UNS Energy Corp - FORM 8-K - EX-99.2 - EXHIBIT-99.2

Attached files

file	filename
8-K - 8-K - UNS Energy Corp	coverpage.htm
EX-99.1 - EXHIBIT-99.1 - UNS Energy Corp	ex9916302013.htm
EX-99.3 - EX-99.3 - UNS Energy Corp	exhibit993q2webcastslide.htm

Exhibit 99.2

UNS Energy Corporation

2nd Quarter 2013 Supplemental Earnings Information

As of July 30, 2013



TABLE OF CONTENTS
Safe Harbor and Non-GAAP Measures	1
Variance Explanation	2
UNS Energy and TEP O&M	4
TEP Operating Statistics	5
TEP Margin Revenues	7
UNS Electric Operating Statistics	9
UNS Gas Operating Statistics	11
Basic & Diluted Shares Outstanding	13

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 retiree 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 2ND QUARTER EARNINGS VARIANCE EXPLANATION



2nd Quarter 2012 UNS Energy Net Income													$	26.3
	2nd Quarter						Change
TEP	2013			2012			Pre-Tax			After Tax
	Millions of Dollars
Utility Gross Margin Components:
Retail Margin Revenues⁽¹⁾	$	145.2		$	146.3		$	(1.1	)	(0.7		)
L-T Wholesale Margin Revenues⁽¹⁾	1.3			—			1.3			0.8
Transmission Revenues	3.7			3.9			(0.2		)	(0.1		)
Total	150.2			150.2			—			—
Other Income Sources:
Operating synergies—Springerville Units 3&4	5.5			5.8			(0.3		)	(0.2		)
Expenses:
Base O&M⁽¹⁾	61.2			59.5			1.7			1.0
Depreciation	28.9			27.5			1.4			0.9
Amortization	9.1			10.0			(0.9		)	(0.6		)
PPFAC Adjustment⁽²⁾	3.0			—			3.0			1.8
Total Other Deductions (Income)	1.1			0.7			0.4			0.2
Total Interest Expense	19.9			21.3			(1.4		)	(0.9		)
Other Line Item Changes	—			0.9			(0.9		)	(0.6		)
Income Tax Expense⁽³⁾	1.7			14.2			NM			(12.5		)
TEP Net Income (GAAP)	$	30.8		$	21.9		NM			$	8.9
Change in TEP Net Income													8.9
Other Business Segments—After Tax Amounts
UNS Electric Net Income	$	3.8		$	4.5		NM			$	(0.7	)
UNS Gas Net Income	0.3			—			NM			0.3
Millennium Energy Holdings Net Income	0.1			0.4			NM			(0.3		)
Other and Consolidating Adjustments	(0.4		)	(0.5		)	NM			0.1
Total Net Income from Other Business Segments and Consolidating Adjustments	$	3.8		$	4.4		NM			$	(0.6	)
Change in UNS Electric, UNS Gas, Millennium Energy Holdings and Other Net Income													(0.6		)
2nd Quarter 2013 UNS Energy Net Income													$	34.6

⁽¹⁾ Retail Margin Revenues, Long-Term Wholesale Margin and Base O&M are all non-GAAP measures. See the following pages for a reconciliation of these non-GAAP measures.

⁽²⁾ A one-time credit to retail customers that was approved in TEP's recently completed rate case, recorded to fuel expense during the second quarter of 2013.

⁽³⁾A reduction to income tax expense related to a regulatory asset that was recorded during the second quarter of 2013 for deferred tax expenses that will be recovered in future periods.

