XML 56 R30.htm IDEA: XBRL DOCUMENT v3.25.0.1
Common Stock Equity and Earnings Per Share
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Common Stock Equity and Earnings Per Share Common Stock Equity and Earnings Per Share
ATM Program

On November 8, 2024, Pinnacle West entered into an equity distribution sales agreement, pursuant to which Pinnacle West may sell, from time to time, up to $900 million of its common stock through an ATM program, which includes the ability to enter into forward sale agreements. As of December 31, 2024, approximately $850 million of common stock is available to be issued under the ATM Program, which takes into account the forward sale agreement in effect as of December 31, 2024.

As of December 31, 2024, Pinnacle West had an outstanding forward sale agreement under the ATM program relating to approximately $50 million of common stock (the “November 2024 ATM Forward Sale Agreement”). The November 2024 ATM Forward Sale Agreement may be settled at Pinnacle West’s discretion no later than June 30, 2026. On a given settlement date, Pinnacle West will issue shares of common at the then-applicable forward sales price. The terms of the November 2024 ATM Forward Sale Agreement also allow Pinnacle West, at its option, to settle the agreements with the counterparties by delivering cash, in lieu of shares.

The initial forward sales price for the November 2024 ATM Forward Sale Agreement was approximately $89.73, subject to certain adjustments. On December 31, 2024, Pinnacle West could have settled the outstanding November 2024 ATM Forward Sale Agreement with the physical delivery of 552,833 shares of Pinnacle West common stock in exchange for cash of approximately $50 million. As of December 31, 2024, Pinnacle West has not received any proceeds relating to the November 2024 Forward
Sale Agreement. Pinnacle West will receive proceeds, if any, when settlement occurs, and will record the proceeds, if any, in equity.

Non-ATM February 2024 Forward Sale Agreements

On February 28, 2024, Pinnacle West executed equity forward sale agreements, relating to 11,240,601 shares of Pinnacle West common stock (“February 2024 Forward Sale Agreements”). The February 2024 Forward Sale Agreements may be settled at our discretion no later than September 4, 2025, and were not issued under the ATM program discussed above. On a settlement date, Pinnacle West will issue shares of Pinnacle West common stock and receive cash, if any, at the then-applicable forward sales price. The terms of the February 2024 Forward Sale Agreements also allow Pinnacle West, at its option, to settle the agreements with the counterparties by delivering cash, in lieu of shares.

The initial forward sales price for the February 2024 Forward Sale Agreements was initially, approximately $64.51 per share and is subject to adjustment based on the terms of the agreements. In December 2024, Pinnacle West partially settled the February 2024 Forward Sale Agreements with the issuance of 5,377,115 shares of common stock and received 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 in exchange for cash of $377 million. We will not receive any additional proceeds, if any, from the February 2024 Forward Sale Agreements until settlement occurs.

Convertible Notes

In June 2024, Pinnacle West issued $525 million of 4.75% convertible senior notes that will mature on June 15, 2027. The Convertible Notes conversion options are indexed to Pinnacle West’s common stock. See Note 5.
Earnings Per Share

The following table presents the calculation of Pinnacle West’s basic and diluted EPS (in thousands, except per share amounts):
 202420232022
Net income attributable to common shareholders$608,806 $501,557 $483,602 
Weighted average common shares outstanding — basic113,846 113,442 113,196 
Net effect of dilutive securities:   
Contingently issuable performance shares and restricted stock units480 362 220 
Dilutive shares related to equity forward sale agreements (a)1,906 — — 
Total contingently issuable shares2,386 362 220 
Weighted average common shares outstanding — diluted116,232 113,804 113,416 
Earnings per weighted-average common share outstanding
Net income attributable to common shareholders — basic$5.35 $4.42 $4.27 
Net income attributable to common shareholders — diluted$5.24 $4.41 $4.26 
(a)    For the years ended December 31, 2024, 2023 and 2022, diluted weighted average common shares excludes 1,038,463, 0 and 0 shares, respectively, relating to the Convertible Notes and the ATM equity forward. These potentially issuable shares were excluded from the calculation of diluted shares as their inclusion would have been antidilutive.
The November 2024 ATM Forward Sale Agreements and the February 2024 Forward Sale Agreements are classified as equity transactions, and are not recorded on the Pinnacle West Consolidated Balance Sheets. Delivery of shares to settle equity forward agreements result in dilution to basic earnings per share (EPS) upon settlement. Prior to settlement, the potentially issuable shares are reflected in our diluted EPS calculations using the treasury stock method. Under this method, the number of shares, if any, that would be issued upon settlement less that number of shares that could be purchased by Pinnacle West in the market with the proceeds received from issuance (based on the average market price during the reporting period). Share dilution occurs when the average market price of our stock during the reporting period is higher than the adjusted forward sale price as of the end of the reporting period.