Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - TUCSON ELECTRIC POWER CO | d492458dex991.htm |
| 8-K - FORM 8-K - TUCSON ELECTRIC POWER CO | d492458d8k.htm |
| EX-99.3 - EX-99.3 - TUCSON ELECTRIC POWER CO | d492458dex993.htm |
Exhibit 99.2
UNS Energy Corporation
Supplemental Earnings & Outlook Information
February 26, 2013
| TABLE OF CONTENTS | ||||
| Safe Harbor and Non-GAAP Measures |
1 | |||
| Earnings Outlook & Assumptions |
2-3 | |||
|
4th Quarter Earnings Variance |
4 | |||
| Year-End Earnings Variance |
5 | |||
| UNS Energy and TEP O&M |
6 | |||
| TEP Operating Statistics |
7 | |||
| TEP Margin Revenues |
8 | |||
| UNS Electric Operating Statistics |
9 | |||
| UNS Gas Operating Statistics |
10 | |||
| Basic & Diluted Shares Outstanding |
11 | |||
SAFE HARBOR AND NON-GAAP MEASURES
This document contains forward-looking information that involves risks and uncertainties, which 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 UNS 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 UNS Energy. The forecast assumptions and estimates below are not intended to be a full list of factors which could cause UNS Energy’s future results to differ from current expectations. Please refer to UNS Energy’s SEC filings for more information regarding risks and other uncertainties that could cause current expectations to differ from future results.
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.
UNS ENERGY 2013 OUTLOOK & ASSUMPTIONS
The table below provides key assumptions related to UNS Energy’s 2013 earnings, as of February 26, 2012.
| Actual | Estimated | |||||||||||||||
| Key Assumptions |
2012 | 2013 | 2014 | 2015 | ||||||||||||
| UNS Energy Consolidated |
||||||||||||||||
| Base O&M ($ millions) |
$ | 266 | $ | 273 | 1 | |||||||||||
| Depreciation & Amortization Expense ($ millions) |
$ | 177 | $ | 180 | 1 | |||||||||||
| Total Interest Expense ($ millions) |
$ | 105 | $ | 96 | ||||||||||||
| Effective Income Tax Rate |
38.0 | % | 39.1 | % | ||||||||||||
| Avg. Basic Shares Outstanding (millions) |
40.4 | 41.6 | ||||||||||||||
| Avg. Diluted Shares Outstanding (millions) |
41.8 | 42.0 | ||||||||||||||
| TEP |
||||||||||||||||
| Retail Sales—(GWh) |
9,265 | 9,211 | ||||||||||||||
| Change vs. Prior Year |
-0.7 | % | -0.6 | % | 0-0.5%/yr | |||||||||||
| Retail Sales—Weather Normalized (GWh) |
9,196 | 9,211 | ||||||||||||||
| Retail Customers (Yr End) |
406,390 | 408,815 | ||||||||||||||
| Change vs. Prior Year |
0.5 | % | 0.6 | % | 0.5%-1%/yr | |||||||||||
| Long-Term Wholesale Sales (GWh) |
||||||||||||||||
| Salt River Project (SRP) |
500 | 500 | ||||||||||||||
| Navajo Tribal Utility Authority (NTUA) |
223 | 225 | ||||||||||||||
| Long-Term Wholesale Sales—Pre-Tax Margin ($ millions) |
$ | 5 | $ | 7 | ||||||||||||
| Palo Verde Index Prices / MWh (On-Peak) |
$ | 29 | $ | 35 | ||||||||||||
| Other Expenses ($ millions) |
||||||||||||||||
| Capital Lease Amortization Expense |
$ | 14 | $ | 15 | $ | 16 | $ | 6 | ||||||||
| Capital Lease Interest Expense |
$ | 34 | $ | 24 | $ | 10 | $ | 4 | ||||||||
| (Net of Interest Income on Investment in Lease Debt) |
||||||||||||||||
| 1 | Assumes TEP Settlement Agreement effective on Aug. 1, 2013 |
2
| Actual | Estimated | |||||||||||||
| Key Assumptions |
2012 | 2013 | 2014 | 2015 | ||||||||||
| UES |
||||||||||||||
| UNS Gas Retail Sales (Millions of Therms) |
104 | 113 | ||||||||||||
| Avg. Change vs. Prior Year |
-8.5 | % | 8.1 | % | 0.5 | %–1% | ||||||||
| Retail Sales—Weather Normalized (Millions of Therms) |
109 | 113 | ||||||||||||
| UNS Electric Retail Sales (GWh) |
1,756 | 1,703 | ||||||||||||
| Avg. Change vs. Prior Year |
-5.3 | % | -3.0 | % | 0.5 | %–1% | ||||||||
| Retail Sales—Weather Normalized (GWh) |
1,750 | 1,703 | ||||||||||||
UNS ENERGY 2013 EARNINGS ESTIMATE SENSITIVITIES
| 2013 Sensitivities |
Pre-Tax (millions) |
After-Tax (millions) |
Per Diluted Share |
|||||||||
| 1% Change in Consolidated Retail Energy Sales |
$ | 0.09–$0.10 | ||||||||||
