Pinnacle West raises 2026 earnings outlook to $5.05-$5.25
Higher sales and weather supported quarterly results as Pinnacle West adjusted its 2026 earnings guidance upward.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Pinnacle West Capital Corp. reported third-quarter 2026 net income attributable to common shareholders of $434.2 million, or $3.49 per diluted share, compared with $413.2 million and $3.39 a year earlier. Operating revenue was $1.973 billion versus $1.821 billion. The company attributed the increase primarily to customer sales and usage, weather effects, and customer growth, partly offset by higher depreciation and amortization and interest charges.
Its utility subsidiary, Arizona Public Service (APS), reported 9.5% weather-normalized retail sales growth, including 14.5% commercial and industrial sales growth, and record peak demand of 9,166 MW on August 2, 2026. Pinnacle West raised 2026 consolidated earnings guidance to $5.05-$5.25 per diluted share. APS projects customers' annual electricity needs to more than double by 2041; its preferred portfolio identifies about 15 GW of new resources and 2.6 GW of transmission capacity.
APS is providing more than $33 million in bill credits effective this month; a typical residential customer's November bill is expected to be reduced by about $14. Pinnacle West is also making an additional $5 million available to customers experiencing financial hardship, funded by Pinnacle West rather than customer rates.
2 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter common-shareholder net income rose to $434.2 million from $413.2 million.
- Moderate pointThird-quarter operating revenue was $1.973 billion, versus $1.821 billion a year earlier.
Negative
- None.
Filing Explained
The presentation lists a
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net income attributable to common shareholders: $434.2 million; $413.2 million in the prior-year quarter
Operating revenue: $1.973 billion; $1.821 billion in the prior-year quarter
Diluted earnings per share: $3.49; $3.39 in the prior-year quarter
+4 more
7 metrics
Net income attributable to common shareholders
$434.2 million; $413.2 million in the prior-year quarter
Three months ended September 30, 2026 and 2025
Operating revenue
$1.973 billion; $1.821 billion in the prior-year quarter
Three months ended September 30, 2026 and 2025
Diluted earnings per share
$3.49; $3.39 in the prior-year quarter
Third quarter 2026 and 2025
2026 consolidated earnings guidance
$5.05-$5.25 per diluted share
Adjusted upward
Weather-normalized retail sales growth
9.5%
Third quarter 2026
APS peak demand
9,166 MW
Record peak on August 2, 2026
APS bill credits
More than $33 million
Effective this month
Key Terms
weather-normalized sales, Adjusted gross margin, AFUDC, Formula Rate Adjustment Mechanism, +1 more
5 terms
weather-normalized sales financial
"overall weather-normalized sales growth of 9.5%"
Adjusted gross margin financial
"Adjusted gross margin $3.40 billion $3.53 - $3.59 billion"
Adjusted gross margin is a measure of how much profit a company makes from its sales after accounting for certain expenses or one-time costs, but before deducting other operating expenses. It helps investors see the company's core profitability more clearly by removing factors that might distort the usual profit picture, similar to a runner measuring their speed without considering obstacles or weather. This metric provides a clearer view of the company's ongoing financial health.
AFUDC financial
"Total AFUDC ~$125 million"
Allowance for Funds Used During Construction (AFUDC) is an accounting method that adds the cost of financing — typically interest and sometimes a return — to the value of a long-term project while it’s being built, rather than charging that cost immediately as an expense. Think of it like capitalizing the loan interest on a house while it’s under construction so the cost becomes part of the asset; this raises reported asset value and delays expense recognition, which can make current earnings look stronger and affect future regulated rates and investor returns.
Formula Rate Adjustment Mechanism regulatory
"Formula Rate Adjustment Mechanism (FRAM) proposal"
Integrated Resource Plan regulatory
"filed its Integrated Resource Plan with the Arizona Corporation Commission"
An integrated resource plan is a utility’s long-term roadmap showing how it will meet future electricity needs using a mix of power sources, energy efficiency, demand reductions and storage while balancing cost, reliability and regulatory requirements. Like a household budget that plans income, bills and savings, the plan reveals expected investments, operating costs and risks, so investors use it to assess future capital spending, potential rate changes and long-term profitability.
Earnings Snapshot
Net income attributable to common shareholders: $434.2 million · Guidance included
Third quarter 2026
Net income attributable to common shareholders
$434.2 million
Compared with $413.2 million in the third quarter of 2025
Operating revenue
$1.973 billion
Compared with $1.821 billion in the third quarter of 2025
Diluted earnings per share
$3.49
Compared with $3.39 in the third quarter of 2025
Guidance
2026 consolidated earnings guidance adjusted upward to $5.05-$5.25 per diluted share
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did PNW earn in the third quarter of 2026?
Pinnacle West reported $434.2 million in net income attributable to common shareholders and $3.49 per diluted share, compared with $413.2 million and $3.39 per diluted share a year earlier.
What is PNW's 2026 earnings guidance?
Pinnacle West adjusted its 2026 consolidated earnings guidance upward to $5.05-$5.25 per diluted share.
What bill credits and customer assistance did APS announce?
APS is providing more than $33 million in bill credits, applied automatically through the Environmental Benefits Surcharge; the credit is expected to reduce a typical residential customer's November bill by about $14. Pinnacle West is also making an additional $5 million available for customers experiencing financial hardship, funded by Pinnacle West rather than customer rates.
How much did PNW's utility subsidiary APS sales and peak demand grow?
APS reported 9.5% weather-normalized retail sales growth, with commercial and industrial sales up 14.5% and residential sales up 4.5%. Customer peak demand reached a record 9,166 MW on August 2, 2026.
What does APS's pledge say about serving extra-large customers?
APS will not connect new extra-large customers faster than the grid can reliably support, will require those customers to fund the costs of serving their growth, and will preserve sufficient capacity for existing and future Arizona customers.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): | |||||||||||
| Commission File Number | Exact name of registrant as specified in its charter; State or other jurisdiction of incorporation or organization; Address of principal executive offices, including zip code; and Registrant's telephone number, including area code | IRS Employer Identification No. | |||||||||||||||||||||
| (an Arizona corporation) | |||||||||||||||||||||||
| (an Arizona corporation) | |||||||||||||||||||||||
| Not Applicable | |||||||||||||||||||||||
| (Former name or former address, if changed since last report.) | |||||||||||||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
This combined Form 8-K is separately filed or furnished by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing or furnishing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries. Except as stated in the preceding sentence, neither registrant is filing or furnishing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
Item 2.02. Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02.
On November 3, 2026, Pinnacle West Capital Corporation (“Pinnacle West”) issued a press release regarding its financial results for the fiscal quarter ended September 30, 2026. A copy of the press release is attached hereto as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
The following information is furnished pursuant to Item 7.01.
