rollover any portion of their pre-tax contributions or rollover account (if
any) while employed. The following are applicable: a maximum of two withdrawals or rollovers may be
requested per year; earnings on pre-tax contributions and rollover account are included; there are
no restrictions on the reason for withdrawal or rollover (if any), and penalties do not apply. 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 calendar year in which the participant terminated employment. If a former participant
who received a distribution becomes re-employed 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 them within five years of their date of re-employment or, if earlier, the
last day of the fifth calendar year following the calendar year in which the distribution
occurred. At December 31, 2006 and 2005, forfeited nonvested accounts totaled $3,466 and
$11,628, respectively. Forfeitures are used to reduce future Employer contributions to the Plan.
During the year ended December 31, 2006, Employer contributions were reduced by $60,430 from
forfeited nonvested accounts.
8
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 and the Internal Revenue
Code. 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.
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, common and
collective trust funds, guaranteed investment contracts, stocks and bonds. Investment securities,
in general, are exposed to various risks, such as interest rate risk, credit risk, liquidity 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.
Investments
The Plan’s investments are stated at fair value. Benefit-responsive investment contracts are
stated at fair value and then adjusted to contract value (see Note 4). Fair value is calculated by
discounting the related cash flows based on current yields of similar instruments with
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comparable durations. Quoted market prices are used to value all other investments. Shares of
mutual funds are valued at quoted market prices, which represent the net asset value of shares held
by the Plan at year end. Common and collective funds are valued at fair value, as determined by
the Trustee, based on market prices of the underlying securities. Participant loans are valued at
the outstanding loan balances. Management fees and operating expenses charged to the Plan for
investments in the mutual funds are deducted from income earned on a daily basis and are not
separately reflected. Consequently, management fees are reflected as a reduction of investment
return for such investments.
Income Recognition
Investment
transactions are recorded as of the trade date. Interest income is recorded on the accrual basis. Dividend income
is recorded as of the ex-dividend date.
Administrative Expenses
Participants pay implicit Plan record-keeping and administrative fees and explicit
administrative fees for loans. Participants pay investment, sales, record-keeping and
administrative expenses charged by funds, which are deducted from income and reflected as a
reduction of investment return for the fund, and redemption fees for certain funds when not held
for the required period of investment. Certain mutual funds have entered into revenue-sharing
agreements to pay a portion of the mutual funds’ record-keeping, administrative and/or sales fees
to the Plan’s record keeper to largely offset record-keeping and administrative fees for the Plan
as a whole. The mutual funds that pay a portion of their expense ratios and/or 12b-1 fees to the
record keeper are held in the: Index Fund (0.07%), Large Cap Growth Fund (0.40%), Large Cap Value
Fund (0.10%), Mid Cap Core Fund (0.10%), Small Cap Core Fund (0.20%) and International Equity Fund
(0.05%). The percentage of each fund’s revenue share is shown in parentheses and is expressed as a
percentage of the fund’s net asset value. As of March 29, 2007, the revenue share amounts for the
Large Cap Growth Fund, Mid-cap Core Fund and Small Cap Core Fund changed to 0.35%, 0.25% and 0.25%
respectively, and the Index Fund’s revenue sharing arrangement was eliminated. Pinnacle West pays
the remaining Plan administration expenses such as legal expenses of the Plan. Effective January
1, 2006 and ending April 1, 2007, participant’s accounts are charged an administrative fee for all
withdrawals and distributions. See Note 8 for additional information.
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Payment of Benefits
Benefit payments to participants are recorded upon distribution.
3. FEDERAL INCOME TAX STATUS
Plan management received a determination letter dated June 30, 2003
from the Internal Revenue Service (“IRS”)
indicating that the Plan has been determined to be a qualified plan under
the provisions of the Internal Revenue Code. In 2004, management identified an error in
the manner that vesting and eligibility service has been credited for employees who
originally served as temporary employees through leasing arrangements, prior to being
hired as an employee of the Company, which impacts the Plan. Legal counsel for the
Company filed a submission with the IRS pursuant to the Employee Plans Compliance
Resolution System, seeking IRS approval of the method by which the Company
proposed to correct this error. At December 31, 2005 an estimate of $1,500,000 was
included in Employer contributions receivable to reflect the proposed correction.
The proposed methodology for correction was approved by the IRS in a
Compliance Statement dated June 6, 2006. The correction to restore the accounts of affected employees
was made by contributing approximately $1,400,000 in September 2006. The Company has corrected all operational
deficiencies.
The Plan has been amended since receiving the June 30, 2003 determination
letter, and on June 26, 2006 the Company filed a letter with the IRS requesting a favorable determination letter relating to this
amendment. The Company and Plan management 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. Accordingly, no provision for income
taxes has been included in the Plan’s financial statements.
4. GUARANTEED INVESTMENT CONTRACTS
The Plan invests in conventional Guaranteed Investment Contracts (“GICs”) and Synthetic
Investment Contracts, which are held in the Fixed Income Fund. All investment contracts held by
the Plan are considered fully benefit-responsive and are recorded at fair value and adjusted to
contract value.
Synthetic investment contracts are comprised of both investment and contractual components.
The investment component consists of securities or shares of units of a portfolio of fixed income
securities, referred to as the underlying investments. This investment component is “wrapped” by
contracts issued by third-party financial institutions. These wrap contracts provide for benefit
withdrawals and investment exchanges at the full contract value of the synthetic investment
contracts (i.e. principal plus accrued interest) notwithstanding the actual market value of the
underlying investments (i.e. fair value of security plus accrued interest). In this manner, wrap
contracts are designed to smooth out the impact of normal market fluctuations associated with the
performance of the underlying investments.
