On November 8, 2024, Pinnacle West opened its ATM Program, pursuant to which Pinnacle West may sell, from time to time, up to $900 million of its common stock through an at-the-market equity distribution program, which includes the ability to enter into forward sale agreements. Approximately $700 million of common stock is available to be sold under the ATM Program, which takes into account the forward sale agreements in effect as of September 30, 2025.

As of September 30, 2025, Pinnacle West had four outstanding forward sale agreements under its ATM Program, collectively referred to as the (“ATM Forward Sale Agreements”). These agreements relate to approximately $200 million of common stock and may be settled at Pinnacle West’s discretion by issuing shares at the applicable forward sales price or, alternatively, by delivering cash in lieu of shares.


		As of September 30, 2025
ATM Forward Sale Agreements	Maturity Date	Number of Shares	Forward Sales Price Per Share (a)			Aggregate Value (in thousands)

November 2024	June 30, 2026	552,833	$	89.73		$	49,606
March 2025	September 14, 2026	544,959	$	90.83		$	49,499
August 2025	February 16, 2027	543,001	$	91.21		$	49,527
September 2025	February 22, 2027	558,622	$	88.69		$	49,544
		2,199,415	$	90.10	(b)	$	198,176

In addition to the ATM Forward Sale Agreements, Pinnacle West also has the February 2024 Forward Sale Agreements that were entered into on February 28, 2024. These agreements may be settled at Pinnacle West’s discretion by issuing shares of Pinnacle West common stock and receiving 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 February 2024 Forward Sale Agreements were partially settled in December 2024 and September 2025. In August 2025, APS amended the February 2024 Forward Sale Agreements with Wells Fargo Bank, National Association, to extend the maturity date of those forward confirmations to December 31, 2026.


	As of September 30, 2025
	February 2024 Forward Sale Agreements
Initial Price
Number of Shares	11,240,601
Forward Sales Price Per Share (a)	$	64.51
Aggregate Value	$	725,131

Settlements
Date	12/23/2024
Number of Shares Settled (b)	5,377,115
Forward Sales Price Upon Settlement	$	64.17
Net Proceeds (c)	$	345,049

Date	9/4/2025
Number of Shares Settled (b)	243,186
Forward Sales Price Upon Settlement	$	63.12
Net Proceeds (c)	$	15,350

In June 2024, Pinnacle West issued $525 million of 4.75% Convertible Senior Notes due 2027, which are senior unsecured obligations of Pinnacle West and will mature on June 15, 2027. Interest is payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024.

Prior to March 15, 2027, the holders of the Convertible Notes may elect at their option to convert all or any portion of their Convertible Notes under the following limited circumstances:

•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. 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 September 30, 2025, 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 Condensed Consolidated Balance Sheets with a carrying amount of $525 million, with an additional $4 million in unamortized debt issuance costs. The estimated fair value of the Convertible Notes as of September 30, 2025 was $566 million (Level 2 within the fair value hierarchy).

As of September 30, 2025, 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 earnings per share (“EPS”) relating to the potential conversion of the Convertible Notes.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income attributable to common shareholders	$	413,208	$	394,966	$	601,128	$	615,633

Weighted average common shares outstanding — basic	119,623		113,729		119,578		113,682
Net effect of dilutive securities:
Contingently issuable performance shares and restricted stock units	570		636		539		484
Dilutive shares related to equity forward sale agreements (a)	1,763		2,754		1,744		1,551
Total contingently issuable shares	2,333		3,390		2,283		2,035

Weighted average common shares outstanding — diluted	121,956		117,119		121,861		115,717
Earnings per weighted-average common share outstanding
Net income attributable to common shareholders — basic	$	3.45	$	3.47	$	5.03	$	5.42
Net income attributable to common shareholders — diluted	$	3.39	$	3.37	$	4.93	$	5.32

(a) For the three and nine months ended September 30, 2025, the diluted weighted-average common shares excludes 156,579 and 139,806 shares, respectively relating to the ATM Program and the Convertible Notes. For the three and nine months ended September 30, 2024, diluted weighted-average common shares excludes 460,231 and 808,729 shares, respectively relating to the Convertible Notes. These potentially issuable shares were excluded from the calculation of diluted shares as their inclusion would have been antidilutive.

Pinnacle West’s forward sale agreements are classified as equity transactions and are not recorded on the Pinnacle West Condensed Consolidated Balance Sheets until shares are settled. Delivery of shares to settle equity forward agreements will result in dilution to basic 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 is reduced by the 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.

On May 21, 2025, Pinnacle West shareholders approved an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 300,000,000. This amendment was subsequently filed with the ACC on May 22, 2025.