Pinnacle West is providing a copy of the slide presentation made in connection with the quarterly earnings conference call on November 3, 2026. This information contains Pinnacle West operating results for the fiscal quarter ended September 30, 2026 and earnings outlook for 2026. The slide presentation is attached hereto as Exhibit 99.2 and is concurrently being posted to Pinnacle West’s website at www.pinnaclewest.com.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Registrant(s) | Description | ||||||
| 99.1 | Pinnacle West Arizona Public Service Company | Earnings News Release issued on November 3, 2026 | ||||||
| 99.2 | Pinnacle West Arizona Public Service Company | Pinnacle West Capital Corporation Third Quarter 2026 Results slide presentation accompanying November 3, 2026 conference call | ||||||
| 104 | Pinnacle West Arizona Public Service Company | 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PINNACLE WEST CAPITAL CORPORATION | ||||||||
| (Registrant) | ||||||||
| Dated: November 3, 2026 | By: /s/ Andrew Cooper | |||||||
| Andrew Cooper | ||||||||
| Senior Vice President and | ||||||||
| Chief Financial Officer | ||||||||
| ARIZONA PUBLIC SERVICE COMPANY | ||||||||
| (Registrant) | ||||||||
| Dated: November 3, 2026 | By: /s/ Andrew Cooper | |||||||
| Andrew Cooper | ||||||||
| Senior Vice President and | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 99.1
| FOR IMMEDIATE RELEASE | November 3, 2026 | |||||||
| Media Contact: Analyst Contact: | Alan Bunnell (602) 250-3376 Amanda Ho (602) 250-3334 | |||||||
| Website: | pinnaclewest.com | |||||||
PINNACLE WEST REPORTS 2026 THIRD-QUARTER FINANCIAL RESULTS
•Continued sales growth and summer weather increase energy demand
•Reliable service and strong operating performance support customers
•APS reinforces its Pledge for Responsible Energy Growth
PHOENIX – Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income attributable to common shareholders for the 2026 third quarter of $434.2 million, or $3.49 per diluted share of common stock. This result compares with consolidated net income of $413.2 million, or $3.39 per diluted share of common stock, for the same period a year ago.
The 2026 third-quarter results reflect an increase of about $21 million compared to the 2025 third quarter, primarily as a result of increased customer sales and usage; the positive impacts of weather effects versus the same period a year ago; and customer growth. These positive factors were partially offset by higher depreciation and amortization expenses; and interest charges.
“Arizona continues to grow at an extraordinary pace, and our responsibility is clear: deliver safe, reliable and affordable energy for the customers who count on us every day,” said Pinnacle West Chairman, President and Chief Executive Officer Ted Geisler. “Years of planning and the dedication of our employees enabled us to once again meet strong summer demand while maintaining reliability, returning savings to customers and investing in the infrastructure needed to support Arizona’s future. We are committed to ensuring that growth helps strengthen the grid without shifting costs to Arizona families and businesses.”
Providing Reliable Power Amid Record Growth and Demand
Geisler said APS employees delivered strong operational performance throughout the 2026 third quarter, supporting Arizona's continued economic expansion while maintaining reliable service during another summer of record demand. Reflecting the strength of the state's economy, commercial and industrial sales increased 14.5%, while residential sales grew 4.5%, contributing to overall weather-normalized sales growth of 9.5%.
APS customers set an all-time peak demand record of 9,166 megawatts (MW) on Aug. 2, with demand exceeding 9,000 MW on three occasions during the quarter. APS surpassed last year's previous peak of 8,648 MW a dozen times, marking the fourth consecutive year of record-setting summer demand and highlighting the value of the company's long-term resource planning, proactive maintenance programs and customer-focused demand-side initiatives.
Summer weather also contributed to increased energy use. The quarter was substantially warmer than normal – with residential cooling degree days up 3% from the same period in 2025 – and featured one of the more active monsoon seasons in recent years.
Additionally, overall customer growth increased 1.8%, including 1.9% residential customer growth.
Supporting Arizona's Growth Responsibly
Geisler said that planning for growth has always been central to the company’s mission. Customers’ annual electricity needs are projected to more than double by 2041, while peak demand is expected to rise more than 5,000 MW above today’s peak demand.
To address this growth, APS recently filed its Integrated Resource Plan with the Arizona Corporation Commission (ACC), outlining the resources needed to serve customers over the next 15 years. The plan identifies a diverse portfolio of resources and transmission investments designed to maintain reliability and support customer affordability, while also maintaining the flexibility needed to serve one of the fastest-growing regions in the country.
The company remains equally focused on ensuring that growth strengthens the electric system while protecting existing customers. Toward that end, Geisler reiterated the company's Pledge for Responsible Energy Growth.
The pledge is built on three principles: safeguarding reliability, protecting customer rates and preserving capacity for Arizona’s homes, businesses and communities.
“Growth should pay for growth. It’s that simple,” Geisler said. “When a data center or manufacturer comes to Arizona, they pay the cost of the infrastructure needed to serve them, and those investments help to cover shared grid costs that existing customers would otherwise carry. Done right, new growth doesn’t threaten affordability for Arizona families and businesses. It helps protect it.
“Arizonans should be able to welcome the jobs, investment and opportunity coming to our state with confidence that their energy needs come first and their rates are protected.”
Under the pledge, APS will not connect new extra-large customers faster than the grid can reliably support, will require those customers to fund the costs of serving their growth, and will preserve sufficient capacity to meet the needs of existing and future Arizona customers. Geisler emphasized that these principles are embedded in agreements with extra-large energy users to ensure reliability remains strong, existing customers’ rates are protected, and Arizona can continue to benefit from economic growth.
Focus on Customer Affordability and Financial Support
APS's focus on protecting customers extends beyond long-term growth. Effective this month, APS is providing more than $33 million in bill credits following approval by the ACC. Applied automatically through the Environmental Benefits Surcharge, the credit is expected to reduce a typical residential customer's November bill by about $14, with business customers also benefiting based on their energy use.
Funded in part by revenue from APS's Green Power Partners program, the credit returns benefits directly to customers while supporting APS's commitment to affordability, renewable energy investment and Arizona's continued growth. APS also is making an additional $5 million available to support customers experiencing financial hardship. The assistance is funded by Pinnacle West and not through customer rates.
“Delivering safe, reliable and affordable energy remains our top priority,” Geisler said. “This credit is one example of how we're creating value for customers by returning benefits directly to them while continuing to support Arizona's growth.”
