Pinnacle West Capital Corporation

Good day, ladies and gentlemen, and welcome to the Pinnacle West Capital Corporation 2021 Third Quarter Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Amanda Ho, Director of Investor Relations. Ma'am, the floor is yours.

Thank you, Kate. I would like to thank everyone for participating in this conference call and webcast to review our third quarter 2021 earnings, recent developments, and financial outlook. Our speakers today will be our Chairman, President, and CEO, Jeff Goldner, and our Senior Vice President, CFO, Ted Geisler. Barbara Lockwood, Senior Vice President, Public Policy is also here with us. First, I need to cover a few details with you. We will be advancing the slides as the speakers present today. The slides that we will be using are also available on our investor relations website, along with our earnings release and related information. Today's comments and our slides contain forward-looking statements based on current expectations and actual results may differ materially from expectations. Our third quarter 2021 form 10Q was filed this morning. Please refer to that document for forward-looking statements, cautionary language, as well as the risk factors and MD&A sections, which identify risks and uncertainties that could cause actual results to differ materially from those contained in our disclosures. A replay of this call will be available shortly on our website for the next 30 days. It will also be available by telephone through November 12, 2021. Now I will return the call over to Ted.

Thank you, Amanda, and thanks again, everyone, for joining us today. These are indeed challenging times for us, but right up front, I want to make it clear that while we may be navigating some short-term challenges, as you'll see, the midterm prospects post-2022 are positive, and we remain confident in our ability to create renewed growth and deliver strong shareholder returns. I know the conclusion of the 2019 rate case is the most significant development, and everyone is interested in hearing more about that. But before we cover the rate case, you can see from the four main topics we will discuss today. I'll cover our third quarter results and our expectations for the remainder of 2021. I will then turn it over to Jeff to discuss our rate case outcome, next steps, and strategy coming out of this case. Finally, I will wrap up with 2022 guidance and our long-term financial outlook. Focusing on the third quarter, our performance remains strong. earning $3 per share compared to $3.07 per share in third quarter 2020. Mild weather was a significant factor, largely offset by strong sales. We experienced a mild July and August driven by one of the wettest monsoon seasons in recent history. Residential cooling degree days in the third quarter decreased 27.5% compared to the same time a year ago and were 10.6% lower than historical 10-year averages. As a reminder, third quarter last year was the hottest on record. Robot sales and usage growth, in addition to increased transmission sales this quarter, mitigated most of the weather impacts. Looking at full year, I'll provide an update to the 2021 key drivers and earnings guidance. Customer growth and weather normalized sales growth remain important drivers for the remainder of the year. We are updating weather normalized sales guidance to 3% to 4%, up from 1% to 2%. based on continued robust customer growth and strong residential usage lastly with the conclusion of the 2019 rate case we're now able to provide full year guidance we expect earnings per share to be within the range of five dollars and twenty five cents to five dollars and thirty five cents per share before i continue with our long-term financial outlook i'll turn it over to jeff to provide an update on our rate case uh thanks ted and thank you all for joining us today uh as