| $5 / MWh Change in Wholesale Power Prices – Salt River Project Contract |
$ | 2.5 | $ | 1.5 | $ | 0.04 | ||||||
| 1% Increase in Rate on TEP’s Un-hedged Long-Term Variable Rate Debt ($215 million outstanding at 12/31/12 of which $50 million is hedged) |
($ | 1.7 | ) | ($ | 1.0 | ) | ($ | 0.02 | ) | |||
3
UNS ENERGY 4th QUARTER EARNINGS VARIANCE EXPLANATION
| 4th Quarter 2011 UNS Energy Net Income | $8.2 | |||||||||||||||||||
| 4th Quarter | Change | |||||||||||||||||||
| TEP |
2012 | 2011 | Pre-Tax | After Tax | ||||||||||||||||
| -millions of dollars- | ||||||||||||||||||||
| Utility Gross Margin Components: |
||||||||||||||||||||
| Retail Margin Revenues* |
$ | 115.1 | $ | 118.1 | ($ | 3.0 | ) | ($ | 1.8 | ) | ||||||||||
| L-T Wholesale Margin Revenues* |
1.7 | 1.4 | 0.3 | 0.2 | ||||||||||||||||
| Transmission Revenues |
4.2 | 4.1 | 0.1 | 0.1 | ||||||||||||||||
|
|
|
|
|
|
|
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|
|||||||||||||
| Total |
121.0 | 123.6 | (2.6 | ) | (1.6 | ) | ||||||||||||||
| Other Income Sources: |
||||||||||||||||||||
| Operating synergies—Springerville Units 3&4 |
5.8 | 5.9 | (0.1 | ) | (0.1 | ) | ||||||||||||||
| Expenses: |
||||||||||||||||||||
| Base O&M* |
64.5 | 64.1 | 0.4 | 0.2 | ||||||||||||||||
| Depreciation |
28.3 | 26.8 | 1.5 | 0.9 | ||||||||||||||||
| Amortization |
9.9 | 9.4 | 0.5 | 0.3 | ||||||||||||||||
| Total Other Deductions |
3.0 | 2.6 | 0.4 | 0.2 | ||||||||||||||||
| Total Interest Expense |
22.7 | 23.6 | (0.9 | ) | (0.5 | ) | ||||||||||||||
| Partial Write-off of Tucson to Nogales Transmission Line |
4.5 | — | 4.5 | 2.7 | ||||||||||||||||
| Other Line Item Changes |
(6.3 | ) | 1.5 | (7.8 | ) | (4.7 | ) | |||||||||||||
| Income Tax Expense (Benefit) |
(0.3 | ) | (0.1 | ) | NM | (0.2 | ) | |||||||||||||
|
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|
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|
|
|||||||||||||
| TEP Net Income (GAAP) |
$ | 0.5 | $ | 1.6 | NM | ($ | 1.1 | ) | ||||||||||||
|
|
|
|
|
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|
|
|||||||||||||
| Change in TEP Net Income | (1.1 | ) | ||||||||||||||||||
| Other Business Segments—After Tax Amounts |
||||||||||||||||||||
| UNS Electric Net Income |
$ | 3.2 | $ | 3.3 | NM | ($ | 0.1 | ) | ||||||||||||
| UNS Gas Net Income |
$ | 4.1 | $ | 4.3 | NM | (0.2 | ) | |||||||||||||
| Millennium Energy Holdings Net Income |
0.1 | 0.3 | NM | (0.2 | ) | |||||||||||||||
| Other and Consolidating Adjustments |
(0.4 | ) | (1.3 | ) | NM | 0.9 | ||||||||||||||
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|
|||||||||||||
| Total Net Income from Other Business Segments and Consolidating Adjustments |
$ | 7.0 | $ | 6.6 | NM | $ | 0.4 | |||||||||||||
|
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|
|||||||||||||
| Change in UNS Electric, UNS Gas, Millennium Energy Holdings, and Other Net Income |
|
0.4 | ||||||||||||||||||
| 4th Quarter 2012 UNS Energy Net Income |
|
$ | 7.5 | |||||||||||||||||
| * | Retail Margin Revenues, Long-Term Wholesale Margin and Base O&M are all non-GAAP measures. Please see following pages for a reconciliation of these non-GAAP measures. |
QTD Variance Explanation
4
UNS ENERGY YEAR-TO-DATE EARNINGS VARIANCE EXPLANATION
| YTD December 31, 2011 UNS Energy Net Income | $110.0 | |||||||||||||||||||
| Year End | Change | |||||||||||||||||||
| TEP |
2012 | 2011 | Pre-Tax | After Tax | ||||||||||||||||
| -millions of dollars- | ||||||||||||||||||||
| Utility Gross Margin Components: |
||||||||||||||||||||
| Retail Margin Revenues* |
$ | 544.0 | $ | 550.6 | ($ | 6.6 | ) | ($ | 4.1 | ) | ||||||||||
| L-T Wholesale Margin Revenues* |
4.7 | 13.1 | (8.4 | ) | (5.2 | ) | ||||||||||||||
| Transmission Revenues |
15.8 | 16.4 | (0.6 | ) | (0.4 | ) | ||||||||||||||
|
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|
|||||||||||||
| Total |
564.5 | 580.1 | (15.6 | ) | (9.6 | ) | ||||||||||||||
| Other Income Sources: |
||||||||||||||||||||
