Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — Q3 2010 Earnings Presentation
18 slides from Pinnacle West Capital's earnings presentation, Oct 28, 2010
Slide 1: 3rd Quarter 2010 Results
PK PINNACLE \WVEST CAPITAL CORPORATION 3'¢ 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: Amounts Attributable to Common Shareholders and Non-GAAP Financial Measures
Amounts Attributable to Common Shareholders and Non-GAAP Financial Measures In this presentation, references to net income and earnings per share refer to amounts attributable to common shareholders. We present “regulated electricity segment gross margin” per diluted share of common stock. Regulated
Slide 4: CFO Agenda
CFO Agenda 3rd Quarter Results Arizona Economic Outlook Earnings Guidance Financing and Liquidity Update Third Quarter 2010 4
Slide 5: Consolidated EPS Comparisons
Consolidated EPS Comparisons 3rd Quarter 2010 vs. 3rd Quarter 2009 Net Income On-Going Earnings Per Share Per Share $2.50 $2.50 $2.14 $2.08 $2.00 $2.00 $1.96 $1.84 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2010 2009 2010 2009 Third Quarter 2010 5
Slide 6: Non-GAAP EPS Reconciliation
Non-GAAP EPS Reconciliation 3rd Quarter 2010 vs. 3rd Quarter 2009 3rd Qtr 3rd Qtr 2010 2009 Change EPS as reported $ 2.14 $ 1.84 $ 0.30 Adjustments: Discontinued Operations* (0.06) 0.12 (0.18) On-Going EPS $ 2.08 $ 1.96 $ 0.12 *Primarily real estate segment Third Quarter 2010 6
Slide 7: On-Going EPS Variances
On-Going EPS Variances 3rd Quarter 2010 vs. 3rd Quarter 2009 Share Other, net issuance Capitalized $0.05 $(0.14) financing costs Regulated $0.06 electricity gross margin* $0.27 O&M* $(0.09) Infrastructure- related costs Net $(0.03) Increase $0.12 = * Excluding renewable energy and demand-side manage
Slide 8: Regulated Electricity Gross Margin Drivers
Regulated Electricity Gross Margin Drivers* 3rd Quarter 2010 vs. 3rd Quarter 2009 Line Weather Lower extension effects kWh sales revenues $0.02 $(0.05) Retail base $0.03 rate increase Other, net Net $0.30 $(0.03) Increase $0.27 = * See non-GAAP reconciliation in Appendix. Third Quarter 2010 8
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 200 130 190 185 125 150 Office 180 120 175 Retail 100 170 115 165 50 110 160 0 105 155 ‘05 ‘06 ‘07 ‘08 ‘09 ‘1
Slide 10: Consolidated On-Going EPS Outlook
Consolidated On-Going EPS Outlook 2009 Actual: $2.33 per share $3.10 $2.95 Guidance as of October 28, 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 Third Quarter 2010 10
Slide 11: CEO Discussion
CEO Discussion Arizona Regulatory Update Renewable Resources Operations Update Looking Ahead Third Quarter 2010 11
Slide 12: 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 Announced projects to date: 15 MW at Luke Air Force Base (mid-2011) 18 MW Gila Bend (late-2011) $150 million estimated total capital expenditures Additiona
Slide 13: CEO Discussion
CEO Discussion Arizona Regulatory Update Renewable Resources Operations Update Looking Ahead Third Quarter 2010 13
Slide 14: Appendix
oe PINNACLE WEST CAPITAL CORPORATION Appendix — 3Q ‘10 Appendix 14
Slide 15: 2010 On-Going EPS Guidance
2010 On-Going EPS Guidance Key Factors and Assumptions APS earnings to comprise nearly all of consolidated on-going earnings; Actual weather for first nine months of year and normal weather patterns for remainder of year; Retail customer growth of about 1%; Weather-normalized retail electric
Slide 16: Renewable Energy and Demand-Side Management Surcharges
Renewable Energy and Demand-Side Management Surcharges* Pretax Millions $40 $35 $30 15 $25 12 6 7 $20 5 4 $15 $10 19 19 21 18 18 18 18 $5 8 7 7 $0 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2010 Renewable Energy Demand-Side Management * Revenues associated with these surcharges were offset substan
Slide 17: Quarterly Mark-to-Market on Hedge Contracts
Quarterly Mark-to-Market on Hedge Contracts* Pretax Millions $20 14 14 $10 8 5 0 $0 (2) (1) (1) $(10) (5) (9) $(20) $(30) (29) $(40) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2010 * Related to APS 10% share under Power Supply Adjustor (PSA), net of related deferrals. Appendix – 3Q ‘10 17
Slide 18: Non-GAAP Measure Reconciliation
Non-GAAP Measure Reconciliation Regulated Electricity Segment Gross Margin Three Months Ended September 30, EPS $ millions, except per share amounts 2010 2009 Change Reconciliation of Regulated Electricity Segment Gross Margin Regulated electricity segment revenue* $ 1,116 $ 1,084 Regulated electric
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