Pinnacle West reports $436.43 million net income for Q3 2026

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For the quarterly period ended June September 30, 2026

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PINNACLE WEST CAPITAL CORPORATION ☐

ARIZONA PUBLIC SERVICE COMPANY ☐

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PINNACLE WEST CAPITAL CORPORATION Number of shares of common stock, no par value, outstanding as of July October 28, 2026: 121,197,234 121,201,207

ARIZONA PUBLIC SERVICE COMPANY Number of shares of common stock, $2.50 par value, outstanding as of July October 28, 2026: 71,264,947

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Exhibits 3 changes

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DPC Direct pricing contract

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EPS Earnings per share

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SOFR Secured Overnight and Financing Rate

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Financial statements 264 changes

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Pinnacle West Condensed Consolidated Statements of Income for Three and Six Nine Months Ended June September 30 , 2026 and 202 5

Pinnacle West Condensed Consolidated Statements of Comprehensive Income for Three and Six Nine Months Ended June September 30 , 2026 and 202 5

Pinnacle West Condensed Consolidated Balance Sheets as of June September 30 , 202 6 and December 31, 2025

Pinnacle West Condensed Consolidated Statements of Cash Flows for Six Nine Months Ended June September 30 , 202 6 and 2025

Pinnacle West Condensed Consolidated Statements of Changes in Equity for Three and Six Nine Months Ended June September 30 , 2026 and 2025

APS Condensed Consolidated Statements of Income for Three and Six Nine Months Ended June September 30 , 20 26 and 2025

APS Condensed Consolidated Statements of Comprehensive Income for Three and Six Nine Months Ended June September 30 , 2026 and 2025

APS Condensed Consolidated Balance Sheets as of June September 30 , 202 6 and December 31, 2025

APS Condensed Consolidated Statements of Cash Flows for Six Nine Months Ended June September 30 , 2026 and 2025

APS Condensed Consolidated Statements of Changes in Equity for Three and Six Nine Months Ended June September 30 , 2026 and 2025

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Note 1 3 . 13. Common Stock Equity and Earnings Per Share

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Note 1 8 . Asset Retirement Obligations

N ote 1 8 9 . El Do rado Equity Investments

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Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

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Fuel and purchased power 558,498 477,008 995,227 857,079

Operations and maintenance 283,387 286,605 560,087 586,714

Depreciation and amortization 243,226 228,893 483,084 463,833

Taxes other than income taxes 61,684 57,651 123,656 117,005

Other expense 3,282 1,042 6,446 1,626

Total 1,150,077 1,051,199 2,168,500 2,026,257

Fuel and purchased power 758,025 655,969 1,753,252 1,513,048

Operations and maintenance 294,583 299,617 854,670 886,331

Depreciation and amortization 242,502 224,555 725,586 688,388

Taxes other than income taxes 56,308 58,416 179,964 175,421

Other expense 507 338 6,953 1,964

Total 1,351,925 1,238,895 3,520,425 3,265,152

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Allowance for equity funds used during construction 17,052 14,767 31,834 28,016

Allowance for equity funds used during construction 20,854 17,671 52,688 45,687

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Total 28,596 26,304 49,601 57,402

Interest charges 133,601 113,527 259,360 218,470

Allowance for borrowed funds used during construction ( 11,402 ) ( 11,559 ) ( 21,265 ) ( 21,661 )

Total 122,199 101,968 238,095 196,809

Total 20,745 24,762 70,346 82,164

Interest charges 138,843 125,179 398,203 343,649

Allowance for borrowed funds used during construction ( 14,074 ) ( 13,979 ) ( 35,339 ) ( 35,640 )

Total 124,769 111,200 362,864 308,009

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Weighted-average common shares outstanding - basic 121,306 119,517 121,333 119,555 121,321 119,623 121,329 119,578

Weighted-average common shares outstanding - diluted 124,494 121,865 124,136 121,813 124,339 121,956 124,204 121,861

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Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

OTHER COMPREHENSIVE INCOME, (LOSS), NET OF TAX

Derivative instruments net unrealized gain (loss), net of tax benefit (expense) of $( 6 12 ), $ 18 42 , $( 8 4 ) and $ 18 ) 24

Pension and other postretirement benefit activity, net of tax benefit expense of $( 295 162 ), $( 69 156 ), $( 460 622 ) and $( 95 251 )

Total other comprehensive income (loss)

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Cash and cash equivalents $ 9,124 11,124 $ 6,604

Customer and other receivables 775,549 967,309 579,831

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Materials and supplies (at average cost) 603,676 620,437 546,329

Income tax receivable 3,494 — 5,979

Fossil fuel (at average cost) 21,564 21,796 18,824

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Other current assets 178,791 158,346 108,686

Total current assets 2,002,916 2,153,551 1,703,709

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Other assets 168,703 144,997

Other assets 177,159 144,997

Total investments and other assets 2,068,530 2,058,637 1,999,127

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Plant in service and held for future use 27,914,887 28,048,875 27,370,296

Accumulated depreciation and amortization ( 9,303,903 9,406,189 ) ( 9,012,021 )

Net 18,610,984 18,642,686 18,358,275

Construction work in progress 2,196,736 2,506,796 1,649,542

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Intangible assets, net of accumulated amortization 535,799 525,227 575,978

