Pinnacle West Reports 2024 Full-Year and Fourth-Quarter Results

   -- 
 New customer rates, retail sales growth of 5.7% and an exceptionally 
      hot summer contribute to an increase in retail revenue and full-year 
      financial results 
 
 
   -- 
 Annual retail customer growth increases a robust 2.1% 
 
 
   -- 
 Customer satisfaction continues improvement, reaches new highs 
 
PHOENIX--(BUSINESS WIRE)--February 25, 2025-- 

Pinnacle West Capital Corp. $(PNW)$ today reported consolidated net income attributable to common shareholders of $608.8 million, or $5.24 per diluted share, for full-year 2024. This result compares with net income of $501.6 million, or $4.41 per diluted share, in 2023.

For the quarter ended Dec. 31, 2024, Pinnacle West reported a consolidated net loss attributable to common shareholders of $6.8 million, or a loss of $0.06 per diluted share, compared with a net loss of $23,000, or $0.00 per diluted share, for the same period in 2023.

The higher 2024 full-year results reflect an increase of about $107 million, primarily as a result of the impacts of new customer rates, increased customer usage and growth, the effects of weather, and higher revenue resulting from Arizona Public Service Co.'s (APS) Lost Fixed Cost Recovery $(LFCR)$ adjustor mechanism and a surcharge resulting from the outcome of the utility's 2019 Rate Case appeal. These positive factors were partially offset by higher operations and maintenance expense, higher depreciation and amortization expense mostly due to increased plant and intangible assets, higher interest charges, net of AFUDC, higher income taxes and lower transmission revenues.

"Our employees once again did an excellent job running and maintaining the electric grid and ensuring that our 1.4 million customers received the reliable electrical service they expect from us," said Pinnacle West Chairman, President and CEO Jeff Guldner. "Our strong year-end earnings not only reflect this outstanding operational performance, but the results are consistent with a fast-growing service territory and us making the substantial infrastructure investments needed to meet the energy requirements of all our customers, now and in the future."

Reliability for a Growing State

Reliability remains at the core of the company's customer service and drives plans to continue providing a balanced energy portfolio delivering power at reasonable rates.

"Our customer base, which for decades leaned heavily residential, is now more diversified than ever before," APS President Ted Geisler said. "A dramatic increase in commercial and industrial customers in our service territory -- including new semiconductor manufacturing plants and expanding data center operations -- is leading to incredible economic growth and triggering a historic wave of demand for electricity in our state."

APS, the company's principal subsidiary, experienced customer growth of 2.1% in 2024 and anticipates projected average annual growth in the range of 1.5% to 2.5% through 2027. Not surprisingly, these changes are driving a significant increase in energy consumption. APS also experienced weather-normalized, year-over-year retail electricity sales growth of 5.7% in 2024. Future sales are expected to increase between 4% and 6% annually over the next three years due in large part to the expected additions of several large data centers and new large manufacturing facilities.

To prioritize reliability and meet requirements of this substantial growth, APS expects to add 9,805 megawatts (MW) of renewable power, battery storage and natural gas to the grid between 2025 and 2028 -- more than 90% of which will be carbon-free. Some expansion highlights include:

   -- 
 Power purchase agreements that are expected to add 3,321 MW of solar 
      power along with 168 MW from the APS-owned Ironwood Solar Plant, 
      currently under construction in Yuma County. 
 
 
   -- 
 At the Agave Solar Plant in Maricopa County, construction is under way 
      on 150 MW of battery storage that will deliver solar energy to customers 
      after sunset. 
 
 
   -- 
 Power purchase agreements for an anticipated 5,087 MW of battery energy 
      storage that grid operators can release during evening hours when 
      customer demand is greatest. 
 
 
   -- 
 500 MW of additional wind power in northern Arizona's Navajo County; 
      and 
 
 
   -- 
 Expansion of the company's existing Sundance and Redhawk natural 
      gas-fired power plants. These additions are expected to deliver a 
      combined 487 MW, providing much-needed energy during peak consumption 
      hours. Just as important, they provide a critical complement to the large 
      quantities of solar and battery energy storage we're adding to our 
      system. 
 

Additionally, excellent performance at the company's generating facilities continues to benefit customers and the company's bottom line. For the 16th consecutive year -- and 20th overall -- Palo Verde Generating Station's three nuclear units exceeded 30 million MWh of net generation and achieved a capacity factor of 93.7%. Importantly, the plant remains a cornerstone of APS's aspirational goal to deliver 100% clean, carbon-free energy by 2050 and a nearer-term target to achieve a resource mix that is 65% clean by 2030.

