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Common Stock Equity and Earnings Per Share | 6 Months Ended
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Jun. 30, 2026
Earnings Per Share [Abstract] |
Common Stock Equity and Earnings Per Share | Common Stock Equity and Earnings Per Share At-the-Market Program 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. As of June 30, 2026, Pinnacle West had thirteen outstanding forward sale agreements under its ATM Program (collectively, the “ATM Forward Sale Agreements”). These agreements relate to approximately $816 million, on a gross basis, 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. On June 26, 2026, Pinnacle West entered into a fourteenth forward sale agreement, with an effective date of July 6, 2026, relating to a total of $84 million, on a gross basis, of common stock, with a maturity date of July 3, 2028. Following entry into this agreement, the $900 million of sales of common stock contemplated by the ATM Program have been substantially completed. The following table presents information about the outstanding ATM Forward Sale Agreements as of June 30, 2026 based on their contractual terms at the effective date of the agreement, including the applicable forward sale prices and related aggregate contractual values, which may differ from the gross amount of common stock referenced above (dollars in thousands, except price per share):
ATM Forward Sale Agreements |  | Maturity (a) |  | Number of Shares |  | Forward Sales Price Per Share (b) |  | Aggregate Value |
November 2024 |  | December 2026 |  | 552,833 |  |  | $ | 89.73 |  |  | $ | 49,606 |  |
March 2025 |  | December 2026 |  | 544,959 |  |  | $ | 90.83 |  |  | $ | 49,499 |  |
August 2025 |  | February 2027 |  | 543,001 |  |  | $ | 91.21 |  |  | $ | 49,527 |  |
September 2025 |  | February 2027 |  | 558,622 |  |  | $ | 88.69 |  |  | $ | 49,544 |  |
January 2026 |  | July 2027 |  | 119,553 |  |  | $ | 89.88 |  |  | $ | 10,745 |  |
March 2026 |  | September 2027 |  | 646,674 |  |  | $ | 99.52 |  |  | $ | 64,357 |  |
March 2026 |  | September 2027 |  | 490,537 |  |  | $ | 100.94 |  |  | $ | 49,515 |  |
March 2026 |  | September 2027 |  | 488,813 |  |  | $ | 101.28 |  |  | $ | 49,507 |  |
March 2026 |  | September 2027 |  | 916,930 |  |  | $ | 98.12 |  |  | $ | 89,969 |  |
April 2026 |  | September 2027 |  | 1,000,000 |  |  | $ | 99.00 |  |  | $ | 99,000 |  |
May 2026 |  | November 2027 |  | 699,100 |  |  | $ | 99.16 |  |  | $ | 69,323 |  |
June 2026 |  | December 2027 |  | 879,813 |  |  | $ | 101.35 |  |  | $ | 89,169 |  |
June 2026 |  | June 2028 |  | 865,297 |  |  | $ | 103.00 |  |  | $ | 89,126 |  |
|  |  |  | 8,306,132 |  |  | $ | 97.38 |  | (c) | $ | 808,887 |  | (d)
(a) Maturity date may be extended. Maturity date set forth in the table is as extended, if applicable. (b) Subject to certain adjustments. (c) Total weighted-average share price. (d) Does not include one forward sale agreement, whose effective date was July 6, 2026, relating to a total of $84 million, on a gross basis, of common stock, with a maturity date of July 3, 2028. Non-ATM February 2024 Forward Sale Agreements 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 Sale 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. The following table presents information about the outstanding February 2024 Forward Sale Agreements as of June 30, 2026 (dollars in thousands, except price per share):
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)
(a) Subject to certain adjustments. (b) Physical delivery. (c) Proceeds recorded in common equity on the Condensed Consolidated Balance Sheets. Convertible Notes 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 •upon the occurrence of certain corporate events, as defined in the Convertible Notes’ indenture. 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 June 30, 2026, the conditions allowing holders to convert their Convertible Notes were not met, and as a result, the Convertible Notes were classified as current maturities of long-term debt on Pinnacle West’s Condensed Consolidated Balance Sheets with a carrying amount of $525 million, net of approximately $2 million in unamortized debt issuance costs. The estimated fair value of the Convertible Notes as of June 30, 2026 was approximately $629 million (Level 2 within the fair value hierarchy). As of June 30, 2026, based on Pinnacle West’s average stock price and the relevant terms of the Convertible Notes, there were shares of Pinnacles West’s common stock included in diluted EPS relating to the potential conversion of the Convertible Notes, but no shares included in basic EPS. Earnings Per Share The following table presents the calculation of Pinnacle West’s basic and diluted EPS (dollars and shares in thousands, except earnings per share amounts):
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |
|  | 2026 |  | 2025 |  | 2026 |  | 2025 |  |  |  |  |  |
Net income attributable to common shareholders |  | $ | 178,574 |  |  | $ | 192,564 |  |  | $ | 211,494 |  |  | $ | 187,920 |  |  |  |  |  |  |
Weighted average common shares outstanding — basic |  | 121,306 |  |  | 119,517 |  |  | 121,333 |  |  | 119,555 |  |  |  |  |  |  |
Net effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently issuable performance shares and restricted stock units |  | 469 |  |  | 548 |  |  | 457 |  |  | 523 |  |  |  |  |  |  |
Dilutive shares related to equity forward sale agreements (a) |  | 2,156 |  |  | 1,800 |  |  | 1,939 |  |  | 1,735 |  |  |  |  |  |  |
Dilutive shares related to convertible debt instruments (b) |  | 563 |  |  | — |  |  | 407 |  |  | — |  |  |  |  |  |  |
Total contingently issuable shares |  | 3,188 |  |  | 2,348 |  |  | 2,803 |  |  | 2,258 |  |  |  |  |  |  |
Weighted average common shares outstanding — diluted |  | 124,494 |  |  | 121,865 |  |  | 124,136 |  |  | 121,813 |  |  |  |  |  |  |
Earnings per weighted-average common share outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income attributable to common shareholders — basic |  | $ | 1.47 |  |  | $ | 1.61 |  |  | $ | 1.74 |  |  | $ | 1.57 |  |  |  |  |  |  |
Net income attributable to common shareholders — diluted |  | $ | 1.43 |  |  | $ | 1.58 |  |  | $ | 1.70 |  |  | $ | 1.54 |  |  |  |  |  |  |
(a) For the three and six months ended June 30, 2026 and 2025, there were no potentially dilutive shares related to equity forward sale agreements excluded from the calculation of diluted weighted-average common shares. (b) No shares related to the Convertible Notes were excluded from diluted weighted-average common shares for the three and six months ended June 30, 2026. For the three and six months ended June 30, 2025, potentially issuable shares of 51,380 and 244,134, respectively, were excluded from the diluted weighted-average common shares calculation 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.

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