Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — Q1 2010 Earnings Presentation
19 slides from Pinnacle West Capital's earnings presentation, May 6, 2010
Slide 1: 1st Quarter 2010 Results
oe PINNACLE \WEST CAPITAL CORPORATION 1st Quarter 2010 Results
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements based on our current expectations, and neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by applicable law. These forward-looking
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures In this presentation, we present “regulated electricity segment gross margin” per diluted share of common stock. Regulated electricity segment gross margin refers to regulated electricity segment revenues less regulated electricity segment fuel and purchased power expense
Slide 4: CFO Agenda
CFO Agenda 1st Quarter Results Arizona Economic Outlook Earnings Guidance Financing and Liquidity Update First Quarter 2010 4
Slide 5: Consolidated EPS Summary
Consolidated EPS Summary 1st Quarter 2010 vs. 1st Quarter 2009 Reported On-Going Per Share Per Share $0.00 $0.10 $0.07 $(0.06) $(0.25) $0.00 $(0.50) $(0.75) $(0.10) $(1.00) $(1.25) $(0.20) $(1.50) $(1.55) $(0.25) $(1.75) $(0.30) 2010 2009 2010 2009 First Quarter 2010 5
Slide 6: Non-GAAP EPS Reconciliation
Non-GAAP EPS Reconciliation 1st Quarter 2010 vs. 1st Quarter 2009 1st Qtr 1st Qtr 2010 2009 Change EPS per diluted share as reported $ (0.06) $ (1.55) $ 1.49 Adjustments: Real estate segment 0.13 1.30 (1.17) On-going earnings per share $ 0.07 $ (0.25) $ 0.32 First Quarter 2010 6
Slide 7: Summary of On-Going EPS Variances
Summary of On-Going EPS Variances 1st Quarter 2010 vs. 1st Quarter 2009 Other income, net of other Net expense O&M* Other items, $0.05 $(0.04) net Increase Lower $0.03 $0.32 effective tax rate $0.08 = Regulated electricity gross margin* $0.20 * Excluding renewable energy and demand-side management r
Slide 8: Regulated Electricity Gross Margin Drivers
Regulated Electricity Gross Margin Drivers* 1st Quarter 2010 vs. 1st Quarter 2009 Improved Weather Lower hedge effects kWh sales mark-to- $0.02 $(0.02) Other market items, net Net Transmission $0.02 $(0.02) rate increase Increase Line $0.03 $0.20 extension = Retail base revenues rate increase, $0.03
Slide 9: Arizona Economic Indicators
Arizona Economic Indicators Metro Phoenix Housing & Commercial Real Estate Home Prices Commercial Building Occupancy Value Relative Office Sq. Ft. Retail Sq .Ft. to Jan ‘05 Millions Millions 200 130 190 185 125 180 150 Office 120 175 115 170 100 Retail 110 165 160 105 50 155 100 150 0 95 145 ‘05 ‘06
Slide 10: Arizona Economic Indicators
Arizona Economic Indicators Employment & Payroll Taxes Personal Income Non-Farm Job Growth Month-to- Month-to- Tax Withholdings Month Change Month Change 1.0% 1.0% 25.0% 20.0% 15.0% 0.5% 0.5% 10.0% 5.0% 0.0% 0.0% 0.0% (5.0)% (0.5)% (0.5)% (10.0)% (15.0)% (1.0)% (1.0)% (20.0)% ‘05 ‘06 ‘07 ‘08 ‘09 ‘10
Slide 11: Consolidated On-Going EPS
Consolidated On-Going EPS EPS 2009 Actual: $2.33 per share $3.10 $2.95 Guidance as of May 6, 2010 $2.33 2010 $2.95 - $3.10 per share 2011 Estimated to be within guidance range provided for 2010, with some opportunity for modestly exceeding the range Projected First Quarter 2010 11
Slide 12: Adequate Liquidity and Financing Access
Adequate Liquidity and Financing Access* March 31, 2010** Est. 2010 Cash Credit Facilities Available Liquidity Sources & Uses $ Millions Capacity Borrower ($ Millions) Matures APS $ 489 Sep. ’11 APS 500 Feb. ’13 PNW 200 Feb. ’13 $1,189 Cash Liquidity Cushion $953 Solid bank group Dividend No MAC
Slide 13: CEO Discussion
CEO Discussion Arizona Regulatory Update Renewable Resources Operations Update Looking Ahead First Quarter 2010 13
Slide 14: APS AZ Sun Program
APS AZ Sun Program 100 MW photovoltaic solar plants owned by APS Up to $500 million capital investment In service 2011 through 2014 Approved rate recovery First 50 MW: Renewable Energy Surcharge adjustor Second 50 MW: Adjustor determined in 2012 rate case decision First Quarter 2010 14
Slide 15: CEO Discussion
CEO Discussion Arizona Regulatory Update Renewable Resources Operations Update Looking Ahead First Quarter 2010 15
Slide 16: Appendix — 1Q '10
oe PINNACLE WEST CAPITAL CORPORATION Appendix — 1Q ‘10 Appendix 16
Slide 17: Renewable Energy and Demand-Side Management Surcharges
Renewable Energy and Demand-Side Management Surcharges* Pretax $ Millions 2008 2009 2010 * Revenues associated with these surcharges were offset substantially by comparable amounts of O&M expense. Appendix – 1Q ‘10 17
Slide 18: Quarterly Mark-to-Market on Hedge Contracts
Quarterly Mark-to-Market on Hedge Contracts* Pretax $ Millions 2008 2009 2010 * APS 10% share under Power Supply Adjustor (PSA), net of related deferrals. Appendix – 1Q ‘10 18
Slide 19: Non-GAAP Measure Reconciliation – Regulated Electricity Segment Gross Margin
Non-GAAP Measure Reconciliation – Regulated Electricity Segment Gross Margin Three Months Ended March 31, EPS $ millions, except per share amounts 2010 2009 Change Reconciliation of Regulated Electricity Segment Gross Margin Regulated electricity segment revenue* $ 611 $ 602 Regulated electricity se
Pinnacle West Capital — Q1 2010 Earnings Presentation on 6ix