Wrap contract issuers place restrictions on minimum/maximum portfolio durations and on the
minimum credit quality of the underlying investments.
Most of the investments underlying the synthetic contracts have expected average lives. That
is, they have a target maturity date that is subject to change depending on market conditions.
Should the expected average life of the investments shorten or extend, the crediting rate on the
contract is
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normally reset to reflect the investments’ net yield to maturity. If the underlying investments
prepay prior to their expected maturity, the cash flows from the investments are typically
reinvested in new investments.
Investment contracts can be structured as non-participating, participating or a combination
therein. Conventional GICs issued by insurance companies are primarily non-participating, wherein
the contract holder does not participate in any gains and losses incurred due to performance of the
underlying fixed-income portfolio relative to the book value at times of withdrawals. Conversely,
Synthetic Investment Contracts, or wrap contracts, issued by insurance companies or banks, are
primarily participating, wherein the contract holder participates in gains and losses incurred due
to the performance of the underlying fixed-income portfolio relative to book value at times of
withdrawals. Gains and losses are amortized through future crediting rate re-sets. Participating
structures are the most common structure utilized in the Fixed Income Fund.
GIC contracts are typically issued with a fixed crediting rate and a fixed maturity that does
not change over the life of the contract. Wrap contracts typically re-set on a monthly or
quarterly basis as negotiated with the wrap issuer and do not have a final stated maturity date.
The wrap contracts in the Fixed Income Fund are predominately re-set on a monthly basis with a
one-month look back for the portfolio statistics. The investment contract issuer guarantees a
minimum 0% crediting rate although a wrap does not absorb any loss for credit defaults in an
underlying portfolio.
The gross crediting rate formula is negotiated in the wrap contract and is typically
represented as:
CR = (MV/BV)^(1/D)*(1+YTM)-1 where:
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MV = market value of the portfolio |
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BV = book value of the portfolio |
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D = weighted average duration of the portfolio |
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YTM = annualized dollar or duration weighted yield to maturity of the portfolio |
The net crediting rate is equal to the gross crediting rate minus the wrap fee due the
contract issuer. Crediting rates reflect the amortization of realized and unrealized gains and
losses in the underlying portfolio over the duration of the portfolio and, in consequence, may not
reflect the actual returns achieved in the portfolio. From time to time the crediting rate may be
significantly greater or less than current market interest rates.
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There are a number of factors that can influence future crediting rates. Such factors may
include but are not limited to: portfolio cash flows, performance of the underlying fixed-income
portfolio, current market interest rates for reinvestment, duration posture, credit downgrades, the
unexpected receipt of principal and interest payments, extraordinary withdrawals and certain wrap
contract terms.
The average yield earned by the Fixed Income Fund for all fully benefit-responsive investment
contracts was 5.32% and 4.96% for the years ended December 31, 2006 and 2005, respectively.
The average yield earned by the Fixed Income Fund for all fully benefit-responsive investment
contracts, adjusted to reflect the actual interest rate credited to
participants, was 4.92% and
4.48% for the years ended December 31, 2006 and 2005, respectively.
Market value events may limit the ability of the Fixed Income Fund to transact at contract
value with the issuer. Market value events are events or conditions, the occurrence of which are
outside the normal operation of the Fixed Income Fund and leads to Fixed Income Fund disbursements
that have or will have a material adverse affect on the operations of the Fixed Income Fund and a
financial effect on the investment contract or wrap issuer’s interest hereunder. Such events may
include, but are not limited to: Plan amendments or changes, company mergers or consolidations,
participant investment election changes, group terminations or layoffs, implementation of an early
retirement program, termination or partial termination of the Plan, failure to meet certain tax
qualifications, participant communication that is designed to influence participants not to invest
in the Fixed Income Fund, transfers to competing options without meeting the equity wash provisions
of the Fixed Income Fund, Plan sponsor withdrawals without the appropriate notice to the Fixed
Income Fund’s investment manager and/or investment contract issuers, any changes in laws or
regulations that would result in substantial withdrawals from the Plan, and default by the Plan
sponsor in honoring its credit obligations, insolvency or bankruptcy if such events could result in
withdrawals. The probability of the occurrence of any of these events is considered to be remote.
In the normal course of business, such events or conditions would not limit the ability of the
Fixed Income Fund to transact at contract value with the participants in the Fixed Income Fund.
The Fixed Income Fund is managed to maintain a certain amount of liquidity to provide for the
day-to-day liquidity needs of participants as well as the occasional market value event.
13
An issuer can terminate an investment contract upon the event of default by the contract
holder, investment manager, or Trustee if the issuer determines in its reasonable discretion, such
event has had, or is likely to have a material adverse effect on the issuer’s interest with respect
to the contract. Such events may include but are not limited to: management of the portfolio not
in accordance with investment guidelines, breach of any material obligation under the wrap
agreement, any representation or warranty made by the contract holder becomes untrue in any
material way, replacement of the investment manager without prior consent of the issuer, the Plan
is terminated or no longer meets the appropriate tax qualifications, or the wrap becomes a
prohibited transaction within the meaning of Section 406 of ERISA.
