Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — Q1 2025 Earnings Presentation
25 slides from Pinnacle West Capital's earnings presentation, May 1, 2025
Slide 1: Renewed, Reliable and Resilient: First-Quarter Financial Results
Renewed, Reliable and Resilient First-Quarter Financial Results May 1, 2025
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements based on 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,” “
Slide 3: First-Quarter results
First-Quarter results Q1 2025 vs Q1 2024 $0.36 ($0.27) $0.15 O&M1 Operating Revenue less Fuel ($0.16) ($0.03) and Purchased D&A ($0.05) Q1 2024 Power1 Interest, net Pension & ($0.04) ($0.04) AFUDC OPEB non- All other3 service Q1 2025 Operating Revenue less Fuel and Purchased credits, net Power 2022
Slide 4: 2025 EPS guidance
2025 EPS guidance Key Factors and Assumptions (as of May 1, 2025) 2025 Adjusted gross margin (operating revenues, net of fuel and $3.13 – $3.19 billion purchased power expenses, x/RES,DSM,CCT)1 • Retail customer growth of 1.5%-2.5% • Weather-normalized retail electricity sales growth of 4.0%-6.0% •
Slide 5: Key drivers & assumptions for 2025 EPS guidance
Key drivers & assumptions for 2025 EPS guidance 2025 EPS guidance of $4.40-$4.60 key drivers1 Long-term guidance and key drivers1,2 Retail customer growth of Depreciation, amortization and • Long-term EPS growth target of 5%-7% off 1.5%-2.5% property taxes due to higher original 2024 midpoint pl
Slide 6: Capital plan to support reliability and continued growth within our service territory
Capital plan to support reliability and continued growth within our service territory APS Total 2024-2027 $9.66B CapEx Profile Today $2.65B $2.55B $2.40B $2.06B $870 $950 Q4 2023 $905 $807 Generation Transmission $675 $750 $9.66B $450 Distribution $340 Other $7.80B $665 $670 $637 $675 $273 $380 $335
Slide 7: Rate Base growing within our service territory
Rate Base growing within our service territory Current Approved Rate Base and Test Year Detail End-of-Year Rate Base and Growth Guidance1 ACC FERC ACC FERC Rate Effective Date 03/08/2024 06/01/2024 $3.2 Test Year Ended 6/30/20221 12/31/2023 $2.12 Equity Layer 51.93% 49.64% Allowed ROE 9.55% 10.75% $
Slide 8: We are focused on cost control and customer affordability
We are focused on cost control and customer affordability Operations & Maintenance Guidance O&M Guidance (millions) • Reduced year-over-year core O&M excluding planned outages • Planned major outage in Q1 at Four Corners Unit 4 $70 $55 - $65 • Lean culture and declining O&M per MWh goal Planned $141
Slide 9: Optimized financing plan to support balanced capital structure
Optimized financing plan to support balanced capital structure 2025-2027 Financing Plan Funding Strategy • External equity to support balanced APS capital Approx. structure and expanded, accretive capital $7.6B investment • Equity needs < prior targeted 40% of new $700-900M capital PNW Equity $500M-
Slide 10: We are focused on maintaining healthy credit ratings to support affordable growth
We are focused on maintaining healthy credit ratings to support affordable growth1 Balance Sheet Senior Targets Corporate Unsecured Short-Term • Solid investment-grade Ratings Ratings Ratings Outlook credit ratings APS • APS equity layer >50% • PNW FFO/Debt range Moody’s Baa1 Baa1 P-2 Stable of 14%-
Slide 11: Debt maturity profile shows well managed and stable financing plan
Debt maturity profile shows well managed and stable financing plan ($millions) APS Fixed APS Floating PNW Fixed PNW Floating $1,200 $1,000 $800 $600 $400 $200 $0 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 As of March 31, 2025 11
Slide 12: Appendix
PINNACLE \WEST CAPITAL CORPORATION
Slide 13: SRB will expand our capacity to self-build generation to meet customer need with reduced lag
SRB will expand our capacity to self-build generation to meet customer need with reduced lag System Reliability Benefit Surcharge Key Features • Projects that compete on cost and reliability from All-Source Request for Proposals • Determines prudency of new generation between general rate cases • In
