-----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, AdMDLCR4b6zBrizNxy7NVgZkLfFBvOxGY3zBpZ+XiT4NMvAY1qXkgiMOj6HDGDvU MUcAeHd0USVn4a8rBH6Xmw== 0000950123-09-054327.txt : 20091029 0000950123-09-054327.hdr.sgml : 20091029 20091028192309 ACCESSION NUMBER: 0000950123-09-054327 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20091028 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20091029 DATE AS OF CHANGE: 20091028 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: 091142862 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: 091142861 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 c91516e8vk.htm FORM 8-K Form 8-K
 
 
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): October 28, 2009
UNISOURCE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
         
Arizona   1-13739   86-0786732
         
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer Identification No.)
     
One South Church Avenue, Suite 100
Tucson, AZ
   
85701
     
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (520) 571-4000
 
(Former name or former address, if changed since last report.)
TUCSON ELECTRIC POWER COMPANY
(Exact name of registrant as specified in its charter)
         
Arizona   1-5924   86-0062700
         
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer Identification No.)
     
One South Church Avenue, Suite 100
Tucson, AZ
   
85701
     
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (520) 571-4000
 
(Former name or former address, if changed since last report.)
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:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   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 October 28, 2009, UniSource Energy Corporation (“UniSource Energy”) issued a press release announcing earnings for the quarter and nine months ended September 30, 2009 for UniSource Energy and Tucson Electric Power Company. A copy of the press release is attached hereto as Exhibit 99.1. UniSource Energy also posted supplemental information accessible from a link on its website, www.uns.com. A copy of the supplemental information is attached hereto as Exhibit 99.2.
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.
Item 9.01 Financial Statements and Exhibits
     
Exhibit 99.1
  UniSource Energy Corporation Press Release, dated October 28, 2009.
Exhibit 99.2
  Supplemental earnings information posted on UniSource Energy’s website, dated October 28, 2009.

 

 


 

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: October 28, 2009
  UNISOURCE ENERGY CORPORATION
 
   
 
  (Registrant)
 
   
 
  Kevin P. Larson
 
   
 
  Kevin P. Larson
 
  Senior Vice President and Principal
 
  Financial Officer
 
   
Date: October 28, 2009
  TUCSON ELECTRIC POWER COMPANY
 
   
 
  (Registrant)
 
   
 
  Kevin P. Larson
 
   
 
  Kevin P. Larson
Senior Vice President and Principal
Financial Officer

 

 


 

EXHIBIT INDEX
     
Exhibit No.   Description
Exhibit 99.1
  UniSource Energy Corporation Press Release, dated October 28, 2009.
Exhibit 99.2
  Supplemental earnings information posted on UniSource Energy’s website, dated October 28, 2009.

 

 

EX-99.1 2 c91516exv99w1.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

(LOGO)
     
FOR IMMEDIATE RELEASE
Media Contact: Joe Salkowski, (520) 884-3625
Financial Analyst Contact: Jo Smith, (520) 884-3650
  October 28, 2009
Page 1 of 9

UNISOURCE ENERGY REPORTS THIRD QUARTER 2009 EARNINGS
MAINTAINS 2009 EARNINGS GUIDANCE

  UniSource Energy’s net income for the third quarter of 2009 was $58 million, or $1.45 per diluted share of common stock, compared with a net loss of $11 million, or $0.31 per diluted share, in the third quarter of 2008.

  Improvement in third quarter 2009 earnings is due primarily to hot summer weather, significantly lower fuel and purchased power expenses and operating cost containment.

  UniSource Energy is maintaining its 2009 reported GAAP earnings guidance of $2.55 to $2.70 per diluted share.

Tucson, Ariz. – UniSource Energy Corporation (NYSE: UNS) today reported third quarter 2009 net income of $58 million, or $1.45 per diluted share of common stock, compared with a net loss of $11 million, or $0.31 per diluted share, in the same period last year. For the nine months that ended September 30, 2009, UniSource Energy reported net income of $94 million, or $2.40 per diluted share of common stock, compared with a net loss of $9 million, or $0.25 per diluted share of common stock, in the same period of 2008.

UniSource Energy’s financial results reflect those of its principal subsidiary, Tucson Electric Power (TEP), which reported net income of $55 million for the third quarter of 2009, compared with a net loss of $12 million during the third quarter of 2008.

TEP’s improved financial performance in the third quarter of 2009 can be attributed to hot summer weather, a 32 percent decrease in net fuel and purchased power costs, revenue reserves recorded in 2008, new retail rates and prudent management of operating expenses.

Hotter than usual summer weather led to a 2.4 percent increase in retail kilowatt-hour (kWh) sales compared with the same period last year. Higher retail sales levels and a new rate structure that charges higher rates for higher levels of energy use helped drive TEP’s retail revenues $33 million higher than those from the third quarter of 2008. This increase excludes the impact of revenue reserves in 2008 and surcharges that pass along to customers the cost of renewable power and energy efficiency programs.

“Although hot weather boosted sales beyond our expectations our retail energy sales on a weather-adjusted basis are in line with the levels we anticipated,” said Paul Bonavia, UniSource Energy’s Chairman, President and CEO.

TEP’s fuel and purchased power expense was lower by $50 million due to the nearly 60% decline in the average market price of natural gas and power from the same period last year. That decline contributed to a $79 million increase in TEP’s third-quarter utility gross margin, which reflects retail and wholesale revenues net of costs for fuel, purchased power and transmission.

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UniSource Energy’s base operating and maintenance expense, excluding costs directly offset by customer surcharges or third party reimbursements, increased by less than $1 million from the third quarter of 2008 despite a nearly $2 million increase in pension-related expenses. Pension expense is primarily a function of stock market performance and other factors not under the company’s control.

“I am pleased with our ability to keep our operating costs under control,” Bonavia said. “While there are signs that the current economic downturn may have reached its bottom here in Arizona, we’re continuing to align our costs with the lower sales levels while maintaining investment levels necessary to safely and reliably meet our customers’ energy needs,” Bonavia said.

The expansion of TEP’s customer base grew at the rate projected by the company, gaining 0.5 percent over the past year. “The economy has certainly slowed TEP’s growth, but I’m encouraged to see that we’re still adding customers,” Bonavia said.

