PHOENIX, ARIZ. - Pinnacle West Capital Corporation (NYSE:PNW) today reported income from continuing operations for the quarter ended September 30, 1999 of $125.6 million or $1.48 per diluted share of common stock, compared with $127.3 million or $1.49 per share for the corresponding prior-year period.
Pinnacle West reported third quarter net income of $23.7 million or $0.28 per share of common stock, including an extraordinary charge of $139.9 million after income taxes or $1.65 per share. APS recorded the extraordinary charge in the third quarter for a regulatory disallowance, as part of a regulatory settlement approved by the Arizona Corporation Commission on September 23, 1999. That settlement also included APS' fifth electricity price decrease in as many years.
Pinnacle West's net income for the quarter also included a tax benefit from discontinued operations of $38 million or $0.45 per share as a result of resolution of tax issues related to a former subsidiary, MeraBank.
Results in the quarter-to-quarter comparison were negatively impacted by weather, which was significantly warmer a year ago, and a 1.5 percent electricity price decrease that was effective July 1, 1999. These negative effects on third quarter earnings were significantly offset by the impact of 3.8 percent customer growth, which is about three times the national average.
Chief Executive Officer Bill Post said the company would continue to maximize growth opportunities while managing costs.
"The real stories in the third quarter were the major events that provided clarity to our future and underlined our strategy going forward, " he said.
Post said these events included the regulatory settlement and an announcement that a new entity, Pinnacle West Energy, will develop a large natural gas-fired power project to compete in deregulated energy markets of Arizona, California and other western states.
"Our company and our operating environment are undergoing significant changes as our industry moves toward competition and away from traditional regulation, but our focus remains on creating value for our customers and shareholders," he said.
For the quarter, APS earned $129.5 million before the extraordinary charge, compared with $130.8 million for the corresponding quarter a year ago. The company's real estate subsidiary, SunCor Development, and its investment company, El Dorado, reported a combined loss of $400,000, compared with a combined loss of $1.2 million recorded in the prior-year period.
For the nine months ended September 30, 1999, Pinnacle West reported consolidated income from continuing operations of $225.0 million or $2.64 per diluted share, compared with $207.4 million or $2.43 per share for the prior-year nine-month period.
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.
Pinnacle West (NYSE:PNW) 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.
Pinnacle West Capital Corporation Consolidated Income Statements
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
Twelve Months Ended
September 30,
|
| |
1999 |
1998 |
1999 |
1998 |
1999 |
1998 |
|
|
| Operating Revenues |
| Electric |
$ 867,630 |
$ 740,734 |
$1,793,047 |
$1,562,872 |
$2,236,573 |
$1,970,832 |
| Real estate |
26,640 |
18,276 |
83,870 |
81,353 |
126,705 |
117,188 |
|
|
| Total |
894,270 |
759,010 |
1,876,917 |
1,644,225 |
2,363,278 |
2,088,020 |
|
|
| Operating Expenses |
| Fuel and purchased power |
396,614 |
252,699 |
628,398 |
422,201 |
743,698 |
515,519 |
|
|
|
|
|
|
|
| Utility operations and maintenance |
110,082 |
110,259 |
315,400 |
309,388 |
420,053 |
421,542 |
|
|
|
|
|
|
|
| Real estate operations |
26,757 |
18,821 |
78,393 |
75,270 |
118,454 |
109,348 |
|
|
|
|
|
|
|
| Depreciation and amortization |
95,068 |
94,981 |
289,361 |
281,396 |
387,644 |
373,676 |
|
|
|
|
|
|
|
| Taxes other than income taxes |
25,455 |
30,412 |
84,504 |
90,690 |
110,720 |
121,098 |
|
|
| Total |
653,976 |
507,172 |
1,396,056 |
1,178,945 |
1,780,569 |
1,541,183 |
|
|
| Operating Income |
240,294 |
251,838 |
480,861 |
465,280 |
582,709 |
546,837 |
|
|
| Other Income (Expenses) |
| Preferred stock dividend requirements of APS |
-- |
(2,347) |
(1,016) |
(7,660) |
(3,059) |
(10,658) |
|
|
|
|
|
|
|
| Net other income and expense |
1,040 |
(1,511) |
(898) |
3,040 |
(3,329) |
(3,374) |
|
|
| Total |
1,040 |
(3,858) |
(1,914) |
(4,620) |
(6,388) |
(14,032) |
|
|
| Income Before Interest and Income Taxes |
241,334 |
247,980 |
478,947 |
460,660 |
576,321 |
532,805 |
|
|
| Interest Expense |
| Interest charges |
39,614 |
42,046 |
121,488 |
127,409 |
163,224 |
172,087 |
| Capitalized interest |
(1,990) |
(4,731) |
(10,253) |
(14,261) |
(14,588) |
(18,969) |
|
|
| Total |
37,624 |
37,315 |
111,235 |
113,148 |
148,636 |
153,118 |
|
|
| Income From Continuing Operations Before Income Taxes |
203,710 |
210,665 |
367,712 |
347,512 |
427,685 |
379,687 |
| Income Taxes |
78,131 |
83,384 |
142,741 |
140,148 |
167,186 |
153,371 |
|
|
| Income From Continuing Operations |
125,579 |
127,281 |
224,971 |
207,364 |
260,499 |
226,316 |
|
|
|
|
|
|
|
| Income Tax Benefit From Discontinued Operations |
38,000 |
-- |
38,000 |
-- |
38,000 |
-- |
|
|
|
|
|
|
|
| Extraordinary Charge - Net of Income Taxes of $94,115 |
(139,885) |
-- |
(139,885) |
-- |
(139,885) |
-- |
|
|
|
|
|
|
|
| Net Income |
$ 23,694 |
$ 127,281 |
$ 123,086 |
$207,364 |
$ 158,614 |
$226,316 |
|
|
| Average Common Shares Outstanding - Basic |
84,759 |
84,770 |
84,715 |
84,789 |
84,719 |
84,773 |
|
|
|
|
|
|
|
| Average Common Shares Outstanding - Diluted |
84,989 |
85,327 |
85,087 |
85,356 |
85,140 |
85,223 |
Earnings Per Average
Common Share Outstanding |
| Continued Operations - Basic |
$ 1.48 |
$ 1.50 |
$ 2.66 |
$ 2.45 |
$ 3.07 |
$ 2.67 |
|
|
|
|
|
|
|
| Net income - Basic |
0.28 |
1.50 |
1.45 |
2.45 |
1.87 |
2.67 |
|
|
|
|
|
|
|
| Continued Operations - Diluted |
1.48 |
1.49 |
2.64 |
2.43 |
3.06 |
2.66 |
|
|
|
|
|
|
|
| Net income - Diluted |
0.28 |
1.49 |
1.45 |
2.43 |
1.86 |
2.66 |
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.