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 Fixed Income Fund,
Intermediate Bond Fund, Conservative, Moderate and Aggressive LifeStyle Funds, Index Fund, Large
Cap Value Fund, Large Cap Growth Fund, Mid Cap Core Fund, Small Cap Core Fund, International Fund,
and the Pinnacle West Stock Fund. See Note 8 for additional information. The number of units and
the related value of the Plan’s net assets available for benefits as of December 31, 2006 and 2005
are as follows:
2006
| |
|
|
|
|
|
|
|
|
|
|
| Investment |
|
Description |
|
|
Number of Units |
|
Value |
|
Fixed Income Fund |
|
Fixed Income Fund |
|
|
11,312,587 |
|
|
$ |
161,983,011 |
** |
PIMCO Total Return Fund Inst. |
|
Intermediate Bond Fund |
|
|
1,407,045 |
|
|
|
14,657,142 |
|
Vanguard Lifestrategy Conservative
Growth Fund Inst. |
|
Conservative LifeStyle Fund |
|
|
785,674 |
|
|
|
13,031,887 |
|
Vanguard Lifestrategy Moderate
Growth Fund Inst. |
|
Moderate LifeStyle Fund |
|
|
1,417,829 |
|
|
|
28,880,077 |
|
Vanguard Lifestrategy
Growth Fund Inst. |
|
Aggressive LifeStyle Fund |
|
|
1,491,161 |
|
|
|
35,616,294 |
|
Wells Fargo
S&P 500 Index Fund
Cl G |
|
Index Fund |
|
|
2,999,078 |
|
|
|
136,429,483 |
* |
T. Rowe Price Equity Income Fund |
|
Large Cap Value Fund |
|
|
1,481,870 |
|
|
|
43,921,103 |
* |
Putnam Voyager Fund Cl A |
|
Large Cap Growth Fund |
|
|
2,548,821 |
|
|
|
46,665,515 |
* |
AIM Mid Cap Core Equity Fund Cl I |
|
Mid Cap Core Fund |
|
|
718,755 |
|
|
|
19,268,045 |
|
BlackRock Value Opportunities
Fund C1 I |
|
Small Cap Core Fund |
|
|
3,056,261 |
|
|
|
74,872,264 |
* |
American FDS EuroPacific Growth
Fund R5 |
|
International Fund |
|
|
1,557,435 |
|
|
|
72,585,776 |
* |
Pinnacle West Common Stock |
|
Pinnacle West Stock Fund |
|
|
3,197,437 |
|
|
|
164,757,900 |
* |
Participant Loans |
|
Participant Loans |
|
|
|
|
|
|
21,321,333 |
|
|
|
|
|
|
|
|
|
|
|
Total at fair value |
|
|
|
|
|
|
|
|
833,989,830 |
|
Adjustment from fair value to
contract value for fully
benefit-
responsive investment
contracts |
|
|
|
|
|
|
|
|
1,512,371 |
|
|
|
|
|
|
|
|
|
|
|
Total at contract value |
|
|
|
|
|
|
|
$ |
835,502,201 |
|
|
|
|
|
|
|
|
|
|
|
14
2005
| |
|
|
|
|
|
|
|
|
|
|
| Investment |
|
Description |
|
|
Number of Units |
|
Value |
|
Fixed Income Fund |
|
Fixed Income Fund |
|
|
10,445,275 |
|
|
$ |
142,217,534 |
** |
PIMCO Total Return Fund Inst. |
|
Intermediate Bond Fund |
|
|
1,218,664 |
|
|
|
12,667,606 |
|
Vanguard Lifestrategy Conservative
Growth Fund Inst. |
|
Conservative LifeStyle Fund |
|
|
668,974 |
|
|
|
10,367,037 |
|
Vanguard Lifestrategy Moderate
Growth Fund Inst. |
|
Moderate LifeStyle Fund |
|
|
1,322,385 |
|
|
|
24,449,871 |
|
Vanguard Lifestrategy
Growth Fund Inst. |
|
Aggressive LifeStyle Fund |
|
|
1,348,358 |
|
|
|
28,300,240 |
|
Wells Fargo
S&P 500 Index Fund
Cl G |
|
Index Fund |
|
|
3,177,724 |
|
|
|
124,744,917 |
* |
T. Rowe Price Equity Income Fund |
|
Large Cap Value Fund |
|
|
1,059,418 |
|
|
|
27,390,087 |
|
Putnam Voyager Fund, Cl A |
|
Large Cap Growth Fund |
|
|
2,678,299 |
|
|
|
46,666,778 |
* |
AIM Mid Cap Core Equity Fund Cl I |
|
Mid Cap Core Fund |
|
|
566,995 |
|
|
|
16,545,042 |
|
Black Rock Value Opportunities
Fund Cl I |
|
Small Cap Core Fund |
|
|
2,768,809 |
|
|
|
71,594,617 |
* |
American FDS EuroPacific Growth
Fund R5 |
|
International Fund |
|
|
1,091,894 |
|
|
|
45,075,464 |
* |
Pinnacle West Common Stock |
|
Pinnacle West Stock Fund |
|
|
3,486,639 |
|
|
|
144,529,966 |
* |
Participant Loans |
|
Participant Loans |
|
|
|
|
|
|
21,349,736 |
|
|
|
|
|
|
|
|
|
|
|
Total at fair value |
|
|
|
|
|
|
|
|
715,898,895 |
|
Adjustment from fair value to
contract value for fully
benefit-
responsive investment
contracts |
|
|
|
|
|
|
|
|
2,682,961 |
|
|
|
|
|
|
|
|
|
|
|
Total at contract value |
|
|
|
|
|
|
|
$ |