TEP’s cash flows remain strong and are expected to combine with those of sister utilities UNS Gas and UNS Electric to push UniSource Energy’s 2009 consolidated operating cash flows above $330 million. Cash flows from operations are expected to be more than adequate to cover the company’s estimated consolidated capital expenditures of approximately $290 million.

Tucson Electric Power

Third Quarter 2009 Results of Operations

TEP reported net income of $55 million in the third quarter of 2009, compared with a net loss of $12 million during the same period in 2008.

    Retail electric revenues increased 12.6 percent, or $33 million, excluding non-cash revenue deferrals in 2008 and the pass-through components for renewable energy and energy efficiency surcharges. The increases resulted from a 2.4 percent increase in total retail kWh sales combined with a new rate structure that charges higher rates for higher levels of energy use.

    kWh sales to residential customers increased 6.8 percent compared with the third quarter of 2008.  Hot summer weather led to a 32 percent increase in cooling degree days over last year’s level.  

    Third-quarter kWh sales to commercial customers were up 1 percent compared with those from last year. The sluggish economy continues to impact TEP’s industrial customer base, whose usage declined 4.2% compared with the third quarter of 2008.

  Long-term wholesale revenues decreased $4 million, or 29 percent, due to lower sales volumes. The margin on long-term wholesale sales for the third quarter of 2009 was $6 million.

  A $30 million revenue reserve recorded in the third quarter of 2008 did not recur in 2009.

  PPFAC-related expenses, net of offsets, decreased by $50 million compared with the fuel and purchased power expenses net of short term wholesale revenues recorded during the third quarter of 2008. The decrease was due primarily to lower wholesale market prices for energy and natural gas.

  O&M expense, excluding a $5 million increase in expenses directly offset by customer surcharges and third party reimbursements, increased by less than $1 million. Higher pension and generating plant maintenance expenses were mostly offset by cost containment measures.

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  Depreciation and amortization increased $7 million due primarily to plant additions, new depreciation rates for generating assets and amortization of regulatory assets resulting from the 2008 TEP rate order.

  Interest expense decreased $2 million due primarily to lower rates on variable rate debt and lower balances of capital lease obligations.

UNS Gas

UNS Gas reported net losses of $1.3 million in the third quarters of 2009 and 2008. UNS Gas’ operations are seasonal in nature with peak usage occurring in the winter months.

In November 2008, UNS Gas filed a general rate case with the Arizona Corporation Commission (ACC) requesting an average base rate increase of 6 percent, or approximately $9.5 million, to cover increases in capital and operating costs. The ACC’s staff has recommended rates that would provide a $3.4 million revenue increase. Hearings before an administrative law judge (ALJ) concluded in August 2009, and a recommendation from the ALJ is pending.

UNS Electric

UNS Electric reported net income of $3.6 million for the third quarter of 2009, compared with $2.5 million in the same period last year. The improvement is due primarily to hot summer weather. Like TEP, UNS Electric’s operations are seasonal in nature with peak energy demand occurring in the summer months.

Third-quarter retail kWh sales rose 8.2 percent compared with the same period last year due to the operations of a new copper mine in the company’s service area. Excluding mining sales, UNS Electric’s retail kWh sales rose 1.4 percent compared with the same period last year due to hot weather.

In April 2009, UNS Electric filed a general rate case with the ACC requesting an average base rate increase of $13.5 million, or 7.4 percent over 2008 retail revenues, to cover its rising service costs. Hearings before an ALJ are scheduled to begin Feb. 2, 2010.

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Net Income and Earnings Per Share Summary
                                 
    3rd Quarter     YTD Sept. 30,  
Net Income   2009     2008     2009     2008  
    -Millions-     -Millions-  
 
Tucson Electric Power
  $ 55.3       ($12.2 )   $ 81.2       ($15.3 )
UNS Gas
    (1.3 )     (1.3 )     3.6       5.3  
UNS Electric
    3.6       2.5       5.9       3.7  
Other (1)
                3.1       (2.6 )
 
                       
Net Income
  $ 57.6       ($11.0 )   $ 93.8       ($8.9 )
 
                       
 
Avg. Basic Shares Outstanding (millions)
    35.9       35.7       35.8       35.6  
Avg. Diluted Shares Outstanding (millions)
    40.5       35.7       40.4       35.6  
                                 
    3rd Quarter     YTD Sept. 30,  
Earnings Per UniSource Energy Share   2009     2008     2009     2008  
Tucson Electric Power
  $ 1.54       ($0.34 )   $ 2.27       ($0.43 )
UNS Gas
    (0.04 )     (0.04 )     0.10       0.15  
UNS Electric
    0.10       0.07       0.16       0.10  
Other (1)
    0.00       0.00       0.09       (0.07 )
 
                       
Net Income per Basic Share
  $ 1.60       ($0.31 )   $ 2.62       ($0.25 )
 
                       
Net Income per Diluted Share (2)
  $ 1.45       ($0.31 )   $ 2.40       ($0.25 )
 
                       
     
(1)   Includes UniSource Energy on a stand-alone basis and results from Millennium Energy Holdings, Inc. and UniSource Energy Development, wholly-owned subsidiaries of UniSource Energy.
 
(2)   For the three and nine months ended September 30, 2009, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $1 million and $3 million, respectively, were not included in the computation of diluted EPS because to do so would have been anti-dilutive.

UniSource Energy believes the presentation of TEP, UNS Gas, UNS Electric 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 or losses.

Seasonality of Earnings

The net income and results of operations of UniSource Energy’s utility businesses are seasonal in nature. TEP and UNS Electric are summer-peaking utilities and historically have recorded a majority of their net income during the second and third quarters, when hot weather drives increases in energy consumption.

Energy demand from UNS Gas customers typically peaks during the winter and accordingly UNS Gas records the majority of its net income during the first and fourth quarters.

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Conference Call and Webcast

The company will host a conference call on Thursday, Oct. 29 at 12 p.m. EDT to discuss the financial results and outlook. To participate in the call, please dial in five to 10 minutes prior to the start.

Dial-in number: (877) 582-0446
Reference code: 36550961

The conference call also can be heard live on UniSource Energy’s Web site. The webcast can be accessed at uns.com and will be available for replay for seven days.