Financial Outlook
Given the positive customer and sales growth and impact of weather through the first three quarters of the year, the company is adjusting its 2026 consolidated earnings guidance upward to a range of $5.05 to $5.25 per diluted share.
Key factors and assumptions underlying the 2026 outlook can be found in the third-quarter 2026 earnings presentation slides at pinnaclewest.com/investors.
Conference Call and Webcast
Pinnacle West invites interested parties to listen to the live webcast of management’s conference call to discuss the Company’s financial results and recent developments, and to provide an update on the company’s long-term financial outlook, at 11 a.m. ET (9 a.m. Arizona time) today, Nov. 3. The webcast can be accessed at pinnaclewest.com/presentations and will be available for replay on the website for 30 days. To access the live conference call by telephone, dial (888) 506-0062 or (973) 528-0011 for international callers and enter participant access code 904565. A replay of the call also will be available at pinnaclewest.com/presentations or by telephone until 11:59 p.m. ET, Tuesday, Nov. 10, 2026, by calling (877) 481-4010 in the U.S. and Canada or (919) 882-2331 internationally and entering replay passcode 54576.
General Information
Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of about $33.5 billion, almost 6,300 megawatts of generating capacity and approximately 6,600 employees in Arizona and New Mexico. Through its principal subsidiary, Arizona Public Service, the company provides retail electricity service to about 1.5 million Arizona homes and businesses. For more information about Pinnacle West, visit the company’s website at pinnaclewest.com.
Dollar amounts in this news release are after income taxes. Earnings per share amounts are based on average diluted common shares outstanding. For more information on Pinnacle West’s operating statistics and earnings, please visit pinnaclewest.com/investors.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements based on current expectations. These forward-looking statements are often identified by words such as "estimate," "predict," "may," "believe," "plan," "expect," "require," "intend," "assume," "project," "anticipate," "goal," "seek," "strategy," "likely," "should," "will," "could," and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to:
•our ability to achieve timely and adequate rate recovery of our costs through our regulated rates and adjustor recovery mechanisms, including returns on and of debt and equity capital investment;
•the impacts of federal, state, and local laws, judicial decisions, statutes, regulations, and FERC, NRC, EPA, ACC, and other agency requirements, including as they are changed by legislative and regulatory action as well as executive orders, such as those relating to tax, environment, energy, nuclear plants, and deregulation of the retail electric market;
•our operation of Palo Verde is subject to substantial regulatory oversight and potentially significant liabilities and capital expenditures;
•we are subject to numerous environmental laws and changes to existing laws, or new laws, may increase our costs and impact our business;
•the potential effects of climate change on our electric system, including as a result of weather extremes, such as prolonged drought and high temperature variations in the area where APS conducts its business, as well as the impacts of policy and regulatory changes introduced to address climate change;
•co-owners of our jointly owned generation and transmission facilities may have unaligned goals;
•the willingness or ability of counterparties, participants, and landowners to meet contractual or other obligations or extend the rights for continued generation and transmission operations;
•deregulation of the electric industry and other factors, such as large customers developing large, utility scale generation to serve their energy needs, may result in increased competition;
•variations in demand for electricity, including those due to weather, seasonality (including large increases in ambient temperatures), the general economy or social conditions, customer and sales growth (or decline), data center growth (or lack thereof), including to support the AI industry, the effects of energy conservation measures and DG, and technological advancements;
•wildfires, including those arising as a result of climate change, extreme weather events, or the expansion of the wildland urban interface;
•generation, transmission, and distribution facilities and system operating costs, conditions, performance, and outages;
•our ability and efforts to meet current and anticipated future needs for generation and transmission and distribution facilities in our region at reliable levels, including factors affecting our ability to acquire and develop new resources to serve this load as well as difficulties in accurately forecasting load growth, particularly from high load energy users;
•availability of fuel and water supplies as well as the volatility and costs of fuel and purchased power;
•the direct or indirect effect on our facilities or business from cybersecurity threats or intrusions, data security breaches, terrorist attack, physical attack, severe storms, or other catastrophic events, such as fires, explosions, pandemic health events, or similar occurrences;
•risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty;
•the development of new technologies and the impact they have on the retail and wholesale electricity market and the impacts of our adoption or failure to adopt such technologies;
•the availability and retention of qualified personnel and the need to negotiate collective bargaining agreements with union employees;
•the cost of debt, including increased cost as a result of rising interest rates, and equity capital and our ability to access capital markets when required as well as the impacts a credit rating downgrade would have on us;
•the investment performance of the assets of our nuclear decommissioning trust, captive insurance cell, coal mine reclamation escrow, pension, and other postretirement benefit plans, and the resulting impact on future funding requirements;
•Pinnacle West’s cash flow depends on the performance of APS and its ability to make dividends and distributions;
•potential shortfalls in insurance coverage;
•Pinnacle West’s ability to meet its debt service obligation could be adversely affected because its debt securities are structurally subordinated to the debt securities and obligations of its subsidiaries;
•the liquidity of wholesale power markets and the use of derivative contracts in our business;
•policy changes in Arizona or other states through ballot initiatives or referenda may increase our cost or operations or affect our business plans;
•general economic conditions, such as tariffs, inflation, and other supply chain constraints, as well as uncertainties associated with the current and future economic environment and conditions in Arizona; and
•disruptions in financial markets could adversely affect our cost of and access to credit and capital markets.
These and other factors are discussed in the most recent Pinnacle West/APS Form 10-K and 10-Q along with other public filings with the Securities and Exchange Commission, which readers should review carefully before placing any reliance on our financial statements or disclosures. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law.
