TUCSON ELECTRIC POWER CO - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - February 28, 2011

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Exhibit 99.2
UniSource Energy Corporation
Supplemental Earnings & Outlook Information
February 28, 2011
TABLE OF CONTENTS
         
Safe Harbor and Non-GAAP Measures
     1  
Earnings Outlook & Assumptions
     2-4  
4th Quarter Earnings Variance
     5  
Year-End Earnings Variance
     6  
UniSource Energy and TEP O&M
     7  
TEP Operating Statistics
     8  
TEP Margin Revenues
     9  
UNS Electric Operating Statistics
     10  
UNS Gas Operating Statistics
     11  
Basic & Diluted Shares Outstanding
     12  
SAFE HARBOR AND NON-GAAP MEASURES
This document contains forward-looking information that involves risks and uncertainties, that include, but are not limited to: state and federal regulatory and legislative decisions and actions; regional economic and market conditions which could affect customer growth and energy usage; weather variations affecting energy usage; the cost of debt and equity capital and access to capital markets; the performance of the stock market and changing interest rate environment, which affect the value of the company’s pension and other postretirement benefit plan assets and the related contribution requirements and expense; unexpected increases in Operations and Maintenance (O&M) expense; resolution of pending litigation matters; changes in accounting standards; changes in critical accounting estimates; the ongoing restructuring of the electric industry; changes to long-term contracts; the cost of fuel and power supplies; performance of TEP’s generating plants; and other factors listed in UniSource Energy’s Form 10-K and 10-Q filings with the Securities and Exchange Commission. The preceding factors may cause future results to differ materially from historical results or from outcomes currently expected by UniSource Energy. The forecast assumptions and estimates below are not intended to be a full list of factors which could cause UniSource Energy’s future results to differ from current expectations. Please refer to UniSource Energy’s SEC filings for more information regarding risks and other uncertainties that could cause current expectations to differ from future results.
The Company’s press releases and other communications may include certain non-Generally Accepted Accounting Principles (GAAP) financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.
Non-GAAP financial measures utilized by the Company include presentations of revenues, operating expenses, operating income and earnings (loss) per share. The Company uses these non-GAAP measures to evaluate the operations of the Company. Certain non-GAAP financial measures utilized by the Company exclude: the impact of non-recurring items: the effect of accounting changes or adjustments; expenses that are reimbursed by third parties; and other items. The Company’s management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings or cash flow capacity of the Company’s operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.

 

1

 

UNISOURCE ENERGY 2011 EARNINGS OUTLOOK & ASSUMPTIONS
The table below provides key assumptions related to UniSource Energy’s estimated 2011 earnings of $2.60 to $2.90 per diluted share, as of February 28, 2011.
                                 
    Actual     Estimated
Key Assumptions   2010     2011E     2012E     2013E  
UniSource Consolidated
                                
Base O&M ($ millions)
   $ 265     $ 272                  
Change vs. Prior Year
     -1.6 %     2.6 %                
 
                                
Effective Income Tax Rate
     41.0 %     38.8 %                
 
                                
Avg. Basic Shares Outstanding (millions)
     36.4       36.8                  
Avg. Diluted Shares Outstanding (millions)
     41.0       41.6                  
 
                                
TEP
                                
 
                                
Retail Sales -Actual (GWh)
     9,292       9,334                  
Change vs. Prior Year
     -0.8 %     0.5 %   1.5% - 2.5% / yr
 
                                
Retail Sales — Weather Normalized (GWh)
     9,221                          
 
                                
Retail Customers (Yr End)
     402,793                          
Change vs. Prior Year
     0.3 %     0.5 %   1.0% - 1.5% / yr
 
                                
Long-Term Wholesale Sales (GWh)
                                
Salt River Project (SRP)
     700       785       876       876  
Navajo Tribal Utility Authority (NTUA)
     245       245       245       245  
 
                                
Long-Term Wholesale Sales-Pre-Tax Margin ($ millions)
   $ 28     $ 19                  
 
                                
Other Expenses ($ millions)
                                