Replay number: (800) 642-1687
Reference code: 36550961

UniSource Energy is a Tucson, Arizona-based company with consolidated assets of approximately $3.5 billion. UniSource Energy’s primary subsidiaries include Tucson Electric Power Company, which serves more than 400,000 customers in southern Arizona, and UniSource Energy Services, provider of natural gas and electric service for about 236,000 customers in northern and southern Arizona.
For more information about UniSource Energy and its subsidiaries, visit uns.com.

This release contains forward-looking information that involves risks and uncertainties, including factors that could affect UniSource Energy’s ability to reach the 2009 earnings guidance. These risks and uncertainties 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 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 outcomes currently expected by UniSource Energy.

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UNISOURCE ENERGY 2009 RESULTS
                                 
UniSource Energy Corporation            
Comparative Condensed Consolidated Statements of Income (Loss)   Three Months Ended        
(in thousands of dollars, except per share amounts)   September 30,     Increase / (Decrease)  
(UNAUDITED)   2009     2008     Amount     Percent  
Operating Revenues
                               
Electric Retail Sales
  $ 348,938     $ 322,690     $ 26,248       8.1  
Provision for Rate Refunds — CTC Revenue
          (29,517 )     29,517       N/M  
 
                       
Net Electric Retail Sales
    348,938       293,173       55,765       19.0  
Electric Wholesale Sales
    28,785       57,279       (28,494 )     (49.7 )
Gas Revenue
    16,226       19,831       (3,605 )     (18.2 )
Other Revenues
    20,290       17,569       2,721       15.5  
 
                       
Total Operating Revenues
    414,239       387,852       26,387       6.8  
 
                       
 
                               
Operating Expenses
                               
Fuel
    99,895       112,389       (12,494 )     (11.1 )
Purchased Energy
    76,207       135,086       (58,879 )     (43.6 )
Transmission
    2,356       8,114       (5,758 )     (71.0 )
Increase (Decrease) to reflect PPFAC/PGA Recovery Treatment
    (15,403 )     (1,842 )     (13,561 )     N/M  
 
                       
Total Fuel and Purchased Energy
    163,055       253,747       (90,692 )     (35.7 )
Other Operations and Maintenance
    79,549       73,364       6,185       8.4  
Depreciation and Amortization
    43,679       36,762       6,917       18.8  
Taxes Other Than Income Taxes
    11,098       10,079       1,019       10.1  
 
                       
Total Operating Expenses
    297,381       373,952       (76,571 )     (20.5 )
 
                       
Operating Income
    116,858       13,900       102,958       N/M  
 
                       
 
                               
Other Income (Deductions)
                               
Interest Income
    2,609       2,520       89       3.5  
Other Income
    1,899       1,069       830       77.6  
Other Expense
    (812 )     (2,837 )     2,025       71.4  
 
                       
Total Other Income (Deductions)
    3,696       752       2,944       N/M  
 
                       
 
                               
Interest Expense
                               
Long-Term Debt
    14,317       18,182       (3,865 )     (21.3 )
Interest on Capital Leases
    12,504       13,180       (676 )     (5.1 )
Other Interest Expense
    980       (349 )     1,329       N/M  
Interest Capitalized
    (436 )     (1,304 )     868       66.6  
 
                       
Total Interest Expense
    27,365       29,709       (2,344 )     (7.9 )
 
                       
 
                               
Income (Loss) Before Income Taxes
    93,189       (15,057 )     108,246       N/M  
Income Tax Expense (Benefit)
    35,543       (4,018 )     39,561       N/M  
 
                       
 
                               
Net Income (Loss)
  $ 57,646     $ (11,039 )   $ 68,685       N/M  
 
                       
 
                               
Weighted-average Shares of Common Stock Outstanding (000)
    35,928       35,677       251       0.7  
 
                       
 
                               
Basic Earnings (Loss) per Share
  $ 1.60     $ (0.31 )   $ 1.91       N/M  
 
                       
 
                               
Diluted Earnings (Loss) per Share
  $ 1.45     $ (0.31 )   $ 1.76       N/M  
 
                       
 
                               
Dividends Declared per Share
  $ 0.29     $ 0.24     $ 0.05       20.8  
 
                       
 
    Three Months Ended        
Tucson Electric Power   September 30,     Increase / (Decrease)  
Electric kWh Sales — In Millions:   2009     2008     Amount     Percent  
Retail Sales
    3,036       2,966       70       2.4  
Long-Term Wholesale Sales
    126       253       (127 )     (50.2 )
 
                       
Total Retail and Long-Term Wholesale Sales
    3,162       3,219       (57 )     (1.8 )
 
                       
N/M — Not Meaningful
Reclassifications have been made to prior periods to conform to the current period’s presentation.

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UNISOURCE ENERGY 2009 RESULTS
                                 
UniSource Energy Corporation            
Comparative Condensed Consolidated Statements of Income (Loss)   Nine Months Ended        
(in thousands of dollars, except per share amounts)   September 30,     Increase / (Decrease)  
(UNAUDITED)   2009     2008     Amount     Percent  
Operating Revenues
                               
Electric Retail Sales
  $ 817,490     $ 769,983     $ 47,507       6.2  
Provision for Rate Refunds — CTC Revenue
          (44,415 )     44,415       N/M  
 
                       
Net Electric Retail Sales
    817,490       725,568       91,922       12.7  
Electric Wholesale Sales
    92,031       187,103       (95,072 )     (50.8 )
Gas Revenue
    99,189       115,002       (15,813 )     (13.8 )
Other Revenues
    55,169       50,635       4,534       9.0  
 
                       
Total Operating Revenues
    1,063,879       1,078,308       (14,429 )     (1.3 )
 
                       
 
                               
Operating Expenses
                               
Fuel
    223,758       257,594       (33,836 )     (13.1 )
Purchased Energy
    217,121       366,644       (149,523 )     (40.8 )
Transmission
    7,607       16,735       (9,128 )     (54.5 )
Increase (Decrease) to reflect PPFAC/PGA Recovery Treatment
    (5,083 )     (13,073 )     7,990       61.1  
 
                       
Total Fuel and Purchased Energy
    443,403       627,900       (184,497 )     (29.4 )
Other Operations and Maintenance
    243,432       211,524       31,908       15.1  
Depreciation and Amortization
    131,881       109,196       22,685       20.8  
Amortization of Transition Recovery Asset
          23,945       (23,945 )     N/M  
Taxes Other Than Income Taxes
    35,915       35,198       717       2.0  
 
