PINNACLE WEST REPORTS 2025 THIRD-QUARTER FINANCIAL RESULTS (Form 8-K)

PINNACLE WEST REPORTS 2025 THIRD-QUARTER FINANCIAL RESULTS

•Customer growth, summer heat drive increase in sales and usage

•Operating performance, customer reliability remain strong

•Company expands support for community and utility bill assistance programs

PHOENIX - Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income attributable to common shareholders for the 2025 third quarter of $413.2 million, or $3.39 per diluted share of common stock. This result compares with consolidated net income of $395.0 million, or $3.37 per share of common stock, for the same period a year ago. However, through the first three quarters of the current year, the company's earnings were 2.4% lower than in the first nine months of 2024.

The 2025 third-quarter results reflect an increase of about $18 million compared to the 2024 third quarter, primarily as a result of increased customer usage, customer growth and related pricing; higher transmission service revenues; lower operations and maintenance expenses; higher AFUDC; lower depreciation and amortization expenses mostly due to operations ceasing at Cholla, partially offset by increased plant additions and intangible assets. These positive factors were partially offset by the unfavorable impacts of weather effects versus the same period a year ago; higher interest charges; lower pension and other post-retirement non-service credits; higher income taxes due to higher pre-tax income and lower tax credits.

"Driven by one of the fastest-growing service territories in the country and the third-hottest Arizona summer on record, we experienced an increase in retail sales that helped contribute to solid third-quarter financial results," said Pinnacle West Chairman, President and Chief Executive Officer Ted Geisler. "In addition, our employees continued to do what they do best: maintaining reliable electric service for our 1.4 million customers. Our diverse generation fleet - including critical baseload generating plants like Palo Verde and Four Corners - performed well, ensuring we met our customers' energy needs."

Providing Reliable Power Amid Record Growth and Demand

In addition to robust customer growth of 2.4% and weather-normalized sales growth of 5.4% (largely boosted by residential sales growth of 4.3%) during the quarter, weather variations also spurred an increase in customers' energy consumption. While the average high and low temperatures were lower during the 2025 third quarter compared to last year's record-setting third quarter, both periods recorded temperatures well over historical averages. As a result, the number of residential cooling degree-days (a utility's measure of the effects of weather) in this year's third quarter was 9.1% higher than historical 10-year averages.

On August 7, Arizona Public Service (APS) customers set an all-time record peak demand of 8,631 megawatts (MW), the third time this summer that demand surpassed the previous record set in 2024.

These milestones mark the third consecutive year of record-breaking summer demand and underscore the strength of APS's careful, long-term planning for adequate resources, combined with equipment maintenance programs and innovative customer demand side programs.

Arizona's rapid population and economic growth further reinforce the importance of APS's reliability and resiliency efforts. According to the U.S. Census Bureau, annual population gains in Maricopa County (home of the Phoenix metropolitan area) are among the highest in the United States since 2016.

Arizona's business climate is equally strong. Site Selection Magazine recently named Maricopa County the top U.S. region for economic development, fueled in part by Phoenix's tech momentum and advanced manufacturing boom. And, according to CBRE's 2025 Scoring Tech Talent Report, Phoenix is now among the top 20 tech markets in North America.

Planning Ahead for Arizona's Energy Future

As more people and businesses choose to move to Arizona, Geisler said the company remains focused on delivering safe, reliable and resilient energy to power the state's future - supporting customers, communities and the economy, alike.

APS intends to invest more than $2.5 billion annually through 2028 for infrastructure additions and upgrades. In addition to already planned distribution and transmission improvements, last week APS announced plans for a proposed natural gas power plant site, that would be built near Gila Bend, Ariz., capable of adding up to 2,000 MW of reliable and flexible generation to APS's system.

The Desert Sun Power Plant would support increasing energy needs from existing customers, as well as addressing unprecedented requests from extra-large energy users, such as data centers and manufacturers. The plant is expected to be completed in two phases.

Phase One (expected to enter service by late-2030) would support existing customers, plus new residential and business customers outside of the extra-large segment. Phase Two is earmarked for new, extra-large energy users and would be paid for by those customers through APS's proposed subscription model, part of the company's "growth pays for growth" strategy. This approach helps ensure that extra-large energy users pay for infrastructure they need without compromising reliability and affordability for the families and businesses that also count on APS for energy.

"Natural gas plays a vital role in providing around-the-clock reliability, especially during peak hours when solar and wind resources are unavailable," said Geisler. "It is a critical component in our portfolio of diverse energy resources that ensures our customers have the reliable energy they need to live comfortably and do business in Arizona, while also keeping customer bills as low as possible."

Focus on Community Resilience and Financial Support

While APS's infrastructure investments help ensure the grid will meet Arizona's growing energy needs, Geisler added that the company's commitment goes beyond reliability.

"While summer has ended and temperatures have begun to cool off, some of our customers continue to face economic hardships that make it a challenge to pay their bills or make repairs to vital heating and cooling equipment," he said. "As a result, we are partnering with community nonprofits that can provide much-needed assistance directly to our customers who need it most."

APS is expanding community support efforts this year by granting an additional $3 million in shareholder funds to nonprofit organizations that provide utility bill assistance, air conditioner repair and replacement and housing support across Arizona. "Altogether, since 2021, our company has provided $6.1 million to support heat relief efforts in Arizona, inclusive of this contribution and previously pledged $2.5 million for crisis bill assistance this year alone," Geisler added.

These efforts are part of a broader, ongoing collaboration between APS and groups like St. Vincent de Paul, AllThrive 365, Chicanos Por La Causa, the American Red Cross, Maricopa County Human Services and Wildfire to help Arizonans in need.

APS also remains committed to providing cost-effective demand-side management, energy efficiency and renewable energy programs that help customers manage their energy use and reduce their impact on the grid. These initiatives - which help reduce overall energy demand and support clean energy development - remain at the heart of APS's growth strategy.

"As we look ahead, our employees remain focused on powering Arizona's future with infrastructure that's built to withstand challenges, adapt to growth and support the evolving needs of our customers and communities," Geisler stated. "By investing in both infrastructure and community partnerships, APS is helping power Arizona now and into the future."

Financial Outlook

Given the positive customer and sales growth and impact of weather and through the first three quarters of the year - partially offset by higher than previously forecasted operations and maintenance expenses - the company is adjusting its 2025 consolidated earnings guidance upward to a range of $4.90 to $5.10 per diluted share.

Looking forward, the Company estimates its 2026 consolidated earnings will be within a range of $4.55 to $4.75 per diluted share on a weather-normalized basis.

Key factors and assumptions underlying the 2025 and 2026 outlook can be found in the third-quarter 2025 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 502381. A replay of the call also will be available at pinnaclewest.com/presentations or by telephone until 11:59 p.m. ET, Monday, Nov. 10, 2025, by calling (877) 481-4010 in the U.S. and Canada or (919) 882-2331 internationally and entering replay passcode 53038.

General Information

Pinnacle West Capital Corp., an energy holding company based in Phoenix, has consolidated assets of nearly $30 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.