-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NRj9aTYGV33YWSLCRSXE4oot2ALm0HX941CadMKeIVSVynydHzjFVQL2GJjVU1h0 L3aDwpfypxWaESwnmbvs0w== 0000950120-05-000334.txt : 20050505 0000950120-05-000334.hdr.sgml : 20050505 20050505135556 ACCESSION NUMBER: 0000950120-05-000334 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050505 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050505 DATE AS OF CHANGE: 20050505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TUCSON ELECTRIC POWER CO CENTRAL INDEX KEY: 0000100122 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 860062700 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05924 FILM NUMBER: 05802718 BUSINESS ADDRESS: STREET 1: ONE SOUTH CHURCH AVENUE STREET 2: SUITE 100 CITY: TUCSON STATE: AZ ZIP: 85701 BUSINESS PHONE: 520-571-4000 MAIL ADDRESS: STREET 1: ONE SOUTH CHURCH AVENUE, SUITE 100 STREET 2: P.O. BOX 711 CITY: TUCSON STATE: AZ ZIP: 85702 FORMER COMPANY: FORMER CONFORMED NAME: TUCSON GAS & ELECTRIC CO /AZ/ DATE OF NAME CHANGE: 19790528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNISOURCE ENERGY CORP CENTRAL INDEX KEY: 0000941138 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 860786732 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13739 FILM NUMBER: 05802719 BUSINESS ADDRESS: STREET 1: ONE SOUTH CHURCH AVENUE STREET 2: SUITE 100 CITY: TUCSON STATE: AZ ZIP: 85701 BUSINESS PHONE: 520-571-4000 MAIL ADDRESS: STREET 1: ONE SOUTH CHURCH AVENUE, SUITE 100 STREET 2: P.O. BOX 711 CITY: TUCSON STATE: AZ ZIP: 85702 8-K 1 uni8k.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 5, 2005 IRS Employer Commission Registrant; State of Incorporation; Identification File Number Address; and Telephone Number Number - ----------- ------------------------------------------ --------------- 1-13739 UNISOURCE ENERGY CORPORATION 86-0786732 (An Arizona Corporation) One South Church Avenue, Suite 100 Tucson, AZ 85701 (520) 571-4000 1-5924 TUCSON ELECTRIC POWER COMPANY 86-0062700 (An Arizona Corporation) One South Church Avenue, Suite 100 Tucson, AZ 85701 (520) 571-4000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On May 5, 2005, UniSource Energy Corporation ("UniSource Energy") issued a press release announcing earnings for the quarter ended March 31, 2005 for UniSource Energy and Tucson Electric Power Company. A copy of the press release is attached hereto as Exhibit 99. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS Exhibit 99 UniSource Energy Corporation Press Release, dated May 5, 2005 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: May 5, 2005 UNISOURCE ENERGY CORPORATION ------------------------------------ (Registrant) /s/ Kevin P. Larson ------------------------------------ Vice President and Principal Financial Officer Date: May 5, 2005 TUCSON ELECTRIC POWER COMPANY ------------------------------------ (Registrant) /s/ Kevin P. Larson ------------------------------------ Vice President and Principal Financial Officer EX-99 2 pressrelease.txt PRESS RELEASE - MAY 5, 2005 [GRAPHIC OMITTED] Unisource Energy NEWS FOR IMMEDIATE RELEASE May 5, 2005 Media Contact: Joe Salkowski, (520) 884-3625 Page 1 of 5 Financial Analyst Contact: Jo Smith, (520) 884-3650 UNISOURCE ENERGY REPORTS FIRST QUARTER EARNINGS FOR 2005 TUCSON, ARIZ. - UniSource Energy Corporation (NYSE: UNS) today reported a loss for the first quarter of 2005 of $3.8 million, or $0.11 per basic share of common stock. In the first quarter of 2004, UniSource Energy reported earnings of $6.4 million, or $0.19 per basic share of common stock. Mild winter weather and a lengthy scheduled outage at a key generating unit of Tucson Electric Power Company (TEP), UniSource Energy's principal subsidiary, contributed substantially to the loss. "We've traditionally reported a loss in the first quarter while making up the difference in the hot summer months," said James S. Pignatelli, Chairman, President and Chief Executive Officer of UniSource Energy. "This year, though, the extended outage made for an unusually challenging quarter." One of two 380-MW units at TEP's Springerville Generating Station (SGS) was out of service for nearly six weeks during the first quarter of 2005 to allow the installation of updated emissions control equipment. The outage at SGS Unit 2 required TEP to purchase replacement power to serve its retail customers and reduced TEP's wholesale sales opportunities. "Although this outage affected