Capital Lease Amortization
   $ 14     $ 13     $ 13     $ 14  
 
                                
Capital Lease Interest Expense
   $ 40     $ 38     $ 34     $ 25  
(Net of Interest Income on Investment in Lease Debt)
                                
 
                                
Interest Expense on Long-Term and Short-Term Debt
   $ 41     $ 48                  
(Excluding Capital Lease Interest Expense)
                                

 

2

 

                                 
    Actual     Estimated
Key Assumptions   2010     2011E     2012E     2013E  
UES
                                
 
                                
UNS Gas Retail Customers (Yr End)
     146,698                          
Change vs. Prior Year
     0.3 %     0.5 %   Approx. 1.5% / yr
 
                                
UNS Gas Retail Sales (Millions of Therms)
     114.1       112.8                  
Avg. Change vs. Prior Year
     5.8 %     -1.1 %   1.0 - 1.5% / yr
 
                                
UNS Electric Retail Customers (Yr End)
     90,881                          
Change vs. Prior Year
     0.7 %   Flat   Approx. 1% / yr
 
                                
UNS Electric Retail Sales (GWh)
     1,857       1,907                  
Avg. Change vs. Prior Year
     4.1 %     2.7 %   Approx. 1% / yr
TEP Long-Term Wholesale Sales
In 2010 and 2009, TEP’s margin on long-term wholesale sales was $28 million and $25 million, respectively. TEP’s two primary long-term wholesale contracts are with Salt River Project Agricultural Improvement and Power District (SRP) and the Navajo Tribal Utility Authority (NTUA).
SRP
Prior to June 1, 2011, under the terms of the SRP contract, TEP receives a monthly demand charge of approximately $1.8 million, or $22 million annually, and sells the energy at a price based on TEP’s average fuel cost. Beginning June 1, 2011, SRP will be required to purchase 73,000 MWhs per month, or 876,000 MWhs annually. TEP will not receive a monthly demand charge and the price of energy will be based on a slight discount to the Palo Verde Market Index. As of February 15, 2011, the average around-the-clock forward price of power on the Palo Verde Market Index for June through December 2011 was $34 MWh.
NTUA
TEP serves the portion of NTUA’s load that is not served from NTUA’s allocation of federal hydroelectric power. Over the last three years, sales to NTUA averaged 225,000 MWh. Since 2010, the price of 50% of the MWh sales from June to September has been based on the Palo Verde Market Index. In 2010, approximately 25% of the total energy sold to NTUA was priced based on the Palo Verde Market Index.

 

3

 

UNISOURCE ENERGY 2011 EARNINGS ESTIMATE SENSITIVITIES
                         
2011 Sensitivities   Pre-Tax
(millions)		     After-Tax
(millions)		     Per Diluted
Share		  
1% Change in Total Utility Retail Sales (Based on average margin rate across all customer classes)
   $ 6.0     $ 3.6     $ 0.09  
 
                                
1% Change in UNS Consolidated Base O&M
   $ 2.7     $ 1.6     $ 0.04  
 
                                
$5 / MWh Change in Wholesale Power Prices — SRP Contract (Contract to be market-based beginning June 2011)
   $ 2.6     $ 1.6     $ 0.04  
 
                                
1% Increase in Rate on TEP’s Un-hedged Long-Term Variable Rate Debt ($365 million outstanding at 12/31/10 of which $50 million is hedged)
   $ (3.2 )   $ (1.9 )   $ (0.05 )
 
                        

 

4

 

UNISOURCE ENERGY 4TH QUARTER EARNINGS VARIANCE EXPLANATION
                                       
4th Quarter 2009 UniSource Energy Net Income   $10.4  
 
                                      
    4th Quarter     Change      
TEP   2010     2009     Pre-Tax     After Tax      
    -millions of dollars-      
Retail Margin Revenues
   $ 117.4     $ 117.5       ($0.1 )     ($0.1 )      
L-T Wholesale Margin Revenues
     7.9       6.3       1.6       0.9        
Transmission Revenues
     5.3       6.5       (1.2 )     (0.7 )      
 