UNS ENERGY YEAR TO DATE EARNINGS VARIANCE EXPLANATION



YTD June 30, 2012 UNS Energy Net Income													$	32.7
	YTD June 30,						Change
TEP	2013			2012			Pre-Tax			After Tax
	Millions of Dollars
Utility Gross Margin Components:
Retail Margin Revenues⁽¹⁾	$	255.1		$	251.7		$	3.4		2.1
L-T Wholesale Margin Revenues⁽¹⁾	3.6			1.9			1.7			1.0
Transmission Revenues	7.6			7.8			(0.2		)	(0.1		)
Total	266.3			261.4			4.9			3.0
Other Income Sources:
Operating synergies—Springerville Units 3&4	10.9			11.5			(0.6		)	(0.4		)
Expenses:
Base O&M⁽¹⁾	121.7			119.9			1.8			1.1
Depreciation	57.4			55.0			2.4			1.5
Amortization	18.3			19.6			(1.3		)	(0.8		)
PPFAC Adjustment⁽²⁾	3.0			—			3.0			1.8
Total Other Deductions (Income)	1.1			(0.3		)	1.4			0.9
Total Interest Expense	39.9			43.6			(3.7		)	(2.3		)
Other Line Item Changes	0.6			2.4			(1.8		)	(1.1		)
Income Tax Expense⁽³⁾	2.9			12.3			NM			(9.4		)
TEP Net Income (GAAP)	$	32.3		$	20.4		NM			$	11.9
Change in TEP Net Income													11.9
Other Business Segments—After Tax Amounts
UNS Electric Net Income	$	6.1		$	7.3		NM			$	(1.2	)
UNS Gas Net Income	7.6			5.4			NM			2.2
Millennium Energy Holdings Net Income	0.4			1.2			NM			(0.8		)
Other and Consolidating Adjustments	(0.4		)	(1.6		)	NM			1.2
Total Net Income from Other Business Segments and Consolidating Adjustments	$	13.7		$	12.3		NM			$	1.4
Change in UNS Electric, UNS Gas, Millennium Energy Holdings and Other Net Income													1.4
YTD June 30, 2013 UNS Energy Net Income													$	46.0

⁽¹⁾ Retail Margin Revenues, Long-Term Wholesale Margin and Base O&M are all non-GAAP measures. See the following pages for a reconciliation of these non-GAAP measures.

⁽²⁾ A one-time credit to retail customers that was approved in TEP's recently completed rate case, recorded to fuel expense during the second quarter of 2013.

⁽³⁾A reduction to income tax expense related to a regulatory asset that was recorded during the second quarter of 2013 for deferred tax expenses that will be recovered in future periods.

UNS ENERGY AND TEP O&M



UNS Energy	Quarter Ended June 30,				YTD June 30,
O&M Components	2013		2012		2013		2012
	Millions of Dollars				Millions of Dollars
UNS Energy Base O&M (Non-GAAP) ⁽¹⁾	71.1		68.1		$	140.4	$	137.0
Reimbursed O&M Related to Springerville Units 3 and 4	16.5		13.3		30.3		26.6
O&M Related to Customer-funded Renewable Energy and DSM Programs	7.5		9.5		14.3		21.6
UNS Energy O&M (GAAP)	$	95.1	$	90.9	$	185.0	$	185.2



TEP	Quarter Ended June 30,						YTD June 30,
O&M Components	2013			2012			2013			2012
	Millions of Dollars						Millions of Dollars
TEP Base O&M (Non-GAAP) ⁽¹⁾	$	61.2		$	59.5		$	121.7		$	119.9
O&M Included in Other Expense	(1.7		)	(1.2		)	(3.5		)	(2.1		)
Reimbursed O&M Related to Springerville Units 3 and 4	16.5			13.3			30.3			26.6
O&M Related to Customer-funded Renewable Energy and DSM Programs	6.0			7.1			11.3			16.7
TEP O&M (GAAP)	$	82.0		$	78.7		$	159.8		$	161.1

⁽¹⁾ 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.