                       
Total Operating Expenses
    854,631       1,007,763       (153,132 )     (15.2 )
 
                       
Operating Income
    209,248       70,545       138,703       N/M  
 
                       
 
                               
Other Income (Deductions)
                               
Interest Income
    9,530       8,724       806       9.2  
Other Income
    16,284       6,267       10,017       N/M  
Other Expense
    (2,040 )     (5,719 )     3,679       64.3  
 
                       
Total Other Income (Deductions)
    23,774       9,272       14,502       N/M  
 
                       
 
                               
Interest Expense
                               
Long-Term Debt
    43,680       53,603       (9,923 )     (18.5 )
Interest on Capital Leases
    36,762       39,331       (2,569 )     (6.5 )
Other Interest Expense
    2,411       1,375       1,036       75.3  
Interest Capitalized
    (1,780 )     (4,480 )     2,700       60.3  
 
                       
Total Interest Expense
    81,073       89,829       (8,756 )     (9.7 )
 
                       
 
                               
Income (Loss) Before Income Taxes
    151,949       (10,012 )     161,961       N/M  
Income Tax Expense (Benefit)
    58,110       (1,106 )     59,216       N/M  
 
                       
 
                               
Net Income (Loss)
  $ 93,839     $ (8,906 )   $ 102,745       N/M  
 
                       
 
                               
Weighted-average Shares of Common Stock Outstanding (000)
    35,829       35,616       213       0.6  
 
                       
 
                               
Basic Earnings (Loss) per Share
  $ 2.62     $ (0.25 )   $ 2.87       N/M  
 
                       
 
                               
Diluted Earnings (Loss) per Share
  $ 2.40     $ (0.25 )   $ 2.65       N/M  
 
                       
 
                               
Dividends Declared per Share
  $ 0.87     $ 0.72     $ 0.15       20.8  
 
                       
 
    Nine Months Ended        
Tucson Electric Power   September 30,     Increase / (Decrease)  
Electric kWh Sales — In Millions:   2009     2008     Amount     Percent  
Retail Sales
    7,322       7,396       (75 )     (1.0 )
Long-Term Wholesale Sales
    566       823       (257 )     (31.2 )
 
                       
Total Retail and Long-Term Wholesale Sales
    7,888       8,219       (332 )     (4.0 )
 
                       
N/M — Not Meaningful
Reclassifications have been made to prior periods to conform to the current period’s presentation.

7

 


 

TUCSON ELECTRIC POWER COMPANY 2009 RESULTS
                                 
TUCSON ELECTRIC POWER COMPANY            
Comparative Condensed Consolidated Statements of Income (Loss)   Three Months Ended        
(in thousands of dollars)   September 30,     Increase / (Decrease)  
(UNAUDITED)   2009     2008     Amount     Percent  
Operating Revenues
                               
Electric Retail Sales
  $ 297,418     $ 260,555     $ 36,863       14.1  
Provision for Rate Refunds — CTC Revenue
          (29,517 )     29,517       N/M  
 
                       
Net Electric Retail Sales
    297,418       231,038       66,380       28.7  
Electric Wholesale Sales
    38,018       72,896       (34,878 )     (47.8 )
Other Revenues
    21,753       19,378       2,375       12.3  
 
                       
Total Operating Revenues
    357,189       323,312       33,877       10.5  
 
                       
 
                               
Operating Expenses
                               
Fuel
    92,330       108,350       (16,020 )     (14.8 )
Purchased Energy
    52,999       100,418       (47,419 )     (47.2 )
Transmission
    632       5,098       (4,466 )     (87.6 )
Increase (Decrease) to reflect PPFAC Recovery Treatment
    (12,895 )           (12,895 )     N/M  
 
                       
Total Fuel and Purchased Energy
    133,066       213,866       (80,800 )     (37.8 )
Other Operations and Maintenance
    69,232       63,837       5,395       8.5  
Depreciation and Amortization
    37,719       31,201       6,518       20.9  
Taxes Other Than Income Taxes
    9,117       8,079       1,038       12.8  
 
                       
Total Operating Expenses
    249,134       316,983       (67,849 )     (21.4 )
 
                       
Operating Income
    108,055       6,329       101,726       N/M  
 
                       
 
                               
Other Income (Deductions)
                               
Interest Income
    2,367       2,238       129       5.8  
Other Income
    1,686       927       759       81.9  
Other Expense
    (702 )     (2,526 )     1,824       72.2  
 
                       
Total Other Income (Deductions)
    3,351       639       2,712       N/M  
 
                       
 
                               
Interest Expense
                               
Long-Term Debt
    8,829       12,317       (3,488 )     (28.3 )
Interest on Capital Leases
    12,502       13,176       (674 )     (5.1 )
Other Interest Expense
    420       (457 )     877       N/M  
Interest Capitalized
    (261 )     (1,279 )     1,018       79.6  
 
                       
Total Interest Expense
    21,490       23,757       (2,267 )     (9.5 )
 
                       
 
                               
Income (Loss) Before Income Taxes
    89,916       (16,789 )     106,705       N/M  
Income Tax Expense (Benefit)
    34,639       (4,552 )     39,191       N/M  
 
                       
 
                               
Net Income (Loss)
  $ 55,277     $ (12,237 )   $ 67,514       N/M  
 
                       
N/M — Not Meaningful
Reclassifications have been made to prior periods to conform to the current period’s presentation.

