Pinnacle West(US:PNW)2025-11-03 13:21Financial Performance - Operating revenues for Q3 2025 reached $1,820,741, an increase of 2.9% compared to $1,768,801 in Q3 2024[19] - Net income attributable to common shareholders for Q3 2025 was $413,208, up from $394,966 in Q3 2024, reflecting a growth of 4.5%[19] - Total operating expenses for the nine months ended September 30, 2025, were $3,265,152, compared to $3,101,982 for the same period in 2024, marking an increase of 5.3%[19] - Total comprehensive income for Q3 2025 was $417,864, compared to $399,752 in Q3 2024, an increase of 4.5%[22] - Net income for the nine months ended September 30, 2025, was $614,046, a decrease of 2.4% compared to $628,551 for the same period in 2024[28] - Operating revenues for the nine months ended September 30, 2025, increased to $4,211,772, compared to $4,029,507 for the same period in 2024, representing a growth of about 4.5%[41] - The operating income for the nine months ended September 30, 2025, was $953,672, compared to $933,194 in 2024, showing a growth of about 2.2%[41] - Comprehensive income attributable to common shareholders for the nine months ended September 30, 2025, was $632,458, slightly down from $635,275 in 2024[43] Assets and Liabilities - The company reported a total asset value of $29,892,905 as of September 30, 2025, compared to $26,102,760 at the end of 2024, representing a growth of 10.6%[24] - Total current liabilities increased to $2,965,479 as of September 30, 2025, up from $2,843,797 as of December 31, 2024, reflecting a rise of 4.3%[26] - Long-term debt less current maturities rose to $9,204,259 as of September 30, 2025, compared to $8,058,648 as of December 31, 2024, indicating an increase of 14.2%[26] - Total shareholders' equity increased to $7,168,010 as of September 30, 2025, up from $6,754,311 as of December 31, 2024, reflecting a growth of 6.1%[26] - The company’s total assets as of September 30, 2025, were reported at $7,211,093,000, an increase from $6,726,070,000 as of September 30, 2024, indicating a growth of approximately 7.2%[37] - Total liabilities and equity remained consistent at $29,746,300 thousand as of September 30, 2025, compared to $25,988,235 thousand at the end of 2024[47] Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2025, were $1,328,315, an increase of 13.5% from $1,170,331 in the same period of 2024[28] - Capital expenditures for the nine months ended September 30, 2025, totaled $1,955,102, compared to $1,717,571 in 2024, representing an increase of 13.8%[28] - The company reported a net cash used for investing activities of $1,833,114 for the nine months ended September 30, 2025, compared to $1,469,323 in 2024, indicating an increase of 24.8%[28] - The cash and cash equivalents at the end of the period were $30,885, a decrease from $49,171 at the end of the same period in 2024[28] Debt and Financing - The company issued long-term debt amounting to $1,742,754 during the nine months ended September 30, 2025, compared to $1,313,229 in the same period of 2024[28] - Interest charges for the nine months ended September 30, 2025, totaled $279,896, compared to $271,139 in 2024, marking an increase of approximately 3.2%[41] - Pinnacle West issued $400 million of 4.90% senior unsecured notes maturing May 15, 2028, and $400 million of 5.15% senior unsecured notes maturing May 15, 2030, to repay $500 million of maturing senior unsecured notes[84] Regulatory and Compliance - APS filed a 2025 Rate Case seeking a net base rate increase of $579.5 million, representing a 13.99% increase, to address a total base revenue deficiency of $662.4 million[94] - The 2025 Rate Case includes a proposed capital structure with long-term debt at 47.65% and common stock equity at 52.35%, resulting in a weighted-average cost of capital of 7.63%[94] - The ACC approved APS's request to refund approximately $43 million in uncommitted RES surcharge funds, with refunds totaling $44.2 million issued in July and August 2025[116] Environmental and Regulatory Changes - The Arizona Department of Environmental Quality is developing a CCR permitting program, which could materially impact APS's management of coal combustion residuals[211] - The EPA finalized a proposal to expand federal CCR regulations to include CCRMUs containing at least 1,000 tons of CCR, affecting historical disposal activities prior to 2015[212] - APS cannot currently estimate the total cost of the CCR asset retirement obligation, which may materially increase based on ongoing evaluations[213] Pension and Benefits - The net periodic benefit costs for pension plans for the three months ended September 30, 2025, are $16,803,000, compared to $11,387,000 for the same period in 2024[161] - The expected minimum required cash contributions for the pension plan are zero for the next three years, with no voluntary contributions anticipated in 2025, 2026, or 2027[162] Risk Management - The outstanding gross notional volume of energy derivatives as of September 30, 2025, includes 619 GWh of power and 241 billion cubic feet of gas[182] - As of September 30, 2025, the aggregate fair value of energy derivative instruments in a net liability position is $44.863 million, with potential additional collateral of $10.007 million if credit-risk-related contingent features are fully triggered[194]