Nuclear fuel, net of accumulated amortization 133,649 117,674 104,274

Total property, plant and equipment 21,508,416 21,823,237 20,720,104

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Other 135,406 96,299

TOTAL ASSETS $ 32,576,874 $ 30,031,599

Other 193,018 96,299

Total deferred debits 6,997,012 7,428,636 5,608,659

TOTAL ASSETS $ 33,464,061 $ 30,031,599

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Accounts payable $ 641,564 $ 680,203

Accrued taxes 188,912 186,605

Accrued interest 115,015 105,637

Accounts payable $ 546,532 $ 680,203

Accrued taxes 314,187 186,605

Accrued interest 112,162 105,637

Common dividends payable 110,284 — 110,022

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Customer deposits 79,063 63,776

Customer deposits 83,296 63,776

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Liabilities for asset retirements (Note 18)

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Other current liabilities 126,477 158,907 151,444

Total current liabilities 3,371,525 3,019,263 3,161,026

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Deferred income taxes 2,520,548 2,546,731 2,470,932

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and 184 more changes in the filing

Capitalization 665 changes

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Retained earnings 4,249,317 4,702,297 4,227,237

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Total shareholder equity 9,004,988 9,458,377 8,881,638

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Total equity 9,045,321 9,500,903 8,922,255

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Total capitalization 17,530,663 16,812,195

Total capitalization 18,374,293 16,812,195

TOTAL LIABILITIES AND EQUITY $ 32,400,693 33,285,902 $ 29,886,359

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Six Months Ended June 30,

Nine Months Ended September 30,

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Deferred income taxes 23,230 ( 8,702 )

Deferred investment tax credit ( 5,253 ) ( 3,301 )

Depreciation and amortization including nuclear fuel 517,215 492,191 776,655 731,592

Allowance for equity funds used during construction ( 31,834 52,688 ) ( 28,016 45,687 )

Deferred income taxes 10,751 ( 26,201 )

Deferred investment tax credit ( 14,092 ) ( 10,019 )

Amortization of operating lease assets 120,908 131,176

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Customer and other receivables ( 185,443 ) ( 47,549 )

Accrued unbilled revenues ( 109,320 ) ( 95,424 )

Other current assets ( 48,364 ) ( 41,854 )

Accounts payable ( 47,455 ) 125,387

Accrued taxes 19,818 44,905

Other current liabilities 12,633 ( 12,544 )

Change in operating lease assets 32,679 138,376

Customer and other receivables ( 371,698 ) ( 253,085 )

Accrued unbilled revenues ( 97,670 ) ( 80,971 )

Materials, supplies and fossil fuel ( 60,087 77,080 ) ( 25,497 37,251 )

Deferred fuel and purchased power ( 69,325 247,505 ) ( 95,850 276,327 )

Deferred fuel and purchased power amortization 279,830 201,035 490,421 358,871

Income tax receivable — 5,421 5,463

Other current assets ( 26,769 ) ( 9,366 )

Accounts payable ( 44,094 ) 78,674

Accrued taxes 169,038 199,236

Other current liabilities 47,737 ( 958 )

Change in long-term regulatory assets 19,074 38,992 31,104 72,050

Change in long-term regulatory liabilities 8,863 44,860 ( 19,923 ) 46,167

Change in other long-term assets ( 113,551 143,770 ) ( 117,624 199,945 )

Change in other long-term liabilities 223,225 ( 43,634 ) 248,864 164,112

Change in operating lease liabilities ( 24,808 99,914 ) ( 86,558 135,755 )

Net cash provided by operating activities 688,491 697,603 1,402,816 1,356,495

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Capital expenditures ( 1,357,028 ) ( 1,332,068 )

Capital expenditures ( 2,091,631 ) ( 1,955,102 )

Contributions in aid of construction 177,299 107,716 264,167 166,198

Allowance for borrowed funds used during construction ( 21,265 35,339 ) ( 21,661 35,640 )

Proceeds from nuclear decommissioning trusts sales and other special use funds 991,873 869,190 1,436,440 1,324,705

Investment in nuclear decommissioning trusts and other special use funds ( 980,469 1,432,364 ) ( 870,331 1,327,925 )

Net cash used for investing activities ( 1,188,433 1,856,113 ) ( 1,247,910 1,826,936 )

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Issuance of long-term debt 594,840 — 1,285,374 947,350

Repayment of long-term debt ( 250,000 ) ( 300,000 )

Short-term borrowings and (repayments), net 32,695 385,500 ( 342,555 ) 81,200

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Short-term debt repayments under term loan facility — ( 400,000 )

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Dividends paid on common stock ( 220,300 330,600 ) ( 213,900 320,800 )

Palo Verde sale leaseback noncontrolling interest acquisition — ( 198,744 )

Capital activities by noncontrolling interests ( 4,672 ) ( 10,628 13,370 )

Net cash provided by financing activities 502,563 560,972 457,547 495,636

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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,764 8,393 $ 14,480 29,010

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Three Months Ended June September 30, 2026

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Balance, March 31, 2026

Equity infusion from Pinnacle West — 100,000 — — — 100,000

Other comprehensive income

Dividends on common stock — — ( 220,900 ) — — ( 220,900 )

