Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations

Discontinued Operations

21.          Discontinued Operations

SunCor — In 2009, our real estate subsidiary, SunCor, began disposing of its homebuilding operations, master-planned communities, land parcels, commercial assets and golf courses in order to eliminate its outstanding debt.  All activity for the income statement and prior comparative period income statement amounts are included in discontinued operations.  In 2010 and 2009, SunCor recorded real estate impairment charges (see Note 22).  SunCor’s asset sales resulted in no gain for 2010 and 2009 due to the impairment charges discussed above.  At December 31, 2011, SunCor had approximately $9 million of assets on its balance sheet, including $7 million of intercompany receivables, and $2 million of other assets.  In February 2012, SunCor filed for protection under the United States Bankruptcy Code to complete an orderly liquidation of its business.  We do not expect SunCor’s bankruptcy to have a material impact on Pinnacle West’s financial position, results of operations, or cash flows.

APSES — On August 19, 2011, Pinnacle West sold its investment in APSES.  The sale resulted in an after-tax gain from discontinued operations of approximately $10 million.  In June 2010, APSES sold its district cooling business.  As a result of that sale, we recorded an after-tax gain from discontinued operations of approximately $25 million.  Prior period income statement amounts related to these sales and the associated revenues and costs are reflected in discontinued operations.

The following table provides revenue, income (loss) before income taxes and income (loss) after taxes classified as discontinued operations in Pinnacle West’s Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009 (dollars in millions):

	2011			2010			2009
Revenue:
SunCor	$	1		$	30		$	114
APSES	36			127			40
Total revenue	$	37		$	157		$	154
Income (loss) before taxes:
SunCor	$	(2	)	$	(10	)	$	(276	)
APSES	21			51			(3		)
Total income (loss) before taxes	$	19		$	41		$	(279	)
Income (loss) after taxes:
SunCor (a)	$	(1	)	$	(6	)	$	(167	)
APSES	12			31			(2		)
Total income (loss) after taxes	$	11		$	25		$	(169	)

(a)Includes a tax benefit recognized by the parent company in accordance with an intercompany tax sharing agreement of $1 million for the year ended December 31, 2011, $4 million for the year ended December 31, 2010, and $113 million for the year ended December 31, 2009.