Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — Q2 2025 Earnings Presentation
28 slides from Pinnacle West Capital's earnings presentation, Aug 6, 2025
Slide 1: Renewed, Reliable and Resilient
Renewed, Reliable and Resilient Second-Quarter Financial Results August 6, 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: Second-Quarter results
Second-Quarter results Q2 2025 vs Q2 2024 $0.06 $1.76 $0.01 Operating ($0.09) ($0.02) Interest, net Revenue less Fuel O&M1 D&A AFUDC ($0.06) $1.58 and Purchased Pension & ($0.08) Power1 OPEB non- All other2 service credits, net Operating Revenue less Fuel and Purchased All Other Power El Dorado inve
Slide 4: 2025 EPS guidance
2025 EPS guidance Key Factors and Assumptions (as of August 6, 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 06/01/2025 $3.2 Test Year Ended 6/30/20221 12/31/2024 $2.52 $2.12 Equity Layer 51.93% 52.28% Allowed ROE 9.55% 10
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 • Completed planned major outage in Q1 at Four $70 $55 - $65 Corners Unit 4 Planned • Lean culture and declining O&M per MWh
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 $0 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 As of June 30, 2025 11
Slide 12: Appendix
PINNACLE \WEST CAPITAL CORPORATION
Slide 13: 2025 APS rate case application
2025 APS rate case application Overview of rate request ($ in millions) key components Rate Base Growth $208 12 months Post-test Year Plant $82 Fair Value Increment $101 WACC (7.63%) $129 Other (Base fuel, depreciation study, etc.) $143 Total Revenue Requirement $662 Adjustor Transfers $(82) Net Rev
Slide 14: 2025 APS rate case application
2025 APS rate case application Overview of rate request ($ in millions) key components Test Year Ended December 31, 2024 Total Rate Base - Adjusted $15.3B ACC Rate Base - Adjusted $12.5B Embedded Long-Term Cost of Debt 4.26% Allowed Return on Equity 10.70% ROE Band for Formula Rate +/- 20bps Capital
Slide 15: 2025 APS rate case application
2025 APS rate case application Formula Rate Adjustment Mechanism (FRAM) proposal • Historic test year, with authorized ROE and capital structure approved in most recent rate case • Inclusion of 12 months projected plant • System Reliability Benefit costs transferred into each formula reset • No rate
Slide 16: 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 17: 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 18: 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 19: Arizona’s commercial and industrial growth is diverse
Arizona’s commercial and industrial growth is diverse Source: Arizona Commerce Authority 19
Slide 20: Residential PV Applications
Residential PV Applications 5,000 Residential DG (MWdc) Annual Additions 4,500 216 200 108 4,000 40 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 21: 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 $18 $19 $12 $20 $15 $10 $17 $18 $18 $18 $14 $16 $5 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Renewable Energy and Demand Side Management expenses are substantiall
Slide 22: 2025 gross margin effects of weather
2025 gross margin effects of weather Variances vs. Normal ($ in millions pretax) $14 ($3) Q1 Q2 Q3 Q4 2025 Total Weather Impact: $12 Million All periods recalculated to current 10-year rolling average (2014 – 2023). Numbers may not foot due to rounding. 22
Slide 23: 2025 Planned Outage Schedule
2025 Planned Outage Schedule Coal, Nuclear and Large Gas Planned Outages Q1 Q2 Q4 Actual Duration in Actual Duration in Estimated Duration Plant Unit Plant Unit Plant Unit Days Days in Days Redhawk CC2 60 Palo Verde1 1 42 Palo Verde 3 36 Four Corners 4 72 Four Corners 4 12 1 Outage began at end of Q
Slide 24: 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 25: 2025 Key Regulatory Dates
2025 Key Regulatory Dates Case/Docket # Q1 Q2 Q3 Q4 Notice of Intent filed May 15 ACC Letter of Sufficiency 2025 Rate Case E-01345A-25-0105: Application filed June 13 filed July 14 2025 PSA rate reset effective PSA reset Power Supply Adjustor (PSA) E-01345A-22-0144: March 1 to be filed Nov. 26 Filed
Slide 26: 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 27: Consolidated Statistics
Consolidated Statistics 3 Months Ended June 30, 6 Months Ended June 30, 2025 2024 Incr (Decr) 2025 2024 Incr (Decr) ELECTRIC OPERATING REVENUES (Dollars in Millions) Retail Residential $ 652 $ 658 $ (6) $ 1,101 $ 1,091 $ 10 Business 654 610 44 1,179 1,071 108 Total Retail 1,306 1,268 38 2,279* 2,162
Slide 28: Consolidated Statistics
Consolidated Statistics 3 Months Ended June 30, 6 Months Ended June 30, 2025 2024 Incr (Decr) 2025 2024 Incr (Decr) ENERGY SOURCES (GWH) Generation Production Nuclear 2,139 2,192 (53) 4,647 4,741 (94) Coal 1,448 1,502 (53) 2,549 3,491 (942) Gas, Oil and Other 2,208 1,960 248 4,430 3,370 1,060 Renewa
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