El Dorado Equity Investments

9 Months Ended

Sep. 30, 2025

Equity Method Investments and Joint Ventures [Abstract]

El Dorado Equity Investments

El Dorado Equity Investments

Equity Method Investments

El Dorado holds investments in equity securities accounted for under the equity method. The equity method of accounting is applied when we have the ability to exercise significant influence over the operating and financial policies of an investee. The equity method has been applied to El Dorado’s equity investment holdings in SAI and AZ-VC Fund I, LLC (“AZ-VC”).

SAI — SAI is a private corporation that manufactures electrical switchgear equipment used by data centers. El Dorado holds common stock in SAI and maintains a seat on SAI’s board of directors.

AZ-VC — AZ-VC is a limited liability company fund focused on analyzing, investing, managing, and otherwise dealing with investments in privately-held early stage and emerging growth technology companies and businesses primarily based in Arizona, or based in other jurisdictions and having existing or potential strategic or economic ties to companies or other interests in Arizona. El Dorado holds Class A Membership interests in the fund.

These equity method investments are included in the other assets line item on Pinnacle West’s Condensed Consolidated Balance Sheets. The following table presents El Dorado’s ownership percentages and carrying value of investments accounted for under the equity method (dollars in millions):

Investee	Pinnacle West Ownership Percentage as of September 30, 2025		September 30, 2025		December 31, 2024
SAI (a)	17	%	$	17	$	—
AZ-VC (b)	23	%	14		11
Total equity method investments			$	31	$	11

(a)El Dorado has no further funding commitments to SAI.

(b)El Dorado has a $25.0 million funding commitment to AZ-VC, of which approximately $14.3 million has been funded as of September 30, 2025.

Our share of the investees’ earnings or losses are recognized in other income and other expense on Pinnacle West’s Condensed Consolidated Statements of Income. For the three and nine months ended September 30, 2025, the net equity method earnings relating to these investments was $6.7 million and $25.4 million, respectively. For the three and nine months ended September 30, 2024, the net equity method earnings relating to these investments was $0.4 million and $0.2 million, respectively.

Other Investments

El Dorado holds investments in other equity securities to which the equity method of accounting does not apply due to lack of significant influence over the investees’ operating and financial policies. These equity investments do not have readily determinable fair values, and we have elected the measurement alternative for these investments. Investments accounted for under the measurement alternative are carried at cost adjusted for impairments or observable price changes. The Pinnacle West Condensed Consolidated Balance Sheets, as of September 30, 2025, and December 31, 2024, include $24.5 million and $23.1 million, respectively, relating to these other El Dorado equity investments. These investments are carried at cost, as no impairments or observable price changes have occurred as of September 30, 2025.