EXHIBIT 99.9
NEWS [PINNACLE WEST CAPITAL CORPORATION LOGO]
FOR IMMEDIATE RELEASE JULY 27, 2005
Media Contact: Alan Bunnell, (602) 250-3376 PAGE 1 OF 2
Analyst Contacts: Rebecca Hickman, (602) 250-5668
Lisa Malagon, (602) 250-5671
Web site: www.pinnaclewest.com
PINNACLE WEST REPORTS 2005 SECOND QUARTER RESULTS
On-Going Earnings Reflect Strong Growth
PHOENIX - Pinnacle West Capital Corporation (NYSE: PNW) today reported
consolidated net income for the quarter ended June 30, 2005, of $27 million, or
$0.28 per diluted share of common stock. This result compares with net income of
$73 million, or $0.79 per diluted share, for the same quarter a year ago.
On-going consolidated earnings in the second quarter of 2005 were $86 million,
or $0.89 per share, compared with $54 million, or $0.59 per share in the
comparable 2004 quarter.
On-going earnings for the second quarter of 2005 exclude an after-tax loss of
$59 million, or $0.61 per share, related to the pending sale of the Silverhawk
Power Station. On-going earnings for the 2004 second quarter exclude income
after income taxes of $19 million, or $0.20 per share, related to the sale of
the Company's interests in the Phoenix Suns, NAC International and Silverhawk.
"Customer growth continues to be one of the underlying fundamentals of our
company's success," said Pinnacle West Chairman Bill Post, citing a service
territory that is growing about 4 percent a year and three times the national
average. "That growth, however, will require significant planning and investment
on our part and continuing cooperation from our regulators." Post added that,
looking forward, "the Company's earnings outlook for the year remains unchanged
and on target" excluding the effects of the Silverhawk sale.
The quarter-to-quarter results were favorably affected by higher retail
electricity revenues resulting from the company's first price increase in 14
years and higher retail sales volumes due to customer growth; lower depreciation
expense; the absence of regulatory asset amortization; deferred fuel and
purchased power costs; and improved results from the Company's real estate
operations. These favorable factors were partially offset by an increase in
operating costs primarily related to generation, customer service and benefits
costs.
For more information on Pinnacle West's operating statistics and earnings,
please visit www.pinnaclewest.com/financials.
PINNACLE WEST SECOND QUARTER EARNINGS JULY 27, 2005
PAGE 2 OF 2
CONFERENCE CALL
Pinnacle West invites interested parties to listen to the live webcast of
management's conference call to discuss the Company's 2005 second quarter
earnings and recent developments at 12 noon (ET) today, July 27, 2005. The
webcast 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 reservation number 7452307. A
replay of the call also will be available until 12 midnight (ET), Wednesday,
August 3, 2005, by calling (800) 642-1687 in the U.S. and Canada or
(706) 645-9291 internationally and the same reservation number.
Pinnacle West is a Phoenix-based company with consolidated assets of about $10.7
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.
-30-
This press release contains a forward-looking statement about Pinnacle West's
2005 earnings outlook. Neither Pinnacle West nor APS assumes any obligation to
update this statement or to make any further statements on this issue, except as
required by applicable law. Because actual results may differ materially from
expectations, we caution readers not to place undue reliance on this statement.
A number of factors could cause future results to differ materially from
historical results, or from results or outcomes currently expected or sought by
Pinnacle West or APS. In addition to the "Risk Factors" described in Exhibits
99.1 and 99.2 to Pinnacle West's and APS' Report on Form 10-Q for the fiscal
quarter ended March 31, 2005, these factors include, but are not limited to:
state and federal regulatory and legislative decisions and actions, including by
the Arizona Corporation Commission and the Federal Electric Regulatory
Commission; the ongoing restructuring of the electric industry, including the
introduction of retail electric competition in Arizona and decisions impacting
wholesale competition; the outcome of regulatory, legislative and judicial
proceedings relating to the restructuring; market prices for electricity and
natural gas; power plant performance and outages; transmission outages and
constraints; weather variations affecting local and regional customer energy
usage; customer growth and energy usage; regional economic and market
conditions, including the results of litigation and other proceedings resulting
from the California energy situation, volatile purchased power and fuel costs
and the completion of generation and transmission construction in the region,
which could affect customer growth and the cost of power supplies; the cost of
debt and equity capital and access to capital markets; the uncertainty that
current credit ratings will remain in effect for any given period of time; our
ability to compete successfully outside traditional regulated markets (including
the wholesale market); the performance of our marketing and trading activities
due to volatile market liquidity and any deteriorating counterparty credit and
the use of derivative contracts in our business (including the interpretation of
the subjective and complex accounting rules related to these contracts); changes
in accounting principles generally accepted in the United States of America and
the interpretation of those principles; the performance of the stock market and
the changing interest rate environment, which affect the amount of required
contributions to Pinnacle West's pension plan and APS' nuclear decommissioning
trust funds, as well as the reported costs of providing pension and other
postretirement benefits; technological developments in the electric industry;
the strength of the real estate market in SunCor's market areas, which include
Arizona, Idaho, New Mexico and Utah; and other uncertainties, all of which are
difficult to predict and many of which are beyond the control of Pinnacle West
and APS.
PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2005 2004 2005 2004
--------- --------- --------- ---------
OPERATING REVENUES
Regulated electricity segment $ 579,652 $ 519,929 $ 995,682 $ 935,393
Marketing and trading segment 71,172 110,156 160,429 198,840
Real estate segment 84,753 66,084 156,809 116,547
Other revenues 20,259 9,414 30,394 20,319
--------- --------- --------- ---------
Total 755,836 705,583 1,343,314 1,271,099
--------- --------- --------- ---------
OPERATING EXPENSES
Regulated electricity segment purchased power and fuel 160,590 151,642 239,013 240,253
Marketing and trading segment purchased power and fuel 57,593 88,067 128,402 155,832
Operations and maintenance 153,097 138,595 308,181 275,981
Real estate segment operations 68,593 62,217 125,069 109,510
Depreciation and amortization 85,142 102,012 176,535 203,115
Taxes other than income taxes 34,638 32,308 69,203 62,638
Other expenses 17,556 7,575 25,930 16,325
--------- --------- --------- ---------
Total 577,209 582,416 1,072,333 1,063,654
--------- --------- --------- ---------
OPERATING INCOME 178,627 123,167 270,981 207,445
--------- --------- --------- ---------
OTHER
Allowance for equity funds used during construction 2,952 2,184 5,555 4,186
Other income 8,684 36,496 9,487 47,330
Other expense (3,846) (3,371) (8,232) (9,316)
--------- --------- --------- ---------
Total 7,790 35,309 6,810 42,200
--------- --------- --------- ---------
INTEREST EXPENSE
Interest charges 49,781 42,061 96,042 88,617
Capitalized interest (3,544) (2,681) (6,833) (4,180)
--------- --------- --------- ---------
Total 46,237 39,380 89,209 84,437
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 140,180 119,096 188,582 165,208
INCOME TAXES 55,024 45,028 73,685 60,439
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS 85,156 74,068 114,897 104,769
LOSS FROM DISCONTINUED OPERATIONS
NET OF INCOME TAX BENEFIT (58,421) (1,428) (63,714) (703)
--------- --------- --------- ---------
NET INCOME $ 26,735 $ 72,640 $ 51,183 $ 104,066
========= ========= ========= =========
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - BASIC 96,192 91,315 94,089 91,304
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING - DILUTED 96,299 91,400 94,189 91,391
EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING
Income From Continuing Operations - Basic $ 0.89 $ 0.81 $ 1.22 $ 1.15
Net Income - Basic $ 0.28 $ 0.80 $ 0.54 $ 1.14
Income From Continuing Operations - Diluted $ 0.88 $ 0.81 $ 1.22 $ 1.15
Net Income - Diluted $ 0.28 $ 0.79 $ 0.54 $ 1.14
Certain prior-year amounts have been reclassified to conform to the 2005
presentation.
PINNACLE WEST CAPITAL CORPORATION
NON-GAAP MEASURE RECONCILIATION - NET INCOME (GAAP MEASURE)
TO ON-GOING EARNINGS (NON-GAAP MEASURE)
THREE MONTHS ENDED THREE MONTHS ENDED
June 30, 2005 June 30, 2004
------------------------- ------------------------
Dollars Dollars
in Millions Diluted EPS in Millions Diluted EPS
----------- ----------- ----------- -----------
Net Income $ 27 $ 0.28 $ 73 $ 0.79
Adjustments:
Gain on sale of
limited partnership
interest in
Phoenix Suns -- -- (21) (0.23)
Income from
discontinued
operations - NAC
International -- -- (1) (0.01)
Loss from
discontinued
operations -
Silverhawk
Power Station
write-down 55 0.57 -- --
Loss from
discontinued
operations -
Silverhawk
Power Station
operations 4 0.04 3 0.04
----- ------ ----- ------
On-going Earnings $ 86 $ 0.89 $ 54 $ 0.59
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