
	Maturity	Interest	December 31,
	Dates (a)	Rates	2024		2023
APS
Pollution control bonds:
Variable	2029	(b)	$	163,975	$	163,975

Total pollution control bonds			163,975		163,975
Senior unsecured notes	2025-2050	2.20%-6.88%	7,380,000		7,180,000

Unamortized discount			(14,252)		(14,197)
Unamortized premium			9,955		11,162
Unamortized debt issuance cost			(48,800)		(49,049)
Total APS long-term debt			7,490,878		7,291,891
Less current maturities			300,000		250,000
Total APS long-term debt less current maturities			7,190,878		7,041,891
Pinnacle West
Senior unsecured notes	2025-2027	1.30%-4.75%	1,025,000		500,000
Floating rate note	2026	(c)	350,000		—
Term loans	2024	(d)	—		625,000
Unamortized discount			(5)		(15)
Unamortized debt issuance cost			(7,225)		(1,254)

Total Pinnacle West long-term debt			1,367,770		1,123,731
Less current maturities			500,000		625,000
Total Pinnacle West long-term debt less current maturities			867,770		498,731
TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES			$	8,058,648	$	7,540,622


Year	Pinnacle West Consolidated		APS Consolidated
2025	$	800,000	$	300,000
2026	600,000		250,000
2027	825,000		300,000
2028	—		—
2029	568,975		568,975
Thereafter	6,125,000		6,125,000
Total	$	8,918,975	$	7,543,975

Our long-term debt fair value estimates are classified within Level 2 of the fair value hierarchy. The following table represents the estimated fair value of our long-term debt, including current maturities (dollars in thousands):


	As of December 31, 2024				As of December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Pinnacle West	$	1,367,770	$	1,393,744	$	1,123,731	$	1,095,935
APS	7,490,878		6,525,248		7,291,891		6,459,718
Total	$	8,858,648	$	7,918,992	$	8,415,622	$	7,555,653

On December 16, 2022, Pinnacle West entered into a $175 million term loan facility that matured on December 16, 2024. The proceeds were received on January 6, 2023, and used for general corporate purposes. We recognized the term loan facility as long-term debt upon settlement on January 6, 2023. On June 10, 2024 Pinnacle West repaid the full $175 million term loan, that matured on December 16, 2024.

On February 28, 2024, Pinnacle West entered into equity forward sale agreements (the “February 2024 Forward Sale Agreements”), which may be settled with Pinnacle West common stock or cash. In December 2024, Pinnacle West partially settled the 2024 Forward Sale Agreements by issuing 5,377,115 shares of common stock and receiving net proceeds of $345 million. The proceeds were recorded in equity. At December 31, 2024, Pinnacle West could have settled the remaining February 2024 Forward Sale Agreements with the issuance of 5,863,486 shares of common stock, which would have provided cash liquidity to Pinnacle West of approximately $377 million. See Note 13.

On November 8, 2024, Pinnacle West entered into an equity forward sale agreement under the ATM program (the “November 2024 ATM Forward Sale Agreement”), which may be settled with Pinnacle West common stock or cash. At December 31, 2024, Pinnacle West could have settled the November 2024 ATM Forward Sale Agreement with the issuance of 552,833 shares of common stock, which would have provided cash liquidity to Pinnacle West of approximately $50 million. See Note 13.

Convertible Senior Notes. In June 2024, Pinnacle West issued $525 million of 4.75% convertible senior notes due 2027 (the “Convertible Notes”), which are senior unsecured obligations of Pinnacle West, and will mature on June 15, 2027. The Convertible Notes bear interest at a fixed rate of 4.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. Proceeds from the Convertible Notes were used to repay APS’s 364-day $350 million term loan facility that matured on December 10, 2024 and commercial paper borrowings.

•during any calendar quarter (and only during such calendar quarter), if the sale price of Pinnacle West common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter, is greater than or equal to 130% of the conversion price on each applicable trading day;

•during the five business day period after any 10 consecutive trading day period (“Measurement Period”) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of Pinnacle West common stock and the conversion rate on such trading day; or

On or after March 15, 2027, until the maturity date, the holders of the Convertible Notes may elect at their option to convert all or any portion of their notes. Upon conversion, Pinnacle West will pay cash up to the aggregate principal amount of the Convertible Notes converted and at Pinnacle West’s sole discretion, pay or deliver cash, shares of Pinnacle West common stock or a combination of both, in respect to the remainder, if any, of Pinnacle West’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. The initial conversion rate, which is subject to certain adjustments as set forth in the indenture, is 10.8338 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $92.30 per share of Pinnacle West’s common stock. The conversion rate is not subject to adjustment for any accrued and unpaid interest.

If Pinnacle West undergoes a fundamental change, as defined in the Convertible Notes’ indenture, then, subject to certain conditions, holders of the Convertible Notes may require Pinnacle West to repurchase for cash all or any portion of its Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

As of December 31, 2024, the conditions allowing holders to convert their Convertible Notes were not met, and as a result, the Convertible Notes were classified as long term debt on Pinnacle West’s Consolidated Balance Sheets with a carrying amount of $525 million, including unamortized debt issuance costs of $8 million. The estimated fair value of the Convertible Notes as of December 31, 2024 was $552 million (Level 2 within the fair value hierarchy).