our short term results, the operational improvements to SGS Unit 2 and similar upgrades made last year to SGS Unit 1 represent a valuable investment in TEP's long-term performance," Pignatelli said. Tri-State Generation and Transmission Association (Tri-State) paid for the improvements as part of the ongoing construction of SGS Unit 3, a 400-MW coal fired generator expected to be operational in the third quarter of 2006. Tri-State will lease the completed unit from a financial owner and control its output, while TEP will operate the unit and purchase up to 100 MW of its output for up to five years. Weather during the first quarter of 2005 was milder in areas served by TEP and UniSource Energy Services (UES), which provides gas and electric service in northern and southern Arizona. UNS Gas, Inc. and UNS Electric, Inc., operating subsidiaries of UES, each produced similar earnings to last year. A five-percent increase in UES customers was offset by reduced overall energy demand in the service territory. UniSource Energy's interest expense decreased by $2.8 million compared with the first quarter of 2004 due in part to lower balances on long-term debt and capital lease obligations, as well as lower rates under TEP's credit facility. Millennium Energy Holdings (MEH), which oversees UniSource Energy's unregulated energy investments, reported a $2.4 million loss in the first quarter of 2005 compared with earnings of $2.1 million in the same period last year. Results from the first quarter of 2004 included an after-tax gain of $3 million related to its investment in Haddington Energy Partners II, LP, a limited partnership that funds energy-related investments. TUCSON ELECTRIC POWER COMPANY TEP reported a loss of $4.7 million, or $0.14 per basic UniSource Energy share, during the first quarter of 2005, compared with earnings of $0.8 million, or $0.02 per share, during the same period last year. The difference stems from a $12 million year-over-year decrease in TEP's gross margin (total operating revenues less fuel and purchased power expense) due to mild weather and the outage at SGS Unit 2. Total revenues from kWh sales to retail customers decreased by $3 million, or 2 percent, from the same period last year. Heating degree days in TEP's service territory declined 12 percent from the same period last year and were 3 percent lower than the 10-year average. Lower retail demand was partly offset by a 5 percent increase in industrial energy usage and a 14 percent increase in kWh sales to mining customers. TEP's retail customer base expanded to 378,014 in the first quarter, a 2.3 percent increase from the first quarter of 2004. TEP's wholesale sales revenues decreased $2.5 million, or 7 percent, in the first quarter of 2005 due largely to the outage at SGS Unit 2. The outage, which extended from Feb. 19 through Apr. 2, also required TEP to increase its market power purchases and make greater use of its gas-fired generators to serve the needs of its retail customers. Purchased power costs increased $6.6 million over the same period last year. Other factors affecting TEP's first quarter earnings include a $0.9 million increase in Transition Recovery Asset (TRA) amortization, a $3.4 million reduction in interest expense and a $2.2 million tax benefit resulting from TEP's pre-tax losses. UNS GAS UNS Gas, an operating subsidiary of UES, reported net income of $4.1 million, or $0.12 per basic UniSource Energy share, compared with net income of $4.4 million, or $0.13 per basic UniSource Energy share in the same period last year. First quarter retail therm sales declined by 3 percent compared with the same period last year due to mild winter weather in northern Arizona. Retail revenues fell $1 million, or 2 percent, in the first quarter despite a customer base that grew 5 percent to 135,652. UNS ELECTRIC UNS Electric, another UES operating subsidiary, reported net income of $0.5 million, or $0.01 per basic UniSource Energy share, matching first quarter results from last year. Retail kWh sales and revenues held steady due to mild winter weather despite a growing customer base that reached 86,478 by the end of the first quarter - a 5 percent increase over the same period last year. QUARTERLY REPORTED BASIC EARNINGS PER SHARE SUMMARY