                              
TEP Utility Gross Margin (Non-GAAP)
     130.6       130.3       0.3       0.2        
Provision for Wholesale Refunds
     0.0       (4.2 )     4.2       2.5        
Base O&M
     65.3       57.4       7.9       4.7        
Depreciation
     25.4       28.4       (3.0 )     (1.8 )      
Amortization
     8.2       10.0       (1.8 )     (1.1 )      
Operating synergies — Springerville Units 3&4
     5.8       3.7       2.1       1.2        
Total Other Income
     1.9       2.3       (0.4 )     (0.2 )      
Total Interest Expense
     23.9       21.6       2.3       1.4        
Other Line Item Changes
     3.9       2.1       1.8       1.1        
Income Tax Expense
     1.6       4.6       (3.0 )     (3.0 )      
 
                              
TEP Net Income (GAAP)
   $ 10.0     $ 8.0     NM     $ 2.0        
 
                              
 
                                      
Change in TEP Net Income
   2.0  
 
                                      
Other Business Segments — After Tax Amounts
                                      
UNS Electric Net Income
   $ 2.1     $ 0.0     NM     $ 2.1        
UNS Gas Net Income
     3.3       3.8     NM       (0.5 )      
Millennium Energy Holdings
     (4.2 )     (1.1 )   NM       (3.1 )      
Other and Consolidating Adj.
     (0.1 )     (0.3 )   NM       0.2        
 
                              
Total Income (Loss) from Other Business Segments and Consolidating Adjustments
   $ 1.1     $ 2.4     NM       ($1.3 )      
 
                              
 
                                      
Change in UNS Electric, UNS Gas and Other
   (1.3 )
 
                                      
4th Quarter 2010 UniSource Energy Net Income
 $11.1  
5 - Q4 Variance Explanation

 

 

 

UNISOURCE ENERGY YEAR OVER YEAR EARNINGS VARIANCE EXPLANATION
                                       
December 31, 2009 UniSource Energy Net Income   $104.3  
 
                                
    Year End       Change            
TEP   2010     2009     Pre-Tax     After Tax    
    -millions of dollars-
      
Retail Margin Revenues
   $ 550.6     $ 556.0       ($5.4 )     ($3.2 )      
L-T Wholesale Margin Revenues
     28.2       25.3       2.9       1.7        
Transmission Revenues
     20.9       19.0       1.9       1.1        
 
                              
TEP Utility Gross Margin (Non-GAAP)
     599.7       600.3       (0.6 )     (0.4 )      
Provision for Wholesale Refunds
     (3.0 )     (4.2 )     1.2       0.7        
Base O&M
     227.6       231.0       (3.4 )     (2.0 )      
Depreciation (1)
     99.5       110.0       (10.5 )     (6.2 )      
Amortization (1)
     32.2       38.9       (6.7 )     (4.0 )      
Operating synergies — Springerville Units 3&4
     23.8       12.5       11.3       6.7        
Total Other Income (1)
     8.9       16.6       (7.7 )     (4.5 )      
Total Interest Expense (1)
     87.7       87.3       0.4       0.2        
Other Line Item Changes
     14.3       13.7       0.6       0.4        
Income Tax Expense
     61.1       55.1       6.0       6.0        
 
                              
TEP Net Income (GAAP)
   $ 107.0     $ 89.2     NM     $ 17.8        
 
                              
 
                                      
Change in TEP Net Income
   17.8  
 
                                      
Other Business Segments — After Tax Amounts
                                      
UNS Electric Net Income (2)
   $ 10.3     $ 5.9     NM     $ 4.4        
UNS Gas Net Income
     8.6       7.4     NM       1.2        
Millennium Energy Holdings
     (13.5 )     2.4     NM       (15.9 )      
Other and Consolidating Adj.
     (0.9 )     (0.6 )   NM       (0.3 )      
 
                              
Total Other Income and Consolidating Adjustments
   $ 4.5     $ 15.1     NM       ($10.6 )      
 
                              
 
                                      
Change in UNS Electric, UNS Gas and Other
   (10.6 )
 
                                      
December 31, 2010 UniSource Energy Net Income
 $111.5  
     
(1)  
In June 2009, TEP adjusted its accounting for a 2006 investment in 14.14% of Springerville Unit 1 lease equity. As a result, TEP recorded a net increase to the income statement of $0.6 million, before tax. The adjustment recorded included additional depreciation expense of $7 million; a reduction of amortization expense of $3 million; a reduction of interest expense on capital leases of $2 million; and $3 million of equity in earnings which is included in Other Income on the income statement. For comparison purposes, these amounts have been excluded from 2009 depreciation, amortization, interest expense and other income shown above.
 
