EX-99.2 3 p14848exv99w2.htm EX-99.2 exv99w2
Exhibit 99.2
(PINNACLE WEST CAPITAL CORPORATION LOGO)
     
FOR IMMEDIATE RELEASE
  May 5, 2009
         
Media Contact:
Analyst Contacts:

Web site:
  Alan Bunnell, (602) 250-3376
Rebecca Hickman, (602) 250-5668
Lisa Malagon, (602) 250-5671
www.pinnaclewest.com 		  Page 1 of 2
PINNACLE WEST REPORTS 2009 FIRST–QUARTER LOSS
Real Estate Charges Drive Consolidated Results;
Milder Weather and Increased Costs Contribute to Lower APS Results
PHOENIX — Pinnacle West Capital Corp. (NYSE: PNW) today reported a consolidated net loss attributable to common shareholders for the quarter ended March 31, 2009, of $156.5 million, or $1.55 per diluted share of common stock compared with a net loss attributable to common shareholders of $4.5 million, or $0.04 per diluted share, for the same quarter in 2008. The lower results were driven largely by previously announced real estate charges, as well as rising costs incurred by Arizona Public Service (APS) related to its electric system expansion, and the effects of milder weather.
Excluding the real estate charges, Pinnacle West recorded a consolidated on-going loss of $29.1 million or $0.29 per share in the 2009 first quarter compared with a consolidated on-going loss of $4.5 million, or $0.04 per share, in the comparable 2008 quarter.
APS, the company’s principal subsidiary, reported a quarterly net loss of $15.5 million, compared with a net loss of $6.4 million for the 2008 first quarter. In addition to the impact of milder weather, the utility’s results were negatively impacted by lower mark-to-market valuations of fuel and power contracts, and higher costs related to continuing infrastructure additions and improvements. These items more than offset an interim retail electricity price increase implemented at the beginning of this year and transmission rate increases implemented in 2008.
“Even with the current economy, Arizona is still growing. With today’s growth and an eventual economic rebound, APS expects to add another 600,000 customers by 2025 — a 55 percent increase over current levels,” said Chairman Don Brandt. “We must continue preparing to meet this demand by investing in new infrastructure and technologies to ensure our customers’ energy future continues to be highly reliable, as well as cleaner, more efficient and more responsive than ever before. To accomplish these goals, we will maintain a keen focus on energy efficiency, renewable energy expansion, productivity, customer technologies and financial strength.”

 

 

     
PINNACLE WEST 2009 FIRST–QUARTER RESULTS
  May 5, 2009
Page 2 of 2
As announced in early April, the Company’s real estate subsidiary, SunCor, initiated a plan to dispose of a majority of its real estate assets through a series of strategic transactions. As a result of that decision, Pinnacle West’s reported consolidated results for the 2009 first quarter include real estate charges totaling $127.4 million after-tax. Execution of the restructuring plan is currently underway and will allow SunCor to maximize the value of its assets, concentrate on the Phoenix market, and substantially eliminate SunCor’s outstanding debt. The company currently plans to complete the transactions in 2009.
For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/investors.
Conference Call
Pinnacle West invites interested parties to listen to the live web cast of management’s conference call to discuss the Company’s 2009 first–quarter results and recent developments at 12 noon (ET) today, May 5. 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 Number 94112207. A replay of the call also will be available until 11:55 p.m. (ET), Tuesday, May 12, 2009, 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 $11.4 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
NON-GAAP FINANCIAL MEASURE RECONCILIATION
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
(GAAP MEASURE) TO ON-GOING LOSS (NON-GAAP FINANCIAL MEASURE)
                                 
    Three Months Ended     Three Months Ended  
    March 31, 2009     March 31, 2008  
    $ in     Diluted     $ in     Diluted  
    Millions     EPS     Millions     EPS  
 
Net Loss Attributable to Common Shareholders
   $ (156.5 )   $ (1.55 )   $ (4.5 )   $ (0.04 )
Adjustment:
                                
Real estate impairment and related charges
     127.4       1.26       —       —  
 
 
                        
On-going Loss
   $ (29.1 )   $ (0.29 )   $ (4.5 )   $ (0.04 )
 
                        

 

 

PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share amounts)
                 
    THREE MONTHS ENDED  
    MARCH 31,  
    2009     2008  
Operating Revenues
                
Regulated electricity segment
   $ 602,578     $ 622,801  
Real estate segment
     18,366       26,266  
Marketing and trading
     —       30,452  
Other revenues
     8,449       8,737  
 
            
Total
     629,393       688,256  
 
            
 
                
Operating Expenses
                
Regulated electricity segment fuel and purchased power
     247,388       269,378  
Real estate segment operations
     30,281       30,957  
Real estate impairment charge
     211,306       —  
Marketing and trading fuel and purchased power
     —       23,986  
Operations and maintenance
     207,531       193,023  
Depreciation and amortization
     99,921       95,594  
Taxes other than income taxes
     34,128       33,152  
Other expenses
     6,467       5,938  
 
            
Total
     837,022       652,028  
 
            
 
                
Operating Income (Loss)
     (207,629 )     36,228  
 
            
 
                
Other
                
Allowance for equity funds used during construction
     4,992       6,124  
Other income
     380       3,839  
Other expense
     (9,741 )     (4,896 )
 
            
Total
     (4,369 )     5,067  
 
            
 
                
Interest Expense
                
Interest charges
     55,806       54,702  
Capitalized interest
     (3,834 )     (5,679 )
 
            
Total
     51,972       49,023  
 
            
 
                
Loss From Continuing Operations Before Income Taxes
     (263,970 )     (7,728 )
 
                
Income Taxes
     (96,174 )     (1,541 )
 
            
 
                
Loss From Continuing Operations
     (167,796 )     (6,187 )
 
                
Income (Loss) From Discontinued Operations
               
Net of Income Taxes
     (2,924 )     1,714  
 
            
 
                
Net Loss
     (170,720 )     (4,473 )
 
                
Less: Net loss attributable to noncontrolling interests
     (14,210 )     —  
 
            
 
                
Net Loss Attributable To Common Shareholders
   $ (156,510 )   $ (4,473 )
 
            
 
                
Weighted-Average Common Shares Outstanding — Basic
     100,986       100,521  
 
                
Weighted-Average Common Shares Outstanding — Diluted
     100,986       100,521  
 
                
Earnings Per Weighted-Average Common Share Outstanding
                
Loss from continuing operations attributable to common shareholders — basic
   $ (1.52 )   $ (0.06 )
Net loss attributable to common shareholders — basic
   $ (1.55 )   $ (0.04 )
Loss from continuing operations attributable to common shareholders — diluted
   $ (1.52 )   $ (0.06 )
Net loss attributable to common shareholders — diluted
   $ (1.55 )   $ (0.04 )
 
                
Amounts Attributable To Common Shareholders
                
Loss from continuing operations, net of tax
   $ (153,586 )   $ (6,187 )
Discontinued operations, net of tax
     (2,924 )     1,714  
 
            
Net loss attributable to common shareholders
   $ (156,510 )   $ (4,473 )