718,581,856 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * |
|
These investments represent 5 percent or more of the Plan’s Net Assets Available for Benefits. |
| |
| ** |
|
See supplemental schedule for underlying investment. No individual underlying investment exceeds 5 percent
of net assets available for benefits. |
15
The Plan’s investments (including gains and losses on investments purchased and sold, as
well as held during the year) appreciated in value for the year ended December 31, 2006 as follows:
| |
|
|
|
|
Common and Collective Trusts |
|
$ |
19,033,187 |
|
Mutual Funds |
|
|
33,886,646 |
|
Pinnacle West Stock Fund |
|
|
31,026,059 |
|
|
|
|
|
Net realized/unrealized appreciation in fair value of investments |
|
$ |
83,945,892 |
|
|
|
|
|
6. NON-PARTICIPANT DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes in net assets
relating to the investments that are not directed by Plan participants (“non-participant directed
investments”) as of and for the year ended December 31, 2006 is as follows:
| |
|
|
|
|
Pinnacle West Stock Fund Non-Participant Directed
Portion of Net Assets, beginning of year |
|
$ |
88,712,936 |
|
Changes in net assets during the year: |
|
|
|
|
Net realized/unrealized appreciation in fair value of investments |
|
|
23,286,848 |
|
Employer contributions |
|
|
14,395,915 |
|
Benefits paid to participants |
|
|
(5,706,696 |
) |
Transfers to participant directed investments |
|
|
(18,407,595 |
) |
|
|
|
|
Net Change |
|
|
13,568,472 |
|
|
|
|
|
Pinnacle West Stock Fund Non-Participant Directed
Portion of Net Assets, end of year |
|
$ |
102,281,408 |
|
|
|
|
|
7. EXEMPT RELATED PARTY TRANSACTIONS
Certain Plan investments include shares of the Wells Fargo Short Term Investments Cl G and
Wells Fargo S&P 500 Index Fund Cl G that were managed by the Trustee; therefore, these transactions
qualified as exempt party-in-interest transactions. In addition, certain Plan investments consist
of Pinnacle West common stock, qualifying these transactions as exempt party-in-interest
transactions. At December 31, 2006 and 2005, the Plan held 3,197,437 and 3,486,639 units,
respectively, of common stock of Pinnacle West, the sponsoring employer, with a cost basis of
$96,585,775 and $99,481,363, respectively. During the year ended December 31, 2006, the Plan
recorded dividend income from Pinnacle West common stock of $6,578,844.
16
8. SUBSEQUENT EVENTS
Effective March 29, 2007, State Street Bank and Trust Company was appointed as the successor
trustee, and JPMorgan Retirement Plan Services was appointed as the recordkeeper of the Plan.
Effective with those appointments, the following amendments were made to the Plan:
| |
1. |
|
Effective April 1, 2007, eligible employees hired on or
after April 1, 2007 may participate in the pre-tax and after-tax features of
the Plan upon the date they are hired or attain age 18, whichever is
later. |
| |
| |
2. |
|
Employees eligible on or after April 1, 2007 who do not affirmatively elect to
participate or opt out of the Plan are automatically enrolled as soon as
administratively possible after 60 days of employment. Employees automatically
enrolled contribute 3% on a pre-tax basis with their contributions invested in the
default fund. |
| |
| |
3. |
|
Effective April 1, 2007, participants may contribute after-tax contributions to
a Roth 401(k) account in addition to pre-tax and regular after-tax contributions, and
receive Employer matching contributions on their Roth 401(k) contributions. |
| |
| |
4. |
|
Effective April 1, 2007, participants may elect to set their pre-tax
contributions to increase automatically on an annual basis based on the percent
increase and effective date as elected by the participant. |
| |
| |
5. |
|
Effective March 29, 2007, Employer contributions are invested in the same investment funds as the
