Business Wire 8-Nov-2018 8:40 AM
Pinnacle West Capital Corp. (NYSE:PNW) today reported consolidated net income attributable to common shareholders for the 2018 third quarter of $315.0 million, or $2.80 per diluted share. This result compares with net income of $276.1 million, or $2.46 per share, for the same period a year ago.
"Driven by the second hottest September on record, Arizona's summer heat and the resulting increase in retail sales contributed to a solid quarter and sound financial results," said Pinnacle West Chairman, President and Chief Executive Officer Don Brandt. "In addition, our employees continued to do what they do best: maintain reliable electric service for our 1.2 million customers. Our power plants operated well, and our workforce quickly restored service to customers after several volatile summer storms toppled a combined 451 poles – almost as many as in the 2016 and 2017 summers combined."
Brandt added that delivering value to APS customers went beyond just keeping the lights on. The company's regulatory settlement, which was approved and implemented in August 2017, is enabling the company to invest in a smarter, cleaner energy infrastructure, while also keeping electricity rates competitive. This fall, APS filed a second request with the Arizona Corporation Commission (ACC) to return federal tax savings to customers. If approved, this second tax cut will provide retail customers with total tax savings of $205.5 million or almost $8 per month, on average, when combined with the first reduction implemented in March.
"So far this year, we've reduced customer bills by about 2 percent to continue keeping electricity affordable and clean," said Brandt. "Over the last 20 years, our price increases have been below the rate of inflation. With the refunds from tax reform and other price reductions, customer rates will be lower at the end of 2018 than they were at the beginning of the year."
In addition to strong operational performance, the 2018 third-quarter financial results were positively impacted by the following factors compared to the same period a year ago:
These positive factors were offset in part by the following items:
Proposition 127 Ballot Initiative Outcome
Prop 127, a ballot measure that would have amended Arizona's State Constitution and required Arizona's regulated utilities to obtain 50 percent of their energy from renewable sources by 2030, was rejected by voters on Tuesday.
"Arizona voters made it clear that Prop 127 was a bad idea," said Brandt. "With the election now behind us, it's time for Arizonans who are serious about clean energy to come together and work on a forward-thinking plan that is right for Arizona.
"Arizona is number three nationally in solar energy installed, and our APS energy mix is already 50 percent clean, with more improvements to come. We also are on the cutting edge of advanced battery storage technology, which has the potential to be a game-changer in clean energy. And, other initiatives like increased support for electric vehicles are on the way."
For 2018, the Company continues to expect its consolidated earnings guidance will be in the range of $4.35 to $4.55 per diluted share on a weather-normalized basis.
Looking ahead to 2019, the Company estimates its consolidated earnings will be within a range of $4.75 to $4.95 per diluted share, and expects to achieve a consolidated earned return on average common equity of more than 9.5 percent.
Key factors and assumptions underlying the 2018 and 2019 outlook can be found in the third-quarter 2018 earnings presentation slides on the Company's website at pinnaclewest.com/investors.
Conference Call and Webcast
Pinnacle West invites interested parties to listen to the live webcast of management's conference call to discuss the Company's 2018 third-quarter results, as well as recent developments, 11 a.m. ET (9 a.m. Arizona time) today, November 8. The webcast can be accessed at pinnaclewest.com/presentations and will be available for replay on the website for 30 days. To access the live conference call by telephone, dial (877) 407-8035 or (201) 689-8035 for international callers. A replay of the call also will be available until 11:59 p.m. (ET), Thursday, Nov. 15, 2018, by calling (877) 481-4010 in the U.S. and Canada or (919) 882-2331 internationally and entering conference ID number 37662.
Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of almost $18 billion, about 6,200 megawatts of generating capacity and 6,300 employees in Arizona and New Mexico. Through its principal subsidiary, Arizona Public Service, the Company provides retail electricity service to nearly 1.2 million Arizona homes and businesses. For more information about Pinnacle West, visit the Company's website at pinnaclewest.com.
Dollar amounts in this news release are after income taxes. Earnings per share amounts are based on average diluted common shares outstanding. For more information on Pinnacle West's operating statistics and earnings, please visit pinnaclewest.com/investors.
This press release contains forward-looking statements based on our current expectations, including statements regarding our earnings guidance and financial outlook and goals. These forward-looking statements are often identified by words such as "estimate," "predict," "may," "believe," "plan," "expect," "require," "intend," "assume," "project" and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to:
These and other factors are discussed in Risk Factors described in Part 1, Item 1A of the Pinnacle West/APS Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which readers should review carefully before placing any reliance on our financial statements or disclosures. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law.
|PINNACLE WEST CAPITAL CORPORATION|
|CONSOLIDATED STATEMENTS OF INCOME|
|(dollars and shares in thousands, except per share amounts)|
|THREE MONTHS ENDED||NINE MONTHS ENDED|
|SEPTEMBER 30,||SEPTEMBER 30,|
|Fuel and purchased power||389,936||310,469||844,133||777,475|
|Operations and maintenance||246,545||230,839||780,624||677,895|
|Depreciation and amortization||145,971||133,912||436,232||387,278|
|Taxes other than income taxes||51,375||45,169||158,582||133,294|
|Other Income (Deductions)|
|Allowance for equity funds used during construction||12,259||12,728||39,411||32,666|
|Pension and other postretirement non-service credits - net||12,449||6,534||37,314||19,601|
|Allowance for borrowed funds used during construction||(5,913||)||(6,000||)||(18,959||)||(15,378||)|
|Income Before Income Taxes||404,218||425,264||626,698||718,944|
Less: Net income attributable to noncontrolling interests
|Net Income Attributable To Common Shareholders||$||315,012||$||276,072||$||484,971||$||466,827|
|Weighted-Average Common Shares Outstanding - Basic||112,148||111,835||112,094||111,787|
|Weighted-Average Common Shares Outstanding - Diluted||112,533||112,401||112,499||112,314|
|Earnings Per Weighted-Average Common Share Outstanding|
|Net income attributable to common shareholders - basic||$||2.81||$||2.47||$||4.33||$||4.18|
|Net income attributable to common shareholders - diluted||$||2.80||$||2.46||$||4.31||$||4.16|
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