(2)  
UNS Electric’s results in 2010 include a after-tax gain of $1.8 million related to the settlement of a dispute over transactions with the CPX.
6 - YE Variance Explanation

 

 

 

UNISOURCE ENERGY AND TEP O&M
                                 
UniSource Energy   4th Quarter     Year End  
O&M Components   2010     2009     2010     2009  
    -millions of dollars-   -millions of dollars-
TEP Base O&M (Non-GAAP)
   $ 65.3     $ 57.4     $ 227.6     $ 231.0  
UNS Gas Base O&M (Non-GAAP)
     6.9       6.4       25.3       24.7  
UNS Electric Base O&M (Non-GAAP)
     5.5       6.5       20.8       20.8  
Consolidating Adjustments & Other
     (1.9 )     (1.4 )     (8.5 )     (7.0 )
 
                        
UniSource Energy Base O&M (Non-GAAP)
   $ 75.8     $ 68.9     $ 265.2     $ 269.5  
Reimbursed O&M Related to Springerville Units 3 and 4
     24.0       11.2       64.5       40.9  
O&M Related to Customer-funded Renewable Energy and DSM Programs
     11.3       10.4       40.4       23.5  
 
                        
UniSource Energy O&M (GAAP)
   $ 111.1     $ 90.5     $ 370.1     $ 333.9  
 
                        
                                 
TEP   4th Quarter     Year End  
O&M Components   2010     2009     2010     2009  
    -millions of dollars-   -millions of dollars-
Wages, A&G, Other
   $ 42.9     $ 40.4     $ 152.4     $ 149.7  
Generating Plant Maintenance Expense
     19.0       13.0       61.0       64.0  
Pension and Postretirement Benefits Expense
     3.4       4.0       14.2       17.3  
 
                        
TEP Base O&M (Non-GAAP)
   $ 65.3     $ 57.4     $ 227.6     $ 231.0  
Reimbursed O&M Related to Springerville Units 3 and 4
     24.0       11.2       64.5       40.9  
O&M Related to Customer-funded Renewable Energy and DSM Programs
     9.8       8.1       31.4       17.9  
 
                        
TEP O&M (GAAP)
   $ 99.1     $ 76.7     $ 323.5     $ 289.8  
 
                        
7 - O&M

 

 

 

TEP — OPERATING STATISTICS
                                                                 
    Three Months Ended December 31,     Year End  
    2010     2009     Incr (Decr)     % Change     2010     2009     Incr (Decr)     % Change  
AVG. ELECTRIC CUSTOMERS
                                                                
Residential
     366,174       364,847       1,327       0.4 %     365,768       364,755       1,013       0.3 %
Commercial
     35,885       35,746       139       0.4 %     35,860       35,660       200       0.6 %
Industrial
     637       629       8       1.3 %     633       630       3       0.5 %
Mining
     3       3       —       0.0 %     2       2       —       0.0 %
Other
     62       61       1       1.6 %     62       61       1       1.6 %
 
                                                
Total
     402,761       401,286       1,475       0.4 %     402,325       401,108       1,217       0.3 %
 
                                                
 
                                                                
RETAIL SALES — MWH
                                                                
Residential
     760,533       776,536       (16,003 )     -2.1 %     3,869,540       3,905,696       (36,156 )     -0.9 %
Commercial
     447,568       443,842       3,726       0.8 %     1,963,469       1,988,356       (24,887 )     -1.3 %
Industrial
     499,249       494,167       5,082       1.0 %     2,138,749       2,160,946       (22,197 )     -1.0 %
Mining
     272,755       272,039       716       0.3 %     1,079,327       1,064,830       14,497       1.4 %
Other
     62,635       62,556       79       0.1 %     240,703       250,915       (10,212 )     -4.1 %
 
