Financial Data and Key Metrics Changes - In Q4 2025, the company earned $0.13 per share, compared to a loss of $0.06 in Q4 2024, reflecting strong operational execution and cost management [12] - For the full year 2025, earnings were $5.05 per share, down from $5.24 per share in 2024, primarily due to weather impacts, with a $0.71 drag from weather normalization [13] - Weather-normalized sales growth for Q4 was 6.8%, contributing to a full-year growth of 5%, including 2% residential growth and 7.5% commercial and industrial growth [13][14] Business Line Data and Key Metrics Changes - The company achieved a new system peak of 8,648 megawatts in August 2025, exceeding the previous year's peak by over 400 megawatts [6] - Customer satisfaction metrics improved, with the company ranking in the top quartile nationally for residential customer satisfaction and in the second quartile for business customers [8] Market Data and Key Metrics Changes - The customer base grew by 2.4% in 2025, driven by new businesses and residents in Arizona, indicating a strong economic environment [14] - The semiconductor sector, particularly with TSMC's expansion, is expected to drive significant economic activity, with agreements anticipated to spur at least $250 billion in additional investments [8][9] Company Strategy and Development Direction - The company is focused on processing its rate case, executing grid expansion plans, and maintaining affordable rates for customers while finalizing commercial opportunities with large customers [5][11] - The capital program emphasizes reliability, grid resiliency, and meeting customer needs, with a rate-based growth guidance of 7%-9% through 2028 [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet rising demand and create long-term value, emphasizing the importance of safety and operational excellence [5][11] - The company aims to achieve a more linear earnings trajectory through the implementation of a formula rate, which would provide more consistent cost recovery [87][93] Other Important Information - The company successfully reduced O&M per megawatt hour by 3.3% year-over-year in 2025 and aims for further reductions in 2026 [15] - The company is actively engaged in discussions regarding potential new nuclear projects, although these are viewed as medium to long-term opportunities [61] Q&A Session Summary Question: Update on capacity growth and IRP planning - The company plans to file an updated 15-year integrated resource plan mid-year, focusing on load forecasts and resource planning [19][20] Question: Credit metric update and holdco debt - The holdco debt percentage at year-end was approximately 17%, within the targeted range [22] Question: Future sales growth and assumptions - The sales growth forecast of 5%-7% is based on existing demand and projects with high confidence, with potential upside from uncommitted load [27][28] Question: Implications from the UNS case - The UNS case was viewed as generally constructive, with differences noted between UNS and APS situations [41][43] Question: Breakdown of committed versus uncommitted load - The majority of the 4.5GW committed load is from high load factor customers, primarily data centers, with ongoing negotiations for uncommitted load [50][51] Question: FFO to debt ratio and future outlook - The FFO to debt ratio is expected to remain above 14%, with a focus on maintaining a cushion for credit metrics [84][86] Question: TSMC expansions and clarity on future plans - The company is in active discussions with TSMC regarding their expansion plans, with readiness to articulate utility infrastructure needs once solidified [104]

Financial Data and Key Metrics Changes - In Q4 2025, the company earned $0.13 per share, compared to a loss of $0.06 in Q4 2024, reflecting strong operational execution and cost management [12] - For the full year 2025, earnings were $5.05 per share, down from $5.24 in 2024, primarily due to weather impacts, with a $0.71 drag from weather normalization [13][15] - Weather-normalized sales growth for Q4 was 6.8%, contributing to a full-year growth of 5%, including 2% residential growth and 7.5% commercial and industrial growth [14][15] Business Line Data and Key Metrics Changes - The company achieved a new system peak of 8,648 megawatts in August 2025, exceeding the previous year's peak by over 400 megawatts [6] - Customer satisfaction metrics improved, with the company ranking in the top quartile nationally for residential customer satisfaction and in the second quartile for business customers [8] Market Data and Key Metrics Changes - The company noted strong growth among commercial and industrial customers, particularly in chip manufacturing and data centers, with long-term sales growth projected at 5%-7% through 2030 [8][9] - The U.S. Department of Commerce and Taiwan announced agreements expected to spur at least $250 billion in additional semiconductor investment in the U.S., benefiting the company's market position [8] Company Strategy and Development Direction - The company plans to focus on processing its rate case, executing grid expansion plans, and maintaining affordable rates for customers in 2026 [5][11] - Investments in infrastructure are aimed at supporting Arizona's economic growth and maintaining grid reliability, with a capital program focused on reliability and resiliency [10][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet rising demand and create long-term value, emphasizing a commitment to safety and operational excellence [5][11] - The company is focused on cost efficiencies, with a goal of reducing O&M per megawatt hour, achieving a 3.3% decrease in 2025 [16] Other Important Information - The company is actively engaged in discussions regarding its integrated resource plan (IRP), which will reflect known and committed customer demand over a 15-year period [20][50] - The company is exploring financing options for transmission build-out, including potential customer financing and federal grants [84] Q&A Session Summary Question: Update on capacity growth and IRP planning - The company plans to file an updated 15-year integrated resource plan mid-year, detailing load forecasts and resource plans [20] Question: Credit metric update and holdco debt - Holdco debt was at 17% at year-end 2025, within the target range, with plans to maintain modest levels in 2026 [24] Question: Future sales growth and assumptions - The sales growth forecast of 5%-7% is based on existing demand and projects with high confidence, with potential upside from uncommitted load [30] Question: Implications from the UNS case and formula rate decision - The UNS case was seen as generally constructive, with differences noted between UNS and APS, particularly regarding growth and regulatory lag [44] Question: Breakdown of committed versus uncommitted load - The majority of committed load is from high load factor customers, including TSMC, with ongoing negotiations for uncommitted load [53] Question: FFO to debt basis and forecast period - The company aims to maintain an FFO to debt ratio of 14%-16%, focusing on improving credit metrics through regulatory dialogue [90] Question: Transparency and earnings trajectory with formula rate - The company aims for more consistent and linear earnings trajectories post-formula rate implementation, improving visibility for investors [92]

Pinnacle West Capital (NYSE:PNW) Q4 2025 Earnings call February 25, 2026 11:00 AM ET Speaker6Welcome to the Pinnacle West Capital Corporation 2025 fourth quarter earnings conference call. At this time, all participants are placed on a listen-only mode, and we'll open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Amanda Ho. Ma'am, the floor is yours.Speaker0Thank you, Matthew. I would like to thank everyone for participating in th ...