| Operating synergies - Springerville Units 3&4 |
21.0 | 24.1 | (3.1 | ) | (1.9 | ) | ||||||||||||||
| El Paso Settlement |
— | 7.4 | (7.4 | ) | (4.6 | ) | ||||||||||||||
| Expenses: |
||||||||||||||||||||
| Base O&M* |
233.7 | 237.7 | (4.0 | ) | (2.5 | ) | ||||||||||||||
| Depreciation |
110.9 | 104.9 | 6.0 | 3.7 | ||||||||||||||||
| Amortization |
39.5 | 34.7 | 4.8 | 3.0 | ||||||||||||||||
| Total Other Deductions |
3.1 | 2.8 | 0.3 | 0.2 | ||||||||||||||||
| Total Interest Expense |
88.3 | 89.3 | (1.0 | ) | (0.6 | ) | ||||||||||||||
| Partial Write-off of Tucson to Nogales Transmission Line |
4.5 | — | 4.5 | 2.8 | ||||||||||||||||
| Other Line Item Changes |
0.9 | 4.9 | (4.0 | ) | (2.5 | ) | ||||||||||||||
| Income Tax Expense |
39.1 | 52.0 | NM | (12.9 | ) | |||||||||||||||
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|
|||||||||||||
| TEP Net Income (GAAP) |
$ | 65.5 | $ | 85.3 | NM | ($ | 19.8 | ) | ||||||||||||
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|
|||||||||||||
| Change in TEP Net Income | (19.8 | ) | ||||||||||||||||||
| Other Business Segments—After Tax Amounts |
||||||||||||||||||||
| UNS Electric Net Income |
$ | 16.9 | $ | 17.7 | NM | ($ | 0.8 | ) | ||||||||||||
| UNS Gas Net Income |
9.1 | 10.2 | NM | (1.1 | ) | |||||||||||||||
| Millennium Energy Holdings Net Income |
1.8 | 2.3 | NM | (0.5 | ) | |||||||||||||||
| Other and Consolidating Adjustments |
(2.4 | ) | (5.5 | ) | NM | 3.1 | ||||||||||||||
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|||||||||||||
| Total Net Income from Other Business Segments and Consolidating Adjustments |
$ | 25.4 | $ | 24.7 | NM | $ | 0.7 | |||||||||||||
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|||||||||||||
| Change in UNS Electric, UNS Gas, Millennium Energy Holdings, and Other Net Income | 0.7 | |||||||||||||||||||
| YTD December 31, 2012 UNS Energy Net Income | $ | 90.9 | ||||||||||||||||||
| * | Retail Margin Revenues, Long-Term Wholesale Margin and Base O&M are all non-GAAP measures. Please see following pages for a reconciliation of these non-GAAP measures. |
YTD Variance Explation
5
UNS ENERGY AND TEP O&M
| UNS Energy | 4th Quarter | YTD December 31, | ||||||||||||||
| O&M Components |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| -Millions of Dollars- | -Millions of Dollars- | |||||||||||||||
| UNS Energy Base O&M (Non-GAAP) |
$ | 68.0 | $ | 72.1 | $ | 266.2 | $ | 271.1 | ||||||||
| Reimbursed O&M Related to Springerville Units 3 and 4 |
19.4 | 14.4 | 71.9 | 62.9 | ||||||||||||
| O&M Related to Customer-funded Renewable Energy and DSM Programs |
12.7 | 10.8 | 45.6 | 45.2 | ||||||||||||
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| UNS Energy O&M (GAAP) |
$ | 100.1 | $ | 97.3 | $ | 383.7 | $ | 379.2 | ||||||||
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| TEP | 4th Quarter | YTD December 31, | ||||||||||||||
| O&M Components |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| -Millions of Dollars- | -Millions of Dollars- | |||||||||||||||
| TEP Base O&M (Non-GAAP) |
$ | 64.5 | $ | 64.1 | $ | 233.7 | $ | 237.7 | ||||||||
| O&M Included in Other Expense |
(7.3 | ) | (2.8 | ) | (6.2 | ) | (8.0 | ) | ||||||||
| Reimbursed O&M Related to Springerville Units 3 and 4 |
19.4 | 14.4 | 71.9 | 62.9 | ||||||||||||
| O&M Related to Customer-funded Renewable Energy and DSM Programs |
9.9 | 8.7 | 35.2 | 38.2 | ||||||||||||
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| TEP O&M (GAAP) |
$ | 86.5 | $ | 84.4 | $ | 334.6 | $ | 330.8 | ||||||||
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Base O&M, a non-GAAP financial measure, should not be considered as an alternative to Other O&M, which is determined in accordance with GAAP. We believe Base O&M provides useful information to investors because it represents the fundamental level of operating and maintenance expense related to our core utility business. Base O&M excludes expenses that are directly offset by revenues collected from customers and other third parties.