                                                
Total
     2,042,740       2,049,140       (6,400 )     -0.3 %     9,291,788       9,370,743       (78,955 )     -0.8 %
 
                                                
 
                                                                
RETAIL USAGE —
KWH/CUSTOMER
                                                                
Residential
     2,077       2,128       (51 )     -2.4 %     10,579       10,708       (129 )     -1.2 %
Commercial
     12,472       12,417       56       0.4 %     54,754       55,759       (1,005 )     -1.8 %
Industrial
     783,750       785,639       (1,889 )     -0.2 %     3,378,750       3,430,073       (51,323 )     -1.5 %
Mining
     90,918,333       90,679,667       238,667       0.3 %     539,663,500       532,415,000       7,248,500       1.4 %
Other
     1,010,242       1,025,508       (15,266 )     -1.5 %     3,882,306       4,113,361       (231,054 )     -5.6 %
 
                                                
Total
     5,072       5,106       (35 )     -0.7 %     23,095       23,362       (267 )     -1.1 %
 
                                                
 
                                                                
WEATHER —COOLING DEGREE DAYS
                                                                
Actual
     53       28       25       89.3 %     1,543       1,599       (56 )     -3.5 %
10-Year Average
     35       35                       1,468       1,469                  
% Change Actual vs. 10-Year Avg.
     51.4 %     -20.0 %                     5.1 %     8.8 %                
 
                                                                
WEATHER — HEATING DEGREE DAYS
                                                                
Actual
     500       577       (77 )     -13.3 %     1,469       1,287       182       14.1 %
10-Year Average
     559       585                       1,430       1,434                  
% Change Actual vs. 10-Year Avg.
     -10.6 %     -1.4 %                     2.7 %     -10.3 %                
 
                                                
 
                                                                
ENERGY MARKET INDICATORS
                                                                
Avg. Wholesale Power Prices
                                                                
Palo Verde Index — $/MWh
                                                                
On Peak
   $ 34.49     $ 40.13       ($5.64 )     -14.1 %   $ 38.93     $ 34.89     $ 4.04       11.6 %
Off Peak
   $ 26.21     $ 30.49       ($4.28 )     -14.0 %   $ 28.00     $ 24.35     $ 3.65       15.0 %
 
                                                                
Avg. Natural Gas Prices
                                                                
Permian Index — $/MMBtu
   $ 3.58     $ 4.03       ($0.45 )     -11.2 %   $ 4.18     $ 3.34     $ 0.84       25.1 %
 
                                                
     
*  
Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table
8 - TEP Operating Stats

 

 

 

TEP — RETAIL AND WHOLESALE MARGIN REVENUES
                                                                 
    Three Months Ended December 31,     Year End  
    2010     2009     Incr (Decr)     % Change     2010     2009     Incr (Decr)     % Change  
 
                                                
RETAIL REVENUES — $ MILLIONS
                                                                
Margin Revenues:
                                                                
Residential
   $ 48.1     $ 49.2       ($1.1 )     -2.2 %   $ 251.5     $ 253.7       ($2.2 )     -0.9 %
Commercial
     35.7       35.3       0.4       1.2 %     159.1       159.9       (0.7 )     -0.5 %
Industrial
     22.7       22.4       0.3       1.3 %     96.8       99.9       (3.1 )     -3.1 %
Mining
     7.8       7.5       0.3       3.6 %     31.0       30.1       0.9       3.0 %
Other
     3.1       3.1       0.0       1.0 %     12.2       12.5       (0.3 )     -2.4 %
 
                                                
Total
   $ 117.4     $ 117.5       ($0.1 )     -0.1 %   $ 550.6     $ 556.0       ($5.4 )     -1.0 %
DSM / REST
     8.0       15.5       (7.5 )     -48.4 %     37.8       25.4       12.4       48.7 %
Fuel Revenues:
                                                                
