news-release-details

Pinnacle West Reports Second Quarter Earnings

07/22/1999

PHOENIX, Ariz. - Pinnacle West Capital Corporation (NYSE:PNW) today reported consolidated net income for the quarter ended June 30, 1999 of $68.7 million or $0.81 per diluted share of common stock, compared with $49.0 million or $0.57 per share a year ago.

The earnings comparison was distorted by weather that in the second quarter of 1998 was the mildest it had been in 20 years.

Positive effects for the quarter included 4 percent customer growth at Arizona Public Service, increased contributions from power marketing and trading activities and lower financing costs, partially offset by a 1998 electricity price decrease, increased fuel costs and minor increases in other expenses.

For the quarter ended June 30, 1999, APS earned $69.5 million, compared with $49.7 million for the year-ago quarter.

SunCor Development, the company's real estate subsidiary, and El Dorado, its investment subsidiary, contributed a combined $2.9 million to consolidated results for the second quarter, compared with $3.1 million in the second quarter last year.

For the six-month period ended June 30, 1999, Pinnacle West reported consolidated net income of $99.4 million or $1.17 per share of diluted common stock, compared with $80.1 million or $0.94 per share for the corresponding period in 1998.

Pinnacle West is a Phoenix-based company with consolidated assets of approximately $7 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.

Three Months Ended
       June 30,
       Six Months Ended
       June 30,
       Twelve Months Ended
       June 30,
         1999        1998        1999        1998        1999        1998

Operating Revenues
Electric $ 511,434 $ 441,715 $ 925,417 $ 822,138 $2,109,677 $1,862,919
Real estate 32,697 28,916 57,230 63,077 118,341 129,841

    Total 544,131 470,631 982,647 885,215 2,228,018 1,992,760

Operating Expenses
Fuel and purchased power 132,543 95,585 231,784 169,502 599,783 421,350
Utility operations and maintenance 106,234 102,713 205,318 199,129 420,230 421,385
Real estate operations 29,401 26,213 51,636 56,449 110,518 120,014
Depreciation and amortization 97,383 93,585 194,293 186,415 387,557 370,289
Taxes other than income taxes 29,602 29,930 59,049 60,278 115,677 121,269

    Total 395,163 348,026 742,080 671,773 1,633,765 1,454,307

Operating Income 148,968 122,605 240,567 213,442 594,253 538,453

Other Income (Expenses)
Preferred stock dividend requirements of APS -- (2,435) (1,016) (5,313) (5,406) (11,295)
Net other income and expense 399 192 (1,938) 4,551 (5,880) 74

    Total 399 (2,243) (2,954) (762) (11,286) (11,221)

Income Before Interest and Income Taxes 149,367 120,362 237,613 212,680 582,967 527,232

Interest Expense
Interest charges 41,105 42,441 81,874 85,363 165,656 176,207
Capitalized interest (4,189) (4,874) (8,263) (9,530) (17,329) (19,223)

    Total 36,916 37,567 73,611 75,833 148,327 156,984

Income Before Income Taxes 112,451 82,795 164,002 136,847 434,640 370,248
Income Taxes 43,749 33,798 64,610 56,764 172,439 146,873

Net Income $ 68,702 $ 48,997 $ 99,392 $ 80,083 $ 262,201 $ 223,375

Average Common Shares Outstanding - Basic 84,716 84,811 84,693 84,798 84,722 84,768
Average Common Shares Outstanding - Diluted 85,093 85,416 85,135 85,375 85,232 85,299

Earnings Per Average
Common Share Outstanding
Net income - Basic $ 0.81 $ 0.58 $ 1.17 $ 0.94 $ 3.09 $ 2.64

Net income - Diluted $ 0.81 $ 0.57 $ 1.17 $ 0.94 $ 3.08 $ 2.62

Contacts

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.

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