(Millions) 1ST QUARTER NET INCOME (LOSS) 2005 2004 - ------------------------------------------------------------------------ Tucson Electric Power ($4.7) $0.8 UNS Gas 4.1 4.4 UNS Electric 0.5 0.5 Global Solar (1.5) (0.9) Other (1) (2.2) 1.6 - ------------------------------------------------------------------------ UniSource Energy Consolidated ($3.8) $6.4 ======================================================================== 1ST QUARTER PER UNISOURCE ENERGY SHARE 2005 2004 - ------------------------------------------------------------------------ Tucson Electric Power ($0.14) $0.02 UNS Gas 0.12 0.13 UNS Electric 0.01 0.01 Global Solar (0.04) (0.03) Other (1) (0.06) 0.06 - ------------------------------------------------------------------------ UniSource Energy Consolidated ($0.11) $0.19 ======================================================================== Average Basic Shares Outstanding (millions) 34.6 34.2 (1) Includes: for 2005, interest expense on the convertible notes issued by UniSource Energy; interest expense on the note payable from UniSource Energy to TEP; for 2004, costs associated with the proposed acquisition of UniSource Energy by Saguaro Utility; UniSource Energy parent company expenses; income and losses from other Millennium investments; and for 2004, income and losses from UED.
UniSource Energy believes that the presentation of TEP, UNS Gas, UNS Electric, Global Solar, and Other segment net income or loss on a per basic UniSource Energy share basis, which are non-GAAP financial measures, provides useful information to investors by disclosing the results of operations of its business segments on a basis consistent with UniSource Energy's reported earnings. EARNINGS OUTLOOK UniSource Energy's management reaffirms its estimate that 2005 full year earnings will be between $1.50 and $1.75 per basic share. Numerous factors can affect UniSource Energy's ability to reach the 2005 estimates. The factors include, but are not limited to: uncertainties prevailing in the wholesale power market; regulatory decisions; performance of TEP's generating plants; the weather; the pace and strength of the economic recovery in the region; fuel and purchased power expense; changes to long-term contracts; changes in asset depreciable lives; changes in accounting standards; and the amount of research, development and operating expenses incurred by UniSource Energy's unregulated energy technology investments. UniSource Energy's earnings are subject to its utilities' seasonal energy sales. Generally, TEP records a significant portion of its earnings during the third quarter as a result of peak energy usage during the summer. FIRST QUARTER 2005 EARNINGS DISCUSSION UniSource Energy officials will discuss the company's first quarter earnings during a conference call on Thursday May 5 at 2:00 p.m. EDT that will be available live on the Internet. James S. Pignatelli, UniSource Energy Chairman, President and Chief Executive Officer, and Kevin Larson, Vice President and Chief Financial Officer, will host the call. Telephone Access - ---------------- To listen to the live conference call, dial (877) 582-0446 five to 10 minutes prior to the event and reference confirmation code 5959422. A telephone replay will be available for seven days starting May 5. To listen to the replay, dial (800) 642-1687 and reference confirmation code 5959422. Internet Access - --------------- A live audio-only webcast of the conference call is available through a link at www.UniSourceEnergy.com. Listeners are encouraged to visit the Web site at least 30 minutes before the event to register, download and install any necessary audio software. A recording of the webcast will be available for 30 days through a link at www.UniSourceEnergy.com. UniSource Energy's primary subsidiaries include Tucson Electric Power Co., which serves more than 375,000 customers in southern Arizona; UniSource Energy Services, provider of natural gas and electric service for more than 218,000 customers in northern and southern Arizona; and Millennium Energy Holdings, parent company of UniSource Energy's unregulated energy businesses. For more information about UniSource Energy and its subsidiaries, visit www.UniSourceEnergy.com. This news release contains forward-looking information that involves risks and uncertainties, that include, but are not limited to, the outcome of regulatory proceedings; the ongoing restructuring of the electric industry; regional economic and market conditions which could affect customer growth and the cost of fuel and power supplies; changes to long-term contracts; performance of TEP's generating plants; the weather; changes in asset depreciable lives; changes related to the recognition of unbilled revenue; the cost of debt and equity capital; changes in accounting standards; 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 outcomes currently expected by UniSource Energy. UNISOURCE ENERGY 2005 RESULTS