8

 


 

TUCSON ELECTRIC POWER COMPANY 2009 RESULTS
                                 
TUCSON ELECTRIC POWER COMPANY            
Comparative Condensed Consolidated Statements of Income (Loss)   Nine Months Ended        
(in thousands of dollars)   September 30,     Increase / (Decrease)  
(UNAUDITED)   2009     2008     Amount     Percent  
Operating Revenues
                               
Electric Retail Sales
  $ 675,190     $ 627,963     $ 47,227       7.5  
Provision for Rate Refunds — CTC Revenue
          (44,415 )     44,415       N/M  
 
                       
Net Electric Retail Sales
    675,190       583,548       91,642       15.7  
Electric Wholesale Sales
    107,762       207,791       (100,029 )     (48.1 )
Other Revenues
    59,055       54,716       4,339       7.9  
 
                       
Total Operating Revenues
    842,007       846,055       (4,048 )     (0.5 )
 
                       
 
                               
Operating Expenses
                               
Fuel
    208,808       251,565       (42,757 )     (17.0 )
Purchased Energy
    112,416       211,194       (98,778 )     (46.8 )
Transmission
    2,439       9,567       (7,128 )     (74.5 )
Increase (Decrease) to reflect PPFAC Recovery Treatment
    (16,898 )           (16,898 )     N/M  
 
                       
Total Fuel and Purchased Energy
    306,765       472,326       (165,561 )     (35.1 )
Other Operations and Maintenance
    213,069       183,902       29,167       15.9  
Depreciation and Amortization
    114,539       93,198       21,341       22.9  
Amortization of Transition Recovery Asset
          23,945       (23,945 )     N/M  
Taxes Other Than Income Taxes
    29,413       29,143       270       0.9  
 
                       
Total Operating Expenses
    663,786       802,514       (138,728 )     (17.3 )
 
                       
Operating Income
    178,221       43,541       134,680       N/M  
 
                       
 
                               
Other Income (Deductions)
                               
Interest Income
    9,176       7,704       1,472       19.1  
Other Income
    9,671       4,943       4,728       95.7  
Other Expense
    (1,616 )     (3,255 )     1,639       50.4  
 
                       
Total Other Income (Deductions)
    17,231       9,392       7,839       83.5  
 
                       
 
                               
Interest Expense
                               
Long-Term Debt
    27,232       36,654       (9,422 )     (25.7 )
Interest on Capital Leases
    36,753       39,315       (2,562 )     (6.5 )
Other Interest Expense
    1,104       1,012       92       9.1  
Interest Capitalized
    (1,393 )     (3,632 )     2,239       61.6  
 
                       
Total Interest Expense
    63,696       73,349       (9,653 )     (13.2 )
 
                       
 
                               
Income (Loss) Before Income Taxes
    131,756       (20,416 )     152,172       N/M  
Income Tax Expense (Benefit)
    50,527       (5,081 )     55,608       N/M  
 
                       
 
                               
Net Income (Loss)
  $ 81,229     $ (15,335 )   $ 96,564       N/M  
 
                       
N/M — Not Meaningful
Reclassifications have been made to prior periods to conform to the current period’s presentation.

9

 

EX-99.2 3 c91516exv99w2.htm EXHIBIT 99.2 Exhibit 99.2
Exhibit 99.2
(UNISOURCE ENERGY LOGO)
Supplemental Earnings Information
3rd Quarter and Year-to-Date Sept. 30, 2009
October 28, 2009

 

 


 

UniSource Energy Corporation
Supplemental Earnings Information
October 28, 2009
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 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 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.

 

 


 

YEAR OVER YEAR EARNINGS VARIANCE EXPLANATION
                                 
    3rd Quarter     Year-to-Date Sept. 30  
$ in millions   Pre-Tax     After Tax     Pre-Tax     After Tax  
2008 UniSource Energy Net Loss
            ($11.0 )             ($8.9 )
 
                               
TEP2009 vs. 2008
                               
Change in Revenues
                               
Higher retail revenues (excluding REST and DSM revenues) due to hot summer weather and TEP’s new rate structure.
    32.7       20.1       38.2       23.5  
 
                               
Lower long-term wholesale electric and transmission revenues due to lower sales volumes.
    (4.3 )     (2.6 )     (9.0 )     (5.6 )
 
                               
Change in PPFAC-Related Expenses
                               
Lower fuel and purchased power expense (net of short-term wholesale revenues) resulting primarily from a decline in the wholesale market price for power and natural gas.
    50.1       30.8       73.8       45.5  
 
                       
Change in TEP Utility Gross Margin
  $ 78.5     $ 48.3     $ 102.9     $ 63.5  
 
                               
Change in Other Expenses and Income
                               
 
                               
Higher base O&M due to an increase in pension expense. YTD base O&M also impacted by higher generating plant maintenance expense.
    (0.4 )     (0.2 )     (20.1 )     (12.4 )
 
                               
Higher depreciation and amortization due to: additions to plant in service; new depreciation rates for generation assets; and amortization of regulatory assets resulting from the 2008 TEP Rate Order. YTD also impacted by an adjustment related to an investment in lease equity made in 2006.
    (6.5 )     (4.0 )     (21.3 )     (13.2 )
 
                               
Higher Other Income
    2.7       1.7       7.8       4.8  
 
                               
Lower interest expense due to: lower rates on variable rate debt; and lower balances of capital lease obligations. YTD also impacted by an adjustment related to an investment in lease equity made in 2006.
    2.3       1.4       9.7       6.0  
 
                               
Other Changes
    3.8       2.3       9.3       5.7  
 
                       
Change in TEP’s Other Expenses and Income
  $ 1.9     $ 1.1       ($14.7 )     ($9.1 )
 
                               
Change in Regulatory Refunds and Amortization of TRA
                               
Deferral of Revenues after TRA amortized in May 2008
    29.5       18.1       44.4       27.4  
TRA amortization expense in 2008
    0.0       0.0       23.9       14.7  
 
                       
Total TEP Change 2009 vs. 2008
  $ 109.9     $ 67.5     $ 156.5     $ 96.6  
 
                               
Other Changes 2009 vs. 2008
                               
UNS Gas Change in Net Income
            0.0               (1.7 )
 
                               
UNS Electric Change in Net Income
            1.1               2.2  
Rate increase in June 2008, hot summer weather and a new mining customer.
                               
 
                               
Other
            0.0               5.6  
YTD results include an after-tax gain at Millennium from the sale of Sabinas ($3.6 million). Q3 and YTD results include results of UED and consolidating adjustments.
                               