O&M
6
TEP—OPERATING STATISTICS
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2012 | 2011 | Incr (Decr) | % Change | 2012 | 2011 | Incr (Decr) | % Change | |||||||||||||||||||||||||
| AVG. ELECTRIC CUSTOMERS |
||||||||||||||||||||||||||||||||
| Residential |
369,296 | 367,083 | 2,213 | 0.6 | % | 368,246 | 366,582 | 1,664 | 0.5 | % | ||||||||||||||||||||||
| Commercial |
36,205 | 36,174 | 31 | 0.1 | % | 36,210 | 36,058 | 152 | 0.4 | % | ||||||||||||||||||||||
| Industrial |
632 | 636 | (4 | ) | -0.6 | % | 633 | 636 | (3 | ) | -0.5 | % | ||||||||||||||||||||
| Mining |
2 | 2 | — | 0.0 | % | 2 | 2 | — | 0.0 | % | ||||||||||||||||||||||
| Other |
62 | 62 | — | 0.0 | % | 62 | 62 | — | 0.0 | % | ||||||||||||||||||||||
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| Total |
406,197 | 403,957 | 2,240 | 0.6 | % | 405,153 | 403,340 | 1,813 | 0.4 | % | ||||||||||||||||||||||
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| RETAIL SALES—MWH |
||||||||||||||||||||||||||||||||
| Residential |
735,853 | 779,550 | (43,697 | ) | -5.6 | % | 3,820,637 | 3,888,011 | (67,374 | ) | -1.7 | % | ||||||||||||||||||||
| Commercial |
450,971 | 455,688 | (4,717 | ) | -1.0 | % | 1,973,931 | 1,972,526 | 1,405 | 0.1 | % | |||||||||||||||||||||
| Industrial |
503,682 | 491,555 | 12,127 | 2.5 | % | 2,132,214 | 2,145,163 | (12,949 | ) | -0.6 | % | |||||||||||||||||||||
| Mining |
274,906 | 272,138 | 2,768 | 1.0 | % | 1,092,518 | 1,083,071 | 9,447 | 0.9 | % | ||||||||||||||||||||||
| Other |
63,879 | 61,086 | 2,793 | 4.6 | % | 245,519 | 243,337 | 2,182 | 0.9 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total |
2,029,291 | 2,060,017 | (30,726 | ) | -1.5 | % | 9,264,819 | 9,332,108 | (67,289 | ) | -0.7 | % | ||||||||||||||||||||
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| RETAIL USAGE—KWH/CUSTOMER |
||||||||||||||||||||||||||||||||
| Residential |
1,993 | 2,124 | (131 | ) | -6.2 | % | 10,375 | 10,606 | (231 | ) | -2.2 | % | ||||||||||||||||||||
| Commercial |
12,456 | 12,597 | (141 | ) | -1.1 | % | 54,513 | 54,704 | (191 | ) | -0.3 | % | ||||||||||||||||||||
| Industrial |
796,965 | 772,885 | 24,080 | 3.1 | % | 3,368,427 | 3,372,898 | (4,471 | ) | -0.1 | % | |||||||||||||||||||||
| Mining |
137,453,000 | 136,069,000 | 1,384,000 | 1.0 | % | 546,259,000 | 541,535,500 | 4,723,500 | 0.9 | % | ||||||||||||||||||||||
| Other |
1,030,306 | 985,258 | 45,048 | 4.6 | % | 3,959,984 | 3,924,790 | 35,194 | 0.9 | % | ||||||||||||||||||||||
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| Total |
4,996 | 5,100 | (104 | ) | -2.0 | % | 22,867 | 23,137 | (270 | ) | -1.2 | % | ||||||||||||||||||||
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| WEATHER—COOLING DEGREE DAYS |
||||||||||||||||||||||||||||||||
| Actual |
33 | 49 | (16 | ) | -32.7 | % | 1,556 | 1,528 | 28 | 1.8 | % | |||||||||||||||||||||
| 10-Year Average |
41 | 38 | 1,484 | 1,473 | ||||||||||||||||||||||||||||
| % Change Actual vs. 10-Year Avg. |
-19.5 | % | 28.9 | % | 4.9 | % | 3.7 | % | ||||||||||||||||||||||||
| WEATHER—HEATING DEGREE DAYS |
||||||||||||||||||||||||||||||||
| Actual |
411 | 694 | (283 | ) | -40.8 | % | 1,201 | 1,597 | (396 | ) | -24.8 | % | ||||||||||||||||||||
| 10-Year Average |
549 | 566 | 1,394 | 1,417 | ||||||||||||||||||||||||||||
| % Change Actual vs. 10-Year Avg. |
-25.1 | % | 22.6 | % | -13.8 | % | 12.7 | % | ||||||||||||||||||||||||
| ENERGY MARKET INDICATORS |
||||||||||||||||||||||||||||||||
| Avg. Wholesale Power Prices |
||||||||||||||||||||||||||||||||
| Palo Verde Index—$/MWh |
||||||||||||||||||||||||||||||||
| On Peak |
$ | 30.51 | $ | 32.75 | ($ | 2.24 | ) | -6.8 | % | $ | 28.99 | $ | 35.72 | ($ | 6.73 | ) | -18.8 | % | ||||||||||||||
| Off Peak |
$ | 25.40 | $ | 24.07 | $ | 1.33 | 5.5 | % | $ | 20.51 | $ | 20.95 | ($ | 0.44 | ) | -2.1 | % | |||||||||||||||
| Avg. Natural Gas Prices |
||||||||||||||||||||||||||||||||
| Permian Index—$/MMBtu |
$ | 3.30 | $ | 3.23 | $ | 0.07 | 2.2 | % | $ | 2.67 | $ | 3.89 | ($ | 1.22 | ) | -31.4 | % | |||||||||||||||
TEP Operating Stats
7
TEP—RETAIL AND WHOLESALE MARGIN REVENUES
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2012 | 2011 | Incr (Decr) | % Change | 2012 | 2011 | Incr (Decr) | % Change | |||||||||||||||||||||||||
| RETAIL REVENUES—$ MILLIONS |
||||||||||||||||||||||||||||||||
| Margin Revenues: |
||||||||||||||||||||||||||||||||
| Residential |