UNISOURCE ENERGY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended INCREASE/(DECREASE) (in thousands of dollars, except per share amounts) March 31, --------------------- (UNAUDITED) 2005 2004 AMOUNT PERCENT - -------------------------------------------------------------------------------------------------------------- OPERATING REVENUES Electric Retail Sales $ 171,590 $ 174,363 $ (2,773) (1.6) Electric Wholesale Sales 39,180 41,700 (2,520) (6.0) Gas Revenue 46,549 48,801 (2,252) (4.6) Other Revenues 3,610 5,220 (1,610) (30.8) - ------------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 260,929 270,084 (9,155) (3.4) - ------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Fuel 47,291 47,449 (158) (0.3) Purchased Energy 64,407 59,502 4,905 8.2 Other Operations and Maintenance 61,492 63,579 (2,087) (3.3) Depreciation and Amortization 34,824 35,136 (312) (0.9) Amortization of Transition Recovery Asset 9,487 8,597 890 10.4 Taxes Other Than Income Taxes 13,499 13,111 388 3.0 - ------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 231,000 227,374 3,626 1.6 - ------------------------------------------------------------------------------------------------------------- OPERATING INCOME 29,929 42,710 (12,781) (29.9) - ------------------------------------------------------------------------------------------------------------- OTHER INCOME (DEDUCTIONS) Interest Income 4,961 4,869 92 1.9 Other Income 2,261 8,715 (6,454) (74.1) Other Expense (2,351) (1,016) (1,335) N/M - ------------------------------------------------------------------------------------------------------------- TOTAL OTHER INCOME (DEDUCTIONS) 4,871 12,568 (7,697) (61.2) - ------------------------------------------------------------------------------------------------------------- INTEREST EXPENSE Long-Term Debt 20,352 23,118 (2,766) (12.0) Interest on Capital Leases 19,746 20,044 (298) (1.5) Other Interest Expense, Net of Amounts Capitalized 11 (214) 225 N/M - ------------------------------------------------------------------------------------------------------------- TOTAL INTEREST EXPENSE 40,109 42,948 (2,839) (6.6) - ------------------------------------------------------------------------------------------------------------- INCOME (LOSS) BEFORE INCOME TAXES (5,309) 12,330 (17,639) N/M Income Tax Expense (Benefit) (1,526) 5,909 (7,435) N/M - ------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) $ (3,783) $ 6,421 $ (10,204) N/M ============================================================================================================= WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING (000) 34,635 34,185 450 1.3 ============================================================================================================= BASIC EARNINGS (LOSS) PER SHARE $(0.11) $0.19 $(0.30) N/M ============================================================================================================= DILUTED EARNINGS (LOSS) PER SHARE $(0.11) $0.18 $(0.29) N/M ============================================================================================================= DIVIDENDS PAID PER SHARE $0.19 $0.16 $0.03 18.8 ============================================================================================================= Three Months Ended INCREASE/(DECREASE) TUCSON ELECTRIC POWER March 31, --------------------- ELECTRIC MWH SALES (000): 2005 2004 AMOUNT PERCENT - ------------------------------------------------------------------------------------------------------------- Retail Sales 1,776,401 1,808,747 (32,346) (1.8) Wholesale Sales 761,978 889,290 (127,312) (14.3) - ------------------------------------------------------------------------------------------------------------- TOTAL 2,538,379 2,698,037 (159,658) (5.9) ============================================================================================================= N/M - Not Meaningful Reclassifications have been made to prior periods to conform to the current period's presentation.
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