Slide 14: Transmission expansion will drive increased capital investment
Transmission expansion will drive increased capital investment Support Increase customer Access to resiliency growth markets Making progress on multiple strategic transmission opportunities as part of 2025-2027 capital expenditure plan Length Est. In- Line Voltage Status (miles) Service Sundance to
Slide 15: Arizona continues to be an attractive service territory with strong customer growth
Arizona continues to be an attractive service territory with strong customer growth Arizona economy continues to New APS Customer Meter Sets be robust and attractive 40,000 • Phoenix housing is affordable compared 30,000 to major cities in the region 20,000 • U.S. Census ranked Maricopa County 10,00
Slide 16: Arizona's commercial and industrial growth is diverse
Arizona’s commercial and industrial growth is diverse Source: Arizona Commerce Authority 16
Slide 17: Residential PV Applications
Residential PV Applications 5,000 Residential DG (MWdc) Annual Additions 4,500 216 200 108 4,000 20 3,500 2022 2023 2024 2025 3,000 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2022 Applications 2023 Applications 2024 Applications 2025 Applications Monthly data equal
Slide 18: Renewable Energy & Demand Side Management expenses
Renewable Energy & Demand Side Management expenses1 ($ in millions pretax) Renewable Energy Demand Side Management $50 $45 $40 $35 $30 $26 $25 $16 $15 $19 $12 $20 $15 $10 $17 $18 $18 $18 $14 $5 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Renewable Energy and Demand Side Management expenses are substantially offset
Slide 19: 2025 gross margin effects of weather
2025 gross margin effects of weather Variances vs. Normal ($ in millions pretax) ($3) Q1 Q2 Q3 Q4 2025 Total Weather Impact: $(3) Million All periods recalculated to current 10-year rolling average (2014 – 2023). Numbers may not foot due to rounding. 19
Slide 20: 2025 Planned Outage Schedule
2025 Planned Outage Schedule Coal, Nuclear and Large Gas Planned Outages Q1 Q2 Q4 Actual Duration in Estimated Duration Estimated Duration Plant Unit Plant Unit Plant Unit Days in Days in Days Redhawk CC2 60 Palo Verde1 1 36 Palo Verde 3 36 Four Corners 4 72 Four Corners 4 11 1 Outage began at end o
Slide 21: Non-GAAP Measure Reconciliation
Non-GAAP Measure Reconciliation 2024 Actual3 2025 Guidance3 Operating revenues1 $5.12 billion $5.22 - $5.32 billion Fuel and purchased power expenses1 $1.82 billion $1.93 - $1.97 billion Gross Margin $3.30 billion $3.29 - $3.35 billion Adjustments: Renewable energy and demand side management program
Slide 22: 2025 Key Regulatory Dates
2025 Key Regulatory Dates Case/Docket # Q1 Q2 Q3 Q4 APS Rate Case Application to be filed mid-year 2025 Rate Case E-01345A-25-XXXX: PSA reset 2025 PSA rate effective Power Supply Adjustor (PSA) E-01345A-22-0144: to be filed Nov. 26 March 1 To be filed May 15; Transmission Cost Adjustor E-01345A-22-0
Slide 23: Wildfire Mitigation
Wildfire Mitigation Our current practices are comprehensive and multi-faceted: Vegetation Grid hardening Asset Monitoring and Operational management investments inspection awareness mitigations • Comprehensive right- • Ongoing distribution • Enhanced line • Dedicated team of • Non-reclosing of-way c
Slide 24: Consolidated Statistics
Consolidated Statistics 3 Months Ended March 31, 2025 2024 Incr (Decr) TOTAL OPERATING REVENUES (Dollars in Millions) Retail Residential $ 449 $ 433 16 Business 525 461 63 Total Retail* 974 894 80 Sales for Resale (Wholesale) 25 27 (2) Transmission for Others 26 28 (2) Other Miscellaneous Services 8
Slide 25: Consolidated Statistics
Consolidated Statistics 3 Months Ended March 31, 2025 2024 Incr (Decr) ENERGY SOURCES (GWH) Generation Production Nuclear 2,508 2,549 (41) Coal 1,101 1,990 (889) Gas, Oil and Other 2,222 1,410 812 Renewables 180 230 (51) Total Generation Production 6,010 6,179 (169) Purchased Power Conventional 713
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