# # #
PINNACLE WEST CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating Revenues | $ | 1,972,746 | $ | 1,820,741 | $ | 4,578,092 | $ | 4,211,772 | |||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel and purchased power | 758,025 | 655,969 | 1,753,252 | 1,513,048 | |||||||||||||||||||
| Operations and maintenance | 294,583 | 299,617 | 854,670 | 886,331 | |||||||||||||||||||
| Depreciation and amortization | 242,502 | 224,555 | 725,586 | 688,388 | |||||||||||||||||||
| Taxes other than income taxes | 56,308 | 58,416 | 179,964 | 175,421 | |||||||||||||||||||
| Other expense | 507 | 338 | 6,953 | 1,964 | |||||||||||||||||||
| Total | 1,351,925 | 1,238,895 | 3,520,425 | 3,265,152 | |||||||||||||||||||
Operating Income | 620,821 | 581,846 | 1,057,667 | 946,620 | |||||||||||||||||||
| Other Income (Deductions) | |||||||||||||||||||||||
| Allowance for equity funds used during construction | 20,854 | 17,671 | 52,688 | 45,687 | |||||||||||||||||||
| Pension and other postretirement non-service credits, net | 4,518 | 2,777 | 13,518 | 9,427 | |||||||||||||||||||
| Other income | 4,598 | 12,473 | 22,675 | 42,038 | |||||||||||||||||||
| Other expense | (9,225) | (8,159) | (18,535) | (14,988) | |||||||||||||||||||
| Total | 20,745 | 24,762 | 70,346 | 82,164 | |||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||
| Interest charges | 138,843 | 125,179 | 398,203 | 343,649 | |||||||||||||||||||
| Allowance for borrowed funds used during construction | (14,074) | (13,979) | (35,339) | (35,640) | |||||||||||||||||||
| Total | 124,769 | 111,200 | 362,864 | 308,009 | |||||||||||||||||||
Income Before Income Taxes | 516,797 | 495,408 | 765,149 | 720,775 | |||||||||||||||||||
Income taxes | 80,363 | 77,894 | 112,834 | 106,729 | |||||||||||||||||||
Net Income | 436,434 | 417,514 | 652,315 | 614,046 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 2,194 | 4,306 | 6,581 | 12,918 | |||||||||||||||||||
Net Income Attributable To Common Shareholders | $ | 434,240 | $ | 413,208 | $ | 645,734 | $ | 601,128 | |||||||||||||||
| Weighted-Average Common Shares Outstanding - Basic | 121,321 | 119,623 | 121,329 | 119,578 | |||||||||||||||||||
| Weighted-Average Common Shares Outstanding - Diluted | 124,339 | 121,956 | 124,204 | 121,861 | |||||||||||||||||||
| Earnings Per Weighted-Average Common Share Outstanding | |||||||||||||||||||||||
Net income attributable to common shareholders - basic | $ | 3.58 | $ | 3.45 | $ | 5.32 | $ | 5.03 | |||||||||||||||
Net income attributable to common shareholders - diluted | $ | 3.49 | $ | 3.39 | $ | 5.20 | $ | 4.93 | |||||||||||||||
Powering Arizona’s Future Third-Quarter Financial Results November 3, 2026
2 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,” “believe,” “plan,” “expect,” “require,” “intend,” “assume,” “project,” "anticipate," "goal," "seek," "strategy," "likely," "should," "will," "could," and similar words. Because actual results may differ materially from expectations, we caution you not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to: our ability to achieve timely and adequate rate recovery of our costs through our regulated rates and adjustor recovery mechanisms, including returns on and of debt and equity capital investment; the impacts of federal, state, and local laws, judicial decisions, statutes, regulations, and FERC, NRC, EPA, ACC, and other agency requirements, including as they are changed by legislative and regulatory action as well as executive orders, such as those relating to tax, environment, energy, nuclear plants, and deregulation of the retail electric market; our operation of Palo Verde is subject to substantial regulatory oversight and potentially significant liabilities and capital expenditures; we are subject to numerous environmental laws and changes to existing laws, or new laws, may increase our costs and impact our business; the potential effects of climate change on our electric system, including as a result of weather extremes, such as prolonged drought and high temperature variations in the area where APS conducts its business, as well as the impacts of policy and regulatory changes introduced to address climate change; co-owners of our jointly owned generation and transmission facilities may have unaligned goals; the willingness or ability of counterparties, participants, and landowners to meet contractual or other obligations or extend the rights for continued generation and transmission operations; deregulation of the electric industry and other factors, such as large customers developing large, utility scale generation to serve their energy needs, may result in increased competition; variations in demand for electricity, including those due to weather, seasonality (including large increases in ambient temperatures), the general economy or social conditions, customer and sales growth (or decline), data center growth (or lack thereof), including to support the AI industry, the effects of energy conservation measures and DG, and technological advancements; wildfires, including those arising as a result of climate change, extreme weather events, or the expansion of the wildland urban interface; generation, transmission, and distribution facilities and system operating costs, conditions, performance, and outages; our ability and efforts to meet current and anticipated future needs for generation and transmission and distribution facilities in our region at reliable levels, including factors affecting our ability to acquire and develop new resources to serve this load as well as difficulties in accurately forecasting load growth, particularly from high load energy users; availability of fuel and water supplies as well as the volatility and costs of fuel and purchased power; the direct or indirect effect on our facilities or business from cybersecurity threats or intrusions, data security breaches, terrorist attack, physical attack, severe storms, or other catastrophic events, such as fires, explosions, pandemic health events, or similar occurrences; risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty; the development of new technologies and the impact they have on the retail and wholesale electricity market and the impacts of our adoption or failure to adopt such technologies; the availability and retention of qualified personnel and the need to negotiate collective bargaining agreements with union employees; the cost of debt, including increased cost as a result of rising interest rates, and equity capital and our ability to access capital markets when required as well as the impacts a credit rating downgrade would have on us; the investment performance of the assets of our nuclear decommissioning trust, captive insurance cell, coal mine reclamation escrow, pension, and other postretirement benefit plans, and the resulting impact on future funding requirements; Pinnacle West’s cash flow depends on the performance of APS and its ability to make dividends and distributions; potential shortfalls in insurance coverage; Pinnacle West’s ability to meet its debt service obligation could be adversely affected because its debt securities are structurally subordinated to the debt securities and obligations of its subsidiaries; the liquidity of wholesale power markets and the use of derivative contracts in our business; policy changes in Arizona or other states through ballot initiatives or referenda may increase our cost or operations or affect our business plans; general economic conditions, such as tariffs, inflation, and other supply chain constraints, as well as uncertainties associated with the current and future economic environment and conditions in Arizona; and disruptions in financial markets could adversely affect our cost of and access to credit and capital markets. These and other factors are discussed in the most recent Pinnacle West/APS Form 10-K and Form 10-Q along with other public filings with the Securities and Exchange Commission, which you should review carefully before placing any reliance on our financial statements, disclosures or earnings outlook. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law. In this presentation, references to net income and earnings per share (EPS) refer to amounts attributable to common shareholders. Forward Looking Statements