"Our employees remain focused on creating value for customers and shareholders, including consistently working to minimize our costs, while maintaining reliable electric service and improving customer satisfaction. As a result, we are well-positioned to have a solid 2025," Geisler concluded.

Staying Focused on Customer Satisfaction

In furtherance of a customer-centric culture, APS's focus remains on its customers and the communities it serves. This past year, the company rolled out a newly designed customer bill with the aim of increasing personalization and helping customers better understand their energy use and find ways to save. The bill was developed with direct input from customers.

APS also increased its energy support and crisis bill assistance; maintained a summer moratorium on disconnects for past-due bills; assisted customers with payment arrangements; and partnered with more than 100 local non-profit and community agencies to connect the state's most vulnerable populations with helpful resources.

These and other company-wide efforts helped provide a more frictionless customer experience that was recognized by APS customers, as measured by J.D. Power. For 2024, APS ranked at the top of the second quartile for large investor-owned utilities for both business and residential customers, with the residential results being APS's highest rank and placement since 2016. In fact, this past year, residential customers ranked APS at or near the top of its peer set for Phone Customer Care, Power Quality & Reliability, Billing & Payment and Corporate Citizenship.

Financial Outlook

For 2025, the Company continues to estimate its consolidated earnings will be within a range of $4.40 to $4.60 per diluted share on a weather-normalized basis. Key factors and assumptions underlying this outlook can be found in the year-end/fourth-quarter 2024 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 longer-term financial outlook, at 11 a.m. ET (9 a.m. Arizona time) today, Feb. 25. 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 685021. A replay of the call also will be available at pinnaclewest.com/presentations or by telephone until 11:59 p.m. ET, Tuesday, March 4, 2025, by calling (877) 481-4010 in the U.S. and Canada or (919) 882-2331 internationally and entering replay passcode 51904.

General Information

Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of more than $26 billion, about 6,500 megawatts of generating capacity and approximately 6,400 employees in Arizona and New Mexico. Through its principal subsidiary, Arizona Public Service, the company provides retail electricity service to about 1.4 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:

   -- 
 uncertainties associated with the current and future economic 
      environment, including economic growth rates, labor market conditions, 
      inflation, supply chain delays, increased expenses, volatile capital 
      markets, or other unpredictable effects; 
 
 
   -- 
 current and future economic conditions in Arizona, such as the housing 
      market and overall business and regulatory environment; 
 
 
   -- 

 our ability to manage capital expenditures and operations and 
      maintenance costs while maintaining reliability and customer service 
      levels; 
 
 
   -- 
 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; 
 
 
   -- 
 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), the effects of energy conservation measures and distributed 
      generation, and technological advancements; 
 
 
   -- 
 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; 
 
 
   -- 
 power plant and transmission system performance and outages; 
 
 
   -- 
 competition in retail and wholesale power markets; 
 
 
   -- 
 regulatory and judicial decisions, developments, and proceedings; 
 
 
   -- 
 new legislation, ballot initiatives and regulation or interpretations 
      of existing legislation or regulations, including those relating to 
      environmental requirements, regulatory and energy policy, nuclear plant 
      operations and potential deregulation of retail electric markets; 
 
 
   -- 
 fuel and water supply availability; 
 
 
   -- 
 our ability to achieve timely and adequate rate recovery of our costs 
      through our rates and adjustor recovery mechanisms, including returns on 
      and of debt and equity capital investment; 
 
 
   -- 
 the ability of APS to meet renewable energy and energy efficiency 
      mandates and recover related costs; 
 
 
   -- 
 the ability of APS to achieve its clean energy goals (including a goal 
      by 2050 of 100% clean, carbon-free electricity) and, if these goals are 
      achieved, the impact of such achievement on APS, its customers, and its 
      business, financial condition, and results of operations; 
 
 
   -- 
 risks inherent in the operation of nuclear facilities, including spent 
      fuel disposal uncertainty; 
 
 
   -- 
 the development of new technologies which may affect electric sales or 
      delivery, including as a result of delays in the development and 
      application of new technologies; 
 
 
   -- 
 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; 
 
 
   -- 
 environmental, economic, and other concerns surrounding coal-fired 
      generation, including regulation of greenhouse gas emissions; 
 
 
   -- 
 volatile fuel and purchased power costs; 
 
