Pinnacle West(US:PNW)2022-11-03 12:29Financial Performance - Operating revenues for Q3 2022 were $1,469,871, an increase of 12.3% from $1,308,254 in Q3 2021[23] - Net income attributable to common shareholders for Q3 2022 was $326,326, a decrease of 3.4% compared to $339,798 in Q3 2021[23] - The company reported a total comprehensive income of $332,146 for Q3 2022, compared to $345,016 in Q3 2021, reflecting a decrease of 3.8%[24] - Net income for the nine months ended September 30, 2022, was $520,512 thousand, a decrease of 13.8% compared to $604,054 thousand for the same period in 2021[32] - For the nine months ended September 30, 2022, operating revenues increased to $3,315,071,000, up from $3,004,978,000 in the same period of 2021, representing a growth of approximately 10.3%[42] - The net income for the nine months ended September 30, 2022, was $538.8 million, a decrease of 7.5% from $611.6 million in the same period of 2021[64] Expenses and Liabilities - Total operating expenses for the nine months ended September 30, 2022, were $2,619,911, up 16.4% from $2,249,685 in the same period of 2021[23] - Interest expense for the nine months ended September 30, 2022, was $186,630, up from $173,316 in the same period of 2021[23] - Total current liabilities increased to $2,060,904 thousand as of September 30, 2022, up from $1,756,869 thousand in 2021, representing a growth of approximately 17.3%[30] - Total operating expenses for the nine months ended September 30, 2022, were $2,610,056,000, compared to $2,239,959,000 in the same period of 2021, an increase of about 16.5%[42] - Interest expense for the nine months ended September 30, 2022, totaled $174,447,000, compared to $165,214,000 in the same period of 2021, an increase of approximately 5.4%[42] Assets and Equity - Total assets as of September 30, 2022, were $22,844,598, an increase from $22,003,222 as of December 31, 2021[27] - Total shareholders' equity rose to $6,362,113 thousand as of September 30, 2022, up from $6,021,460 thousand in 2021, indicating a growth of 5.7%[30] - The company’s total assets as of September 30, 2022, were reported at $6,362,113,000, compared to $6,186,464,000 as of September 30, 2021, an increase of approximately 2.8%[42] - Total assets increased to $22,711,504 thousand as of September 30, 2022, compared to $21,909,656 thousand as of December 31, 2021, reflecting a growth of approximately 3.66%[48] - Total liabilities and equity reached $22,844,598 thousand as of September 30, 2022, compared to $22,003,222 thousand in 2021, reflecting an increase of 3.8%[30] Cash Flow and Investments - Cash flows from operating activities provided $1,031,914 thousand, significantly higher than $660,513 thousand in the previous year, marking a 56.2% increase[32] - The company reported a net cash used for investing activities of $1,221,895 thousand, higher than $962,312 thousand in the previous year, indicating a 27% increase in investment outflows[32] - Cash and cash equivalents decreased to $7,032 from $9,969 as of December 31, 2021[27] - Cash and cash equivalents at the end of the period were $7,032 thousand, down from $25,688 thousand in 2021, representing a decrease of 72.6%[32] - Net cash provided by operating activities was $1,040,356 thousand, an increase of 59.7% compared to $650,697 thousand in the prior year[52] Capital Expenditures - Capital expenditures for the nine months ended September 30, 2022, were $1,276,861 thousand, compared to $1,006,431 thousand in 2021, reflecting a 27% increase[32] - Capital expenditures for the nine months ended September 30, 2022, were $1,254,693 thousand, compared to $1,006,431 thousand in the same period of 2021, reflecting a rise of 24.6%[52] Customer Revenue - Retail electric revenue from residential customers reached $1,648.0 million for the nine months ended September 30, 2022, up 6.0% from $1,554.5 million in 2021[66] - Pinnacle West's retail electric revenue from non-residential customers increased to $1,370.2 million for the nine months ended September 30, 2022, up 12.7% from $1,216.4 million in 2021[66] - Wholesale energy sales for the nine months ended September 30, 2022, amounted to $198.5 million, a significant increase from $144.1 million in 2021, reflecting a growth of 37.8%[66] Regulatory and Compliance - APS filed a 2022 Rate Case on October 28, 2022, seeking a net increase of $460 million in annual retail base rates, which would result in a 13.6% average annual customer bill increase[85] - The original cost rate base for APS's 2022 Rate Case is $10.5 billion, with a proposed weighted-average cost of capital of 7.17%[87] - The ACC Staff recommended a rate increase of $59.8 million, translating to an average annual customer bill increase of 1.82%, while RUCO suggested a revenue decrease of $50.1 million, or a 1.52% average annual customer bill decrease[97] - The ACC approved a total annual revenue decrease for APS of $4.8 million, excluding temporary CCT payments and expenditures, following amendments to the 2019 Rate Case ROO[99] Environmental and Energy Initiatives - APS's 2022 DSM Implementation Plan requested a budget of $78.4 million, representing an increase of approximately $14 million from 2021[125] - The ACC adopted clean energy rules requiring APS to meet certain clean energy standards and technology procurement mandates, with a new docket opened for all-source RFP requirements[114] - APS's community solar proposal includes a pilot-scale program of up to 140MW, pending approval from the ACC[115] - The ACC approved a final clean energy rule requiring 100% of retail kWh sales from clean energy resources by 2070, with interim carbon reduction targets[159] Debt and Financing - The company issued long-term debt amounting to $455,628 thousand during the nine months ended September 30, 2022, compared to $596,999 thousand in the same period of 2021[32] - Pinnacle West entered into a $450 million term loan facility on December 21, 2021, with $150 million received initially and the remaining $300 million on January 6, 2022, recognized as long-term debt[75] - As of September 30, 2022, Pinnacle West had a $200 million revolving credit facility maturing on May 28, 2026, with no outstanding borrowings and $24 million in commercial paper borrowings[77] Pension and Benefits - The company reported a net periodic benefit cost for pension benefits of $(1,323,000) for the three months ended September 30, 2022, compared to $(6,720,000) for the same period in 2021[182] - The company has not made any voluntary contributions to its pension plan year-to-date in 2022 and does not expect to make contributions in 2022, 2023, or 2024[183] - The company reported a service cost for pension benefits earned during the three months ended September 30, 2022, of $13,868,000, down from $15,309,000 in 2021[182] Miscellaneous - The company has committed to end the use of coal at its remaining Cholla units by 2025, with a decommissioning cost of $38.4 million as of September 30, 2022[174] - APS provided refunds to approximately 13,000 customers due to an error in its rate plan comparison tool, which did not have a material impact on financial statements[169] - APS is contesting a $215.5 million disallowance related to SCR investments and deferrals in an ongoing legal appeal[172]