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 December 31, 2025.

As of December 31, 2025, Pinnacle West had four outstanding forward sale agreements under its ATM Program (collectively, 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. Pinnacle West also entered into a contract to begin a fifth ATM forward sale agreement in December 2025, transacting a total of $10.7 million with an effective date of January 5, 2026, and a maturity date of July 2, 2027.


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 Forward Sale Agreements that were entered into on February 28, 2024 (the “February 2024 Forward Sales Agreements”). 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, September 2025, and December 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.


February 2024 Forward Sale Agreements	Number of Shares		Forward Sales Price Per Share			Aggregate Value

Initial Price	11,240,601		$	64.51	(a)	$	725,131

Settlements
December 23, 2024	5,377,115	(b)	$	64.17		$	345,049	(c)
September 4, 2025	243,186	(b)	$	63.12		$	15,350	(c)
December 18, 2025	1,193,950	(b)	$	62.82		$	75,004	(c)

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

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 December 31, 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 Consolidated Balance Sheets with a carrying amount of $525 million, net of $4 million in unamortized debt issuance costs. The estimated fair value of the Convertible Notes as of December 31, 2025 was $561 million (Level 2 within the fair value hierarchy).

As of December 31, 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 EPS relating to the potential conversion of the Convertible Notes.


	As of December 31,
		2025		2024		2023
Net income attributable to common shareholders		$	616,531	$	608,806	$	501,557

Weighted average common shares outstanding — basic		119,687		113,846		113,442
Net effect of dilutive securities:
Contingently issuable performance shares and restricted stock units		568		480		362
Dilutive shares related to equity forward sale agreements (a)		1,716		1,906		—
Total contingently issuable shares		2,284		2,386		362

Weighted average common shares outstanding — diluted		121,971		116,232		113,804
Earnings per weighted-average common share outstanding
Net income attributable to common shareholders — basic		$	5.15	$	5.35	$	4.42
Net income attributable to common shareholders — diluted		$	5.05	$	5.24	$	4.41

(a) For the years ended December 31, 2025, 2024 and 2023 the diluted weighted-average common shares excludes 148,098, 1,038,463 and 0 shares, respectively relating to the ATM Program and 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 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.