Pinnacle West — 2026 Third Quarter Earnings Summary

Financial Performance:

• Consolidated net income attributable to common shareholders for Q3 2026 was $434.2 million ($3.49 per diluted share), compared to $413.2 million ($3.39 per diluted share) in Q3 2025.
• Operating revenues for the three months ended September 30, 2026, were $1,972.7 million, up from $1,820.7 million in the same period of 2025.
• Operating income for the quarter was $620.8 million, an increase from $581.8 million in the prior year period.
• Net income attributable to common shareholders for the nine months ended September 30, 2026, was $645.7 million ($5.20 per diluted share), compared to $601.1 million ($4.93 per diluted share) in 2025.
• Fuel and purchased power expenses increased to $758.0 million in Q3 2026 from $656.0 million in Q3 2025.
• Depreciation and amortization expenses rose to $242.5 million in Q3 2026 from $224.6 million in Q3 2025.
• Interest charges increased to $138.8 million in Q3 2026 from $125.2 million in Q3 2025.
• Weather-normalized sales growth was 9.5% for the quarter, driven by a 14.5% increase in commercial and industrial sales and a 4.5% increase in residential sales.
• Overall customer growth increased 1.8% (including 1.9% residential customer growth).

Guidance and Future Outlook:

• The company adjusted its 2026 consolidated earnings guidance upward to a range of $5.05 to $5.25 per diluted share, citing positive customer and sales growth and weather impacts through the first three quarters.
• APS filed its Integrated Resource Plan with the Arizona Corporation Commission, outlining resources needed to serve customers over the next 15 years.
• Customers' annual electricity needs are projected to more than double by 2041, with peak demand expected to rise more than 5,000 MW above current levels.

Business Segments and Product Lines:

• APS maintained reliable service during a summer of record demand, surpassing the previous year's peak demand of 8,648 MW a dozen times.
• APS customers set an all-time peak demand record of 9,166 megawatts (MW) on August 2, 2026.
• The quarter featured one of the more active monsoon seasons in recent years, with residential cooling degree days up 3% from the same period in 2025.
• APS is providing over $33 million in bill credits to customers effective November 2026, funded in part by revenue from the Green Power Partners program.
• An additional $5 million in financial hardship assistance is available, funded by Pinnacle West rather than customer rates.

Market and Competitive Landscape:

• Arizona continues to grow at an extraordinary pace, supporting the company's strong operational performance.
• The company emphasizes that growth should pay for growth, with new large customers funding infrastructure costs to protect existing customer rates.
• The company notes potential competition from deregulation and large customers developing utility-scale generation to serve their energy needs.

Risks and Challenges:

• Key risks include the ability to achieve timely rate recovery of costs, impacts of federal, state, and local laws and regulations, and regulatory oversight of the Palo Verde nuclear plant.
• Climate change impacts, such as weather extremes, prolonged drought, and wildfires, pose risks to the electric system and operations.
• Risks include variations in electricity demand due to weather, seasonality, economic conditions, and data center growth.
• Potential risks involve cybersecurity threats, physical attacks, fuel and water supply availability, and volatility in fuel and purchased power costs.
• The company faces risks related to the investment performance of nuclear decommissioning trusts, pension plans, and the ability to access capital markets.

Management Commentary and Tone:

• CEO Ted Geisler stated that the company is committed to ensuring growth strengthens the grid without shifting costs to Arizona families and businesses.
• Geisler reiterated the "Pledge for Responsible Energy Growth," built on safeguarding reliability, protecting customer rates, and preserving capacity.
• Management emphasized that "Growth should pay for growth," ensuring new large customers fund the infrastructure needed to serve them.
• The tone reflects confidence in the company's ability to meet record demand while maintaining reliability and returning savings to customers.

Other Key Points:

• Pinnacle West Capital Corp. has consolidated assets of approximately $33.5 billion, almost 6,300 megawatts of generating capacity, and approximately 6,600 employees.
• The company provides retail electricity service to about 1.5 million Arizona homes and businesses through its principal subsidiary, Arizona Public Service.
• A conference call and webcast were scheduled for November 3, 2026, to discuss financial results and the long-term outlook.
• The company operates under a "Pledge for Responsible Energy Growth" which includes not connecting new extra-large customers faster than the grid can reliably support.