Capital activities by noncontrolling interests — — — — ( 4,672 ) ( 4,672 )

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Other comprehensive income

Other — — ( 3 ) — ( 1 ) ( 4 )

Balance, September 30, 2026

Three Months Ended June September 30, 2025

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Balance, March 31, 2025

Equity infusion from Pinnacle West — 300,000 — — — 300,000

Other comprehensive loss

Dividends on common stock — — ( 213,600 ) — — ( 213,600 )

Capital activities by noncontrolling interests — — — — ( 10,628 ) ( 10,628 )

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Other comprehensive income

Capital activities by noncontrolling interests — — — — ( 2,742 ) ( 2,742 )

Deconsolidation of noncontrolling interests (a) — — — — ( 59,633 ) ( 59,633 )

Other — — ( 2 ) — — ( 2 )

Balance, September 30, 2025

71,264,947 $ 178,162 $ 4,416,696 $ 4,410,624 $ ( 13,459 ) $ 43,083 $ 9,035,106 (a) See Note 9 for information related to the Palo Verde sale leaseback purchases.

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Six Months Ended June 30, 2026

Nine Months Ended September 30, 2026

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Balance, June 30, 2026

Six Months Ended June 30, 2025

Balance, September 30, 2026

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and 585 more changes in the filing

MD&A 157 changes

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Our vision is to create a sustainable energy future for Arizona. Our mission is to serve customers with safe, reliable, and affordable energy. We are committed to delivering operational excellence at the lowest cost possible while aspiring to lower carbon emissions over time.

Our vision is to create a sustainable energy future for Arizona. Our mission is to serve customers with safe, reliable, and affordable energy. As a part of that mission, in 2026, APS introduced its Pledge for Responsible Energy Growth, reaffirming its longstanding commitment to protect customers while serving the needs of new large energy users. The pledge is built on three core principles: safeguarding reliability by connecting large customers only when the grid can reliably support such customers; protecting customer rates by ensuring new large energy users pay the costs associated with serving their energy needs and growth; and preserving sufficient capacity to meet the needs of Arizona's current and future homes, businesses, schools, hospitals, and communities.

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Palo Verde, one of the nation's largest carbon-free energy resources, serves as a foundational part of APS's resource portfolio. The plant is a critical asset to the Southwest, generating more than 32 million MWh per year – enough power for roughly 3.4 million households, or approximately 8.5 million people. Its continued operation is important to a carbon-neutral future for Arizona and the region, as a reliable, continuous, affordable resource and as a large contributor to the local economy. APS owns or leases 29.1% of Units 1, 2, and 3 Palo Verde. In June 2025, APS entered into agreements to purchase two of the three leased interests in Unit 2. The two subject leased interests represented approximately 7% or 94 MW of Unit 2. The transaction closed in September 2025, leaving one remaining lease for approximately 5.2% of Unit 2 that expires in 2033. See Note 9 for more information. The 2025 Rate Case includes pro forma adjustments to account for these acquisitions.

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APS uses fire modeling software to identify and calculate risk and target future system improvement investments such as fire-resistant pole wrapping, wood to steel pole conversions, and additional remote-controllable field devices like reclosers and switches. In 2024, APS began installing a system of artificial intelligence-based fire sensing cameras with the ability to detect and alert on fire ignitions. These alerts are sent both to APS and fire response dispatch centers to speed fire response in APS's service territory regardless of the cause of the fire. APS also implemented a public safety power shutoff ("PSPS") program on certain feeders that began in the 2024 fire season, leveraging real-time analysis of weather and environmental factors, such as temperature, humidity, fuel moisture levels, and wind, provided by APS field sensors and the modeling software. APS has educated and will continue education outreach to customers and communities that may potentially be impacted by the PSPS program.

APS's service territory regardless of the cause of the fire. APS also implemented a public safety power shutoff ("PSPS") program on certain feeders that began in the 2024 fire season, leveraging real-time analysis of weather and environmental factors, such as temperature, humidity, fuel moisture levels, and wind, provided by APS field sensors and the modeling software. APS has educated and will continue education outreach to customers and communities that may potentially be impacted by the PSPS program.

APS was selected by DOE's Grid Deployment Office ("GDO") to receive up to $70 million in federal money for fire mitigation and grid infrastructure projects. This funding is part of the GDO's Grid Resilience and Innovation Partnership Program. and is contingent on APS negotiating and executing final The grant agreements with GDO were finalized and became effective September 30, 2026. Additionally, on May 12, 2025, the Arizona governor signed into law a bill that requires Arizona electric utilities to develop and seek approval for wildfire mitigation plans and defines the standard of care with respect to wildfire-related claims by reference to such plans. Pursuant to that legislation, APS submitted its Comprehensive Wildfire Mitigation Plan to the Arizona Department of Forestry and Fire Management for review and approval. The wildfire mitigation plan was approved on May 7, 2026. APS continues to evaluate policy and regulatory options, as well as insurance programs, to mitigate the impact of wildfire events.