$ | 46.8 | $ | 49.3 | ($ | 2.5 | ) | -5.1 | % | $ | 248.4 | $ | 251.9 | ($ | 3.5 | ) | -1.4 | % | ||||||||||||||
| Commercial |
36.1 | 36.4 | (0.3 | ) | -0.8 | % | 160.2 | 160.0 | 0.2 | 0.1 | % | |||||||||||||||||||||
| Industrial |
21.6 | 21.6 | — | 0.0 | % | 92.4 | 94.8 | (2.4 | ) | -2.5 | % | |||||||||||||||||||||
| Mining |
7.3 | 7.7 | (0.4 | ) | -5.2 | % | 30.4 | 31.6 | (1.2 | ) | -3.8 | % | ||||||||||||||||||||
| Other |
3.3 | 3.1 | 0.2 | 6.5 | % | 12.6 | 12.3 | 0.3 | 2.4 | % | ||||||||||||||||||||||
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|
|||||||||||||||||
| Total |
$ | 115.1 | $ | 118.1 | ($ | 3.0 | ) | -2.5 | % | $ | 544.0 | $ | 550.6 | ($ | 6.6 | ) | -1.2 | % | ||||||||||||||
| DSM / REST |
13.5 | 10.5 | 3.0 | 28.6 | % | 45.4 | 46.6 | (1.2 | ) | -2.6 | % | |||||||||||||||||||||
| Fuel and Purchased Power Revenues: |
||||||||||||||||||||||||||||||||
| Recovered from Customers |
70.3 | 61.1 | 9.2 | 15.1 | % | 326.5 | 306.7 | 19.8 | 6.5 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total Retail Revenues |
$ | 198.9 | $ | 189.7 | $ | 9.2 | 4.8 | % | $ | 915.9 | $ | 903.9 | $ | 12.0 | 1.3 | % | ||||||||||||||||
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|||||||||||||||||
| RETAIL REVENUES—CENTS / KWH |
||||||||||||||||||||||||||||||||
| Margin Revenues: |
||||||||||||||||||||||||||||||||
| Residential |
6.36 | 6.32 | 0.04 | 0.6 | % | 6.50 | 6.48 | 0.02 | 0.3 | % | ||||||||||||||||||||||
| Commercial |
8.00 | 7.99 | 0.01 | 0.1 | % | 8.12 | 8.11 | 0.01 | 0.1 | % | ||||||||||||||||||||||
| Industrial |
4.29 | 4.39 | (0.10 | ) | -2.3 | % | 4.33 | 4.42 | (0.09 | ) | -2.0 | % | ||||||||||||||||||||
| Mining |
2.66 | 2.83 | (0.17 | ) | -6.0 | % | 2.78 | 2.92 | (0.14 | ) | -4.8 | % | ||||||||||||||||||||
| Other |
5.17 | 5.07 | 0.10 | 2.0 | % | 5.13 | 5.05 | 0.08 | 1.6 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total |
5.67 | 5.73 | (0.06 | ) | -1.0 | % | 5.87 | 5.90 | (0.03 | ) | -0.5 | % | ||||||||||||||||||||
| DSM / REST |
0.67 | 0.51 | 0.16 | 31.4 | % | 0.49 | 0.50 | (0.01 | ) | -2.0 | % | |||||||||||||||||||||
| Fuel and Purchased Power Revenues: |
||||||||||||||||||||||||||||||||
| Recovered from Customers |
3.46 | 2.97 | 0.49 | 16.5 | % | 3.52 | 3.29 | 0.23 | 7.0 | % | ||||||||||||||||||||||
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|||||||||||||||||
| Total Retail Revenues |
9.80 | 9.21 | 0.59 | 6.4 | % | 9.88 | 9.69 | 0.19 | 2.0 | % | ||||||||||||||||||||||
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|||||||||||||||||
| LONG-TERM WHOLESALE MARGIN (Non-GAAP)—$ MILLIONS |
||||||||||||||||||||||||||||||||
| Long-Term Wholesale Margin Revenues (Non-GAAP) |
$ | 1.7 | $ | 1.4 | $ | 0.3 | 21.4 | % | $ | 4.7 | $ | 13.1 | ($ | 8.4 | ) | -64.1 | % | |||||||||||||||
| Fuel and Purchased Power Expense Allocated to Long-Term Wholesale Revenues |
4.9 | 6.8 | (1.9 | ) | -27.9 | % | 20.2 | 28.0 | (7.8 | ) | -27.9 | % | ||||||||||||||||||||
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|||||||||||||||||
| Long-Term Wholesale Revenues |
$ | 6.6 | $ | 8.2 | ($ | 1.6 | ) | -19.5 | % | $ | 24.9 | $ | 41.1 | ($ | 16.2 | ) | -39.4 | % | ||||||||||||||
| Wholesale Transmission Revenues |
4.2 | 4.1 | 0.1 | 2.4 | % | 15.8 | 16.4 | (0.6 | ) | -3.7 | % | |||||||||||||||||||||
| Short-term Wholesale Revenues |
22.9 | 20.9 | 2.0 | 9.6 | % | 70.5 | 72.4 | (1.9 | ) | -2.6 | % | |||||||||||||||||||||
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|||||||||||||||||
| Electric Wholesale Sales (GAAP) |
$ | 33.7 | $ | 33.2 | $ | 0.5 | 1.5 | % | $ | 111.2 | $ | 129.9 | ($ | 18.7 | ) | -14.4 | % | |||||||||||||||
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|||||||||||||||||
Retail Margin Revenues, a non-GAAP financial measure, should not be considered as an alternative to Net Electric Retail Sales, which is determined in accordance with GAAP. Retail Margin Revenues excludes: (i) revenues collected from retail customers that are directly offset by expenses recorded in other line items; and (ii) revenues collected from third parties that are unrelated to kWh sales to retail customers. We believe the change in Retail Margin Revenues between periods provides useful information to investors because it demonstrates the underlying revenue trend and performance of our core utility business. Retail Margin Revenues represents the portion of retail operating revenues available to cover the operating expenses of our core utility business.