Recovered from Customers
     57.5       59.4       (1.9 )     -3.1 %     279.8       286.1       (6.3 )     -2.2 %
 
                                                
Total Retail Revenues
   $ 182.9     $ 192.3       ($9.4 )     -4.9 %   $ 868.1     $ 867.5     $ 0.6       0.1 %
 
                                                
 
                                                                
RETAIL REVENUES — CENTS / KWH
                                                                
Margin Revenues:
                                                                
Residential
     6.32       6.33       (0.01 )     -0.2 %     6.50       6.49       0.00       0.1 %
Commercial
     7.98       7.95       0.03       0.4 %     8.10       8.04       0.06       0.8 %
Industrial
     4.54       4.53       0.01       0.3 %     4.53       4.62       (0.10 )     -2.1 %
Mining
     2.86       2.77       0.09       3.3 %     2.87       2.82       0.05       1.6 %
Other
     5.00       4.96       0.04       0.8 %     5.07       4.98       0.09       1.7 %
 
                                                
Total
     5.75       5.73       0.01       0.3 %     5.93       5.93       (0.01 )     -0.1 %
DSM / REST
     0.39       0.76       (0.36 )     -48.2 %     0.41       0.27       0.14       50.0 %
Fuel Revenues:
                                                                
Recovered from Customers
     2.81       2.90       (0.08 )     -2.8 %     3.01       3.05       (0.04 )     -1.4 %
 
                                                
Total Retail Revenues
     8.95       9.38       (0.43 )     -4.6 %     9.34       9.26       0.09       0.9 %
 
                                                
 
                                                                
LONG-TERM WHOLESALE MARGIN — $ MILLIONS
                                                                
Long-term Wholesale Revenues
   $ 13.9     $ 13.6     $ 0.3       2.2 %   $ 55.7     $ 48.2     $ 7.5       15.6 %
Fuel and Purchased Power Expense
     6.0       7.3       (1.3 )     -17.8 %     27.5       22.9       4.6       20.1 %
 
                                                
Net
   $ 7.9     $ 6.3     $ 1.6       25.4 %   $ 28.2     $ 25.3     $ 2.9       11.5 %
 
                                                
Note: Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table.
9 — TEP Margin Revenues

 

 

 

UNS ELECTRIC — OPERATING STATISTICS
                                                                 
    Three Months Ended December 31,     Year End  
    2010     2009     Incr (Decr)     % Change     2010     2009     Incr (Decr)     % Change  
 
                                                
AVG. ELECTRIC CUSTOMERS
                                                                
Residential
     80,224       79,553       671       0.8 %     80,168       79,483       685       0.9 %
Commercial
     10,343       10,328       15       0.1 %     10,345       10,330       15       0.1 %
Industrial
     22       24       (2 )     -8.3 %     23       22       1       4.5 %
Mining
     2       1       1       100.0 %     2       1       1       100.0 %
Other
     258       266       (8 )     -3.0 %     264       264       —       0.0 %
 
                                                
Total
     90,849       90,172       677       0.8 %     90,802       90,100       702       0.8 %
 
                                                
 
                                                                
RETAIL SALES — MWH
                                                                
Residential
     167,895       162,218       5,677       3.5 %     820,352       813,796       6,556       0.8 %
Commercial
     136,381       129,300       7,081       5.5 %     606,241       607,928       (1,687 )     -0.3 %
Industrial
     53,770       52,712       1,058       2.0 %     219,241       196,985       22,256       11.3 %
Mining
     60,054       46,831       13,223       28.2 %     209,307       163,474       45,833       28.0 %
Other
     498       634       (136 )     -21.5 %     2,018       2,220       (202 )     -9.1 %
 
                                                
Total
     418,598       391,695       26,903       6.9 %     1,857,159       1,784,403       72,756       4.1 %
 
                                                
 