As of December 31, 2024, based on Pinnacle West’s average stock price and the relevant terms of the Convertible Notes, there were no shares of Pinnacles West’s common stock included in basic or diluted EPS relating to the potential conversion of the Convertible Notes. See Note 13.

Floating Rate Notes. In June 2024, Pinnacle West completed the sale of $350 million Floating Rate Notes due 2026 (the “Floating Rate Notes”). The Floating Rate Notes are senior unsecured obligations of Pinnacle West and will mature on June 10, 2026. The Floating Rate Notes bear a variable interest rate of Compounded SOFR (as defined in the Fifth Supplemental Indenture dated as of June 10, 2024) plus 82 basis points per year. Proceeds were used to repay a portion of Pinnacle West’s $450 million term loan that matured in December 2024 and the full amount of Pinnacle West’s $175 million term loan that matured in December 2024.

On June 10, 2024, Pinnacle West repaid $250 million of its $450 million term loan which matured in December 2024. On December 20, 2024, Pinnacle West repaid the remaining $200 million of the term loan.

APS was previously authorized to receive up to $150 million annually in equity infusions from Pinnacle West without seeking ACC approval. In 2023, APS sought approval for an additional $500 million in equity infusions and received approval in early 2024. Subsequently, APS requested and the ACC issued a new financing order that approved a limit on yearly equity infusions equal to 2.5% of APS’s total assets each calendar year on a three-year rolling average basis, subject to APS’s equity ratio remaining below the most recently approved rate case capital structure plus 50 basis points.

On June 12, 2024, Pinnacle West contributed $450 million into APS in the form of an equity infusion. APS used this contribution to repay short-term indebtedness. On December 23, 2024, Pinnacle West contributed $345 million into APS in the form of an equity infusion. APS used this contribution to repay a portion of commercial paper borrowings and for other general corporate purposes.

On May 9, 2024, APS issued $450 million of 5.7% senior unsecured notes that mature August 15, 2034. The net proceeds from the sale were used to repay short-term indebtedness consisting of commercial paper and for general corporate purposes.

On February 11, 2022, a special purpose subsidiary of BCE entered into a credit agreement to finance capital expenditures and related costs for the development of a 31 megawatt (“MW”) solar and 20 megawatt hour (“MWh”) battery storage project in Los Alamitos, California (“Los Alamitos”). The credit

agreement consisted of an equity bridge loan facility, a non-recourse construction facility, a letter of credit facility, and a related interest rate swap. On August 4, 2023, Pinnacle West entered into a purchase and sale agreement with Ameresco, Inc. (“Ameresco”), pursuant to which we agreed to sell all our equity interest in BCE to Ameresco (the “BCE Sale”). See Note 20. As a part of the BCE Sale closing, the $36 million construction facility, the letter of credit facility, and the interest rate swap were transferred to Ameresco. On August 4, 2023, concurrent with the BCE Sale, Pinnacle West paid in full the outstanding $31 million equity bridge loan balance. As of December 31, 2024, there is no outstanding balance on our Consolidated Balance Sheets relating to this credit agreement.

On April 18, 2023, and on December 29, 2023, Pinnacle West issued performance guarantees in connection with BCE’s Kūpono Solar investment project financing. BCE held an equity method investment relating to the Kūpono Solar project that was included in the BCE Sale relating to the stage of the BCE Sale that closed on January 12, 2024. The performance guarantees did not transfer in the BCE Sale, and Pinnacle West continues to retain these performance guarantees. See Note 10.

Pinnacle West’s and APS’s debt covenants related to their respective bank financing arrangements include maximum debt to capitalization ratios. Pinnacle West and APS comply with this covenant. For both Pinnacle West and APS, this covenant requires that the ratio of consolidated debt to total consolidated capitalization not exceed 65%. At December 31, 2024, the ratio was approximately 59% for Pinnacle West and 49% for APS. Failure to comply with such covenant levels would result in an event of default, which, generally speaking, would require the immediate repayment of the debt subject to the covenants and could cross-default other debt. See further discussion of “cross-default” provisions below.

Neither Pinnacle West’s nor APS’s financing agreements contain “rating triggers” that would result in an acceleration of the required interest and principal payments in the event of a rating downgrade. However, our bank credit agreements contain a pricing grid in which the interest rates we pay for borrowings thereunder are determined by our current credit ratings.

All of Pinnacle West’s loan agreements contain “cross-default” provisions that would result in defaults and the potential acceleration of payment under these loan agreements if Pinnacle West or APS were to default under certain other material agreements. All of APS’s bank agreements contain “cross-default” provisions that would result in defaults and the potential acceleration of payment under these bank agreements if APS were to default under certain other material agreements. Pinnacle West and APS do not have a material adverse change restriction for credit facility borrowings.

Although provisions in APS’s articles of incorporation and ACC financing orders establish maximum amounts of preferred stock and debt that APS may issue, APS does not expect any of these provisions to limit its ability to meet its capital requirements.

On April 19, 2024, APS submitted an application to the ACC requesting to increase the long-term debt limit from $8.0 billion to $9.5 billion and to increase Pinnacle West’s permitted yearly equity infusions to equal up to 2.5% of APS’s consolidated assets each calendar year on a three-year rolling average basis. On December 17, 2024, the ACC issued a financing order approving the increase of the long-term debt limit to $9.5 billion and the permitted yearly equity infusions to equal to 2.5% of APS’s total assets each calendar year on a three-year rolling average basis, subject to APS’s equity ratio