We are committed to keeping bills as low as possible for our customers while maintaining high levels of reliability. Inflation has dramatically impacted the cost of goods and services in recent years, as shown by the Consumer Price Index for All Urban Consumers ("CPI-U"), which from 2018 through 2024 rose nationally 24.9% and 32.1% in Phoenix. Despite this, APS's average residential rates remained well-below those inflation figures, rising 16.2% for the same period according to the U.S. Energy Information Administration. Inflation has recently reached its highest level since 2023, slightly moderated from recent peaks, with CPI-U rising 4.2% 3.4% nationally in the 12 months ended May 2026 and 3.0% 2.5% in Phoenix over the 12 months ended April August 2026. As a result of increased tariffs and supply chain constraints, APS amended several of its agreements from its ASRFP issued in 2023 to mitigate these cost impacts. However, APS remains cautious of potential price increases as a result of Ongoing geopolitical events and current and proposed tariffs which could lead to higher costs further cost increases and supply chain constraints while also continuing to monitor the impact of the U.S. Supreme Court's recent decision regarding the validity of certain tariffs resulting in rate increases and any other related executive or legislative action. negative impacts.

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APS has seen increasing demand from large load customers energy users in recent years. In Consistent with the 2025 Rate Case, Pledge for Responsible Energy Growth, APS requested is seeking adjustments to rate designs and modification of cost allocation methodologies in the 2025 Rate Case to ensure growth pays for growth and reduce cross-subsidization by customer classes. In line with the 2025 Rate Case, APS has developed an approach it believes will allow for these large load customers energy users to fund the incremental infrastructure needed to serve them through long-term contracts where they cover capital costs and assume development risks, thereby accelerating their path to service and ensuring those infrastructure costs are borne by those customers rather than residential or small business customers.

There are also external opportunities that allow APS to deliver more affordable energy to customers, such as APS's participation in western energy markets and programs. APS participated in market design and tariff development of Markets+, a day-ahead and real-time market offering from the Southwest Power Pool. The Markets+ tariff was filed with FERC on March 29, 2024 and was approved on January 16, 2025. APS is a funding party to the implementation phase of Markets+ and expects to go live in the market in late October 2027. or early 2028. In addition, APS is participating in the Western Resource Adequacy Program administered by Western Power Pool and plans to transition to full-binding participation in November 2027. These regional efforts are driven by the objectives of reducing customer cost and improving reliability. APS will continue to participate in the Western Energy Imbalance Market ("WEIM") as a tool for creating savings for APS's customers from the real-time only, voluntary market for as long as feasible leading up to before being replaced by the transition to real-time market of Markets+. APS expects that its participation in the WEIM and future participation in Markets+ will lower its fuel and purchased-power costs, improve situational awareness for systems operations in the Western Interconnection, and improve integration of APS's resources. As other market participants evaluate their market options, APS continues to monitor the participants in Western markets to ensure viability of benefits to its customers.

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APS remains focused on providing reliable energy at the lowest cost possible while striving to lower emissions over time and continues to look for opportunities to support reliability through traditional dispatchable resources, such as gas and the potential extension of coal coal-fired generation beyond 2031. APS's diverse portfolio of existing and planned resources includes biomass, biogas, coal, energy storage, geothermal, natural gas, nuclear, solar, and wind. Every three years, APS performs an IRP, a comprehensive study to identify what resources will be necessary to safely, reliably, and affordably meet the demand and energy needs of its customers over the next 15 years. In November 2023, October 2026, APS released its latest IRP, which identified forecasted customer demand and energy needs growing at an unprecedented rate. faster than previously predicted. In developing the IRP, APS considered how factors such as forecasted economic growth, impacts from weather, and new resource technology availability impact the amount and type of resources required to reliably and affordably meet customer needs. These factors, among others, were used to develop a plan that identified a balanced mix of diverse energy-generating resources to reliably serve customers' future energy needs. APS expects to file filed its next IRP on October 30, 2026, which will provide providing an updated view on the resource types and volumes necessary to maintain reliability for a rapidly expanding customer base. To help ensure competitive costs for resources procured by APS, APS regularly issues competitive bid solicitations through the ASRFP process, with the most recent ASRFP being issued in 2025. These ASRFPs are open to bids for all resource types, including customer-scale (behind the meter) and utility-scale (in front of the meter) resources.

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APS's 24/7 call center answers more than 75% of customer calls within 30 seconds, and our mobile platforms enable our customers to quickly and easily find the information they need when they need it. We seek to provide relevant and valuable options for help customers to understand and manage their bill, including through rate plan energy bills by providing relevant information and options, including tools that explain energy usage and bill drivers, programs that help them customers save energy and money, and alerts and notifications that help keep them aware of customers informed about outages, payments and usage. APS has a high-bill analyzer tool enabling phone advisors to provide also helps many customers with specific, customized guidance evaluate their rate plan options and identify the most economical rate plan based on their actual usage individual energy-use patterns and habits. needs. For customers experiencing higher-than-expected bills, APS's high-bill analyzer tool allows phone advisors to provide specific, customized guidance based on a customer's actual energy-use patterns.

Additionally, APS offers a variety of customer assistance resources, including APS CARE, income-qualified bill discounts of up to 60% for eligible customers, through APS Energy Support, Crisis Bill Assistance, and flexible payment arrangements. and emergency utility bill assistance. To ensure customers are aware of and connected to these resources, APS partners with nearly one hundred community action agencies across our service territory, providing training and support to representatives who serve our shared customers. Through these partnerships and programs, APS works to ensure assistance is available to customers when they need it most.