Long-Term Wholesale Margin Revenues, a non-GAAP financial measure, should not be considered as an alternative to Electric Wholesale Sales, which is determined in accordance with GAAP. We believe the change in Long-Term Wholesale Margin Revenues between periods provides useful information to investors because it demonstrates the underlying profitability of TEP’s long-term wholesale sales contracts. Long-Term Wholesale Margin Revenues represents the portion of long-term wholesale revenues available to cover the operating expenses of our core utility business.
TEP Margin Revenues
8
UNS ELECTRIC—OPERATING STATISTICS
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2012 | 2011 | Incr (Decr) | % Change | 2012 | 2011 | Incr (Decr) | % Change | |||||||||||||||||||||||||
| AVG. ELECTRIC CUSTOMERS |
||||||||||||||||||||||||||||||||
| Residential |
81,015 | 80,596 | 419 | 0.5 | % | 80,865 | 80,576 | 289 | 0.4 | % | ||||||||||||||||||||||
| Commercial |
10,496 | 10,406 | 90 | 0.9 | % | 10,459 | 10,387 | 72 | 0.7 | % | ||||||||||||||||||||||
| Industrial |
20 | 21 | (1 | ) | -4.8 | % | 21 | 22 | (1 | ) | -4.5 | % | ||||||||||||||||||||
| Mining |
2 | 2 | — | 0.0 | % | 2 | 2 | — | 0.0 | % | ||||||||||||||||||||||
| Other |
512 | 325 | 187 | 57.5 | % | 474 | 268 | 206 | 76.9 | % | ||||||||||||||||||||||
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|
|||||||||||||||||
| Total |
92,045 | 91,350 | 695 | 0.8 | % | 91,821 | 91,255 | 566 | 0.6 | % | ||||||||||||||||||||||
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|
|||||||||||||||||
| RETAIL SALES—MWH |
||||||||||||||||||||||||||||||||
| Residential |
170,250 | 175,800 | (5,550 | ) | -3.2 | % | 835,784 | 827,795 | 7,989 | 1.0 | % | |||||||||||||||||||||
| Commercial |
143,844 | 139,126 | 4,718 | 3.4 | % | 614,169 | 601,871 | 12,298 | 2.0 | % | ||||||||||||||||||||||
| Industrial |
46,566 | 53,498 | (6,932 | ) | -13.0 | % | 213,239 | 220,930 | (7,691 | ) | -3.5 | % | ||||||||||||||||||||
| Mining |
15,622 | 28,146 | (12,524 | ) | -44.5 | % | 90,689 | 200,619 | (109,930 | ) | -54.8 | % | ||||||||||||||||||||
| Other |
462 | 506 | (44 | ) | -8.7 | % | 1,660 | 1,689 | (29 | ) | -1.7 | % | ||||||||||||||||||||
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|
|||||||||||||||||
| Total |
376,744 | 397,076 | (20,332 | ) | -5.1 | % | 1,755,541 | 1,852,904 | (97,363 | ) | -5.3 | % | ||||||||||||||||||||
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|||||||||||||||||
| RETAIL USAGE—KWH/CUSTOMER |
||||||||||||||||||||||||||||||||
| Residential |
2,101 | 2,181 | (80 | ) | -3.7 | % | 10,336 | 10,273 | 63 | 0.6 | % | |||||||||||||||||||||
| Commercial |
13,705 | 13,370 | 335 | 2.5 | % | 58,722 | 57,945 | 777 | 1.3 | % | ||||||||||||||||||||||
| Industrial |
2,328,300 | 2,547,524 | (219,224 | ) | -8.6 | % | 10,154,238 | 10,042,273 | 111,965 | 1.1 | % | |||||||||||||||||||||
| Mining |
7,811,000 | 14,073,000 | (6,262,000 | ) | -44.5 | % | 45,344,500 | 100,309,500 | (54,965,000 | ) | -54.8 | % | ||||||||||||||||||||
| Other |
902 | 1,557 | (655 | ) | -42.1 | % | 3,502 | 6,302 | (2,800 | ) | -44.4 | % | ||||||||||||||||||||
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|
|||||||||||||||||
| Total |
4,093 | 4,347 | (254 | ) | -5.8 | % | 19,119 | 20,305 | (1,186 | ) | -5.8 | % | ||||||||||||||||||||
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|||||||||||||||||
| RETAIL REVENUES—MILLIONS |
||||||||||||||||||||||||||||||||
| Margin Revenues: |
||||||||||||||||||||||||||||||||
| Residential |
$ | 6.7 | $ | 6.8 | ($ | 0.1 | ) | -1.5 | % | $ | 32.1 | $ | 31.2 | $ | 0.9 | 2.9 | % | |||||||||||||||
| Commercial |
7.0 | 6.9 | 0.1 | 1.4 | % | 28.9 | 28.9 | — | 0.0 | % | ||||||||||||||||||||||
| Industrial |
2.1 | 2.3 | (0.2 | ) | -8.7 | % | 9.0 | 9.0 | — | 0.0 | % | |||||||||||||||||||||
| Mining |
1.4 | 1.7 | (0.3 | ) | -17.6 | % | 6.4 | 6.6 | (0.2 | ) | -3.0 | % | ||||||||||||||||||||
| Other |
0.1 | 0.1 | — | 0.0 | % | 0.2 | 0.3 | (0.1 | ) | -33.3 | % | |||||||||||||||||||||
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|||||||||||||||||
| Total Margin Revenues |
$ | 17.3 | $ | 17.8 | (0.5 | ) | -2.8 | % | $ | 76.6 | $ | 76.0 | 0.6 | 0.8 | % | |||||||||||||||||
| DSM / REST |
3.0 | 2.2 | 0.8 | 36.4 | % | 11.3 | 6.6 | 4.7 | 71.2 | % | ||||||||||||||||||||||
| Fuel Revenues: |
||||||||||||||||||||||||||||||||
