EX-99.9 11 p71793exv99w9.htm EXHIBIT 99.9 exv99w9
 

Exhibit 99.9
(NEWS REALEASE)
         
FOR IMMEDIATE RELEASE   February 1, 2006
Media Contacts:
  Alan Bunnell, (602) 250-3376   Page 1 of 2
Analyst Contacts:
  Rebecca Hickman, (602) 250-5668    
 
  Lisa Malagon, (602) 250-5671    
Web site:
  www.pinnaclewest.com    
PINNACLE WEST REPORTS 2005 EARNINGS
Lower Annual Earnings Due to Regulatory Disallowance and Higher Fuel Costs
PHOENIX — Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the year 2005 of $176.3 million, or $1.82 per diluted share of common stock. This result compares with $243.2 million, or $2.66 per share, for the year 2004.
“Our 2005 earnings reflect the deferral of the higher natural gas prices we experienced,” said Chairman Bill Post. “The Arizona Corporation Commission’s (ACC) action last week to start recovery of these deferrals is a positive step; however, the pending emergency rate case is critical to recover the higher fuels costs we are incurring to meet current customer demands today.”
Under the power supply adjustor (PSA) approved by the ACC in Arizona Public Service Company’s (APS) last rate case, 90 percent of the increases in the Company’s fuel and purchased power costs above current base rates are “deferred,” or set aside, for future recovery from customers. In accordance with generally accepted accounting principles, the deferrals positively impact earnings on a non-cash basis until the collection of such costs is approved by the ACC.
The year-to-year comparison was negatively impacted by the regulatory disallowance resulting from the ACC’s retail rate decision issued in April 2005; higher fuel and purchased power costs; a net loss from discontinued operations related to the sale of the Company’s interest in the Silverhawk Power Station; an increase in operating costs primarily related to customer service and generation; higher property taxes; lower contributions from the marketing and trading segment; and the 2004 gain on the sale of the Phoenix Suns. These factors were partially offset by the PSA deferrals; higher retail sales volumes at APS due to customer growth; higher retail electricity revenues resulting from the company’s first price increase in 14 years; improved results from the Company’s real estate operations; and lower depreciation and amortization expense.
APS reported lower net income for 2005 of $170.5 million, of which about 60 percent, or $105.5 million, was related to the PSA deferrals. This result compares with net income of $199.6 million for 2004. APS’ retail customer base grew 4.3 percent, more than three times the U.S. average, and its customers’ peak energy needs grew more than 9 percent. Moreover, in 2005, APS passed the one-million-customer mark as it added more than 41,000 new retail customers.

 

 

     
PINNACLE WEST REPORTS 2005 EARNINGS
  February 1, 2006
 
  Page 2 of 2
SunCor Development Co., Pinnacle West’s real estate subsidiary, delivered solid performance, reporting 2005 net income of $55.6 million, compared with net income of $44.7 million for 2004.
For the 2005 fourth quarter, the Company reported consolidated net income of $21.3 million, or $0.22 per diluted share of common stock. This result compares with consolidated net income of $33.7 million, or $0.37 per share, in last year’s corresponding period.
For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/financials.
Pinnacle West is a Phoenix-based company with consolidated assets of about $11 billion. Through its subsidiaries, the Company generates, sells and delivers electricity and sells energy-related products and services to retail and wholesale customers in the western United States. It also develops residential, commercial, and industrial real estate projects.
Web cast and Conference Call
The Company will hold a conference call and live web cast at 4 p.m. (ET) today, Wednesday, February 1, 2006, to discuss its earnings and recent events. The web cast can be accessed at www.pinnaclewest.com/presentations and will be available for replay on the web site for 30 days. To access the live conference call by telephone, dial (877) 356-3961 and enter reservation number 3786864. A replay of the call also will be available until 11:55 p.m. (ET), Wednesday, February 8, 2006, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same reservation number.
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PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
                                 
    THREE MONTHS ENDED     TWELVE MONTHS ENDED  
    DECEMBER 31,     DECEMBER 31,  
    2005     2004     2005     2004  
Operating Revenues
                                
Regulated electricity segment
   $ 488,035     $ 429,295     $ 2,237,145     $ 2,035,247  
Marketing and trading segment
     84,098       110,521       351,558       400,628  
Real estate segment
     105,081       163,553       338,031       350,315  
Other revenues
     14,458       9,912       61,221       42,816  
 
                        
Total
     691,672       713,281       2,987,955       2,829,006  
 
                        
 
                                
Operating Expenses
                                
Regulated electricity segment fuel and purchased power
     152,609       125,024       595,141       567,433  
Marketing and trading segment fuel and purchased power
     77,744       88,151       293,091       320,667  
Operations and maintenance
     168,706       157,732       635,827       592,320  
Real estate segment operations
     87,811       108,634       278,366       284,194  
Depreciation and amortization
     85,622       96,655       347,652       391,597  
Taxes other than income taxes
     28,512       27,064       132,040       120,722  
Other expenses
     12,536       8,215       51,987       34,108  
Regulatory disallowance
     (4,655 )     —       138,562       —  
 
                        
Total
     608,885       611,475       2,472,666       2,311,041  
 
                        
 
                                
Operating Income
     82,787       101,806       515,289       517,965  
 
                        
 
                                
Other
                                
Allowance for equity funds used during construction
     2,784       2,026       11,191       4,885  
Other income
     5,505       3,309       23,360       53,289  
Other expense
     (13,895 )     (7,066 )     (26,716 )     (21,340 )
 
                        
Total
     (5,606 )     (1,731 )     7,835       36,834  
 
                        
 
                                
Interest Expense
                                
Interest charges
     42,267       48,463       185,087       183,527  
Capitalized interest
     (1,884 )     (2,774 )     (12,018 )     (11,460 )
 
                        
Total
     40,383       45,689       173,069       172,067  
 
                        
 
                                
Income From Continuing Operations Before Income Taxes
     36,798       54,386       350,055       382,732  
 
                                
Income Taxes
     13,029       16,666       126,892       136,142  
 
                        
 
                                
Income From Continuing Operations
     23,769       37,720       223,163       246,590  
 
                                
Loss From Discontinued Operations
                                
Net of Income Taxes
     (2,422 )     (3,991 )     (46,896 )     (3,395 )
 
                        
 
                                
Net Income
   $ 21,347     $ 33,729     $ 176,267     $ 243,195  
 
                        
 
                                
Weighted-Average Common Shares Outstanding — Basic
     98,982       91,620       96,484       91,397  
 
                                
Weighted-Average Common Shares Outstanding — Diluted
     99,050       91,779       96,590       91,532  
 
                                
Earnings Per Weighted-Average Common Share Outstanding
                                
Income From Continuing Operations — Basic
   $ 0.24     $ 0.41     $ 2.31     $ 2.70  
Net Income — Basic
   $ 0.22     $ 0.37     $ 1.83     $ 2.66  
Income From Continuing Operations — Diluted
   $ 0.24     $ 0.41     $ 2.31     $ 2.69  
Net Income — Diluted
   $ 0.22     $ 0.37     $ 1.82     $ 2.66  
Certain prior-year amounts have been reclassified to conform to the 2005 presentation.