Greetings, and welcome to the Pinnacle West Capital Corporation 2014 Fourth Quarter and Full Year 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, Paul Mountain, Director of Investor Relations. Thank you, sir. You may begin.

Thank you, Christine. I would like to thank everyone for participating in this conference call and webcast to review our fourth quarter and full year 2014 earnings, recent developments and operating performance. Our speakers today will be our Chairman and CEO, Don Brandt; and our CFO, Jim Hatfield. Jeff Guldner, APS’s Senior Vice President of Public Policy; and Mark Schiavoni, APS’s Chief Operating Officer, are also here with us. First, I need to cover a few details with you. The slides that we will be using are available on our Investor Relations website, along with our earnings release and related information. Note that the slides contain reconciliations of certain non-GAAP financial information. Today’s comments 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 2014 Form 10-K was filed this morning. Please refer to that document for forward-looking statements, cautionary language, as well as the risk factors and MD&A sections, which identify risks and uncertainties that could cause actual results to differ materially from those contained in our disclosures. A replay of this call will be available shortly on our website for the next 30 days. It will also be available by telephone through February 27. I will now turn the call over to Don.

Thanks Paul and thank you all for joining us today. The fourth quarter wrapped up a productive year, and set the stage for further progress in the year ahead. Earnings finished the year in the middle of the range after adjusting for below normal weather. APS’s reliability and customer satisfaction remain in the top tier. Safety had another solid year and Palo Verde set a record for power production. In fact Palo Verde Unit No. 3 produced the second highest electricity output of any nuclear unit in the world in 2014 and all three Palo Verde units individually ranked among the top six producers in the United States. Jim will discuss the 2014 financial results but first I’ll update you on the regulatory progress and discuss a few significant projects. In December the Arizona Corporation commission voted on several key issues and we appreciate their commitment to resolve these items before the bench turned over. I’ll provide an update on two key issues in a moment but I’d like to first thank commissioners Brenda Burns and Gary Pierce, whose terms ended in early January. We appreciate their commitment to the state over many years of public service and on driving the dialog on several complex regulatory issues. Commissioners Doug Little and Tom Forese were sworn in on January 5th to four year terms. Commissioner Susan Bitter Smith was selected by her fellow commissioners as the next chair succeeding Commissioner Stump who did a tremendous job leading the Commission through a challenging period. Governor Doug Ducey was also sworn in, leading a group of many new officials at the state level that are bringing a renewed focus to economic development in Arizona. We look forward to working Governor Ducey’s team. I’ll now provide an overview of the key dockets that were…

Thank you Don. The topics I will cover today are outlined on Slide 3 and include a discussion of our 2014 financial results and update on the Arizona economy, a look at our financing activity and a review of earnings guidance. Slide 4 summarizes our GAAP net income and ongoing earnings for the quarter and the full year. For the fourth quarter of 2014, we reported consolidated ongoing earnings of $5.4 million or $0.05 per share compared with ongoing earnings of $24.3 million or $0.22 per share for the fourth quarter of 2013. For the full year 2014, we reported consolidated net income attributable to common shareholders of $398 million or $3.58 per share compared to net income of $406 million or $3.66 per share for 2013. Weather-normalized our earnings for 2014 would have been $3.68 in the middle of our guidance range at $3.60 to $3.75, translating earned consolidated earning of greater than 9.5%. Slide 5 outlines the full year earnings per share drivers compared to 2013. Primary favorable variances include higher gross margin supported by the various revenue adjustments and lower interest expense driven by our financing activities and the lower cost of longer term debt. The effect of adverse weather decreased earnings by $0.16 per share. To put the unfavorable weather effect in perspective, in terms of its impact on megawatt hours, 2014 was the second modest year in 15 years including the first quarter of 2014 which was the modest first quarter in 40 years. There was not much variance in the other drivers including operating and maintenance expenses. Starting on Slide 6 let me walk through the variances that drove the change in quarterly ongoing earnings per share. An increasing gross margin improved earnings by $0.07 per share. I’ll cover the drivers of our gross…

Thank you. [Operator Instructions] Thank you. Our first question comes from the line of Dan Eggers with Credit Suisse. Please proceed with your question. Mr. Eggers your line is live, perhaps you have yourself on mute.

We can go to the next question, Dan can get back in the queue.

