HOENIX, ARIZ - Pinnacle West Capital Corporation (NYSE:PNW) today reported consolidated net income for the quarter ended September 30, 1998 of $127.3 million or $1.49 per diluted share of common stock, compared with $124.3 million or $1.46 per share for the prior-year period.
The period a year ago benefited from two settlements related to coal and gas used for electric generation, which contributed approximately $21 million to earnings before income taxes.
Results for the third quarter 1998 benefited from strong customer growth at Arizona Public Service of four percent, higher profitability from power marketing activities, warmer weather and lower financing costs.
Earnings were negatively affected by a 1.1 percent price reduction for APS customers, effective July 1, 1998. Over the last five years, APS has reduced prices to its customers by a total of 8.4 percent.
"We continue to enjoy strong underlying fundamentals and believe earnings for the year will meet our expectations," said Chairman Richard Snell.
Snell said considerable management attention is being dedicated to achieving a comprehensive settlement with the Arizona Corporation Commission staff and other interested parties that would facilitate a transition to a competitive electricity market.
"We remain optimistic that settlement can be achieved within the next month or so," he said.
According to the Company, the settlement would be subject to approval by the three-member commission and would address stranded investment, future rates and other issues related to the phase in of competition starting January 1, 1999 by APS, as called for by ACC rules.
For the quarter, APS earned $130.8 million, compared with $126.7 million for the prior-year period. The Company's real estate subsidiary, SunCor Development, and its investment company, El Dorado, reported a combined net loss of $1.2 million compared with combined net income of $0.5 million for the year-ago quarter.
For the nine months ended September 30, 1998 Pinnacle West reported consolidated net income of $207.4 million or $2.43 per share of common stock, compared with $216.9 million or $2.51 per share for the prior-year period.
Pinnacle West is a Phoenix-based holding company with consolidated assets of approximately $7 billion. Its major subsidiary is APS, Arizona's largest electric utility. SunCor, its real estate subsidiary, has some 13,000 acres under development.
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, |
|
1998 |
1997 |
1998 |
1997 |
1998 |
1997 |
|
|
|
|
|
|
|
| Operating Revenues |
| Electric |
$ |
740,734 |
$ |
632,821 |
$ |
1,562,872 |
$ |
1,470,593 |
$ |
1,970,832 |
$ |
1,850,047 |
| Real estate |
|
18,276 |
|
30,929 |
|
81,353 |
|
80,638 |
|
117,188 |
|
106,090 |
|
|
|
|
|
|
|
| Total |
|
759,010 |
|
663,750 |
|
1,644,225 |
|
1,551,231 |
|
2,088,020 |
|
1,956,137 |
|
| Fuel Expenses |
|
(252,699) |
|
(158,530) |
|
(422,201) |
|
(343,309) |
|
(515,519) |
|
(424,769) |
| Utility operations and maintenance |
|
(110,259) |
|
(110,102) |
|
(309,388) |
|
(287,280) |
|
(421,542) |
|
(429,569) |
| Real estate operations |
|
(18,821) |
|
(29,487) |
|
(75,270) |
|
(77,550) |
|
(109,348) |
|
(101,881) |
| Other operating expenses |
|
(125,393) |
|
(122,177) |
|
(372,086) |
|
(367,143) |
|
(494,774) |
|
(484,566) |
|
|
|
|
|
|
|
| Operating Income |
|
251,838 |
|
243,454 |
|
465,280 |
|
475,949 |
|
546,837 |
|
515,352 |
|
| Interest expense |
|
(37,315) |
|
(41,181) |
|
(113,148) |
|
(123,165) |
|
(153,118) |
|
(166,890) |
| Other deductions - net |
|
(3,858) |
|
(1,047) |
|
(4,620) |
|
1,178 |
|
(14,032) |
|
(10,121) |
|
|
|
|
|
|
|
|
| Income From Continuing Operations Before Income Taxes |
|
210,665 |
|
201,226 |
|
347,512 |
|
353,962 |
|
379,687 |
|
338,341 |
| Income tax expense |
|
83,384 |
|
76,886 |
|
140,148 |
|
137,058 |
|
153,371 |
|
128,097 |
|
|
|
|
|
|
|
| Income From Continuing Operations |
|
127,281 |
|
124,340 |
|
207,364 |
|
216,904 |
|
226,316 |
|
210,244 |
| Loss on discontinued operations, net of tax of $6,461 |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
(9,539) |
| Extraordinary charge for early retirement of debt net of tax of $9,667 |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
|
|
|
|
|
|
| Net Income |
$ |
127,281 |
$ |
124,340 |
$ |
207,364 |
$ |
216,904 |
$ |
226,316 |
$ |
200,705 |
|
|
|
|
|
|
|
Average
Common
Shares
Outstanding |
|
84,770 |
|
84,748 |
|
84,789 |
|
85,764 |
|
84,773 |
|
86,191 |
| Earnings (Loss) Per Average Common Share Outstanding |
| Continuing operations |
$ |
1.50 |
$ |
1.47 |
$ |
2.45 |
$ |
2.53 |
$ |
2.67 |
$ |
2.44 |
| Discontinued operations |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
(0.11) |
| Extraordinary charge |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
-- |
|
|
|
|
|
|
|
| Total |
$ |
1.50 |
$ |
1.47 |
$ |
2.45 |
$ |
2.53 |
$ |
2.67 |
$ |
2.33 |
|
|
|
|
|
|
|
| Fully diluted |
$ |
1.49 |
$ |
1.46 |
$ |
2.43 |
$ |
2.51 |
$ |
2.66 |
$ |
2.32 |
|
|
|
|
|
|
|
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.