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◦ elimination of the interim rate reset by accepting Commission ACC approval prior to implementation (subject to an automatic reversion provision).

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APS requested that the increase become effective in the second half of 2026. The hearing concluded on July 7, 2026. After the conclusion of the hearing, the Administrative Law Judge overseeing the hearing issued a procedural order outlining briefing schedules APS and other next steps in the proceedings. The order noted parties filed their Initial Post-Hearing Briefs and Reply Briefs on August 27, 2026 and September 11, 2026, respectively. Although APS anticipates that the 2025 Rate Case is anticipated to will be resolved before the end of this year, APS cannot predict the outcome of its request nor when the 2025 Rate Case will be decided by the ACC.

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Six intervenors and the Attorney General of Arizona requested rehearing on various issues included in the ACC's decision, such as the GAC for solar customers, the SRB, and Coal Community Transition funding. On April 15, 2024, the ACC granted, in part, the rehearing applications of the Attorney General, AriSEIA, SEIA, and Vote Solar specifically to review whether the GAC rate is just and reasonable, including whether it should be higher or lower, whether the GAC rate constitutes a discriminatory fee to solar customers, and whether omission of a GAC charge is discriminatory to non-solar customers. All other applications for rehearing were denied. A limited rehearing was held October 28 through November 1, 2024. Following the limited rehearing, an Administrative Law Judge issued the Limited Rehearing ROO on December 3, 2024, which recommended affirming the GAC as just and reasonable and that the GAC is not discriminatory to solar customers and the absence of a GAC is not discriminatory to non-solar customers. On December 17, 2024, the ACC approved the Limited Rehearing ROO with an amendment that requires APS in its next rate case to propose a revenue allocation based on a site-load cost of service study in order to bring further parity in revenue collection between solar and non-solar customers. SEIA, AriSEIA, Vote Solar, the Arizona Attorney General, and two individual customers have filed requests for rehearing of the ACC's December 17, 2024 decision on the rehearing. The ACC has taken no action on these requests. In addition, each of these parties has subsequently filed an appeal to the Arizona Court of Appeals seeking review of the ACC's decisions regarding the GAC and on rehearing. On February 25, 2026, parties provided oral arguments before the Court of Appeals. On June 16, 2026, the Arizona Court of Appeals found that the GAC and related increases for residential solar customers were imposed by the ACC without adequate notice or opportunity to be heard. APS has since moved Following motions for reconsideration of this decision filed by APS and if reconsideration is not successful, the Commission, the Court of Appeals denied those motions on October 29, 2026. APS now plans to seek further file a petition for review of this decision before with the Arizona Supreme Court. APS cannot predict the outcome of these proceedings, but does not expect the outcome will have a material impact on APS' financial position, results of operations, or cash flows.

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On January 5, 2023, the ACC opened a new docket to explore the possibility of modifications to the ACC's historical test year rules. The ACC requested comments and held two workshops exploring ways to reduce regulatory lag, including alternative ratemaking structures such as future test years, hybrid test years, and formula rates. On December 3, 2024, the ACC approved a policy statement regarding formula rate plans. The policy statement provides regulated utilities with the opportunity to propose formula rate plans in future rate cases. On March 28, 2025, RUCO, the ALCG, and an individual customer filed a lawsuit challenging the ACC's authority to issue the formula rate policy statement outside of Arizona's formula rulemaking process. On June 13, 2025, the lawsuit challenging the ACC's formula rate policy was dismissed by the Superior Court of Maricopa County. Following the dismissal, the plaintiffs filed an appeal with the Arizona Court of Appeals as well as a Petition for Special Action with the Arizona Supreme Court. The Supreme Court declined to exercise jurisdiction on the Petition for Special Action. The plaintiffs also filed a Petition for Special Action with the Arizona Court of Appeals, which has accepted jurisdiction to determine whether the case should be remanded back to the Superior Court for expedited consideration of the merits. On November 21, 2025, the Arizona Court of Appeals ruled that the issue should be remanded back to the Superior Court to determine whether the ACC's formula rate policy must go through a formal rulemaking process. In response, APS, the ACC, and several other Arizona utility companies filed petitions for review of the Court of Appeals decision with the Arizona Supreme Court. That petition was denied on May 8, 2026, which will return returned the litigation to the Superior Court of Maricopa County for further proceedings on the merits of whether the ACC's issuance of the formula rate policy statement complied with the Arizona Administrative Procedure Act. Subsequent to that remand, the Superior Court granted a motion on August 28, 2026, to stay the proceedings pending the outcome of appellate litigation in the Arizona Court of Appeals addressing challenges to the UNS Gas Inc. Annual Rate Adjustment Mechanism, which is premised on similar grounds as the Superior Court litigation. Thereafter, on September 28, 2026, RUCO filed a petition for another special action with the Arizona Supreme Court seeking to reverse the Superior Court's stay and enjoin further implementation of retail formula rates in Arizona pursuant to the ACC's policy statement. APS cannot predict the outcome of this matter or the impact (if any) it may have on other proceedings.