 
   -- 
 the investment performance of the assets of our nuclear decommissioning 
      trust, captive insurance cell, pension, and other postretirement benefit 
      plans and the resulting impact on future funding requirements; 
 
 
   -- 
 the liquidity of wholesale power markets and the use of derivative 
      contracts in our business; 
 
 
   -- 
 potential shortfalls in insurance coverage; 
 
 
   -- 
 new accounting requirements or new interpretations of existing 
      requirements; 
 
 
   -- 
 generation, transmission and distribution facilities and system 
      conditions and operating costs; 
 
 
   -- 
 our ability to meet the anticipated future need for additional 
      generation and associated transmission facilities in our region; 
 
 
   -- 
 the willingness or ability of our counterparties, power plant 
      participants and power plant landowners to meet contractual or other 
      obligations or extend the rights for continued power plant operations; 
      and 
 
 
   -- 
 restrictions on dividends or other provisions in our credit agreements 
      and Arizona Corporation Commission orders. 
 

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       TWELVE MONTHS ENDED 
                            DECEMBER 31,              DECEMBER 31, 
                       ----------------------  -------------------------- 
                          2024        2023        2024         2023 
                        ---------    -------    ---------    --------- 
 
Operating Revenues     $1,095,408   $991,574   $5,124,915   $4,695,991 
 
Operating Expenses 
   Fuel and purchased 
    power                 396,148    375,879    1,822,566    1,792,657 
   Operations and 
    maintenance           327,251    281,388    1,165,156    1,058,725 
   Depreciation and 
    amortization          230,585    203,598      895,346      794,043 
   Taxes other than 
    income taxes           56,803     56,064      227,395      224,013 
   Other expenses              83        265        2,389        1,913 
                        ---------    -------    ---------    --------- 
      Total             1,010,870    917,194    4,112,852    3,871,351 
                        ---------    -------    ---------    --------- 
 
Operating Income           84,538     74,380    1,012,063      824,640 
                        ---------    -------    ---------    --------- 
 
Other Income 
 (Deductions) 
   Allowance for 
    equity funds used 
    during 
    construction            9,830     13,047       38,620       53,118 
   Pension and other 
    postretirement 
    non-service 
    credits - net          12,237     10,135       48,870       40,648 
   Other income             5,380      5,242       48,614       33,666 
   Other expense          (19,556)    (9,140)     (34,136)     (25,056) 
                        ---------    -------    ---------    --------- 
      Total                 7,891     19,284      101,968      102,376 
                        ---------    -------    ---------    --------- 
 
Interest Expense 
   Interest charges       107,152     96,027      425,742      374,887 
   Allowance for 
    borrowed funds 
    used during 
    construction          (12,192)    (9,433)     (48,270)     (43,564) 
                        ---------    -------    ---------    --------- 
      Total                94,960     86,594      377,472      331,323 
                        ---------    -------    ---------    --------- 
 
Income (Loss) Before 
 Income Taxes              (2,531)     7,070      736,559      595,693 
 
Income Taxes                  (10)     2,787      110,529       76,912 
                        ---------    -------    ---------    --------- 
 
Net Income (Loss)          (2,521)     4,283      626,030      518,781 
 
      Less: Net 
       income 
       attributable 
       to 
       noncontrolling 
       interests            4,306      4,306       17,224       17,224 
 
Net Income (Loss) 
 Attributable To 
 Common Shareholders   $   (6,827)  $    (23)  $  608,806   $  501,557 
                        =========    =======    =========    ========= 
 
 
Weighted-Average 
 Common Shares 
 Outstanding - Basic      114,337    113,534      113,846      113,442 
 
Weighted-Average 
 Common Shares 
 Outstanding - 
 Diluted                  114,337    113,534      116,232      113,804 
 
Earnings Per 
 Weighted-Average 
 Common Share 
 Outstanding 
   Net income (loss) 
    attributable to 
    common 
    shareholders - 
    basic              $    (0.06)  $      -   $     5.35   $     4.42 
   Net income (loss) 
    attributable to 
    common 
    shareholders - 
    diluted            $    (0.06)  $      -   $     5.24   $     4.41 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250225561594/en/

 
    CONTACT:    Media Contact: Alan Bunnell (602) 250-3376 

Analyst Contact: Amanda Ho (602) 250-3334

Website: pinnaclewest.com

(END) Dow Jones Newswires

February 25, 2025 08:40 ET (13:40 GMT)