Pinnacle West Capital Corporation is an American utility holding company that owns

Arizona Public Service Arizona Public Service (APS) is the largest electric utility in Arizona, United States. Since 1985, it has been the principal subsidiary of publicly traded S&P 500 member Pinnacle West Capital Corporation, known as AZP Group until 1987. Pinnacl ...

and Bright Canyon Energy. It is publicly traded on the New York Stock exchange and a component of the

S&P 500 The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of ...

stock market index.

History

In February 1985, Arizona Public Service Company reorganized as a holding company, AZP Group Inc., with APS as the leading subsidiary.Compilation of Investor-Owned Utility Transactions – Holding Companies Established
, American Public Power Association, (updated 09-03) It traded under the ticker symbol AZP. 1985 earnings reached a new record high at almost US$290 million, and by the end of the year the stock price had doubled from its 1984 low.Standard & Poor's Stock Guide, various issues In 1987, AZP Group changed its name to Pinnacle West Capital Corporation, and began trading under the new ticker symbol PNW. The utility continued to operate as its principal subsidiary. By then Pinnacle's long-term debt had grown to almost US$2.4 billion. Earnings had declined to US$260 million in 1986, but were recovering by the end 1987. However, the stock price reached an all-time peak that year, which was not surpassed for the next decade, as the company ran into troubles through the early 1990s. In 1986, Pinnacle acquired MeraBank, a savings and loan. It grew to become Arizona's largest thrift, with $6.5 billion in assets. However, the thrift was seized by federal regulators in January 1990, due in part to the deterioration in prices in the Arizona real estate market.A Reckoning for the Utility High Rollers ''New York Times'' July 29, 199

/ref> By 1990, the company's earnings had fallen to under US$100 million, as it struggled through the

1990-1991 recession The early 1990s recession describes the period of economic downturn affecting much of the Western world in the early 1990s. The impacts of the recession contributed in part to the 1992 U.S. presidential election victory of Bill Clinton over incu ...

, as well as a series of failed attempts to diversify. By 1991, the company was facing a loss of almost US$190 million, and discontinued paying its

dividend A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-i ...

. APS and its predecessors had paid a dividend without interruption since 1920. The stock price plunged 85% from its 1987 peak, to its lowest level in over twenty years. Its long-term debt by then reached over US$2.5 billion. However, by 1992, the company returned to profitability, as earnings recovered to over US$150 million. The stock price tripled from its 1991 low by the end of 1993. The company reinstated its dividend that year. By 1995, Pinnacle West Capital had been added to the S&P MidCap 400 index. That year, earnings surpassed US$200 million again, and by early the next year the stock price began approaching its old 1987 high. Also in 1995, the utility subsidiary Arizona Public Services issued 30-year Monthly Income Debt Securities paying 10%.

References

External links

* {{Authority control Companies listed on the New York Stock Exchange American companies established in 1985 Arizona Public Service