Direct Pricing Contract

On October 16, 2026, APS signed a DPC with TSMC Arizona. APS expects to submit the DPC to the ACC for regulatory approval in 2026. APS cannot predict the outcome of this matter.

Pursuant to the DPC, APS has agreed to provide service ramping to approximately 1.88 gigawatts to power TSMC Arizona's semiconductor fabs/advanced packaging facilities for an initial term of 25 years. The DPC includes various contractual provisions to support the development of resources for APS to meet the load demand, including upfront payments for credit support and various forms of liquid and non-liquid collateral beginning on January 1, 2027. The exact amount and forms of collateral will vary throughout the term of the DPC depending on various factors, including the in-service dates of the resources developed to support TSMC Arizona.

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• $25 million investment in the Energy Impact Partners Fund, of which approximately $21 million has been funded as of June September 30, 2026. Energy Impact Partners is an organization that focuses on fostering innovation and supporting the transformation of the utility industry.

• $25 million investment in Copper Sky, previously AZ-VC, of which approximately $19 $20 million has been funded as of June September 30, 2026. Copper Sky is a 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.

• $7.5 million investment in Westly Seed Fund, of which approximately $2 $3 million has been funded as of June September 30, 2026. Westly Seed Fund is focused on supporting entrepreneurs involved in the energy, mobility, building, and industrial sectors.

• $15 million investment in Westly Capital Partners Fund, of which none has been funded as of September 30, 2026. Westly Capital Partners Fund is focused primarily on venture capital investments in privately held companies in the energy, transportation, industrial technology, innovative infrastructure and security sectors.

• Equity investment in SAI, a private corporation that manufactures electrical switchgear equipment used by data centers. El Dorado accounts for this investment under the equity method and has an investment carrying value of approximately $34 $41 million as of June September 30, 2026.

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Electric Operating Revenues. For 2025, retail electric revenues were 95% of our total operating revenue. revenues. For 2023 through 2025, retail electric revenues averaged approximately 94% of our total operating revenues. Our electric operating revenues are affected by customer growth or decline, variations in weather from period to period, customer mix, average usage per customer and the impacts of energy efficiency programs, distributed energy additions, electricity rates and tariffs, the recovery of PSA deferrals and the operation of other recovery mechanisms. Our revenues are affected by the availability of excess generation or other energy resources and wholesale market conditions, including competition, demand, and prices.

Actual and Projected Customer and Sales Growth. Retail customers in APS's service territory increased 2.1% 2.0% for the period nine months ended June September 30, 2026 compared with the prior-year period. For the three years through 2025, APS's customer growth averaged 2.2% per year. We currently project annual customer growth to be 1.5% to 2.5% for 2026 and the average annual growth to be in the range of 1.5% to 2.5% through 2030 based on anticipated steady population growth in Arizona during that period.

Retail electricity sales in kWh, adjusted to exclude the effects of weather variations, increased 3.9% for residential customers, 13.6% 9.5% for commercial and industrial all retail customers, 3.9% including 4.2% for residential customers and 9.5% 13.9% for all retail commercial and industrial customers for the period nine months ended June September 30, 2026 compared with the prior-year period. While overall strong sales to commercial and industrial customers continue to be driven by the ramp-up of new data center and large manufacturing and data center customers, the main drivers of increased revenues for this period were a surge in continued high levels of residential, usage during April small commercial, and May, including on days with normal weather conditions, industrial customer usage, following the strong weather-driven demand caused by a record-setting March heat wave in Arizona in customer usage pattern established during the first second quarter, of 2026 and steady customer growth, which was only partially offset by energy savings driven by customer conservation, energy efficiency, and distributed renewable generation. Due to the growth of large load large-load customers as a proportion of our business, in the first quarter of 2025, we updated our procedures with respect to estimates of unbilled revenues. This resulted in a downward adjustment to unbilled revenues in that quarter, which contributes approximately 0.9% 0.5% to 2026 year-to-date sales growth as compared to the same period last year.

For the three years through 2025, annual retail electricity sales growth averaged 3.9%, adjusted to exclude the effects of weather variations. Due to the expected growth of several data centers and large manufacturing and data center facilities, we currently project that annual retail electricity sales in kWh will increase in the range of 4.0% 8.0% to 6.0% 10.0% for 2026 and that average annual growth will be in the range of 5.0% 8.0% to 7.0% 10.0% through 2030, including the effects of customer conservation, energy efficiency, and distributed renewable generation, but excluding the effects of weather variations. These projected sales growth ranges include the impacts of several data centers and large manufacturing and data center facilities, which are expected to contribute to 2026 growth in the range of 3.0% to 5.0% to 7.0% and to average annual growth in the range of 4.0% 7.0% to 6.0% 9.0% through 2030.

Longer term, APS has been preparing for and can serve significant load growth from residential and business customers. On top of these existing growth trends, APS is also receiving incremental requests for service from large load customers energy users with very high energy demands that persist virtually around-the-clock, such as data centers for AI and large manufacturers. These incremental requests for service by large load customers far exceed available generation and transmission resource capacity in the Southwest region for the foreseeable future. Because of the high growth in demand for such projects, APS has developed a queue that identifies and prioritizes projects while maintaining system reliability and affordability for existing APS customers and signed its first DPC with a large energy user. See Note 7. APS is also continues exploring available options for developing additional electric generation and transmission to meet these projections of future customer needs while protecting customers as a part of the company's "growth pays Pledge for Responsible Energy Growth. strategy, such as long-term contracts with large load customers to pay for the costs associated with the incremental infrastructure needed to provide service without compromising reliability and affordability for existing customers.

