Greetings, and welcome to the Pinnacle West Capital Corporation 2011 Fourth Quarter and Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rebecca Hickman, Director of Investor Relations. Thank you, Ms. Hickman, you may begin.

Thank you, Christine. I’d like to thank everyone for participating in this conference call and webcast to review our fourth quarter and full year 2011 earnings, recent developments and operating performance. Our speakers today will be our Chairman and CEO, Don Brandt; and our CFO, Jim Hatfield. Jeff Guldner, who is APS Vice President of Rates and Regulation is also here with us. Before I turn the call over to our speakers, I need to cover a few details with you. First, the slides to which we refer are available on our Investor Relations website, along with our earnings release, supplemental information on our earnings variances and operating statistics, the webcast and the Form 8-K filed this morning. Please note that slides contain reconciliations of certain non-GAAP financial information. Also, all of our references to per share amounts will be after income taxes and based on diluted shares outstanding. It is my responsibility to advise you that this call and our slides contain forward-looking statements based on current expectations, and the company assumes no obligation to update these statements. Because actual results may differ materially from expectations, we caution you not to place undue reliance on these statements. Our 2011 Form 10-K was filed this morning. Please refer to that document for forward-looking statements, cautionary language as well as the MD&A section, which identifies risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements. A replay of this call will be available on our website for the next 30 days. It will also be available by telephone through March 2. At this point, I’ll turn the call over to Jim.

Thank you, Becky. The topics I will discuss today are outlined on slide four. First, I’ll review the consolidated fourth quarter results and discuss the main variances from last year’s corresponding quarter. Second, I will discuss our 2011 full year results provide. Third, I will provide a brief update on the status and outlook for the Arizona economy. And lastly, I will close with brief comments on our liquidity and financing activities. Slide five summarizes our reported and ongoing earnings for the quarter. On a GAAP basis, for this year’s fourth quarter, we reported consolidated net income attributable to common shareholders of $13 million, or $0.11 per share, compared with net income of $7 million, or $0.07 per share for the prior year’s fourth quarter. Our ongoing earnings increased $0.06 per share. For the 2011 fourth quarter, we had consolidated ongoing earnings of $12 million, or $0.11 per share, versus ongoing earnings of $5 million, or $0.05 per share for the comparable quarter a year ago. Slide six contains a reconciliation of our fourth quarter 2011 and 2010 GAAP earnings per share to our ongoing earnings. The amounts for both quarters exclude the results related to our discontinued operations. The discontinued operations amounts relate primarily to APS Energy Services, part of which were sold in mid-2010 and the remainder of which was sold in mid-2011. My remaining comments on the quarter will focus on ongoing results. Moving to slide seven, you see the variances that drove the change in quarterly ongoing earnings per share. First, an increase in our regulated electricity segment gross margin added $0.05 per share, compared with the prior year’s fourth quarter. Several pluses and minuses comprise this positive net variance and I will cover those items in more detail on the next slide. Second, lower operations…

Thanks, Jim, and thank you all for joining us this morning. Today I will update you on three areas: first, APS’ pending retail rate settlement; two, our investments in renewable resources and other generation, and three, our operating performance in 2011. We know Arizona regulation and APS’ recently filed rate settlement are top of mind for investors. So I will start with those topics. On January 6, we filed a proposed settlement of APS’s pending retail rate case. 22 of the 24 active parties to the proceedings signed the settlement agreement. Such broad-based support demonstrates significant collaboration and cooperation among APS, the commission staff and other parties. Details of the settlement as well as key underlying assumptions are outlined in the appendix to our slides today. The settlement contains a number of benefits for our customers, the communities we serve and our shareholders. Slide 14 highlights the benefits from an investor’s perspective. Notably, the requested regulatory treatment would build upon the constructive framework established in the 2009 settlement and provide a financial support structure for APS that will help us achieve Arizona’s energy goals over the next four years. Slide 15 shows the settlement’s proposed base rate changes which include: first, a non-fuel base rate increase of $116.3 million, reflecting, among other things, 15 months of post-test year plant additions in rate base. Second, a fuel related rate base decrease of $153.1 million attributable to lower commodity costs, and finally, a $36.8 million base rate increase to transfer revenues from the renewable energy surcharge to base rates. Those revenues relate primarily to the AZ Sun projects that will have been placed in service by March 31 of this year. Collectively, these terms would produce a net zero dollar change to existing base rates in 2012, which is an important benefit…

(Operator Instructions) Our first question is from Shar Pourreza with Citigroup. Please proceed with your question. Shar Pourreza – Citigroup: Just one question. With the current docket in the GRC remaining open for Four Corners, what kind of like a recovery lag are we looking at as you spend on the environmental retrofits?