| Recovered from Customers |
17.1 | 20.0 | (2.9 | ) | -14.5 | % | 83.5 | 99.3 | (15.8 | ) | -15.9 | % | ||||||||||||||||||||
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|||||||||||||||||
| Total Retail Revenues |
$ | 37.4 | $ | 40.0 | (2.6 | ) | -6.5 | % | $ | 171.4 | $ | 181.9 | (10.5 | ) | -5.8 | % | ||||||||||||||||
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|||||||||||||||||
| WEATHER—COOLING DEGREE DAYS |
||||||||||||||||||||||||||||||||
| Actual |
647 | 579 | 68 | 11.7 | % | 9,639 | 9,092 | 547 | 6.0 | % | ||||||||||||||||||||||
| 10-Year Average |
586 | 560 | 9,052 | 8,994 | ||||||||||||||||||||||||||||
| % Change Actual vs. 10-Year Avg. |
10.4 | % | 3.4 | % | 6.5 | % | 1.1 | % | ||||||||||||||||||||||||
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|||||||||||||||||||||||||
| WEATHER—HEATING DEGREE DAYS |
||||||||||||||||||||||||||||||||
| Actual |
2,184 | 2,801 | (617 | ) | -22.0 | % | 5,646 | 6,794 | (1,148 | ) | -16.9 | % | ||||||||||||||||||||
| 10-Year Average |
2,517 | 2,559 | 6,329 | 6,399 | ||||||||||||||||||||||||||||
| % Change Actual vs. 10-Year Avg. |
-13.2 | % | 9.5 | % | -10.8 | % | 6.2 | % | ||||||||||||||||||||||||
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|||||||||||||||||||||||||
Retail Margin Revenues, a non-GAAP financial measure, should not be considered as an alternative to Total Retail Revenues, which is determined in accordance with GAAP. Retail Margin Revenues exclude revenues collected from retail customers that are directly offset by expenses recorded in other line items. We believe the change in Retail Margin Revenues between periods provides useful information to investors because it demonstrates the underlying revenue trend and performance of our core utility business. Retail Margin Revenues represents the portion of retail operating revenues available to cover the operating expenses of our core utility business.
UNS Electric
9
UNS GAS—OPERATING STATISTICS
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2012 | 2011 | Incr (Decr) | % Change | 2012 | 2011 | Incr (Decr) | % Change | |||||||||||||||||||||||||
| AVG. GAS CUSTOMERS |
||||||||||||||||||||||||||||||||
| Residential |
135,707 | 134,673 | 1,034 | 0.8 | % | 134,998 | 134,227 | 771 | 0.6 | % | ||||||||||||||||||||||
| Commercial |
11,357 | 11,282 | 75 | 0.7 | % | 11,302 | 11,243 | 59 | 0.5 | % | ||||||||||||||||||||||
| Industrial |
22 | 22 | — | 0.0 | % | 22 | 22 | — | 0.0 | % | ||||||||||||||||||||||
| Other |
1,118 | 1,122 | (4 | ) | -0.4 | % | 1,120 | 1,117 | 3 | 0.3 | % | |||||||||||||||||||||
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|||||||||||||||||
| Total |
148,204 | 147,099 | 1,105 | 0.8 | % | 147,442 | 146,609 | 833 | 0.6 | % | ||||||||||||||||||||||
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|||||||||||||||||
| RETAIL SALES—THOUSANDS OF THERMS |
||||||||||||||||||||||||||||||||
| Residential |
22,732 | 25,830 | (3,098 | ) | -12.0 | % | 67,166 | 73,925 | (6,759 | ) | -9.1 | % | ||||||||||||||||||||
| Commercial |
9,586 | 10,208 | (622 | ) | -6.1 | % | 29,326 | 31,091 | (1,765 | ) | -5.7 | % | ||||||||||||||||||||
| Industrial |
652 | 719 | (67 | ) | -9.3 | % | 2,015 | 2,374 | (359 | ) | -15.1 | % | ||||||||||||||||||||
| Other |
1,951 | 2,349 | (398 | ) | -16.9 | % | 5,757 | 6,614 | (857 | ) | -13.0 | % | ||||||||||||||||||||
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|||||||||||||||||
| Total |
34,921 | 39,106 | (4,185 | ) | -10.7 | % | 104,264 | 114,004 | (9,740 | ) | -8.5 | % | ||||||||||||||||||||
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|||||||||||||||||
| RETAIL USAGE—THERMS/CUSTOMER |
||||||||||||||||||||||||||||||||
| Residential |
168 | 192 | (24 | ) | -12.5 | % | 498 | 551 | (53 | ) | -9.6 | % | ||||||||||||||||||||
| Commercial |
844 | 905 | (61 | ) | -6.7 | % | 2,595 | 2,765 | (170 | ) | -6.1 | % | ||||||||||||||||||||
| Industrial |
29,636 | 32,682 | (3,046 | ) | -9.3 | % | 91,591 | 107,909 | (16,318 | ) | -15.1 | % | ||||||||||||||||||||
| Other |
1,745 | 2,094 | (349 | ) | -16.7 | % | 5,140 | 5,921 | (781 | ) | -13.2 | % | ||||||||||||||||||||
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|||||||||||||||||
| Total |
236 | 266 | (30 | ) | -11.3 | % | 707 | 778 | (71 | ) | -9.1 | % | ||||||||||||||||||||
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|||||||||||||||||
