Consolidation and Nature of Operations

The unaudited condensed consolidated financial statements include the accounts of Pinnacle West and our subsidiaries, including APS, El Dorado Investment Company (“El Dorado”), and Pinnacle West Power, LLC (“PNW Power”). Intercompany accounts and transactions between the consolidated companies have been eliminated. The unaudited Condensed Consolidated Financial Statements for Pinnacle West include the accounts of Pinnacle West and its subsidiaries as well as a variable interest entity (“VIE”) related to a Captive Insurance Cell (“Captive”). The unaudited Condensed Consolidated Financial Statements for APS include the accounts of APS and the Palo Verde Generating Station (“Palo Verde”) VIEs. See Note 8 for further discussion on Pinnacle West’s VIEs. El Dorado is a wholly-owned subsidiary that invests in energy-related and Arizona community-based ventures. PNW Power is a wholly-owned subsidiary that holds certain investments in wind and transmission joint venture projects that were previously held by Bright Canyon Energy Corporation (“BCE”). Our accounting records are maintained in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

BCE was a Pinnacle West subsidiary that was formed in 2014. On August 4, 2023, Pinnacle West entered into a purchase and sale agreement pursuant to which all of our equity interest in BCE was sold. The sale was completed on January 12, 2024. See Note 18 for more information relating to the sale of BCE.

Amounts reported in our unaudited Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the respective annual periods, due to the effects of seasonal temperature variations on energy consumption, timing of maintenance on electric generating units, and other factors.

Our condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments except as otherwise disclosed in the notes) that we believe are necessary for the fair presentation of our financial position, results of operations, and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in conformity with GAAP have been condensed or omitted, although we believe that the disclosures provided are adequate to make the interim information presented not misleading. The accompanying condensed consolidated financial statements and these notes should be read in conjunction with the audited consolidated financial statements and notes included in our 2024 Form 10-K.

Supplemental Cash Flow Information

The following table summarizes supplemental Pinnacle West cash flow information (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
Cash paid (received) during the period for:
Income taxes, net of refunds	$	(10,799)	$	20,970
Interest, net of amounts capitalized	91,475		83,974
Significant non-cash investing and financing activities:
Accrued capital expenditures	$	315,297	$	217,684



BCE Sale non-cash consideration (Note 18)	—		45,608

The following table summarizes supplemental APS cash flow information (dollars in thousands):


	Three Months Ended March 31,
	2025		2024
Cash paid (received) during the period for:
Income taxes, net of refunds	$	(5,392)	$	—
Interest, net of amounts capitalized	84,110		73,035
Significant non-cash investing and financing activities:
Accrued capital expenditures	$	315,297	$	217,684