                                                                
RETAIL USAGE — KWH/CUSTOMER
                                                                
Residential
     2,093       2,039       54       2.6 %     10,233       10,239       (6 )     -0.1 %
Commercial
     13,186       12,519       666       5.3 %     58,602       58,851       (248 )     -0.4 %
Industrial
     2,444,091       2,196,333       247,758       11.3 %     9,532,217       8,953,864       578,354       6.5 %
Mining
     NM       NM       NM       NM       NM       NM       NM       NM  
Other
     1,930       2,383       (453 )     -19.0 %     7,644       8,409       (765 )     -9.1 %
 
                                                
Total
     4,608       4,344       264       6.1 %     20,453       19,805       648       3.3 %
 
                                                
 
                                                                
RETAIL REVENUES — MILLIONS
                                                                
Margin Revenues:
                                                                
Residential
   $ 5.4     $ 4.3     $ 1.1       24.5 %   $ 21.7     $ 20.5     $ 1.2       5.8 %
Commercial
     5.9       5.1       0.8       15.7 %     22.9       22.3       0.6       2.7 %
Industrial
     1.9       1.7       0.2       13.2 %     7.4       6.5       0.9       14.2 %
Mining
     1.3       0.9       0.4       45.5 %     4.5       3.3       1.2       35.9 %
Other
     0.0       0.1       (0.1 )     -57.3 %     0.2       0.2       0.0       0.8 %
 
                                                
Total Margin Revenues
   $ 14.5     $ 12.1     $ 2.4       20.1 %   $ 56.7     $ 52.8     $ 3.9       7.4 %
DSM / REST
     1.7       3.4       (1.7 )     -50.0 %     8.5       6.3       2.2       35.9 %
Fuel Revenues:
                                                                
Recovered from Customers
     27.2       22.3       4.9       22.0 %     117.6       121.0       (3.4 )     -2.8 %
 
                                                
Total Retail Revenues
   $ 43.4     $ 37.8     $ 5.6       14.9 %   $ 182.8     $ 180.1     $ 2.8       1.5 %
 
                                                
 
                                                                
WEATHER — COOLING DEGREE DAYS
                                                                
Actual
     580       473       107       22.6 %     8,815       9,183       (368 )     -4.0 %
10-Year Average
     569       558                       9,030       9,059                  
% Change Actual vs. 10-Year Avg.
     1.9 %     -15.2 %                     -2.4 %     1.4 %                
 
                                                
 
                                                                
WEATHER — HEATING DEGREE DAYS
                                                                
Actual
     2,389       2,684       (295 )     -11.0 %     6,562       6,228       334       5.4 %
10-Year Average
     2,529       2,601                       6,411       6,388                  
% Change Actual vs. 10-Year Avg.
     -5.5 %     3.2 %                     2.4 %     -2.5 %                
 
                                                
*   Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table
10 — UNS Electric Op. Stats

 

 

 

UNS GAS — OPERATING STATISTICS
                                                                 
    Three Months Ended December 31     Year End  
    2010     2009     Incr (Decr)     % Change     2010     2009     Incr (Decr)     % Change  
 
                                                
AVG. GAS CUSTOMERS
                                                                
Residential
     133,729       133,285       444       0.3 %     133,337       132,776       561       0.4 %
Commercial
     11,178       11,364       (186 )     -1.6 %     11,231       11,372       (141 )     -1.2 %
Industrial
     22       23       (1 )     -4.3 %     23       24       (1 )     -4.2 %
Public Authority
     1,105       1,092       13       1.2 %     1,095       1,087       8       0.7 %
 
                                                
Total
     146,034       145,764       270       0.2 %     145,686       145,259       427       0.3 %
 
                                                
 
                                                                
RETAIL SALES — THOUSANDS OF THERMS
                                                                
Residential
     23,434       25,088       (1,654 )     -6.6 %     73,083       69,641       3,442       4.9 %
Commercial
     9,273       10,018       (745 )     -7.4 %     30,209       29,622       587       2.0 %
Industrial
     575       657       (82 )     -12.5 %     1,932       2,104       (172 )     -8.2 %
Public Authority
     2,163       2,466       (302 )     -12.3 %     6,628       6,521       107       1.6 %
 
                                                
Total
     35,445       38,228       (2,783 )     -7.3 %     111,852       107,888       3,965       3.7 %
 