 
                       
Total Change in UNS Net Income
            68.6               102.7  
 
                       
2009 UniSource Energy Net Income
          $ 57.6             $ 93.8  
 
                       

 

1


 

TEP UTILITY GROSS MARGIN
                                 
    Q3     Q3     YTD Sep. 30     YTD Sep. 30  
(millions)   2009     2008     2009     2008  
Retail Electric Revenues* (Excluding DSM & REST)
  $ 292.6     $ 259.9     $ 665.3     $ 627.1  
Long-Term Wholesale Electric Sales
    10.4       14.5       34.6       43.2  
Wholesale Transmission Revenues
    4.1       4.3       12.4       12.8  
 
                       
Total
  $ 307.1     $ 278.7     $ 712.3     $ 683.2  
 
                               
Less Fuel, Purchased Power and Transmission Expense
                               
Fuel
    92.3       108.4       208.8       251.6  
Reimbursed Fuel
    (1.1 )     (1.3 )     (3.3 )     (4.2 )
Purchased Power
    53.0       100.4       112.4       211.2  
Increase (Decrease) to Reflect PPFAC Recovery
    (12.9 )     0.0       (16.9 )     0.0  
Transmission
    0.6       5.1       2.4       9.6  
Short-Term Wholesale Electric Sales
    (23.5 )     (54.1 )     (60.7 )     (151.7 )
 
                       
Fuel, Purchased Power and Transmission Expense Net of Short-Term Wholesale Revenues
    108.4       158.5       242.7       316.4  
 
                               
 
                       
Utility Gross Margin (non-GAAP)
  $ 198.7     $ 120.2     $ 469.6     $ 366.8  
 
                       
 
                               
Reconciling Line Items to Operating Income
                               
CTC Revenue Subject to Refund
    0.0       (29.5 )     0.0       (44.4 )
Other Revenue
    21.7       19.4       59.1       54.7  
REST & DSM Revenues
    4.8       0.6       9.9       0.8  
 
                               
Other Operating Expenses (Income):
                               
Reimbursed Fuel
    1.1       1.3       3.3       4.2  
Other Operations & Maintenance
    69.2       63.8       213.1       183.9  
Depreciation & Amortization
    37.7       31.2       114.5       93.2  
Amortization of Transition Recovery Asset
    0.0       0.0       0.0       23.9  
Taxes Other Than Income Taxes
    9.1       8.1       29.4       29.1  
 
                       
Operating Income (GAAP)
  $ 108.1     $ 6.3     $ 178.2     $ 43.5  
 
                       

 

2


 

TEP — RETAIL AND LONG-TERM WHOLESALE MARGINS
                 
    YTD Sep 30     Q3  
RETAIL REVENUES (CENTS / KWH)   2009     2009  
Avg. Non-Fuel Rates
               
Residential
    6.52       6.67  
Commercial
    8.07       8.34  
Industrial
    4.60       4.67  
Mining
    2.99       2.87  
Other
    5.01       5.19  
 
           
Total Average Non-Fuel Rate
    5.99       6.23  
Avg. Base Fuel and PPFAC Rate
    3.10       3.41  
Avg. REST & DSM Rate
    0.14       0.16  
 
           
Avg. Total Retail Rate
    9.22       9.80  
 
           
                 
    YTD Sep 30     Q3  
RETAIL NON-FUEL REVENUES* (MILLIONS)   2009     2009  
Residential
  $ 204.1     $ 97.0  
Commercial
    124.6       51.6  
Industrial
    76.7       29.3  
Mining
    23.7       7.7  
Other
    9.4       3.5  
 
           
Total
  $ 438.6     $ 189.1  
Base Fuel and PPFAC Revenues
    226.7       103.6  
REST & DSM Revenues
    9.9       4.8  
 
           
Total Electric Retail Revenues
  $ 675.2     $ 297.4  
 
           
     
*   Retail non-fuel revenues exclude fuel, PPFAC, REST/DSM charges
                 
    YTD Sep 30     Q3  
LONG-TERM WHOLESALE GROSS MARGIN (MILLIONS)   2009     2009  
 
Long-term Wholesale Revenues
  $ 34.6     $ 10.4  
Fuel and Purchased Power Expense
    16.1       4.8  
 
           
Net
  $ 18.5     $ 5.6  
 
           

 

3


 

UNISOURCE ENERGY AND TEP O&M COMPONENTS
                                 
UniSource Energy   YTD Sep 30     YTD Sep 30     Q3     Q3  
O&M Components   2009     2008     2009     2008  
    -millions-     -millions-  
TEP Base O&M (Non-GAAP)
  $ 173.6     $ 153.5     $ 52.6     $ 52.2  
UNS Gas O&M
    18.6       18.5       6.3       5.8  
UNS Electric O&M
    17.1       16.1       6.0       5.6  
Consolidating Adjustments & Other
    (8.5 )     (8.0 )     (3.0 )     (2.3 )
 
                       
UniSource Energy Base O&M (Non-GAAP)
  $ 200.8     $ 180.1     $ 61.8     $ 61.3  
Reimbursed O&M Related to Springerville Units 3 and 4
    29.6       26.2       11.8       9.7  
Expenses Related to Customer-funded Renewable Energy and DSM Programs
    13.0       5.2       5.9       2.4  
 
                       
UniSource Energy O&M (GAAP)
  $ 243.4     $ 211.5     $ 79.5     $ 73.4  
 
                       
                                 
TEP   YTD Sep 30     YTD Sep 30     Q3     Q3  
O&M Components   2009     2008     2009     2008  
    -millions-     -millions-  
Wages, A&G, Other
  $ 127.1     $ 121.6     $ 38.2     $ 42.5  
Generating Plant Maintenance Expense
    30.3       24.1       9.1       7.1  
Pension and Postretirement Benefits Expense
    16.2       7.8       5.3       2.6  
 
                       
TEP Base O&M (Non-GAAP)
  $ 173.6     $ 153.5     $ 52.6     $ 52.2  
Reimbursed O&M Related to Springerville Units 3 and 4
    29.6       26.2       11.8       9.7  
Expenses Related to Customer-funded Renewable Energy and DSM Programs
    9.9       4.2       4.8       1.9  
 
                       
TEP O&M (GAAP)
  $ 213.1     $ 183.9     $ 69.2     $ 63.8  
 
                       

 

4


 

TUCSON ELECTRIC POWER — RETAIL OPERATING STATISTICS
                                                                 
    3 Months Ended Sep. 30     Year-to-Date Sep. 30  
    2009     2008     Incr (Decr)     % Change     2009     2008     Incr (Decr)     % Change  
AVG. ELECTRIC CUSTOMERS
                                                               
Residential
    364,461       362,687       1,774       0.5 %     364,724       362,520       2,204       0.6 %
Commercial
    35,747       35,248       499       1.4 %     35,631       35,061       570       1.6 %
Industrial
    627       633       (6 )     -0.9 %     630       637       (7 )     -1.1 %
Mining
    2       2             0.0 %     2       2             0.0 %
Other
    61       61             0.0 %     61       61             0.0 %
 