participant elects for their future contributions. |
| |
| |
6. |
|
Effective April 1, 2007, the Plan will accept rollovers from eligible
retirement plans including a 401(k) plan, 457(b) plan, Roth 401(k) account, 403(b)
annuity, IRA or after-tax dollars from a qualified plan. |
| |
| |
7. |
|
Effective April 1, 2007, participants will pay explicit recordkeeping and
administrative fees, less any implicit fees paid to the recordkeeper through
revenue-sharing arrangements with certain mutual funds. |
| |
| |
8. |
|
Effective April 1, 2007, in lieu of making their own investment elections,
participants may choose to have a personalized mix of the Plan’s core fund options
selected for them through the Plan’s personal asset manager feature. |
| |
| |
9. |
|
Effective April 1, 2007, participants may establish a self-directed brokerage
account (SDA) to invest up to 90% of their vested account in the investment vehicles
allowed by the SDA. Amounts credited to the SDA are not available for loans or
in-service withdrawals. |
17
| |
10. |
|
Effective April 1, 2007, participants may elect to have their investment mix
automatically rebalanced according to their future investment elections on a quarterly,
semi-annual, or annual basis. |
| |
| |
11. |
|
Effective April 1, 2007, former participants may elect to receive partial,
instead of total, distributions and loans. Former participants may also elect to
continue loan repayments upon termination of employment or retirement. |
| |
| |
12. |
|
Effective April 1, 2007, the restriction of a maximum of two post age 591/2
withdrawals per year is eliminated. |
| |
| |
13. |
|
Effective April 1, 2007, in-service withdrawals and loans will also include the
Roth 401(k) source. |
18
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
FORM 5500, SCHEDULE H: PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2006
| |
|
|
|
|
|
|
|
|
|
| Identity of Issuer, Borrower, |
|
|
|
|
|
|
|
| Lessor or Similar Party |
|
Description |
|
|
Cost |
|
Current Value |
Common and Collective Trusts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Wells Fargo Short Term Investments Cl G |
|
Short-Term Investments*** |
|
|
* |
* |
|
$ |
9,016,814 |
*Wells Fargo
S&P 500 Index Fund Cl G |
|
Index Fund |
|
|
* |
* |
|
|
136,429,483 |
|
|
|
|
|
|
|
|
|
Total common and collective trusts |
|
|
|
|
|
|
|
|
145,446,297 |
|
|
|
|
|
|
|
|
|
|
Mutual Funds |
|
|
|
|
|
|
|
|
|
Putnam Voyager Fund Cl A |
|
Large Cap Growth Fund |
|
|
* |
* |
|
|
46,665,515 |
Vanguard Lifestrategy Conservative
Growth Fund Inst. |
|
Conservative LifeStyle Fund |
|
|
* |
* |
|
|
13,031,887 |
Vanguard Lifestrategy Moderate Growth
Fund Inst. |
|
Moderate LifeStyle Fund |
|
|
* |
* |
|
|
28,880,077 |
Vanguard Lifestrategy Growth Fund Inst. |
|
Aggressive LifeStyle Fund |
|
|
* |
* |
|
|
35,616,294 |
Black Rock Value Opportunities Fund Cl I |
|
Small Cap Core Fund |
|
|
* |
* |
|
|
74,872,264 |
AIM Mid Cap Core Equity Fund Cl I |
|
Mid Cap Core Fund |
|
|
* |
* |
|
|
19,268,045 |
PIMCO Total Return Fund Inst. |
|
Intermediate Bond Fund |
|
|
* |
* |
|
|
14,657,142 |
T. Rowe Price Equity Income Fund |
|
Large Cap Value Fund |
|
|
* |
* |
|
|
43,921,103 |
American FDS EuroPacific Growth Fund R5 |
|
International Equity Fund |
|
|
* |
* |
|
|
72,585,776 |
|
|
|
|
|
|
|
|
|
Total mutual funds |
|
|
|
|
|
|
|
|
349,498,103 |
|
|
|
|
|
|
|
|
|
|
Synthetic Investment Contracts |
|
Fixed Income Fund |
|
|
|
|
|
|
|
Bank of America N.A. Wrap maturity date 3/15/16, yield 4.51% |
|
|
|
|
|
|
|
|
212,585 |
CWL 2005-3 AF4 maturity date 4/25/09 |
|
|
|
|
* |
* |
|
|
997,993 |
CXHE 2005-B AF4 maturity date 3/25/11 |
|
|
|
|
* |
* |
|
|
986,800 |
FHR 2798 JP maturity date 11/15/12 |
|
|
|
|
* |
* |
|
|
1,196,475 |
FHR 2828 YA maturity date 1/15/13 |
|
|
|
|
* |
* |
|
|
1,556,754 |
