For the quarter ended September 30, 1996, Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated income of $121 million or $1.39 per share of common stock before an extraordinary charge, compared with $114 million or $1.31 per share for the corresponding prior-year period.

Including the extraordinary charge of $14.3 million after tax (16 cents per share) for debt prepayment penalties related to the previously-announced refinancing of high-coupon parent debt, net income was $107 million or $1.23 per share of common stock.

For the quarter, earnings at Arizona Public Service were flat at $124 million, as strong 4.4 percent customer growth primarily, but also increased sales due too weather, significantly offset the effects of a recent agreement with the Arizona Corporation Commission which took effect July 1. Among the provisions of that agreement were a 3.4 percent rate reduction and accelerated amortization of regulatory assets.

Chairman Richard Snell said that consolidated results also benefited from lower interest expense at the parent and APS and improved profitability at SunCor, Pinnacle West s real estate subsidiary.

Also affecting the quarter-to-quarter comparison was an accounting adjustment that favorably affected 1996 results and the write-down of an office building which was recorded in 1995.

Snell said the Company will take a charge in the fourth quarter related to a voluntary severance program announced last month. The program runs until November 15, and the Company cannot quantify the amount of the charge until some time thereafter.

Looking ahead, customer growth, continuing cost reduction and the benefits of cash strategies will be significant parts of the Company s earnings picture, he said, Our underlying fundamentals remain strong.

Combined net income from SunCor and El Dorado, the Company s venture capital subsidiary, was $2.0 million, versus a combined loss of $1.7 million for the year-ago quarter. Real estate revenues and expenses reflect SunCor s expanded presence in the home building market following its purchase of Golden Heritage Homes early this year.

For the nine months ended September 30, 1996, Pinnacle West reported net income of $197 million or $2.26 per share of common stock compared with $181 million or $2.08 per share for the corresponding period ended September 30, 1995. Results in 1996 include charges totaling $20.3 million after tax (23 cents per share) for prepayment penalties related to early retirement and refinancing of the remainder of the parent-company, high-coupon debt.

Pinnacle West is a Phoenix-based holding company with consolidated assets of approximately $7 billion. Its major subsidiary is Arizona Public Service, the state s largest electric utility.

This press release contains forward-looking statements that involve risks and uncertainties, which include, but are not limited to, the ongoing restructuring of the electric industry; the outcome of the regulatory proceedings relating to the restructuring; regional economic and market conditions, which could affect customer growth and the cost of power supplies; the cost of debt and equity capital; weather variations affecting customer usage; and the strength of the real estate market. These factors and the other matters discussed above may cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by the Company.