$0.30 $0.03 ($0.11) $0.01 ($0.06) $0.01 ($0.10) $0.02 $3.39 $3.49 Q3 2026 vs Q3 2025 Operating Revenue less Fuel and Purchased Power Sales / Usage $ 0.35 Weather $ 0.09 LFCR / Other $ 0.02 Transmission $ (0.04) RES / DSM $ (0.12)Q3 2025 Q3 2026 1 Includes costs and offsetting operating revenues associated with renewable energy and demand side management programs, see slide 27 for more information. 2 Reflects year-over-year impacts of purchase agreement and termination of two of the three Palo Verde VIE lease agreements, primarily offset by changes in D&A and O&M expense. See Note 12 in the 2025 Form 10-K for more information. Operating Revenue less Fuel and Purchased Power1 O&M1 D&A Pension & OPEB non- service credits, net Interest, net AFUDC All other 3 Third-Quarter results All Other Change in Outstanding Shares $ (0.07) Other, net & rounding $ (0.06) Net Income attributable to non-controlling interest2 $ 0.03 Other taxes Income taxes
Key Factors and Assumptions (as of November 3, 2026) 2026 Adjusted gross margin (operating revenues, net of fuel and purchased power expenses, x/RES,DSM)1 $3.45 – $3.51 billion • Retail customer growth of 1.5%-2.5% • Weather-normalized retail electricity sales growth of 8.0%-10.0% • Includes 5.0%-7.0% contribution to sales growth of new large manufacturing facilities and several large data centers • Assumes normal weather for balance of year Adjusted operating and maintenance expense (O&M x/RES,DSM)1 $1.09 – $1.11 billion Other operating expenses (depreciation and amortization, and taxes other than income taxes) $1.21 – $1.23 billion Other income (pension and other post-retirement non-service credits, other income and other expense) $20 – $25 million Interest expense, net of allowance for borrowed and equity funds used during construction (Total AFUDC ~$125 million) $410 – $430 million Net income attributable to noncontrolling interests $9 million Effective tax rate 15.0% – 16.0% Average diluted common shares outstanding 125.1 million EPS Guidance $5.05 – $5.25 1 Excludes costs and offsetting operating revenues associated with renewable energy and demand side management programs. For reconciliation, see slide 27. 4 2026 EPS guidance
2026 EPS guidance of $5.05-$5.25 key drivers1 Weather-normalized retail electricity sales growth of 8%-10% (includes 5%-7% from large C&I) Depreciation, amortization and property taxes due to higher plant in service Retail customer growth of 1.5%- 2.5% Financing costs (debt & equity) Transmission revenue Operations and maintenance 2026 Weather Long-term guidance and key drivers • Long-term EPS growth target of 5%-7% off original 2024 midpoint1 • Retail customer growth of 1.5%-2.5% • Weather-normalized retail electricity sales growth of 8%-10% through 2030 (includes 7%-9% from large C&I customers) 2.4% 1.5% 5.7% 5.0% 8.0%-10.0% 0% 2% 4% 6% 8% 10% '22 '23 '24 '25 '26E Total Sales Growth 5 1 Arrows represent expected comparative year-over-year impact of each driver on earnings. Key drivers & assumptions for 2026 EPS guidance 1 Long-term EPS growth target based on the Company’s current weather normalized compound annual growth rate projections from 2024-2028.
$335 $460 $420 $380 $710 $765 $795 $750 $465 $550 $695 $860 $890 $825 $740 $710 2025A 2026E 2027E 2028E APS Total 2025-2028 $10.35B1 Generation Transmission Distribution Other $2.40B $2.60B $2.65B $2.70B Source: 2026-2028 as disclosed in the Third Quarter 2026 Form 10-Q 1 The estimated capital expenditures presented above do not include amounts related to Cholla gas conversion project, which is currently expected to cost up to approximately $440 million or incremental capital expenditures related to the recently executed DPC. In addition, projected capital expenditures for entities other than APS are not included, as such amounts are expected to be immaterial. 6 Capital plan to support reliability and continued growth within our service territory
Current Approved Rate Base and Test Year Detail End-of-Year Rate Base and Growth Guidance1 ACC FERC Rate Effective Date 03/08/2024 06/01/2026 Test Year Ended 6/30/20221 12/31/2025 Equity Layer 51.93% 51.99% Allowed ROE 9.55% 10.75% Rate Base $10.36B2 $2.81B $12.23 $13.33 $15.7 $2.52 $2.82 $4.0 2024 2025 2026 2027 2028 ACC FERC 7 Rate base $ in billions, rounded Projected 1 Guidance excludes CWIP amounts of $1.6B in 2024 and $2.7B-$3.2B in 2028. 2 Derived from APS annual update of formula transmission service rates. 3 Represents unadjusted ACC jurisdictional rate base consistent with regulatory filings. 1 Adjusted to include post-test year plant in service through 06/30/2023. 2 Rate Base excludes $215M approved through Joint Resolution in Case No. E-01345A-19-0236. Increased rate base growth within our service territory
8 Operations & Maintenance Guidance • Total O&M remains flat with rapidly growing customer base • Lean culture and declining O&M per MWh goal • Reduction of year-over-year O&M including planned outages We are focused on cost control and customer affordability $955 $978 $1,035- $1,045 $141 $143 $75-$85 $70 $64 $50-$60 2024A 2025A 2026E O&M Guidance (millions) Planned Outages RES/DSM Core O&M Numbers may not foot due to rounding.
Approx. $3.8B Cash from Operations1 Total Capital Investment $2.6B-$2.9B APS Debt2 $300M-$350M PNW Debt2 1 Cash from operations is net of shareholder dividends. 2 APS and PNW debt issuance is net of maturities. 3 PNW equity is net of $485M already priced through January 2026. 2026 Financing Plan Execution 2026-2028 Financing Plan Approx. $8.0B $1.0B-$1.2B PNW Equity3 9 Optimized financing plan to support balanced capital structure 4 Includes maturities. DEBT Estimated Amount4 Maturities Completed APS $1.2B $250M $1.3B PNW $500M $350M $500M EQUITY Estimated Amount Priced Settled PNW $650M $840M $0 Funding Strategy • External equity to support balanced APS capital structure and expanded, accretive capital investment • Of the $1.0B-$1.2B total incremental need, ~$920M is priced under equity forwards through October 2026 • Initiated new $500M ATM program, with ~$235M already priced • Maintain strong balance sheet and current credit ratings
Corporate Ratings1 Senior Unsecured Ratings Short-Term Ratings Outlook APS Moody’s Baa1 Baa1 P-2 Stable S&P BBB+ BBB+ A-2 Stable Fitch BBB+ A- F2 Stable Pinnacle West Moody’s Baa2 Baa2 P-2 Stable S&P BBB+ BBB A-2 Stable Fitch BBB BBB F3 Stable 10 1 Ratings as of October 30, 2026. Outlooks were reaffirmed by all agencies in April 2026. We are focused on maintaining healthy credit ratings to support affordable growth Credit Objectives • Maintain current investment-grade ratings at both PNW and APS • Target PNW FFO/Debt range of 14%-16% over the long-term o Midpoint represents >100bps cushion above Moody’s threshold • Target HoldCo debt to total Company debt % in the mid-teens • Maintain APS capital structure at >50% equity
$0 $200 $400 $600 $800 $1,000 $1,200 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 APS Fixed APS Floating PNW Fixed($millions) As of September 30, 2026 11 Debt maturity profile shows well managed and stable financing plan
Appendix
13 2025 APS Rate Case – Updated Positions Overview of rate request ($ in millions) key components Rate Base Growth $206 12 months Post-test Year Plant $162 Fair Value Increment $89 WACC (7.63%) $129 Other (Base fuel, depreciation study, etc.) $107 Total Revenue Requirement $692 Adjustor Transfers $(83) Net Revenue Increase $609 Customer Net Revenue Impact on Day 1 14.69% Additional details • APS has requested rates become effective in the second half of 2026 • Docket number: E-01345A-25-0105 • Additional details, including filing, can be found at http://www.pinnaclewest.com/investors Numbers may not foot due to rounding.