TEP—OPERATING STATISTICS



	Three Months Ended June 30,
	2013			2012			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential	370,406			367,824			2,582			0.7	%
Commercial	36,258			36,226			32			0.1	%
Industrial	620			633			(13		)	(2.1	)%
Mining	2			2			—			—	%
Other	62			62			—			—	%
Total	407,348			404,747			2,601			0.6	%
RETAIL SALES—MWH
Residential	1,001,793			1,022,359			(20,566		)	(2.0	)%
Commercial	536,754			538,608			(1,854		)	(0.3	)%
Industrial	542,602			543,750			(1,148		)	(0.2	)%
Mining	258,495			269,814			(11,319		)	(4.2	)%
Other	69,797			65,449			4,348			6.6	%
Total	2,409,441			2,439,980			(30,539		)	(1.3	)%
RETAIL USAGE—KWH/CUSTOMER
Residential	2,705			2,779			(74		)	(2.7	)%
Commercial	14,804			14,868			(64		)	(0.4	)%
Industrial	875,165			859,005			16,160			1.9	%
Mining	129,247,500			134,907,000			(5,659,500		)	(4.2	)%
Other	1,125,758			1,055,629			70,129			6.6	%
Total	5,915			6,028			(113		)	(1.9	)%
WEATHER—COOLING DEGREE DAYS
Actual	577			566			11			1.9	%
10-Year Average	463			452
% Change Actual vs. 10-Year Avg.	24.6		%	25.2		%
ENERGY MARKET INDICATORS
Avg. Wholesale Power Prices
Palo Verde Index—$/MWh
On Peak	$	37.70		$	25.62		$	12.08		47.2	%
Off Peak	$	27.36		$	16.35		$	11.01		67.3	%
Avg. Natural Gas Prices
Permian Index—$/MMBtu	$	3.84		$	2.19		$	1.65		75.3	%

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

TEP—OPERATING STATISTICS



	Six Months Ended June 30,
	2013			2012			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential	370,096			367,615			2,481			0.7	%
Commercial	36,235			36,212			23			0.1	%
Industrial	624			633			(9		)	(1.4	)%
Mining	2			2			—			—	%
Other	62			62			—			—	%
Total	407,019			404,524			2,495			0.6	%
RETAIL SALES—MWH
Residential	1,794,774			1,752,698			42,076			2.4	%
Commercial	939,423			934,179			5,244			0.6	%
Industrial	1,016,051			1,012,703			3,348			0.3	%
Mining	528,154			542,794			(14,640		)	(2.7	)%
Other	126,509			115,649			10,860			9.4	%
Total	4,404,911			4,358,023			46,888			1.1	%
RETAIL USAGE—KWH/CUSTOMER
Residential	4,849			4,768			81			1.7	%
Commercial	25,926			25,797			129			0.5	%
Industrial	1,628,287			1,599,847			28,440			1.8	%
Mining	264,077,000			271,397,000			(7,320,000		)	(2.7	)%
Other	2,040,468			1,865,306			175,162			9.4	%
Total	10,822			10,773			49			0.5	%
WEATHER—COOLING DEGREE DAYS
Actual	577			566			11			1.9	%
10-Year Average	464			453
% Change Actual vs. 10-Year Avg.	24.4		%	24.9		%
ENERGY MARKET INDICATORS
Avg. Wholesale Power Prices
Palo Verde Index—$/MWh
On Peak	$	34.85		$	25.31		$	9.54		37.7	%
Off Peak	$	26.97		$	17.78		$	9.19		51.7	%
Avg. Natural Gas Prices
Permian Index—$/MMBtu	$	3.63		$	2.29		$	1.34		58.5	%