                                               
Total
    400,898       398,631       2,267       0.6 %     401,048       398,281       2,767       0.7 %
 
                                               
RETAIL SALES — MWH
                                                               
Residential
    1,453,143       1,360,945       92,198       6.8 %     3,129,160       3,077,958       51,202       1.7 %
Commercial
    618,955       612,664       6,291       1.0 %     1,544,514       1,569,798       (25,284 )     -1.6 %
Industrial
    627,940       655,399       (27,459 )     -4.2 %     1,666,778       1,739,661       (72,883 )     -4.2 %
Mining
    269,172       271,751       (2,579 )     -0.9 %     792,791       815,631       (22,840 )     -2.8 %
Other
    66,744       65,288       1,456       2.2 %     188,359       193,113       (4,754 )     -2.5 %
 
                                               
Total
    3,035,954       2,966,047       69,907       2.4 %     7,321,602       7,396,161       (74,559 )     -1.0 %
 
                                               
RETAIL USAGE

KWH/
CUSTOMER
                                                               
Residential
    3,987       3,752       235       6.3 %     8,580       8,490       89       1.0 %
Commercial
    17,315       17,382       (67 )     -0.4 %     43,347       44,773       (1,426 )     -3.2 %
Industrial
    1,001,499       1,035,385       (33,886 )     -3.3 %     2,645,679       2,731,022       (85,343 )     -3.1 %
Mining
    134,586,000       135,875,500       (1,289,500 )     -0.9 %     396,395,500       407,815,500       (11,420,000 )     -2.8 %
Other
    1,094,164       1,070,295       23,869       2.2 %     3,087,852       3,165,787       (77,934 )     -2.5 %
 
                                               
Total
    7,573       7,441       132       1.8 %     18,256       18,570       (314 )     -1.7 %
 
                                               
RETAIL REVENUES — MILLIONS
                                                               
Residential
  $ 147.7     $ 128.1     $ 19.6       15.3 %   $ 305.5     $ 281.2     $ 24.4       8.7 %
Commercial
    72.1       64.3       7.9       12.2 %     171.7       163.2       8.6       5.3 %
Industrial
    50.4       48.7       1.7       3.5 %     127.1       126.9       0.2       0.1 %
Mining
    16.8       13.9       3.0       21.4 %     45.9       41.4       4.5       10.8 %
Other
    5.6       5.0       0.6       12.7 %     15.0       14.5       0.6       3.8 %
 
                                               
Total
  $ 292.6     $ 259.9     $ 32.7       12.6 %   $ 665.3     $ 627.1     $ 38.1       6.1 %
 
                                               
DSM / REST
    4.8       0.6       4.1       N/M       9.9       0.8       9.1       N/M  
 
                                               
Total Retail Revenues
  $ 297.4     $ 260.6     $ 36.9       14.1 %   $ 675.2     $ 628.0     $ 47.2       7.5 %
 
                                               
 
                                                               
WEATHER — COOLING DEGREE DAYS
                                                               
Actual
    1,155       875       280       32.0 %     1,571       1,295       276       21.3 %
10-Year Average
    970       935                       1,434       1,392                  
% Change Actual vs. 10-Year Avg.
    19.1 %     -6.4 %                     9.6 %     -7.0 %                
 
                                                               
ENERGY MARKET INDICATORS
                                                               
Avg. Wholesale Power Prices
                                                               
Palo Verde Index — $/MWh
                                                               
On Peak
  $ 35.22     $ 81.32       ($46.10 )     -56.7 %   $ 33.14     $ 81.12       ($47.98 )     -59.1 %
Off Peak
  $ 21.95     $ 54.27       ($32.32 )     -59.6 %   $ 22.30     $ 59.35       ($37.05 )     -62.4 %
 
                                                               
Avg. Natural Gas Prices
                                                               
Permian Index — $/MMBtu
  $ 2.98     $ 8.68       ($5.70 )     -65.7 %   $ 3.10     $ 8.47       ($5.37 )     -63.4 %

 

5


 

UNS GAS — OPERATING STATISTICS
                                                                 
    3 Months Ended Sep. 30     Year-to-Date Sep. 30  
    2009     2008     Incr (Decr)     % Change     2009     2008     Incr (Decr)     % Change  
AVG. GAS CUSTOMERS
                                                               
Residential
    132,192       131,890       302       0.2 %     132,606       132,538       68       0.1 %
Commercial
    11,225       11,293       (68 )     -0.6 %     11,374       11,453       (79 )     -0.7 %
All Other
    1,109       1,106       3       0.3 %     1,109       1,105       4       0.4 %
 
                                               
Total
    144,526       144,289       237       0.2 %     145,089       145,096       (7 )     0.0 %
 
                                               
 
                                                               
RETAIL SALES — THOUSANDS OF THERMS
                                                               
Residential
    5,186       5,178       8       0.2 %     44,553       49,906       (5,353 )     -10.7 %
Commercial
    3,888       4,093       (205 )     -5.0 %     19,604       21,680       (2,076 )     -9.6 %
All Other
    700       627       73       11.7 %     5,503       6,050       (547 )     -9.0 %
 
                                               
Total
    9,774       9,898       (124 )     -1.3 %     69,660       77,637       (7,976 )     -10.3 %
 
                                               
 
                                                               
RETAIL USAGE

THERMS/
CUSTOMER
                                                               
Residential
    39.2       39.3       (0 )     -0.1 %     336       377       (41 )     -10.8 %
Commercial
    346.3       362.4       (16 )     -4.4 %     1,724       1,893       (169 )     -8.9 %
 
                                                               
RETAIL REVENUES — MILLIONS Non-Fuel Revenues:
                                                               
Residential
  $ 5.0     $ 5.1       (0.0 )     -0.7 %   $ 24.5     $ 26.4       (1.9 )     -7.3 %
Commercial
    1.5       1.5       (0.1 )     -4.3 %     6.5       7.1       (0.6 )     -8.4 %
All Other
    0.2       0.2       (0.0 )     -3.3 %     1.3       1.4       (0.1 )     -10.4 %
 