14 2025 APS Rate Case – Updated Positions Overview of rate request ($ in millions) key components Test Year Ended December 31, 2024 Total Rate Base - Adjusted $15.8B ACC Rate Base - Adjusted $13.1B Embedded Long-Term Cost of Debt 4.26% Allowed Return on Equity 10.70% ROE Band for Formula Rate +/- 40bps Capital Structure Long-Term Debt 47.65% Common Equity 52.35% Base Fuel Rate (¢/kWh) 4.3881¢/kWh Post-Test Year Plant period 12 months Proposed rate design modifications • Direct assignment of generation costs to ensure extra high load factor customers pay for the resources they require • Align rates with costs to move classes closer to their cost of service which supports small and medium sized businesses • Ensure growth pays for growth and offers significant customer protections
15 2025 APS Rate Case – Updated Positions Formula Rate Adjustment Mechanism (FRAM) proposal • Historic test year, with authorized ROE and capital structure approved in most recent rate case • Inclusion of 6 months post-test year plant • Removal of System Reliability Benefit and the Tax Expense Adjustor Mechanism if FRAM is approved • No rate adjustment if actual ROE falls within +/- 40 bps of authorized ROE • Revenue surplus/deficiency allocated based on ACC jurisdictional cost of service results FRAM proposed schedule ACC filing of Annual Update May 1 Last day for data requests for informal information exchange and to submit informal challenge(s). June 30 Informal challenge(s) resolution deadline July 30 Adjusted annual update posted August 25 Last day for data requests and to submit formal challenge(s) September 4 Last day for Staff challenges and responses to formal challenges September 28 Last day for Interested Parties with an unresolved Formal Challenge to file a request for Hearing October 1 Last day for Staff to file a request for Hearing October 10 Hearing Completed, or Staff Report and Proposed Order Issued (if no hearing) October 31 Commission Decision (if necessary) Before December 1 Rate Effective Date First billing cycle in December
16 2025 APS Rate Case - Testimony Summaries 1. Eliminate if FRAM approved 2. If the FRAM is adopted, the Commission should consider an ROE at the lower end of Staff's recommended range (9.55% - 9.80%) 3. Eliminate if FRAM approved and maintains 120-day schedule 4. Staff is currently evaluating the potential use of the TEAM mechanism to pass on the Nuclear PTC benefits to customers. APS Direct Testimony ACC Direct Testimony APS Rebuttal Testimony ACC Surrebuttal Testimony APS Rejoinder Testimony Return on Equity 10.70% 9.55% - 9.80%2 10.70% 9.55% - 9.80%2 10.70% Fair Value Increment 1.00% 0.20% 0.90% 0.20% 0.90% Capital Tracking Mechanism & Existing Adjustors Eliminate LFCR1 Eliminate SRB, LFCR & TEAM Eliminate SRB, LFCR & TEAM if FRAM Approved3 Eliminate SRB, LFCR, & TEAM4 if FRAM Approved Eliminate SRB, LFCR & TEAM if FRAM Approved3 Maintain SRB, TCA, PSA, DSMAC, REAC and TEAM Phase out DSMAC & REAC Optionally Eliminated Maintain TCA, PSA, DSMAC, and REAC Maintain TCA, PSA, DSMAC, and REAC Maintain TCA, PSA, DSMAC, and REAC Maintain TCA & PSA Formula Rate Adjustment Mechanism (FRAM) TY Eligible 12/31/2026 TY Eligible 12/31/2027 TY Eligible 12/31/2026 TY Eligible 12/31/2026 TY Eligible 12/31/2026 10.70% ROE 9.55% ROE 10.70% ROE 9.55% ROE 10.70% ROE +/- 20pbs Deadband +/- 50pbs Deadband +/- 40pbs Deadband +/- 50pbs Deadband +/- 40pbs Deadband Projected Plant 12 Months Post Test-Year Plant 6 Months Post Test-Year Plant 6 Months Post Test-Year Plant 6 Months Post Test-Year Plant 6 Months Additional items 100% D&O 50% D&O 50% D&O 50% D&O 50% D&O 100% Incentive Comp 50% Incentive Comp 50% Incentive Comp 50% Incentive Comp 50% Incentive Comp 100% BOD Expense 50% BOD Expense 50% BOD Expense 50% BOD Expense 50% BOD Expense Total Revenue Requirement Increase $662.44M $525.19M $694.23M $506.46M $691.61M Bill Impact 13.99% 10.68% 14.75% 10.22% 14.69%
2.4% 2.2% 2.1% 2.3% 2.5% 1.5%-2.5% 0% 1% 2% 3% 2021 2022 2023 2024 2025 2026E Residential Customer Growth1 APS Residential Growth Natn'l Avg.-Residential 17 • Phoenix housing is affordable compared to major cities in the region • Maricopa County ranked top county for economic development in 2025 by Site Selection Magazine • Ranked #1 in the nation for semiconductor manufacturing by Business Facilities Magazine – TSMC has committed $265B • Phoenix is ranked #1 out of 15 top growth markets for manufacturing by Newmark Group, a global real estate firm • Arizona State University ranked #1 in Innovation for 11th straight year by U.S. News and World Report • Phoenix ranks #1 in Western industrial markets by sales and industrial development (3rd nationally) by Commercial Café Report Arizona economy continues to be robust and attractive 1 National average from 2025 Itron Annual Energy Survey Report. Arizona continues to be an attractive service territory with strong customer growth - 10,000 20,000 30,000 40,000 2013 2017 2021 2025 New APS Customer Meter Sets
18 2026 IRP – Customers’ annual electricity needs are projected to more than double by 2041 • Strong long-term growth: Retail energy demand is projected to increase ~42,000 GWh by 2041, more than doubling current customer needs • Customer loads are diversified across all segments, de-risking future load profile • Manufacturing and data centers are expected to drive the majority of incremental load growth • The Preferred Portfolio identifies ~15 GW of new resources and ~2.6 GW of transmission capacity needed to reliably and affordably serve customers during planning horizon Load Growth Highlights 4% 24% 12% 23% 42% 28% 42% 25% 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2026 2041 Load Forecast Growth (GWh) Large Load Industrial & Manufacturing Data Centers Residential Traditional C&I
19 Significant investment opportunity to serve increased demand Which is requiring us to invest There is significant additional load we need to be ready to serve New gas generation: • Announced ~720 MW at Saguaro (2030) and ~1280MW at Desert Sun (2032) • Announced incremental investment of up to $440M for conversion of retired Cholla power plant to 380MWs of natural gas generation (2029) • Anchor shipper on new gas pipeline, expected to be in service by late 2029 Palo Verde generating station: • Approximately $200 million investment made on buyout option for nearly 100 MW of nuclear capacity previously under sale-leaseback • Increased investment in Palo Verde capital program of approximately $500M over the next 10 years Strategic transmission: • Several major transmission investments to support new resources and overall system buildout • Additional investment in large transmission projects to enable access to out of state generation and additional markets 9.2GW 2026 System Peak ~20GW Uncommitted Load Opportunity 9.2GW 2026 System Peak ~20GW Uncommitted Load Opportunity 5.8GW Committed Load