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Operating Results – Three-month period ended June September 30, 2026, compared with three-month period ended June September 30, 2025.

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June September 30, 2026 was $179 $434 million, compared with consolidated net income attributable to common shareholders of $193 $413 million for the prior-year period. The results reflect a decrease an increase of approximately $14 $21 million, primarily as a result of higher interest charges, higher depreciation and amortization expenses mostly due to increased plant additions, partially offset by operations ceasing at Cholla, customer usage and lower transmission service revenues. growth and the effects of weather. These negative positive factors were partially offset by the favorable impacts of the effects of weather, increased customer usage, customer growth, lower operations higher depreciation and maintenance amortization expenses, primarily due to increased plant in service, higher interest charges, and lower other income. taxes. Customer usage and growth in turn was were also partially offset by the related pricing and the impacts of energy efficiency.

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Operating revenues $ 1,456 $ 1,359 $ 97 $ 1,456 $ 1,359 $ 97

Fuel and purchased power (558) (477) (81) (558) (477) (81)

Operations and maintenance (283) (287) 4 (281) (285) 4

Depreciation and amortization (243) (229) (14) (243) (229) (14)

Other income and (expense), net 2 7 (5) (8) (2) (6)

Income taxes (31) (35) 4 (36) (39) 3

Operating revenues $ 1,973 $ 1,821 $ 152 $ 1,973 $ 1,821 $ 152

Fuel and purchased power (758) (656) (102) (758) (656) (102)

Operating revenues less fuel and purchased power (a) 898 882 16 898 882 16 1,215 1,165 50 1,215 1,165 50

Operations and maintenance (295) (300) 5 (292) (298) 6

Depreciation and amortization (243) (225) (18) (242) (225) (17)

Taxes other than income taxes (62) (56) (58) (4) (62) 2 (56) (58) (4) 2

Allowance for equity funds used during construction 17 15 2 17 15 2 21 18 3 21 18 3

Pension and other postretirement non-service credits, net 5 4 1 3 2 5 4 1 3 2

Other income and (expense), net (6) 3 (9) (7) (3) (4)

Interest charges, net of allowance for borrowed funds used during construction (122) (102) (20) (97) (80) (17) (125) (111) (14) (98) (85) (13)

Income taxes (80) (78) (2) (91) (86) (5)

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Effects of weather $ 27 $ 8 $ 19

Operating revenues less fuel and purchased power. Operating revenues less fuel and purchased power expenses were $16 $50 million higher for the three months ended June September 30, 2026 compared with the prior-year period. The following table summarizes the major components of this change (dollars in millions):

Higher retail revenues due to changes in usage patterns and customer growth, partially offset by the related pricing and impacts of energy efficiency 49 31 18 $ 100 $ 41 $ 59

Effects of weather 21 6 15

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Changes in net fuel and purchased power costs, including off-system sales margins and related deferrals 36 40 (4) 44 50 (6)

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Miscellaneous items, net 7 (1) 8

Total $ 97 $ 81 $ 16

• an increase of $2 million related to employee benefit costs;

• a decrease of $2 million for other miscellaneous factors.

Taxes other than income taxes. Taxes other than income taxes were $4 million higher for the three months ended June 30, 2026, compared to the prior-year period, primarily due to higher plant balances.

Lower renewable energy regulatory surcharges, partially offset by lower operations and maintenance costs (13) 3 (16) 3 (19)

Miscellaneous items, net 5 2 3

Total $ 152 $ 102 $ 50

Operations and maintenance . Operations and maintenance expenses decreased $4 $5 million for the three months ended June September 30, 2026 compared with the prior-year period primarily due to:

• a decrease of $18 $20 million related to costs for renewable energy programs and similar regulatory programs, which are partially offset in operating revenues and fuel and purchased power;

• a decrease of $1 $2 million related to non-nuclear generation costs; primarily due to lower planned outages;

• an increase of $4 $3 million related to nuclear generation costs;

• an increase of $4 $3 million related to transmission, distribution, and customer service costs;

• an increase of $5 $3 million related to corporate resource costs; and

• an increase of $2 $8 million related to information technology costs.

Depreciation and amortization. Depreciation and amortization expenses were $14 $18 million higher for the three months ended June September 30, 2026 compared to with the prior-year period, primarily due to increased plant in service, partially offset by operations ceasing at the Cholla plant. lower amortization of intangibles.

Other income and expense, net. Other income and expense, net was $5 were $9 million lower for the three months ended June September 30, 2026 compared to with the prior-year period, primarily due to the Captive activity recognized during the third quarter and lower PSA interest income. and higher other expenses, partially offset by investment gains in The Captive. The difference between APS's and Pinnacle West's other income and expense, net is primarily related to Pinnacle West's investment gains in the Captive. activity recognized by Pinnacle West.