FHR 2934 MA maturity date 3/15/16 |
|
|
|
|
* |
* |
|
|
1,180,290 |
FHR 3087 NA maturity date 8/15/16 |
|
|
|
|
* |
* |
|
|
875,058 |
FNR 2006-69 GC maturity date 4/25/17 |
|
|
|
|
* |
* |
|
|
1,864,433 |
FHR 3170 EC maturity date 3/15/16 |
|
|
|
|
* |
* |
|
|
1,385,910 |
GMACC 2004-C3 A3 maturity date 1/10/10 |
|
|
|
|
* |
* |
|
|
1,464,054 |
GE Capital Corp 4.625 maturity date 9/15/09 |
|
|
|
|
* |
* |
|
|
1,989,857 |
GE 4.25% maturity date 1/15/08 |
|
|
|
|
* |
* |
|
|
1,995,967 |
GCCFC 2004-GG1 A3 maturity date 3/10/09 |
|
|
|
|
* |
* |
|
|
986,290 |
MER 4.75% maturity date 11/20/09 |
|
|
|
|
* |
* |
|
|
1,488,540 |
MET 4.25% maturity date 7/30/09 |
|
|
|
|
* |
* |
|
|
983,133 |
MG Fund 3.9% maturity date 6/15/09 |
|
|
|
|
* |
* |
|
|
970,173 |
MSC 2004-IQ8 A2 maturity date 6/15/09 |
|
|
|
|
* |
* |
|
|
1,221,495 |
WBCMT 2006-C29 A2 maturity date 12/15/11 |
|
|
|
|
* |
* |
|
|
1,501,763 |
19
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
FORM 5500, SCHEDULE H: PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2006
| |
|
|
|
|
|
|
|
|
|
| Identity of Issuer, Borrower, |
|
|
|
|
|
|
|
| Lessor or Similar Party |
|
Description |
|
|
Cost |
|
Current Value |
AIG Financial Products Wrap maturity date 4/15/20, yield 4.77% |
|
|
|
|
|
|
|
|
33,968 |
BACM 2005-1 A3 maturity date 4/10/11 |
|
|
|
|
* |
* |
|
|
1,986,968 |
BACM 2005-2 AAB maturity date 12/10/14 |
|
|
|
|
* |
* |
|
|
1,474,983 |
BAC 7.40% maturity date 1/15/11 |
|
|
|
|
* |
* |
|
|
2,222,424 |
CWL 2005-10 AF3 maturity date 3/25/10 |
|
|
|
|
* |
* |
|
|
1,483,433 |
CFAB 2002-4 1A4 maturity date 3/25/07 |
|
|
|
|
* |
* |
|
|
170,974 |
FGG11751 maturity date 2/15/20 |
|
|
|
|
* |
* |
|
|
1,228,481 |
FGG11810 maturity date 11/15/19 |
|
|
|
|
* |
* |
|
|
1,254,378 |
FN255891 maturity date 6/25/20 |
|
|
|
|
* |
* |
|
|
932,711 |
FNR 2003-75 NB maturity date 12/25/11 |
|
|
|
|
* |
* |
|
|
986,369 |
FNR 2003-109 CX maturity date 6/25/12 |
|
|
|
|
* |
* |
|
|
1,319,124 |
FHR 2808 YA maturity date 8/15/12 |
|
|
|
|
* |
* |
|
|
1,430,820 |
FHR 3178 A maturity date 8/15/18 |
|
|
|
|
* |
* |
|
|
1,890,317 |
HSBC 5.25 maturity date 1/14/11 |
|
|
|
|
* |
* |
|
|
1,536,576 |
RFMS2 2006-HI2 A3 maturity date 3/25/13 |
|
|
|
|
* |
* |
|
|
753,754 |
MSDWC 2001-TOP1 A2 maturity date 11/15/08 |
|
|
|
|
* |
* |
|
|
205,805 |
MSDWC 2001-TOP5 A2 maturity date 1/15/08 |
|
|
|
|
* |
* |
|
|
396,295 |
T 5.0% maturity date 7/31/08 |
|
|
|
|
* |
* |
|
|
2,045,128 |
|
|
|
|
|
|
|
|
|
|
UBS A.G. Wrap maturity date 11/15/19, yield 4.18% |
|
|
|
|
|
|
|
|
284,623 |
CAT 4.35% maturity date 3/04/09 |
|
|
|
|
* |
* |
|
|
1,482,255 |
FGG11678 maturity date 10/15/19 |
|
|
|
|
* |
* |
|
|
773,793 |
FN677680 maturity date 3/25/17 |
|
|
|
|
* |
* |
|
|
456,094 |
FHR 2611 KC maturity date 3/15/12 |
|
|
|
|
* |
* |
|
|
903,399 |
FN254437 FNMA 7-yr. 5% |
|
|
|
|
* |
* |
|
|
380,486 |
FNR 2005-121 AJ maturity date 10/25/17 |
|
|
|
|
* |
* |
|
|
1,699,975 |
FHR 3048 QA maturity date 11/15/17 |
|
|
|
|
* |
* |
|
|
1,832,425 |
FNCI 4.5% Pool 683124 maturity date 8/25/17 |
|
|
|
|
* |
* |
|
|
1,033,401 |
FN695871 maturity date 10/25/17 |
|
|
|
|
* |
* |
|
|
561,785 |
MSC 2006-IQ11 A2 maturity date 6/15/11 |
|
|
|
|
* |
* |
|
|
2,040,788 |
MSDWC 2002-TOP7 A1 maturity date 4/15/11 |
|
|
|
|
* |
* |
|
|
520,799 |
PERF 2005-1 A4 maturity date 6/25/12 |
|
|
|
|
* |
* |
|
|
1,459,513 |
POPLR 2005-A AF3 maturity date 10/25/11 |
|
|
|
|
* |
* |
|
|
986,872 |
RFMS2 2004-HS1 AI4 maturity date 1/25/10 |
|
|
|
|
* |
* |
|
|
1,948,403 |
WBCMT 2005-C17 A2 maturity date 12/15/11 |
|
|
|
|
* |
* |
|
|
1,479,435 |
WBCMT 2004-C10 A2 maturity date 12/15/10 |
|
|
|
|
* |
* |
|
|
2,420,960 |
WFC 4.2 maturity date 1/15/10 |
|
|
|
|
* |
* |
|
|
1,471,800 |
|
|
|
|
|
|
|
|
|
|
Monumental Life Insurance Co. Wrap maturity date 4/15/20, Yield 4.66% |
|
|
|
|
|
|
|
|
209,232 |
