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 at-

the-market (“ATM”) equity distribution program, which includes the ability to enter into forward sale agreements. As of March 31, 2025, approximately $800 million of common stock is available to be issued under the ATM Program, which takes into account the forward sale agreements in effect as of March 31, 2025.

As of March 31, 2025, Pinnacle West had two outstanding forward sale agreements under the ATM Program relating to approximately $100 million of common stock. These agreements are the November 2024 ATM Forward Sale Agreement and the March 2025 ATM Forward Sale Agreement (collectively, the “ATM Forward Sale Agreements”), which may be settled at Pinnacle West’s discretion no later than June 30, 2026 and September 14, 2026, respectively. On a given settlement date, Pinnacle West will issue shares of common stock at the then-applicable forward sales price. Additionally, the terms of the forward sale agreements allow Pinnacle West, at its option, to settle the agreements with the counterparties by delivering cash, in lieu of shares.

The following table presents the calculation of Pinnacle West’s ATM Program as of March 31, 2025 (in thousands, except share amounts and price per share):


	As of March 31, 2025
	November 2024 ATM Forward Sale Agreement		March 2025 ATM Forward Sale Agreement
Initial Price
Number of Shares	552,833		544,959
Forward Sales Price Per Share (a)	$	89.73	$	90.83
Aggregate Value (in thousands)	$	49,606	$	49,499

On February 28, 2024, Pinnacle West executed equity forward sale agreements (“February 2024 Forward Sale Agreements”). The February 2024 Forward Sale Agreements may be settled at Pinnacle West’s 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 following table presents the calculation of Pinnacle West’s February 2024 Forward Sale Agreements as of March 31, 2025 (in thousands, except share amounts and price per share):


	As of March 31, 2025
	February 2024 Forward Sale Agreements
Initial Price
Number of Shares	11,240,601
Forward Sales Price Per Share (a)	$	64.51
Aggregate Value (in thousands)	$	725,131

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

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. The Convertible Notes bear interest at a fixed rate of 4.75% per year, 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 March 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 Condensed Consolidated Balance Sheets with a carrying amount of $525 million, including unamortized debt issuance costs of $6 million. The estimated fair value of the Convertible Notes as of March 31, 2025 was $591 million (Level 2 within the fair value hierarchy).

As of March 31, 2025, based on Pinnacle West’s average stock price, the net loss position, 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.


	Three Months Ended March 31,
	2025		2024
Net income (loss) attributable to common shareholders	$	(4,644)	$	16,862

Weighted average common shares outstanding — basic	119,594		113,621
Net effect of dilutive securities:
Contingently issuable performance shares and restricted stock units	498		327
Dilutive shares related to equity forward sale agreements (a)	1,669		279
Total contingently issuable shares (b)	2,167		606

Weighted average common shares outstanding — diluted	121,761		114,227
Earnings per weighted-average common share outstanding
Net income (loss) attributable to common shareholders — basic	$	(0.04)	$	0.15
Net income (loss) attributable to common shareholders — diluted (b)	$	(0.04)	$	0.15

(a) For the three months ended March 31, 2025 and 2024, diluted weighted average common shares excludes 197,390 and 0 shares, respectively, relating to the Convertible Notes and the November 2024 ATM Forward Sale Agreements. These potentially issuable shares were excluded from the calculation of diluted shares as their inclusion would have been antidilutive.

(b) Contingently issuable shares of 2,167,000 were excluded from the calculation of diluted weighted average common shares outstanding, as their inclusion would have been antidilutive due to the Net Loss results for the three months ended March 31, 2025. For the three months ended March 31, 2024, 0 contingently issuable shares were excluded from the calculation of diluted weighted average common shares outstanding.