20 Our committed load has increased to 5.8 GW and is heavily de- risked 9.2GW 2026 System Peak 9.2GW 2026 System Peak Manufacturing Data Centers Residential Other >90% in different phases of construction GW Committed Load Growth by Segment ~0.9 GW Currently Served ~4.9GW Not Yet Served 0 1 2 3 4 5 6 5.8 GW of Committed Load • More than 84% of committed load is yet to be served, requiring substantial generation and transmission build out • The load growth is diversified: • Manufacturing segment includes multiple industries such as semiconductor, advanced packaging, and consumer products • Data center segment includes more than 15 different data center sites across our service territory • Residential customer load grows steadily with increased usage and customer growth • Other segment reflects large industrial customers including mining
5.9% 5.5% 5.9% 5.5% 4.0%* 5.2% 5.4% 6.8% 7.4%* 9.6% 9.5% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Weather-Normalized Retail Sales Growth 21 Strong track record of consistently robust sales growth * Excludes $11M reduction to unbilled revenues in January 2025 • 11 consecutive quarters of growth within or exceeding the original long-term guidance range of 4%-6% • Strong C&I sales growth as extra high load factor customers continue to ramp • 2026 YTD C&I growth of 13.9% • 2026 sales growth guidance updated to 8%-10% • Long term sales growth increased to 8%-10% and extended through 2030 Continued trend of robust sales growth
22 Transmission expansion could drive significant capital investment $6 billion + of investmentCumulative Transmission CapEx 2026 2028 2035 Source: APS 2026-2035 Ten Year Transmission System Plan • Investments in Extra High Voltage (EHV) transmission to support reliability, resiliency, and integration of new resources – Over 600 miles of 345kV and above and over 300 miles of 230kV lines in planning period • Investments in large transmission projects to enable access to out of state generation and additional markets • Constructive and timely recovery through annual FERC Formula rate with wheeling revenue benefiting retail customers $0.6B $2.1B Major Transmission Projects in Development Project Miles/kV Est. in-service Helios to Milligan ~23 mi/230kV 2027 Pinnacle Peak to Ocotillo ~50 mi/230kV 2030 Cotton Transmission Corridor: Panda to Freedom Lines #2 & #1 Jojoba to Rudd ~80 mi/230kV ~29 mi/500kV 2030/2031 2031 Proposed Transmission for New Gas TBD 2030 Transmission Investment Strategy • Investments in Extra High Voltage (EHV) transmission to support reliability, resiliency, and integration of new resources – Over 600 miles of 345kV and above and over 300 miles of 230kV lines in planni g period • Investments in large transmission projects to enable access to out f state gen ration nd additional markets • Constructive and timely recovery through annual FERC Formula rate with wheeling revenue ben fiti g retail customers
Source: Arizona Commerce Authority 23 Arizona’s commercial and industrial growth is diverse
$18 $16 $19 $19 $17 $9 $13 $15 $18 $24 $14 $6 $7 $9 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Renewable Energy Demand Side Management 2025 $143 Million 2026 $62 Million 1 Renewable Energy and Demand Side Management expenses are substantially offset by adjustment mechanisms. Numbers may not foot due to rounding. ($ in millions pretax) 24 Renewable Energy & Demand Side Management expenses1
$17 $28 $28 Q1 Q2 Q3 Q4 Variances vs. Normal All periods recalculated to current 10-year rolling average (2015 – 2024). Numbers may not foot due to rounding. ($ in millions pretax) 2026 Total Weather Impact: $73 Million 25 2026 gross margin effects of weather
Generation Planned Outages 26 2026 Planned Outage Schedule Q2 Plant Unit Duration in Days Palo Verde1 2 45 Q4 Plant Unit Estimated Duration in Days Palo Verde 1 46 1 Outage began at end of Q1
2025 Actual2 2026 Guidance2 Operating revenues1 $5.34 billion $5.76 - $5.86 billion Fuel and purchased power expenses1 $1.94 billion $2.23 - $2.27 billion Gross Margin $3.40 billion $3.53 - $3.59 billion Adjustments: Renewable energy and demand side management programs $153 million $80 - $90 million Adjusted gross margin $3.25 billion $3.45 - $3.51 billion Operations and maintenance1 $1.19 billion $1.17 - $1.19 billion Adjustments: Renewable energy and demand side management programs $143 million $75 - $85 million Adjusted operations and maintenance $1.04 billion $1.09 - $1.11 billion 27 1 Line items from Consolidated Statements of Income. 2 Numbers may not foot due to rounding. Non-GAAP Measure Reconciliation
Case/Docket # Q1 Q2 Q3 Q4 2025 Rate Case E-01345A-25-0105: Staff and Intervenor Direct Testimony filed March 2 and March 18 • APS Rebuttal Testimony filed April 3 • Staff and Intervenor Surrebuttal Testimony filed May 1 • APS Rejoinder Testimony filed May 11 • Rate Case hearing began May 18 • Initial briefs filed August 27 • Reply briefs filed September 11 Final Decision estimated December 2026 Power Supply Adjustor (PSA) E-01345A-22-0144: 2026 PSA rate reset effective Feb. 4 PSA reset to be filed Q1 2027 Transmission Cost Adjustor E-01345A-22-0144: Filed May 15 for a June 1 effective date Lost Fixed Cost Recovery E-01345A-26-0337: 2026 LFCR filed July 31 2026 LFCR effective Dec. 1 (if approved) Resource Comparison Proxy E-01345A-26-0171: Updated RCP calculation filed May 1 RCP update effective Sep. 1 2027-2031 RES Implementation Plan E-01345A-26-0264: 2026 RES Plan approved Feb. 4 2027-2031 RES Plan filed July 1 2026 DSM/TE Implementation Plan E-01345A-25-0106: 2026 DSM/TE Plan filed April 7 ACC Inquiry into Nuclear Issues E-00000A-25-0026: ACC Nuclear Workshop #2 held Feb. 24 ACC Nuclear Workshop #2B held June 25 Final Workshop to be held November 19 ACC Inquiry into Data Center Rate Classifications E-00000A-25-0069: ACC Large Load Users Development Workshop held April 16 2026 Integrated Resource Plan E-99999A-25-0058: 2026 IRP filed October 30 14th Biennial Transmission Assessment E-99999A-25-0006: APS Ten-Year Transmission System Plan filed Jan. 30 ACC 14th BTA 1st Workshop held July 16 28 2026 Key Regulatory Dates Dates are tentative and subject to change.