CWL 2005-12 1A4 maturity date 11/25/13 |
|
|
|
|
* |
* |
|
|
1,280,508 |
C 5.125 maturity date 2/14/11 |
|
|
|
|
* |
* |
|
|
2,011,423 |
CRMSI 2006-1 A3 maturity date 8-25-10 |
|
|
|
|
* |
* |
|
|
1,509,698 |
FGG18056 maturity date 2/15/20 |
|
|
|
|
* |
* |
|
|
805,225 |
FGB11935 maturity date 7/15/18 |
|
|
|
|
* |
* |
|
|
1,326,919 |
FNR 2003-67 GN maturity date 06/25/09 |
|
|
|
|
* |
* |
|
|
1,713,569 |
FHR 2664 GA maturity date 09/15/12 |
|
|
|
|
* |
* |
|
|
1,237,577 |
FHR 3095 GB maturity date 3/15/18 |
|
|
|
|
* |
* |
|
|
924,779 |
JPMCC 2001-CIB3 A2 maturity date 11/15/10 |
|
|
|
|
* |
* |
|
|
1,222,186 |
LBUBS 2004-C6 A3 maturity date 2/15/11 |
|
|
|
|
* |
* |
|
|
979,299 |
20
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
FORM 5500, SCHEDULE H: PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2006
| |
|
|
|
|
|
|
|
|
|
| Identity of Issuer, Borrower, |
|
|
|
|
|
|
|
| Lessor or Similar Party |
|
Description |
|
|
Cost |
|
Current Value |
MLCFC 2006-1 A2 maturity date 3/12/13 |
|
|
|
|
* |
* |
|
|
1,213,491 |
MSC 2003-IQ5 A3 maturity date 7/15/12 |
|
|
|
|
* |
* |
|
|
1,985,110 |
RAMP 2004-RS6 AI3 maturity date 11/25/07 |
|
|
|
|
* |
* |
|
|
179,023 |
RAMP 2004-RS6 AI4 maturity date 1/25/11 |
|
|
|
|
* |
* |
|
|
1,000,867 |
RASC 2002-KS8 A4 maturity date 10/25/07 |
|
|
|
|
* |
* |
|
|
295,450 |
RASC 2004-KS2 AI6 maturity date 1/25/13 |
|
|
|
|
* |
* |
|
|
959,863 |
T 4 7/8 maturity date 8/15/09 |
|
|
|
|
* |
* |
|
|
2,022,182 |
WBCMT 2006-C25 A2 maturity date 6/15/11 |
|
|
|
|
* |
* |
|
|
1,522,845 |
|
|
|
|
|
|
|
|
|
|
JP Morgan Bank Wrap maturity date 2/16/21, yield 4.49% |
|
|
|
|
|
|
|
|
304,868 |
SO 4.7 maturity date 12/1/10 |
|
|
|
|
* |
* |
|
|
1,474,225 |
CFAB 2004-1 1A3 maturity date 8/25/07 |
|
|
|
|
* |
* |
|
|
283,346 |
FGG11678 maturity date 10/15/19 |
|
|
|
|
* |
* |
|
|
1,160,690 |
FGG11850 maturity date 3/15/19 |
|
|
|
|
* |
* |
|
|
829,383 |
FHR 2378 A maturity date 2/15/09 |
|
|
|
|
* |
* |
|
|
243,130 |
FNMA Pool #254458 5% 8-1-1 maturity date 1/25/17 |
|
|
|
|
* |
* |
|
|
995,484 |
FNR 2003-125 AM maturity date 4/25/13 |
|
|
|
|
* |
* |
|
|
592,732 |
FNR 2003-109 CJ maturity date 6/25/12 |
|
|
|
|
* |
* |
|
|
440,689 |
FHR 2685 DQ maturity date 1/15/18 |
|
|
|
|
* |
* |
|
|
1,294,034 |
FHR 2685 MX maturity date 9/15/12 |
|
|
|
|
* |
* |
|
|
1,716,297 |
FHR 2713 G maturity date 9/15/12 |
|
|
|
|
* |
* |
|
|
1,196,004 |
FHR 2901 CA maturity date 10/15/18 |
|
|
|
|
* |
* |
|
|
1,116,363 |
FHR 3002 YD maturity date 2/15/21 |
|
|
|
|
* |
* |
|
|
1,285,565 |
FHR 3152 LA maturity date 4/15/18 |
|
|
|
|
* |
* |
|
|
1,895,711 |
FN695896 maturity date 12/25/17 |
|
|
|
|
* |
* |
|
|
574,263 |
GNR 2002-15 PG maturity date 6/20/15 |
|
|
|
|
* |
* |
|
|
94,810 |
MI 5.35 maturity date 4/1/11 |
|
|
|
|
* |
* |
|
|
1,716,280 |
MET 5.75% 144A maturity date 7/25/11 |
|
|
|
|
* |
* |
|
|
1,028,543 |
MSC 2004-HQ3 A2 maturity date 7/13/10 |
|
|
|
|
* |
* |
|
|
1,948,030 |
RAMP 2003-RS7 AI4 maturity date 8/25/08 |
|
|
|
|
* |
* |
|
|
1,244,584 |
RAMP 2004-RS10 AI4 maturity date 9/25/10 |
|
|
|
|
* |
* |
|
|
791,103 |
|
|
|
|
|
|
|
|
|
|
Rabobank Nederland N.V. Wrap maturity date 5/28/24, yield 4.32% |
|
|
|
|
|
|
|
|
393,521 |
BSCMS 2001-TOP4 A1 maturity date 12/15/10 |
|
|
|
|
* |
* |
|
|
818,928 |
BSCMS 2006-TOP24 A2 maturity date 10/12/11 |
|
|
|
|
* |
* |
|
|
1,513,560 |
FGB13150 maturity date 9/15/18 |
|
|
|
|
* |
* |
|
|
1,300,157 |
FN254486 maturity date 2/25/17 |
|
|
|
|
* |
* |
|
|
601,204 |
FNR 2003-14 AN maturity date 11/25/23 |
|
|
|
|
* |
* |
|
|
725,852 |
FNR 2003-57 NB maturity date 1/25/18 |
|
|
|
|
* |
* |
|
|
816,748 |
FNR 2005-85 AJ maturity date 10/25/17 |
|
|
|
|
* |
* |
|
|
1,620,542 |
FHR 2950 AB maturity date 7/15/18 |
|
|
|
|
* |
* |
|
|
769,612 |
FN768658 maturity date 9/25/18 |
|
|
|
|
* |
* |
|
|
624,316 |
