Exhibit 99.2
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FOR IMMEDIATE RELEASE | | May 5, 2009 |
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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.”
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PINNACLE WEST 2009 FIRST–QUARTER RESULTS | | May 5, 2009
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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 visitwww.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 atwww.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)
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| | | 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 | | | | — | | | | — | |
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| | | | | | | | | | | | | |
| On-going Loss | | $ | (29.1 | ) | | $ | (0.29 | ) | | $ | (4.5 | ) | | $ | (0.04 | ) |
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PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share amounts)
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| | | 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 | |
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| Total | | | 629,393 | | | | 688,256 | |
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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 | |
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| Total | | | 837,022 | | | | 652,028 | |
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Operating Income (Loss) | | | (207,629 | ) | | | 36,228 | |
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Other | | | | | | | | |
| Allowance for equity funds used during construction | | | 4,992 | | | | 6,124 | |
| Other income | | | 380 | | | | 3,839 | |
| Other expense | | | (9,741 | ) | | | (4,896 | ) |
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| Total | | | (4,369 | ) | | | 5,067 | |
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Interest Expense | | | | | | | | |
| Interest charges | | | 55,806 | | | | 54,702 | |
| Capitalized interest | | | (3,834 | ) | | | (5,679 | ) |
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| Total | | | 51,972 | | | | 49,023 | |
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Loss From Continuing Operations Before Income Taxes | | | (263,970 | ) | | | (7,728 | ) |
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Income Taxes | | | (96,174 | ) | | | (1,541 | ) |
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Loss From Continuing Operations | | | (167,796 | ) | | | (6,187 | ) |
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Income (Loss) From Discontinued Operations | | | | | | | | |
Net of Income Taxes | | | (2,924 | ) | | | 1,714 | |
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Net Loss | | | (170,720 | ) | | | (4,473 | ) |
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| Less: Net loss attributable to noncontrolling interests | | | (14,210 | ) | | | — | |
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Net Loss Attributable To Common Shareholders | | $ | (156,510 | ) | | $ | (4,473 | ) |
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Weighted-Average Common Shares Outstanding — Basic | | | 100,986 | | | | 100,521 | |
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Weighted-Average Common Shares Outstanding — Diluted | | | 100,986 | | | | 100,521 | |
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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 | ) |
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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 | |
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| Net loss attributable to common shareholders | | $ | (156,510 | ) | | $ | (4,473 | ) |
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