                                                
 
                                                                
RETAIL USAGE — THERMS/CUSTOMER
                                                                
Residential
     175       188       (13 )     -6.9 %     548       524       24       4.5 %
Commercial
     830       882       (52 )     -5.9 %     2,690       2,605       85       3.3 %
Industrial
     26,134       28,559       (2,425 )     -8.5 %     84,018       87,667       (3,648 )     -4.2 %
Public Authority
     1,958       2,258       (300 )     -13.3 %     6,053       5,999       54       0.9 %
 
                                                
Total
     243       262       (20 )     -7.5 %     768       743       25       3.4 %
 
                                                
 
                                                                
RETAIL REVENUES — MILLIONS
                                                                
Margin Revenues:
                                                                
Residential
   $ 11.2     $ 11.7       ($0.5 )     -3.9 %   $ 38.5     $ 36.2     $ 2.3       6.4 %
Commercial
     3.0       3.2       (0.2 )     -5.6 %     10.1       9.7       0.5       4.8 %
Industrial
     0.1       0.1       (0.0 )     -20.0 %     0.3       0.3       (0.0 )     -6.0 %
Public Authority
     0.6       0.7       (0.1 )     -17.4 %     1.8       1.8       0.0       2.7 %
 
                                                
Total Margin Revenues
   $ 14.9     $ 15.6       ($0.8 )     -5.0 %   $ 50.7     $ 47.9     $ 2.8       5.9 %
DSM Revenues
     0.3       0.2       0.1       50.0 %     0.9       0.7       0.2       27.1 %
Transport/NSP Revenues
     4.2       4.0       0.2       5.8 %     17.5       16.3       1.2       7.4 %
Fuel Revenues:
                                                                
Recovered from Customers
     25.7       26.3       (0.6 )     -2.3 %     76.8       84.5       (7.7 )     -9.1 %
 
                                                
Total Gas Revenues
   $ 45.1     $ 46.1       ($1.0 )     -2.3 %   $ 145.9     $ 149.4       ($3.5 )     -2.3 %
 
                                                
WEATHER — HEATING DEGREE DAYS
                                                                
Actual
     9,368       10,582       (1,214 )     -11.5 %     26,257       25,487       770       3.0 %
10-Year Average
     9,847       9,980                       25,566       25,234                  
% Change Actual vs. 10-Year Avg.
     -4.9 %     6.0 %                     2.7 %     1.0 %                
 
                                                
*   Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table
11 — UNS Gas Op. Stats

 

 

 

BASIC AND DILUTED SHARES OUTSTANDING
                         
    Years Ended December 31,  
      2010     2009     2008  
          -In Thousands-  
 
                  
Numerator:
                        
Net Income
   $ 111,477     $ 104,258     $ 14,021  
Income from Assumed Conversion of Convertible Senior Notes
     4,390       4,390       0  
 
                  
Adjusted Numerator
   $ 115,867     $ 108,648     $ 14,021  
 
                  
 
                        
Denominator:
                        
Weighted-average Shares of Common Stock Outstanding
                        
Common Shares Issued
     36,200       35,653       35,415  
Participating Securities
     92       100       0  
Fully Vested Deferred Stock Units
     123       105       217  
 
                  
Total Weighted-average Shares of Common Stock Outstanding and Participating Securities — Basic
     36,415       35,858       35,632  
 
                        
Effect of Diluted Securities
                        
Convertible Senior Notes
     4,178       4,093       0  
Options and Stock Issuable under Employee Benefit Plans and the Directors’ Plan
     447       499       537  
 
                  
Total Shares
     41,040       40,450       36,169  
 
                  
For the year ended December 31, 2008, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $4 million was not included in the computation of diluted EPS because to do so would be anti-dilutive.
Stock options to purchase an average of 212,000, 395,000 and 312,000 shares of Common Stock were outstanding during 2010, 2009 and 2008, respectively, but were not included in the computation of EPS because the stock option’s exercise price was greater than the average market price of the Common Stock at year end.
12 — Diluted Share Count

 

 

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