| RETAIL REVENUES—MILLIONS |
||||||||||||||||||||||||||||||||
| Margin Revenues: |
||||||||||||||||||||||||||||||||
| Residential |
$ | 11.7 | $ | 12.3 | ($ | 0.6 | ) | -4.9 | % | $ | 38.3 | $ | 39.7 | ($ | 1.4 | ) | -3.5 | % | ||||||||||||||
| Commercial |
3.4 | 3.4 | — | 0.0 | % | 10.8 | 10.7 | 0.1 | 0.9 | % | ||||||||||||||||||||||
| All Other |
0.7 | 0.7 | — | 0.0 | % | 2.1 | 2.2 | (0.1 | ) | -4.5 | % | |||||||||||||||||||||
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|||||||||||||||||
| Total Margin Revenues |
$ | 15.8 | $ | 16.4 | ($ | 0.6 | ) | -3.7 | % | $ | 51.2 | $ | 52.6 | ($ | 1.4 | ) | -2.7 | % | ||||||||||||||
| DSM Revenues |
0.4 | 0.3 | 0.1 | 33.3 | % | 1.1 | 1.1 | — | 0.0 | % | ||||||||||||||||||||||
| Transport/NSP Revenues |
3.7 | 4.0 | (0.3 | ) | -7.5 | % | 15.9 | 16.6 | (0.7 | ) | -4.2 | % | ||||||||||||||||||||
| Fuel Revenues: |
||||||||||||||||||||||||||||||||
| Recovered from Customers |
18.1 | 25.8 | (7.7 | ) | -29.8 | % | 59.9 | 77.3 | (17.4 | ) | -22.5 | % | ||||||||||||||||||||
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|||||||||||||||||
| Total Gas Revenues |
$ | 38.0 | $ | 46.5 | ($ | 8.5 | ) | -18.3 | % | $ | 128.1 | $ | 147.6 | ($ | 19.5 | ) | -13.2 | % | ||||||||||||||
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|||||||||||||||||
| WEATHER—HEATING DEGREE DAYS |
||||||||||||||||||||||||||||||||
| Actual |
7,358 | 8,407 | (1,049 | ) | -12.5 | % | 19,026 | 21,484 | (2,458 | ) | -11.4 | % | ||||||||||||||||||||
| 10-Year Average |
7,896 | 8,017 | 20,567 | 20,759 | ||||||||||||||||||||||||||||
| % Change Actual vs. 10-Year Avg. |
-6.8 | % | 4.9 | % | -7.5 | % | 3.5 | % | ||||||||||||||||||||||||
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|||||||||||||||||||||||||
Retail Margin Revenues, a non-GAAP financial measure, should not be considered as an alternative to Total Gas Revenues, which is determined in accordance with GAAP. Retail Margin Revenues excludes revenues collected from retail customers that are directly offset by expenses recorded in other line items. We believe the change in Retail Margin Revenues between periods provides useful information to investors because it demonstrates the underlying revenue trend and performance of our core utility business. Retail Margin Revenues represents the portion of retail operating revenues available to cover the operating expenses of our core utility business.
UNS Gas
10
UNS ENERGY BASIC AND DILUTED SHARES OUTSTANDING
| Years Ended December 31, | ||||||||||||
| 2012 | 2011 | 2010 | ||||||||||
| -Thousands of Dollars- | ||||||||||||
| Numerator: |
||||||||||||
| Net Income |
$ | 90,919 | $ | 109,975 | $ | 112,984 | ||||||
| Income from Assumed Conversion of Convertible Senior Notes |
1,100 | 4,390 | 4,390 | |||||||||
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|||||||
| Adjusted Numerator |
$ | 92,019 | $ | 114,365 | $ | 117,374 | ||||||
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|||||||
| Denominator: |
||||||||||||
| Weighted-Average Shares of Common Stock Outstanding: |
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| Common Shares Issued |
40,212 | 36,780 | 36,200 | |||||||||
| Participating Securities |
— | 53 | 92 | |||||||||
| Fully Vested Deferred Stock Units |
150 | 129 | 123 | |||||||||
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| Total Weighted-Average Shares of Common Stock Outstanding and Participating Securities—Basic |
40,362 | 36,962 | 36,415 | |||||||||
| Effect of Dilutive Securities: |
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| Convertible Senior Notes |
1,062 | 4,281 | 4,178 | |||||||||
| Options and Stock Issuable Under Share-Based Compensation Plans |
331 | 366 | 448 | |||||||||
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| Total Shares—Diluted |
41,755 | 41,609 | 41,041 | |||||||||
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The following table shows the number of stock options excluded from the diluted EPS computation because the stock option’s exercise price was greater than the average market price of the Common Stock:
| Years Ended December 31, | ||||||||||||
| 2012 | 2011 | 2010 | ||||||||||
| -Thousands of Shares- | ||||||||||||
| Stock Options Excluded from the Diluted EPS Computation |
50 | 153 | 212 | |||||||||
Diluted Share Count
11