Interest charges, net of allowance for borrowed funds and equity funds used during construction. Interest charges, net of allowance for borrowed funds and equity funds used during construction, were $18 $11 million higher for the three months ended June September 30, 2026 compared to with the prior-year period, primarily due to higher debt balances, partially offset by higher allowance for equity funds used during construction.

Income taxes. Income taxes were $4 $2 million lower higher for the three months ended June September 30, 2026 compared with the prior-year period, primarily due to lower higher pre-tax income and lower permanent tax benefits, partially offset by higher tax credits.

Operating Results – Six-month Nine-month period ended June September 30, 2026, compared with six-month nine-month period ended June September 30, 2025.

Our consolidated net income attributable to common shareholders for the six nine months ended

June September 30, 2026 was $211 $646 million, compared with consolidated net income attributable to common shareholders of $188 $601 million for the prior-year period. The results reflect an increase of approximately $23 $45 million, primarily as a result of the effects of weather, increased customer usage and customer growth, lower operations and maintenance expenses, the effects of weather, higher LFCR revenues, and higher transmission service revenues. Customer growth in turn was partially offset by the related pricing and the impacts of energy efficiency. These positive factors were partially offset by higher interest charges, lower other income mainly due to higher El Dorado other income recognized in the prior year, and higher depreciation and amortization expenses, mostly primarily due to increased plant additions and intangible assets, in service, partially offset by operations ceasing at Cholla and lower amortization of intangible assets, and lower other income. Customer usage and growth were also partially offset by the related pricing and impacts of energy efficiency.

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Six Months Ended June 30, Six Months Ended June 30,

Nine Months Ended September 30, Nine Months Ended September 30,

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Operating revenues $ 2,605 $ 2,391 $ 214 $ 2,605 $ 2,391 $ 214

Fuel and purchased power (995) (857) (138) (995) (857) (138)

Operations and maintenance (560) (587) 27 (554) (582) 28

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and 77 more changes in the filing

Controls and procedures 3 changes

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Pinnacle West's management, with the participation of Pinnacle West's Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of Pinnacle West's disclosure controls and procedures as of June September 30, 2026. Based on that evaluation, Pinnacle West's Chief Executive Officer and Chief Financial Officer have concluded that, as of that date, Pinnacle West's disclosure controls and procedures were effective.

APS's management, with the participation of APS's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of APS's disclosure controls and procedures as of June September 30, 2026. Based on that evaluation, APS's Chief Executive Officer and Chief Financial Officer have concluded that, as of that date, APS's disclosure controls and procedures were effective.

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No change in Pinnacle West's or APS's internal control over financial reporting occurred during the fiscal quarter ended June September 30, 2026 that materially affected, or is reasonably likely to materially affect, Pinnacle West's or APS's internal control over financial reporting.

Other information 4 changes

Ozone National Ambient Air Quality Standards

On October 1, 2015, EPA finalized revisions to the primary ground-level ozone NAAQS at a level of 70 parts per billion ("ppb"). As ozone standards become more stringent, our fossil generation units will come under increasing pressure to reduce emissions of NOx and volatile organic compounds, and to generate emission offsets for new projects or facility expansions located in ozone nonattainment areas. EPA was expected to designate attainment and nonattainment areas relative to the new 70 ppb standard by October 1, 2017. While EPA took action designating attainment and unclassifiable areas on November 6, 2017, the Agency's final action designating non-attainment areas was not issued until April 30, 2018. At that time, EPA designated the geographic areas containing Yuma and Phoenix, Arizona as in non-attainment with the 2015 70 ppb ozone NAAQS. The vast majority of APS's natural gas-fired EGUs are located in these jurisdictions. Areas of Arizona and the Navajo Nation where the remainder of APS's fossil-fuel fired electric generating unit fleet is located were designated as in attainment. On December 23, 2020, EPA issued a final regulation retaining the current primary NAAQS for ozone, following a required scientific review process. On October 7, 2022, EPA took final action designating Maricopa County, which includes the Phoenix, Arizona metropolitan area, as "moderate" for non-attainment with the governing ozone NAAQS, which provided for an August 3, 2024 attainment "deadline" by which the area would be automatically designated as in "serious" non-attainment unless it achieved the 2015 ozone NAAQS. On November 18, 2025, EPA redesignated the geographic area containing Yuma into attainment for the 2015 Ozone NAAQS.

On November 19, 2025, EPA issued a proposed rule determining that the Phoenix-Mesa area would have met the 2015 ozone NAAQS standard by its August 3, 2024 "Moderate" attainment date, "but for" emissions emanating from outside of the United States. This proposal was subsequently finalized on March 23, 2026. As a result, facilities applying for new or modified permits in Maricopa County can continue under the moderate nonattainment NOx threshold, rather than being subject to more restrictive serious nonattainment limitations. On May 22, 2026, a coalition of Environmental NGOs, including Sierra Club, Center for Biological Diversity, Natural Resources Defense Council, and Public Employees for Environmental Responsibility, filed a petition for review in the Ninth Circuit Court of Appeals challenging the EPA's final action. APS will continue to monitor this proceeding. At this time, APS is unable to predict the outcome of this litigation.

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During the fiscal quarter ended June September 30, 2026, none of our directors or executive officers adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408 of Regulation S-K.