Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — Q4 2024 Earnings Presentation
29 slides from Pinnacle West Capital's earnings presentation, Feb 25, 2025
Slide 1: Renewed, Reliable and Resilient
Renewed, Reliable and Resilient Fourth-Quarter and Full-Year 2024 Financial Results February 25, 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: Fourth-Quarter results
Fourth-Quarter results Q4 2024 vs Q4 2023 $0.55 ($0.30) O&M1 ($0.18) $0.01 $(0.00) Operating D&A ($0.08) Pension & Revenue less Fuel Interest, net OPEB non- ($0.06) ($0.06) and Purchased AFUDC service All other2 Q4 2023 Power1 credits, net Q4 2024 Operating Revenue less Fuel and Purchased Power All
Slide 4: Full-Year 2024 results
Full-Year 2024 results 2024 vs 2023 $2.59 ($0.69) O&M1 ($0.66) $0.05 $5.24 D&A ($0.39) ($0.07) Pension & Interest, net OPEB non- All other2 $4.41 AFUDC service Operating credits, net Revenue less Fuel and Purchased Power1 Operating Revenue less Fuel and Purchased Power All Other Other, net & roundin
Slide 5: Accomplished 2024 Operational and Financial Goals
Accomplished 2024 Operational and Financial Goals ✓ Delivered strong customer experience ➢ Ranked top of 2nd quartile in 2024 J.D. Power Residential and Business Survey ✓ Achieved top quartile reliability for the last 11 of 12 years ➢ Through 113 consecutive days above 100 degrees in Phoenix, the lo
Slide 6: 2025 EPS guidance of $4.40 - $4.60
2025 EPS guidance of $4.40 - $4.60 2025 vs 2024 $5.24 $(0.23) $0.22 $(0.07) $0.12 O&M1 D&A Other taxes $(0.15) $0.95 Operating Interest, net $(0.28) Weather Revenue less AFUDC Pension & $4.50 Fuel and OPEB non- $(0.35) Purchased service All other Power1 credits, net Operating Revenue less Fuel and A
Slide 7: 2025 EPS guidance
2025 EPS guidance Key Factors and Assumptions (as of Feb 25, 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 8: 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 9: 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 10: 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 Guidance ACC FERC ACC FERC Rate Effective Date 03/08/2024 06/01/2024 $3.2 Test Year Ended 6/30/20221 12/31/2023 $2.11 Equity Layer 51.93% 49.64% Allowed ROE 9.55% 10.75% $1
Slide 11: 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 • Final planned major outage at Four Corners Unit 4 $70 $55 - $65 • Lean culture and declining O&M per MWh goal Planned $141
Slide 12: 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 Approx. $7.6B APS capital structure and expanded, accretive capital investment $700-900M • Equity needs < prior targeted 40% $500M-700M PNW Equity of new cap
Slide 13: We are focused on maintaining healthy credit ratings to support affordable growth
We are focused on maintaining healthy credit ratings to support affordable growth1 Balance Sheet Senior Targets Corporate Unsecured Short-Term • Solid investment-grade Ratings Ratings Ratings Outlook credit ratings APS • APS equity layer >50% • PNW FFO/Debt range Moody’s Baa1 Baa1 P-2 Stable of 14%-
Slide 14: Debt maturity profile shows well managed and stable financing plan
Debt maturity profile shows well managed and stable financing plan ($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 December 31, 2024 14
Slide 15: Appendix
PINNACLE \WEST CAPITAL CORPORATION
Slide 16: We are making progress towards our Clean Energy Commitment
We are making progress towards our Clean Energy Commitment Progress Since 2020, have contracted over 8,500 MW of clean energy and storage expected to be in service for APS customers by end of 2028 Issued 2024 All-Source RFP as load demand continues to increase in APS service territory Successfully r
Slide 17: SRB will expand our capacity to self-build generation to meet customer need
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 18: 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 19: 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 • Maricopa County ranked #1 for 30,000 economic development by Site Selection 20,000 magazine 10,000 • Phoenix housing is affor
Slide 20: Arizona's commercial and industrial growth is diverse
Arizona’s commercial and industrial growth is diverse Source: Arizona Commerce Authority 20
Slide 21: Residential PV Applications
Residential PV Applications 5,000 Residential DG (MWdc) Annual Additions 4,500 216 169 200 108 4,000 3,500 2021 2022 2023 2024 3,000 2,500 2,000 1,500 1,000 500 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2021 Applications 2022 Applications 2023 Applications 2024 Applications 1 Monthly data eq
Slide 22: 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 $20 $16 $18 $19 $12 $20 $12 $21 $15 $10 $17 $18 $18 $15 $16 $15 $14 $5 $9 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1Renewable Energy and Demand Side Management expenses ar
Slide 23: 2024 gross margin effects of weather
2024 gross margin effects of weather Variances vs. Normal ($ in millions pretax) $95 $35 $18 ($1) Q1 Q2 Q3 Q4 2024 Total Weather Impact: $147 Million All periods recalculated to current 10-year rolling average (2013 – 2022). Numbers may not foot due to rounding. 23
Slide 24: 2025 Planned Outage Schedule
2025 Planned Outage Schedule Coal, Nuclear and Large Gas Planned Outages Q1 Q2 Q4 Estimated Duration Estimated Duration Estimated Duration Plant Unit Plant Unit Plant Unit in Days in Days in Days Redhawk CC2 61 Palo Verde1 1 36 Palo Verde 3 36 Four Corners 4 65 1Outage scheduled to begin at end of Q
Slide 25: 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 26: 2025 Key Regulatory Dates
2025 Key Regulatory Dates Case/Docket # Q1 Q2 Q3 Q4 ACC upheld Grid Access Charge 2022 Rate Case E-01345A-22-0144: Dec. 17, 2024 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-22-0144
Slide 27: 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 28: Consolidated Statistics
Consolidated Statistics 3 Months Ended December 31, 12 Months Ended December 31, 2024 2023 Incr (Decr) 2024 2023 Incr (Decr) ELECTRIC OPERATING REVENUES (Dollars in Millions) Retail Residential $ 505 $ 454 52 $ 2,563 $ 2,289 $ 274 Business 542 476 66 2,335 2,048 287 Total Retail 1,047 930 117 4,898
Slide 29: Consolidated Statistics
Consolidated Statistics 3 Months Ended December 31, 12 Months Ended December 31, 2024 2023 Incr (Decr) 2024 2023 Incr (Decr) ENERGY SOURCES (GWH) Generation Production Nuclear 2,213 2,229 (15) 9,511 9,250 261 Coal 1,310 1,223 87 7,072 6,548 524 Gas, Oil and Other 2,404 2,247 158 8,849 9,047 (198) Re
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