- Hotter-than-normal weather improved the Company’s earnings by $0.23 per share compared to the 2011 second quarter, during which abnormally mild weather adversely affected earnings by $0.15 per share compared with historically normal conditions. In the 2012 second quarter, there were 568 residential cooling degree-days (a proxy for the effects of weather) – 14 percent more than normal and 51 percent more than the year-ago second quarter.
- Lower infrastructure-related costs increased earnings by $0.06 per share, related to lower depreciation and amortization, primarily attributable to the operating license extensions at the Palo Verde Nuclear Generating Station in 2011; and decreased interest expense due to lower debt balances and interest rates. These lower costs were partially offset by higher property taxes .
- Higher transmission revenues augmented results by $0.05 per share, primarily because of a retail transmission rate increase implemented in July 2011.
- Lower fuel costs and improved mark-to-market valuations of fuel contracts, net of regulatory deferrals, raised results by $0.04 per share.
- The net effect of other miscellaneous items increased earnings $0.02 per share.
- Increased operations and maintenance expenses, due largely to stock compensation costs resulting from an improved company stock price and estimated performance, decreased earnings by $0.05 per share. The variance excludes costs associated with renewable energy, demand side management and similar regulatory programs, which are offset by comparable amounts of operating revenues.
- Lower retail electricity sales – excluding the effects of weather variations – reduced results $0.01 per share. The sales decrease, which was substantially offset by modest customer growth of about 1 percent, was primarily related to the impacts of customer conservation and energy efficiency and distributed renewable generation initiatives.
- Actual weather for the first six months of the year and normal weather patterns for remainder of the year;
- Weather-normalized retail electricity sales volume slightly below the prior year, in part due to the effects of customer conservation and energy efficiency and distributed renewable generation initiatives;
- Retail customer growth of about 1 percent;
- Total electricity gross margin (operating revenues, net of fuel and purchased power expenses, excluding Renewable Energy Surcharge and similar rate adjustors) of about $2.13 billion to $2.18 billion;
- Operating expenses (operations and maintenance, excluding costs for Renewable Energy Standard and similar regulatory programs; depreciation and amortization; and taxes other than income taxes) of about $1.33 billion to $1.36 billion;
- Interest expense, net of allowances for borrowed and equity funds used for construction, of about $180 million to $190 million; and
- An effective tax rate of about 35 percent.
|PINNACLE WEST CAPITAL CORPORATION NON-GAAP FINANCIAL MEASURE RECONCILIATION|
|NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (GAAP MEASURE) TO ON-GOING EARNINGS (NON-GAAP FINANCIAL MEASURE)|
|Three Months EndedJune 30, 2012||Three Months EndedJune 30, 2011|
|Dollars inMillions||DilutedEPS||Dollars inMillions||DilutedEPS|
|Net Income Attributable to Common Shareholders||$||122.3||$||1.11||$||86.7||$||0.79|
|Less: Income (loss) from discontinued operations||(0.8||)||(0.01||)||0.7||0.01|