Our next question comes from the line of Ali Agha with SunTrust. Please proceed with your question.

First question, I know you guys talked about the weather impact in 2014 on the earnings but as recently at the end of the Q3 results, or around EEI time, we were still looking at the 360 to 375 guidance range for the year. So when we look at the 358 that you reported, what were the big factors relative to your own assumptions in the fourth quarter that caused us to miss the lower end of guidance for the year?

Well, we had negative weather in the fourth quarter as we talked about. We also had the extension of bonus depreciation which pushed out our ability to use production tax credits which had a negative impact of about $0.03 on the quarter as well.

Got it, okay. And then secondly, looking at the dynamic between weather-normalized sales growth and customer growth, I know, quarterly numbers tend to gets queued, but your customer growth has been fairly steady, 1% and yet we saw the 1.9% weather-normalized sales number in the quarter. Again anything to extrapolate from that and just remind us what the expectations are for customer growth and weather-normalized growth for 2015?

Well, for customer growth we’re looking 1.5% to 2.5% for ‘15 with 1.4% fourth quarter of this year. Weather-normalized sales sort of flat to 1% range. I think it’s important in the fourth quarter of 2013 we had, I think a negative 2% sales growth and I would not look at the quarter in and of itself. I would really look over the course of the year where we really had sort of flat sales and 1.4% customer growth.

Got it. And my last question Jim, with regards to the current thinking in terms of the timing of the next rate case and the earliest need for equity, just remind us again where you stand today on both of those factors.

No change really, we’re looking at not filling until at the earliest mid-16 at equity again no earlier than 2016 at the earliest.

[Operator Instructions] Our next question comes from the line of Paul Ridzon with Keybanc. Please proceed with your question.

Just real quickly, do you have any sizable maturities coming up and kind of how you’re thinking about the opportunities on the interest lend?

While we have 300 million of debt maturing earlier this year -- later this year which we'll refinance. We also have maturities in 2016 and then our big maturity is on 2019. So we’ll look at all factors when we look at that in today’s interest rate environment. We chose January to take advantage the short end of the curve due to demand but we still have historically low interest rates across the board and see that those refinancing got really an opportunity to incrementally provide some interest savings.

Our next question comes from the line of Michael Weinstein with UBS. Please proceed with your question.

I was wondering if you can characterize how the discussions at the commission have been going with regard to rate design. I understand comments were was taken and is the process moving forward at a quick pace, regular place? Has it installed recently, and what kind of initiatives, what’s the involvement of the Company in those discussions.

Michael, this is Jeff Guldner. So I think those discussions are moving forward at a normal pace and so what you’re seeing right now is comments from the parties here in Arizona, obviously folks are also paying attention on what’s happening on the national scene and there's a lot of discussions that are happening nationally and we're engaged in both of those. So we're engaged at a state level. We're also participating in the national debate.

Right and would you say that the things are moving along at the pace you expected?

Yes, I think what you'll see -- so you've got two new commissioners that have just taken their seats and so I think you'll see the discussions continue to accelerate here in the next few months.

And do you still expect that or -- do you have any expectation that rate design and metering, those types of issues be dealt with separately outside of the rate case or whether they'll be rolled into a rate case?

Well, it's a state wide issue. So remember there's going to be a discussion on this, what it means from a state perspective, how the implementation happens as part of that discussion. And so we've got a mechanism right now that is the LFCR DG adjuster. That's a component or that's one method of addressing really the cost shift issue, but structurally how do you the rate design changes. We know a lot of that's going to happen in a rate case.

Okay, I guess maybe the crux of the question is more like when do these, when does action have to be taken by the commission on this docket? How early does it have to happen? What's the latest that could happen before so that a separate process could occur or at some point I guess it's just too late, you've to roll it in into the rate case because the file is coming in mid '16?

So, there is no time clock on the discussion. So the discussion -- I can't tell you when the discussion is going to -- how it's going to specifically unfold, but from a process standpoint, some rate design changes are going to have to happen in a rate case. It's helpful to have the discussion of what that process should look like and what some of the issues are ahead of the rate case filing.

It appears we've no further questions at this time. I'd now like to turn the floor back over to management for closing comments.

All right, well, thanks everyone. I mean as you look at the 10-K and then materials please give us a call if you have any questions and we'll talk with you soon. Thank you.