Business Segments

12 Months Ended

Dec. 31, 2012

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 2012, 2011 and 2010 is provided as follows (dollars in millions):

	Business Segments for the Year Ended December 31, 2012
	Regulated Electricity Segment			All other (a)			Total
Operating revenues	$	3,294		$	8		$	3,302
Fuel and purchased power costs	995			—			995
Other operating expenses	1,047			4			1,051
Operating margin	1,252			4			1,256
Depreciation and amortization	404			—			404
Interest expense	200			—			200
Other expense (income)	(9		)	5			(4		)
Income (loss) from continuing operations before income taxes	657			(1		)	656
Income taxes	238			(1		)	237
Income from continuing operations	419			—			419
Loss from discontinued operations — net of income tax benefit of $(4) million (see Note 21)	—			(6		)	(6		)
Net income	419			(6		)	413
Less: Net income attributable to noncontrolling interests	31			—			31
Net income attributable to common shareholders	$	388		$	(6	)	$	382
Total assets	$	13,347		$	33		$	13,380
Capital expenditures	$	836		$	—		$	836

	Business Segments for the Year Ended December 31, 2011
	Regulated Electricity Segment			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 (loss) from continuing operations before income taxes	541			(2		)	539
Income taxes	184			(1		)	183
Income (loss) from continuing operations	357			(1		)	356
Income from discontinued operations — net of income tax expense of $7 million (see Note 21)	—			11			11
Net income	357			10			367
Less: Net income attributable to noncontrolling interests	28			—			28
Net income attributable to common shareholders	$	329		$	10		$	339
Total assets	$	13,068		$	43		$	13,111
Capital expenditures	$	885		$	—		$	885

	Business Segments for the Year Ended December 31, 2010
	Regulated Electricity Segment			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 continuing operations before income taxes	506			—		506
Income taxes	161			—		161
Income from continuing operations	345			—		345
Income from discontinued operations — net of income tax expense of $16 million (see Note 21)	—			25		25
Net income	345			25		370
Less: Net income attributable to noncontrolling interests	20			—		20
Net income attributable to common shareholders	$	325		$	25	$	350
Total assets	$	12,285		$	108	$	12,393
Capital expenditures	$	666		$	4	$	670

(a) All other activities relate to SunCor, APSES and El Dorado.  Loss from discontinued operations in 2012 is primarily related to a contribution Pinnacle West expects to make to SunCor’s estate as part of a negotiated resolution to the bankruptcy (see Note 21).  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.  None of these segments is a reportable business segment.