On this page of StockholderLetter.com we present the latest annual shareholder letter from PINNACLE WEST CAPITAL CORP — ticker symbol PNW. Reading current and past PNW letters to shareholders can bring important insights into the investment thesis.

 •  2/25/2025 Letter Continued (Full PDF)
 •  2/27/2024 PNW Stockholder Letter
 •  More "Electric Utilities" Category Stockholder Letters
 •  PNW Benford's Law Stock Score = 98

PNW Shareholder/Stockholder Letter Transcript:

ANNUAL
REPORT
2024
PINNACLE WEST CAPITAL CORPORATION

A
rizona continues to be a highly attractive destination for both
residents and businesses. Our growth outlook for 2025 and beyond
remains robust, led by a dramatic increase in commercial and industrial
customers. In turn, this growth is stimulating a historic wave of
demand for electricity in our state.
2024 APS CUSTOMER GROWTH BY REGION
CAPEX GROWTH
Projected
3

1.1%
1.1%
NE
($ Billions)
NW
FLAGSTAFF
2

WINSLOW
1.6%
1.6%
SEDONA
PRESCOTT
PAYSON
1

GLENDALE
SW
1.3%
1.1%
YUMA
PHOENIX
Metro
0

GLOBE
2.6%
2.4%
CASA
GRANDE
SE
2.9%
2.6%
DOUGLAS
Residential Customer Growth Year Over Year
Total Retail Customer Growth Year Over Year
APS service territory is the  darker shaded areas of each region.
   20
   21
   22
   23
   24
   25
   26
   27

Dear Shareholders:
With sunny skies, unmatched natural beauty and hardworking, innovative people, Arizona has everything
necessary to create a vibrant economy and a sense of
opportunity. Pinnacle West Capital Corporation is proud
to have been a part of this story since the beginning.
For nearly 140 years, we have been inextricably tied to
the overall success and sustained growth of Arizona.
Through our operating company Arizona Public Service
(APS), our strong and resilient electric system, affordable
energy and the dedication of our employees, we have built
a foundation for the future.
We are experiencing unprecedented expansion in Arizona,
which translates into healthy growth for our company.
Though this brings distinct challenges, we have the
experience and talent to address them and to successfully
transition into this new era filled with possibilities.
Speaking of transition, you   ll notice that this letter comes
as the organization welcomes a new Chairman, President
and CEO of Pinnacle West and APS effective April 1. Over
the past five years, we have been dedicated to executing
on a vision to improve the customer experience, position
the company for long-term financial health and enable
the workforce of the future     a future that provides
both reliable and carbon-free electricity. Throughout
our respective tenures, we have had a close and trusted
partnership that will enable a seamless succession and
continued focus on advancing our company strategy
to the benefit of shareholders and customers, alike.
Chairman,
President and CEO
Jeff Guldner (right)
and his successor,
Ted Geisler,
President of APS
AR 01

AN EVOLVING CUSTOMER BASE
Our customer base, which for decades leaned
As an example, construction continues in northwest
heavily residential, is now more diversified than
Phoenix on the massive Taiwan Semiconductor
ever before. A robust increase in commercial and
Manufacturing Company (TSMC) facility. By the end
industrial customers in our service territory    
of the decade, TSMC will have invested $65 billion
including new chip manufacturing and expanding
in three dedicated semiconductor fabs. The first
data center operations     is leading to incredible
began high-volume chip production in the fourth
economic growth and triggering a historic wave
quarter of 2024.
of demand for electricity in our state.
Amkor Technology also has announced plans to
The growth outlook for 2025 and beyond in our
invest $2 billion in a semiconductor advanced
service territory remains strong. We expect
packaging and testing facility to be built in nearby
customer growth within a range of 1.5% to 2.5%
Peoria, Ariz., creating more than 2,000 jobs. Both
for both 2025 and the long term, as Arizona
companies, along with an already strong Arizona
continues to be a highly attractive destination
presence by Intel, will stimulate many suppliers
for both residents and businesses. Over the
and related manufacturing and service entities
next three years, we project an annual increase
to establish operations here, further increasing
in weather-normalized energy sales of 4% to
growth for our state and APS. TSMC and the nearby
6%, with 3% to 5% contributed by growth from
science and manufacturing park alone will create
large commercial and industrial customers, as
approximately 62,000 jobs.
more companies choose Arizona and existing
customers continue to ramp up.
Expanding data center operations in Arizona     by
companies such as Microsoft and Compass     will
have similar impact on our state   s growth.
Meanwhile, our residential customer base also
continues to grow. In 2024, we installed more than
32,000 new residential meters, the most since the
Great Recession. Continued adoption of electric
vehicles, smart appliances and smart thermostats,
as examples, will accelerate that growth even with
continued efficiency gains.
From our inception in 1886, it has taken APS
nearly 140 years for our system to exceed 8,000
megawatts (MW) in peak customer demand. We
expect that number to grow to more than 13,000
MW over the next 14 years     an increase of 60%.
To clarify, it is not growth for the sake of growth we
are seeking. We are pursuing smart growth that can
help us develop a cleaner and more efficient energy
supply while ensuring reliability and keeping bills
as low as possible for customers. The result will
be a stronger Arizona for the long term.

RELIABILITY FOR ALL SEASONS
Reliability remains at the core of our service to
    We have secured power purchase agreements
customers and drives our plans to provide a diverse
for an anticipated 5,087 MW of battery energy
energy portfolio delivering power at reasonable
storage that grid operators can release during
rates. The most important numbers that measure
evening hours when customer demand is greatest.
reliability place us solidly in the top quartile of
electric utilities across the nation. To continue
meeting the requirements of our state   s growth,
we expect to add 9,805 MW of renewable energy,
battery storage and natural gas to our system
between 2025 and 2028     more than 90% of which
will be carbon free.
    In northern Arizona   s Navajo County, we have
secured 500 MW of additional wind power.
    And, we are expanding our existing Sundance
and Redhawk natural gas-fired power plants.
These additions are expected to deliver a
combined 487 MW, providing much-needed
energy during peak consumption hours. Just as
Among our highlights:
important, they will provide a critical complement
    Power purchase agreements are expected to add
to the large quantities of solar and battery energy
3,321 MW of solar power along with 168 MW from
the APS-owned Ironwood Solar Plant, currently
under construction in Yuma County.
    At the Agave Solar Plant in Maricopa County,
storage we   re adding to our system.
Once again, our employees adapted to the
demands of what proved to be the hottest summer
on record, avoiding any sustained major outages
construction is under way on 150 MW of
across our service territory     and they did so
battery energy storage that will deliver solar
safely. In 2024, APS proudly achieved a milestone of
energy to customers after sunset.
zero employee Serious Injury and Fatality incidents,
AR 03



 2/25/2025 Letter Continued (Full PDF)