Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments

Business Segments

17.          Business Segments

Pinnacle West’s reportable business segment is our regulated electricity segment, which consists of traditional regulated retail and wholesale electricity businesses (primarily electricity service to Native Load customers) and related activities and includes electricity generation, transmission and distribution.

Financial data for 2011, 2010 and 2009 is provided as follows (dollars in millions):

	Business Segments for the Year EndedDecember 31, 2011
	RegulatedElectricitySegment			All other (a)			Total
Operating revenues	$	3,237		$	4		$	3,241
Fuel and purchased power costs	1,009			—			1,009
Other operating expenses	1,055			3			1,058
Operating margin	1,173			1			1,174
Depreciation and amortization	427			—			427
Interest expense	224			—			224
Other expense (income)	(19		)	3			(16		)
Income from continuingoperations before income taxes	541			(2		)	539
Income taxes	184			(1		)	183
Income from continuingoperations	357			(1		)	356
Income from discontinuedoperations — net of incometax expense of $7 million(see Note 21)	—			11			11
Net income	357			10			367
Less: Net income attributable tononcontrolling interests	28			—			28
Net income attributable tocommon shareholders	$	329		$	10		$	339
Total assets	$	13,068		$	43		$	13,111
Capital expenditures	$	885		$	—		$	885

	Business Segments for the Year EndedDecember 31, 2010
	RegulatedElectricitySegment			All other (a)		Total
Operating revenues	$	3,181		$	8	$	3,189
Fuel and purchased power costs	1,047			—		1,047
Other operating expenses	1,009			4		1,013
Operating margin	1,125			4		1,129
Depreciation and amortization	415			—		415
Interest expense	226			2		228
Other expense (income)	(22		)	2		(20		)
Income from continuingoperations before income taxes	506			—		506
Income taxes	161			—		161
Income from continuingoperations	345			—		345
Income from discontinuedoperations — net of incometax expense of $16 million(see Note 21)	—			25		25
Net income	345			25		370
Less: Net income attributable tononcontrolling interests	20			—		20
Net income attributable tocommon shareholders	$	325		$	25	$	350
Total assets	$	12,285		$	108	$	12,393
Capital expenditures	$	666		$	4	$	670

	Business Segments for the Year EndedDecember 31, 2009
	RegulatedElectricitySegment			All other (a)			Total
Operating revenues	$	3,149		$	5		$	3,154
Fuel and purchased power costs	1,179			—			1,179
Other operating expenses	948			4			952
Operating margin	1,022			1			1,023
Depreciation and amortization	407			—			407
Interest expense	226			1			227
Other expense (income)	(16		)	10			(6		)
Income (loss) from continuingoperations before income taxes	405			(10		)	395
Income taxes	143			(4		)	139
Income (loss) from continuingoperations	262			(6		)	256
Loss from discontinuedoperations — net of incometax benefit of $110 million(see Note 21)	—			(183		)	(183		)
Net income (loss)	262			(189		)	73
Less: Net income (loss)attributable to noncontrollinginterests	19			(14		)	5
Net income (loss) attributable tocommon shareholders	$	243		$	(175	)	$	68
Total assets	$	11,740		$	295		$	12,035
Capital expenditures	$	732		$	13		$	745

(a)All other activities relate to SunCor, APSES and El Dorado.  Income from discontinued operations for 2011 is primarily related to the sale of our investment in APSES.  Income from discontinued operations for 2010 is primarily related to the APSES sale of its district cooling business. Loss from discontinued operations for 2009 is primarily related to real estate impairment charges at SunCor (see Note 22).  None of these segments is a reportable business segment.