On the environmental piece specifically? Shar Pourreza – Citigroup: Yep.

Well, we do have in this case the EIS, which is a surcharge, is capped at $5 million. So we will be recovering some of those on a next-year basis. So we are looking at less than 12 months on some of the environmental for Four Corners.

Our next question is from Michael Lapides with Goldman Sachs. Please proceed with your question.

Hey guys. Stepping in for Neil a little bit here. Just real quick one, want to follow on Four Corners question. First of all, what’s the lag -- from the time you acquired it, what’s the lag between when you acquired it and when the infrastructure rider would let you actually start earnings on the acquisition? And then when you start the environmental CapEx, if the cap is only $5 million, what do you do – just accrue AFUDC for the unrecovered on the non-cash piece until you file your next TRC?

That’s correct, Michael. On the last one, we would recover some real-time in the EIS and the other would be AFUDC. On the first question, to keep the docket open, so assuming we acquire their SCE’s piece in the early fourth quarter, potentially as early as mid-year 2013, we would begin actual recovery of the acquisition.

So I want to make sure I follow that. So if the transaction closes at year end 2012, what’s the earliest you would see – and what’s the most likely timeframe you would actually see a revenue uplift from it?

We’re just assuming mid-year ’13.

Got it. And how do you think about financing the actual acquisition?

Well, I think it’s incremental to sort of our capital build that we would issue incremental debt and equity, just to support the balance sheet.

Got it. Last thing, with the multi-year stay-out, how do you think about your O&M cost reduction opportunities, because I mean, that’s generally the primary benefit of the multi-year stay-out? And second, whether kind of the capital structure ratios during the stay-out versus as you get closer to the end of the rate freeze, or not rate freeze but rate case hiatus?

Well, I think on the O&M side, I look at this year ex-RES, O&M was essentially flat to 2010. As I have said before, as we go forward with the two-thirds of our O&M expense being employee costs, we don’t have a lot of levers to pull. At some point, we are going to become focusing on payroll creep to the O&M. That said, we’re going to continue – I mean, our levers to pull on during the stay-out is the focus on CapEx and O&M. And that’s what we are going to continue to do, and I think our track record over the last three years has proven that we are very much focused on costs. From a cap structure perspective, obviously ’14 is designed to be the test year. And we’ll try to get our capital structure consistent with where we are now by 2014. In the interim, it will be based on financing needs and credit metrics and those sort of things. So it could vary from the 53.9%.

(Operator Instructions) Our next question is from the line of Scott Senchak with Decade Capital. Please proceed with your question.

Just a question on the CapEx you guys provided in the K. How does it treat Arizona’s Sun part two? I know you haven’t announced the projects yet but I was just wondering if there was some estimate in there for that or not?

The estimate for Arizona Sun part two is in the renewables line. It’s really sort of ‘13 to ‘15 even though it only goes to ‘14.

Got you. Okay, great. And then on the O&M side, how should we think about the growth of that? Is there some kind of metrics that you try to taking along with sales growth, or is it customer growth, or is it just something else we could look at?

Well, obviously as we’ve said before, I mean we try to focus O&M growth at equal to or less than the rate of growth of (indiscernible) sales just as a way to allow sales growth to fall to the bottom line. Like I said, we’ve been fairly flat since 2008 and at some point, we’re going to hit the pressures of just the payroll creep, so.

Ms. Hickman, it appears we have no further questions at this time. I would now like to turn the floor back over to you for closing comments.

Thank you, Christine. We appreciate all of you being on the call today. We know it’s a very busy time for you. As always, if you have any questions, please contact me or Geoff Wendt. Thank you very much.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.