29 Wildfire Mitigation Vegetation Management Asset Inspection Monitoring and Awareness Operational Mitigations • Comprehensive right- of-way clearance on maintained cycles • Defensible space around poles (DSAP) • Hazard tree program • Enhanced line patrols • Technology deployments • Drone use • Infra-red scans • Non-reclosing strategy • Public outreach program • Red Flag Alert protocols • Enhanced Powerline Safety Settings (EPSS) • Public Safety Power Shutoff (PSPS) • Dedicated team of meteorologists • Advanced fire modeling software • Cameras and weather stations • Federal & state agency partnerships Grid Hardening Investments • Ongoing distribution system upgrades • Mesh pole wrapping • Expulsion limiting fuses • Steel poles (if truck accessible) Internal: 21-person fire mitigation department engages across entire APS organization to plan and implement initiatives External: Member of 10 fire mitigation industry associations Comprehensive Wildfire Mitigation Plan (CWMP) approved by AZ DFFM as required by AZ Revised Statutes Our current practices are comprehensive and multi-faceted:
30 Consolidated Statistics * Includes reduction of accrued unbilled revenues in January 2025. Numbers may not foot due to rounding. 3 Months Ended September 30, 9 Months Ended September 30, 2026 2025 Incr (Decr) 2026 2025 Incr (Decr) ELECTRIC OPERATING REVENUES (Dollars in Millions) Retail Residential $ 1,032 $ 963 $ 69 $ 2,222 $ 2,064 $ 158 Business 863 765 98 2,173 1,944 229 Total Retail 1,895 1,728 167 4,394 4,008 387 Sales for Resale (Wholesale) 41 46 (5) 70 89 (19) Transmission for Others 34 44 (11) 95 102 (7) Other Miscellaneous Services 3 2 1 19 13 6 Total Operating Revenues $ 1,973 $ 1,821 $ 152 $ 4,578 $ 4,212 $ 366 ELECTRIC SALES (GWH) Retail Residential 6,111 5,728 383 12,942 12,084 857 Business 6,583 5,739 844 16,839 14,617 2,222 Total Retail Sales 12,694 11,467 1,227 29,780 26,701 3,079 Sales for Resale (Wholesale) 1,332 1,505 (173) 2,943 3,496 (553) Total Electric Sales 14,026 12,972 1,054 32,723 30,197 2,526 RETAIL SALES (GWH) - WEATHER NORMALIZED Residential 5,882 5,628 253 12,480 11,976 504 Business 6,537 5,711 826 16,583 14,561 2,023 Total Retail Sales 12,419 11,340 1,079 29,063 26,536 2,527 Retail sales (GWH) (% over prior year) 9.5% 5.4% 9.5% 4.5% AVERAGE ELECTRIC CUSTOMERS Retail Customers Residential 1,313,839 1,289,919 23,920 1,309,543 1,282,986 26,557 Business 147,988 146,536 1,452 147,864 145,838 2,026 Total Retail 1,461,827 1,436,455 25,372 1,457,407 1,428,824 28,583 Wholesale Customers 53 54 (1) 52 56 (4) Total Customers 1,461,881 1,436,509 25,372 1,457,459 1,428,880 28,579 Total Customer Growth (% over prior year) 1.8% 2.4% 2.0% 2.4% RETAIL USAGE - WEATHER NORMALIZED (KWh/Average Customer) Residential 4,477 4,363 113 9,530 9,334 195 Business 44,175 38,977 5,198 112,153 99,840 12,313 *
31 Consolidated Statistics Numbers may not foot due to rounding. Due to hot weather starting in March, we are reporting CDDs through March for 2025, 2026, and the Normal *Includes net battery activity (charges less discharges). 3 Months Ended September 30, 9 Months Ended September 30, 2026 2025 Incr (Decr) 2026 2025 Incr (Decr) ENERGY SOURCES (GWH) Generation Production Nuclear 2,525 2,551 (26) 7,082 7,198 (116) Coal 1,659 1,770 (111) 4,477 4,319 158 Gas 3,588 3,339 249 7,767 7,768 (1) Oil 0 0 (0) 0 0 (0) Renewables 251 290 (38) 724 765 (40) Total Generation Production 8,023 7,949 74 20,050 20,050 0 Purchased Power Conventional 3,554 2,971 583 6,190 5,233 957 Resales 598 870 (272) 822 1,158 (336) Renewables 2,523 1,883 641 7,025 5,297 1,728 Total Purchased Power 6,675 5,723 952 14,037 11,688 2,349 Total Energy Sources 14,699 13,673 1,026 34,088 31,738 2,350 POWER PLANT PERFORMANCE Capacity Factors - Owned Nuclear 100% 101% (1)% 94% 96% (2)% Coal 77% 83% (5)% 70% 68% 2% Gas and Oil 43% 41% 2% 32% 32% (1)% Solar 30% 35% (5)% 30% 31% (2)% System Average 58% 58% (0)% 49% 50% (1)% 3 Months Ended September 30, 9 Months Ended September 30, 2026 2025 Incr (Decr) 2026 2025 Incr (Decr) WEATHER INDICATORS - RESIDENTIAL Actual Cooling Degree-Days 1,444 1,397 47 2,135 1,981 154 Heating Degree-Days N/A N/A 163 389 (226) Average Humidity 31% 23% 8% 26% 21% 5% 10-Year Averages (2015 - 2024) Cooling Degree-Days 1,333 1,333 - 1,868 1,868 - Heating Degree-Days N/A N/A 474 474 - Average Humidity 30% 30% - 25% 25% - * *