EX-99.8 9 p13420exv99w8.htm EX-99.8 exv99w8
Exhibit 99.8
(NEWS LOGO)
         
FOR IMMEDIATE RELEASE   November 4, 2008
Media Contact:
  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 LOWER THIRD QUARTER RESULTS
APS Earnings Decrease 22 Percent; Palo Verde Performance Excels
PHOENIX — Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income for the quarter ended September 30, 2008, of $151.6 million, or $1.50 per diluted share of common stock. This result compares with $208.7 million, or $2.07 per diluted share, for the same period in 2007.
Rising costs incurred by Arizona Public Service (APS) to operate, maintain and expand its electric system and summertime temperatures that were closer to historical averages (versus last year’s record temperatures) drove the lower results. Higher fuel costs; the absence of tax credits recorded in 2007 and not repeated in the 2008 quarter; and decreased earnings from Pinnacle West’s real estate operations also contributed to the quarterly decline.
Pinnacle West Chairman Bill Post said the lower results were in line with expectations given the milder weather compared with last year’s third quarter; and the fact that APS’ current retail prices do not cover the utility’s true costs of doing business.
“Despite the current economic slowdown, we still are experiencing customer growth in our service territory,” he said. “To meet Arizona’s current and future electricity demand, we must continue working with our regulators to establish a comprehensive plan for Arizona’s energy future.”
Post said that plan should include significant additional investments in new infrastructure, new technology, energy efficiency and more sustainable resources. “To accomplish this plan, however, we need a financially strong utility that can finance needed infrastructure at the lowest possible cost while providing high customer service and reliability. This will require timely and supportive regulatory treatment.”
For the third quarter of 2008, APS reported lower net income of $159.8 million, compared with net income of $204.3 million for the same period a year ago. The Company and its customers benefited from strong performance at the Palo Verde Nuclear Generating Station, which operated at 97 percent capacity and generated its highest-ever summer production. Palo Verde’s three units also operated for 100 consecutive days this summer. Additionally, the plant’s solid operation helped minimize the need for

 

 

     
PINNACLE WEST 2008 THIRD QUARTER RESULTS   November 4, 2008
    Page 2 of 2
more expensive natural gas generation and purchased power.
SunCor Development Co, Pinnacle West’s real estate subsidiary, reported a net loss of $6.1 million for the current-year third quarter, compared with net income of $6.0 million in the 2007 quarter. The decrease reflects the distressed national real estate markets.
For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/financials.
Conference Call
Pinnacle West invites interested parties to listen to the live web cast of management’s conference call to discuss the Company’s 2008 third-quarter earnings and recent developments at noon (ET) today, November 4. 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 Conference ID 68083352. A replay of the call also will be available until 11:55 p.m. (ET), Tuesday, November 11, 2008, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same Conference ID number as above.
Pinnacle West is a Phoenix-based company with consolidated assets of about $11.5 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.
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PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
( in thousands, except per share amounts)
                                 
    THREE MONTHS ENDED     NINE MONTHS ENDED  
    SEPTEMBER 30,     SEPTEMBER 30,  
    2008     2007     2008     2007  
Operating Revenues
                                
Regulated electricity segment
   $ 1,040,348     $ 1,043,723     $ 2,492,627     $ 2,291,067  
Real estate segment
     18,965       46,711       103,587       171,662  
Marketing and trading
     11,737       99,203       119,868       264,311  
Other revenues
     8,925       15,597       26,824       36,113  
 
                        
Total
     1,079,975       1,205,234       2,742,906       2,763,153  
 
                        
 
                                
Operating Expenses
                                
Regulated electricity segment fuel and purchased power
     419,979       407,242       1,016,918       880,932  
Real estate segment operations
     28,941       46,075       118,906       153,328  
Marketing and trading fuel and purchased power
     9,503       93,860       106,270       226,337  
Operations and maintenance
     212,327       178,419       601,360       527,307  
Depreciation and amortization
     98,568       94,730       291,959       276,584  
Taxes other than income taxes
     28,423       34,940       94,826       104,416  
Other expenses
     8,321       11,246       21,081       28,537  
 
                        
Total
     806,062       866,512       2,251,320       2,197,441  
 
                        
 
                                
Operating Income
     273,913       338,722       491,586       565,712  
 
                        
 
                                
Other
                                
Allowance for equity funds used during construction
     4,673       5,235       16,211       14,874  
Other income
     2,274       4,276       10,050       11,976  
Other expense
     (7,132 )     (6,744 )     (22,103 )     (13,685 )
 
                        
Total
     (185 )     2,767       4,158       13,165  
 
                        
 
                                
Interest Expense
                                
Interest charges
     51,231       53,151       157,580       155,104  
Capitalized interest
     (3,976 )     (5,435 )     (14,593 )     (15,455 )
 
                        
Total
     47,255       47,716       142,987       139,649  
 
                        
 
                                
Income From Continuing Operations Before Income Taxes
     226,473       293,773       352,757       439,228  
 
                                
Income Taxes
     75,970       92,055       92,489       141,809  
 
                        
 
                                
Income From Continuing Operations
     150,503       201,718       260,268       297,419  
 
                                
Income From Discontinued Operations
                                
Net of Income Taxes
     1,083       6,990       20,707       6,813  
 
                        
 
                                
Net Income
   $ 151,586     $ 208,708     $ 280,975     $ 304,232  
 
                        
 
                                
Weighted-Average Common Shares Outstanding — Basic
     100,750       100,324       100,642       100,200  
 
                                
Weighted-Average Common Shares Outstanding — Diluted
     101,018       100,829       100,911       100,767  
 
                                
Earnings Per Weighted-Average Common Share Outstanding
                                
Income from continuing operations — basic
   $ 1.49     $ 2.01     $ 2.59     $ 2.97  
Net income — basic
   $ 1.50     $ 2.08     $ 2.79     $ 3.04  
Income from continuing operations — diluted
   $ 1.49     $ 2.00     $ 2.58     $ 2.95  
Net income — diluted
   $ 1.50     $ 2.07     $ 2.78     $ 3.02