                                               
Total
  $ 6.7     $ 6.8       ($0.1 )     -1.6 %   $ 32.3     $ 35.0       ($2.7 )     -7.6 %
DSM Revenues
    0.2       0.1       0.1       50.5 %     0.4       0.2       0.2       73.6 %
Transport/NSP Revenues
    3.7       7.3       (3.7 )     -50.1 %     12.1       22.1       (10.0 )     -45.3 %
Fuel Revenues:
                                                               
Recovered from Customers
    7.5       8.8       (1.2 )     -14.2 %     58.2       63.1       (4.9 )     -7.7 %
 
                                               
Total Gas Revenues
  $ 18.1     $ 23.0       ($5.0 )     -21.6 %   $ 103.0     $ 120.3       ($17.3 )     -14.4 %
 
                                               
 
                                                               
WEATHER — HEATING DEGREE DAYS
                                                               
Actual
    301       229       72       31.4 %     11,879       13,589       (1,710 )     -12.6 %
10-Year Average
    346       363                       12,527       12,662                  
% Change Actual vs. 10-Year Avg.
    -13.0 %     -36.9 %                     -5.2 %     7.3 %                
UNS ELECTRIC — OPERATING STATISTICS
                                                                 
    3 Months Ended Sep. 30     Year-to-Date Sep. 30  
    2009     2008     Incr (Decr)     % Change     2009     2008     Incr (Decr)     % Change  
AVG. ELECTRIC CUSTOMERS
                                                               
Residential
    79,476       79,421       55       0.1 %     79,460       79,453       7       0.0 %
Commercial
    10,308       10,347       (39 )     -0.4 %     10,331       10,329       2       0.0 %
All Other
    288       275       13       4.7 %     285       273       12       4.4 %
 
                                               
Total
    90,072       90,043       29       0.0 %     90,076       90,055       21       0.0 %
 
                                               
 
                                                               
RETAIL SALES — MWH
                                                               
Residential
    300,881       299,767       1,114       0.4 %     651,577       666,765       (15,188 )     -2.3 %
Commercial
    185,393       183,430       1,963       1.1 %     478,628       485,458       (6,830 )     -1.4 %
Industrial
    56,438       52,116       4,322       8.3 %     144,273       144,691       (418 )     -0.3 %
Mining
    43,036       6,073       36,963     NM       116,643       17,824       98,819     NM  
Other
    499       492       7       1.4 %     1,586       1,671       (85 )     -5.1 %
 
                                               
Total
    586,247       541,878       44,369       8.2 %     1,392,707       1,316,409       76,298       5.8 %
 
                                               
 
                                                               
RETAIL USAGE

KWH/
CUSTOMER
                                                               
Residential
    3,786       3,774       11       0.3 %     8,200       8,392       (192 )     -2.3 %
Commercial
    17,985       17,728       258       1.5 %     46,329       47,000       (670 )     -1.4 %
 
                                                               
RETAIL REVENUES — MILLIONS
                                                               
Non-Fuel Revenues:
                                                               
Residential
  $ 7.2     $ 7.1       0.1       1.2 %   $ 16.2     $ 18.2       (2.0 )     -11.0 %
Commercial
    6.4       6.2       0.2       2.8 %     17.2       16.3       0.9       5.6 %
Industrial
    1.7       0.9       0.8       86.1 %     5.2       1.7       3.5     NM  
Mining
    0.8       0.5       0.3       57.5 %     2.0       1.0       1.0     NM  
Other
    0.1       0.1       (0.0 )     -3.3 %     0.2       0.2       (0.0 )     -4.1 %
 
                                               
Total
  $ 16.1     $ 14.8     $ 1.4       9.2 %   $ 40.7     $ 37.4     $ 3.3       9.0 %
DSM / REST
    1.2       0.5       0.7     NM       2.9       0.7       2.1     NM  
Fuel Revenues:
                                                               
Recovered from Customers
    34.2       46.9       (12.7 )     -27.1 %     98.7       103.9       (5.2 )     -5.0 %
 
                                               
Total Retail Revenues
  $ 51.5     $ 62.1       ($10.6 )     -17.1 %   $ 142.3     $ 142.0     $ 0.3       0.2 %
 
                                               
 
                                                               
WEATHER — COOLING DEGREE DAYS
                                                               
Actual
    5,666       5,339       327       6.1 %     8,710       8,143       567       7.0 %
10-Year Average
    5,367       5,293                       8,501       8,383                  
% Change Actual vs. 10-Year Avg.
    5.6 %     0.9 %                     2.5 %     -2.9 %                
 
                                                               
WEATHER — HEATING DEGREE DAYS
                                                               
Actual
                                    3,538       4,235       (697 )     -16.5 %
10-Year Average
                                    3,787       3,795                  
% Change Actual vs. 10-Year Avg.
                                    -6.6 %     11.6 %                

 

6


 

BASIC AND DILUTED SHARES OUTSTANDING
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
          -Thousands of Dollars-        
Numerator:
                               
Net Income
  $ 57,646       ($11,039 )   $ 93,839       ($8,906 )
Income from Assumed Conversion of Convertible Senior Notes
    1,097             3,292        
 
                       
Adjusted Numerator
  $ 58,743       ($11,039 )   $ 97,131       ($8,906 )
 
                       
 
                               
Denominator:   - Thousands of Shares -
Weighted-average Shares of Common Stock Outstanding:
                               
Common Shares Issued
    35,722       35,453       35,623       35,398  
Participating Securities
    100               102          
Fully Vested Deferred Stock Units
    106       224       104       218  
 
                       
Total Weighted-average Shares of Common Stock Outstanding and Participating Securities — Basic
    35,928       35,677       35,829       35,616  
Effect of Dilutive Securities:
                               
Convertible Senior Notes
    4,101             4,086        
Options and Stock Issuable under Employee Benefit Plans and the Directors’ Plan
    507             491        
 
                       
Total Shares — Diluted
    40,536       36,677       40,406       36,616  
 
                       
For the three and nine months ended September 30, 2008, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $1 million and $3 million, respectively, were not included in the computation of diluted EPS because to do so would have been anti-dilutive.  The following table shows the number of stock options to purchase shares of Common Stock excluded from the computation of diluted EPS because the stock option’s exercise price was greater than the average market price of the Common Stock.
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
          - In Thousands -        
 
                               
Stock Options Excluded from the Diluted EPS Computation
    395       234       395       288  
 
                       

 

7

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-----END PRIVACY-ENHANCED MESSAGE-----