LBUBS 2002-C7 A-3 maturity date 8/15/12 |
|
|
|
|
* |
* |
|
|
1,973,325 |
LBUBS 2003-C5 A-2 maturity date 8/15/11 |
|
|
|
|
* |
* |
|
|
990,360 |
LBUBS 2003-C5 A-3 maturity date 4/15/13 |
|
|
|
|
* |
* |
|
|
1,446,750 |
MBNAP 2005-2 A4 – 144A maturity date 3/15/11 |
|
|
|
|
* |
* |
|
|
977,060 |
MWD 4.00 maturity date 1/15/10 |
|
|
|
|
* |
* |
|
|
1,461,415 |
MSDWC 2003-TOP9 A1 maturity date 7/13/11 |
|
|
|
|
* |
* |
|
|
1,035,558 |
POPLR 2005-B AF4 maturity date 9/25/11 |
|
|
|
|
* |
* |
|
|
979,933 |
21
THE PINNACLE WEST CAPITAL CORPORATION SAVINGS PLAN
FORM 5500, SCHEDULE H: PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2006
| |
|
|
|
|
|
|
|
|
|
| Identity of Issuer, Borrower, |
|
|
|
|
|
|
|
| Lessor or Similar Party |
|
Description |
|
|
Cost |
|
Current Value |
WBCMT 2006-C23 A2 maturity date 2/12/11 |
|
|
|
|
* |
* |
|
|
2,010,120 |
WB 5.35 maturity date 3/15/11 |
|
|
|
|
* |
* |
|
|
2,023,473 |
|
|
|
|
|
|
|
|
|
|
CDC Wraps maturity date 4/17/17, yield 4.66% |
|
|
|
|
|
|
|
|
147,951 |
BSCMS 2004-T14 A2 maturity date 3/12/09 |
|
|
|
|
* |
* |
|
|
1,962,870 |
BSCMS 2002-TOP6 A1 maturity date 1/15/11 |
|
|
|
|
* |
* |
|
|
1,484,424 |
CWL 2004-7 AF4 maturity date 9/25/08 |
|
|
|
|
* |
* |
|
|
1,493,638 |
CWL 2005-7 AF4 maturity date 1/25/15 |
|
|
|
|
* |
* |
|
|
981,726 |
CFAB 2004-2 1A4 maturity date 7/25/10 |
|
|
|
|
* |
* |
|
|
1,999,372 |
CWL 2006-S3 A4 maturity date 12/25/11 |
|
|
|
|
* |
* |
|
|
1,802,800 |
FGE91523 maturity date 3/15/17 |
|
|
|
|
* |
* |
|
|
1,419,174 |
FNR 2003-112 AB maturity date 5/25/12 |
|
|
|
|
* |
* |
|
|
832,489 |
FHR 2770 QA maturity date 2/15/14 |
|
|
|
|
* |
* |
|
|
1,606,226 |
FHR 2849 AL maturity date 11/15/13 |
|
|
|
|
* |
* |
|
|
698,332 |
FHR 3211 MH maturity date 8/15/23 |
|
|
|
|
* |
* |
|
|
1,933,471 |
GMACC 2003-C3 A3 maturity date 4/10/13 |
|
|
|
|
* |
* |
|
|
982,182 |
LEH 5 3/4 maturity date 7/18/11 |
|
|
|
|
* |
* |
|
|
1,543,700 |
RAMP 2004-RS8 AI3 maturity date 10/25/07 |
|
|
|
|
* |
* |
|
|
433,183 |
RAMP 2004-RS8 AI4 maturity date 5/25/10 |
|
|
|
|
* |
* |
|
|
1,295,056 |
USB 5.3 maturity date 4/28/09 |
|
|
|
|
* |
* |
|
|
1,516,972 |
|
|
|
|
|
|
|
|
|
Total synthetic investment contracts |
|
|
|
|
|
|
|
|
154,788,264 |
|
|
|
|
|
|
|
|
|
|
Guaranteed Investment Contracts |
|
Fixed Income Fund |
|
|
|
|
|
|
|
New York Life Insurance Company maturity date 3/31/09, yield 3.46% |
|
|
|
|
* |
* |
|
|
2,722,274 |
|
|
|
|
|
|
|
|
|
Total guaranteed investment contracts |
|
|
|
|
|
|
|
|
2,722,274 |
|
|
|
|
|
|
|
|
|
|
Other Investments |
|
|
|
|
|
|
|
|
|
*Pinnacle West Common Stock |
|
Pinnacle West Stock Fund |
|
$ |
96,585,775 |
|
|
161,725,930 |
****Participant Loans |
|
Participant Loans |
|
|
* |
* |
|
|
21,321,333 |
|
|
|
|
|
|
|
|
|
Total other investments |
|
|
|
|
|
|
|
|
183,047,263 |
|
|
|
|
|
|
|
|
|
|
Total Assets Held for Investment Purposes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
835,502,201 |
|
|
|
|
|
|
|
|
|
|
|
|
| * |
|
Related Party |
| |
| ** |
|
Cost information not provided as investments are participant-directed. |
| |
| *** |
|
Short-Term Investments represent $5,984,843 from the Fixed Income Fund and $3,031,971 from the Pinnacle West Stock Fund. |
| |
| **** |
|
Interest rates for outstanding loans as of December 31, 2006 ranged from 5% to 10.5% with maturity dates ranging from
2007 to 2021. |
22
Exhibits Filed
| |
|
|
|
|
|
|
| Exhibit No. |
|
Description |
|
|
|
|
| |
23.1
|
|
Consent of Independent Registered Public Accounting Firm |
23
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 21, 2007
|
|
By
|
|
/s/ Armando B. Flores |
|
|
|
|
|
|
|
|
|
|
|
|
|
Armando B. Flores |
|
|
|
|
|
|
Chairman of the Administrative Committee |
|
|
|
|
|
|
and Executive Vice President, |
|
|
|
|
|
|
Corporate Business Services |
|
|
|
|
|
|
Arizona Public Service Company |
24