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

TEP—RETAIL AND WHOLESALE MARGIN REVENUES



	Three Months Ended June 30,
	2013		2012		Incr (Decr)			% Change
RETAIL REVENUES—$ MILLIONS
Retail Margin Revenues:⁽¹⁾
Residential	$	65.5	$	66.9	(1.4		)	(2.1	)%
Commercial	44.0		44.2		(0.2		)	(0.5	)%
Industrial	24.1		23.9		0.2			0.8	%
Mining	8.0		8.0		—			—	%
Other	3.6		3.3		0.3			9.1	%
Total	$	145.2	$	146.3	$	(1.1	)	(0.8	)%
RES & DSM Revenues	11.8		9.6		2.2			22.9	%
Fuel and Purchased Power Revenues:
Recovered from Customers	86.6		91.9		(5.3		)	(5.8	)%
Total Retail Revenues	$	243.6	$	247.8	$	(4.2	)	(1.7	)%
RETAIL REVENUES—CENTS / KWH
Average Retail Margin Rate (Cents/kWh):
Residential	6.54		6.54		—			—	%
Commercial	8.20		8.21		(0.01		)	(0.1	)%
Industrial	4.44		4.40		0.04			0.9	%
Mining	3.09		2.97		0.12			4.0	%
Other	5.16		5.04		0.12			2.4	%
Average Retail Margin Revenue	6.03		6.00		0.03			0.5	%
Average RES & DSM Revenue	0.49		0.39		0.10			25.6	%
Average Fuel and Purchased Power Revenue
Recovered from Customers	3.59		3.77		(0.18		)	(4.8	)%
Total Average Retail Revenue	10.11		10.16		(0.05		)	(0.5	)%
LONG-TERM WHOLESALE MARGIN (Non-GAAP)—$ MILLIONS⁽²⁾
Long-Term Wholesale Margin Revenues (Non-GAAP)	$	1.3	$	—	$	1.3		N/M
Fuel and Purchased Power Expense Allocated to Long-Term Wholesale Revenues	4.0		4.9		(0.9		)	(18.4	)%
Long-Term Wholesale Revenues	$	5.3	$	4.9	$	0.4		8.2	%
Wholesale Transmission Revenues	3.7		3.9		(0.2		)	(5.1	)%
Short-term Wholesale Revenues	20.5		13.5		7.0			51.9	%
Electric Wholesale Sales (GAAP)	$	29.5	$	22.3	$	7.2		32.3	%

⁽¹⁾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.

⁽²⁾ 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.

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

TEP—RETAIL AND WHOLESALE MARGIN REVENUES



	Six Months Ended June 30,
	2013		2012		Incr (Decr)			% Change
RETAIL REVENUES—$ MILLIONS
Retail Margin Revenues:⁽¹⁾
Residential	$	115.5	$	113.0	2.5			2.2	%
Commercial	75.3		74.9		0.4			0.5	%
Industrial	43.5		43.5		—			—	%
Mining	14.5		14.5		—			—	%
Other	6.3		5.8		0.5			8.6	%
Total	$	255.1	$	251.7	$	3.4		1.4	%
RES & DSM Revenues	22.6		21.4		1.2			5.6	%
Fuel and Purchased Power Revenues
Recovered from Customers	150.8		141.0		9.8			7.0	%
Total Retail Revenues	$	428.5	$	414.1	$	14.4		3.5	%
RETAIL REVENUES—CENTS / KWH
Average Retail Margin Rate (Cents/kWh):
Residential	6.44		6.45		(0.01		)	(0.2	)%
Commercial	8.02		8.02		—			—	%
Industrial	4.28		4.30		(0.02		)	(0.5	)%
Mining	2.75		2.67		0.08			3.0	%
Other	4.98		5.02		(0.04		)	(0.8	)%
Average Retail Margin Revenue	5.79		5.78		0.01			0.2	%
Average RES & DSM Revenue	0.51		0.49		0.02			4.1	%
Average Fuel and Purchased Power Revenue
Recovered from Customers	3.42		3.24		0.18			5.6	%
Total Average Retail Revenue	9.72		9.51		0.21			2.2	%
LONG-TERM WHOLESALE MARGIN (Non-GAAP)—$ MILLIONS⁽²⁾
Long-Term Wholesale Margin Revenues (Non-GAAP)	$	3.6	$	1.9	$	1.7		89.5	%
Fuel and Purchased Power Expense Allocated to Long-Term Wholesale Revenues	9.5		9.7		(0.2		)	(2.1	)%
Long-Term Wholesale Revenues	$	13.1	$	11.6	$	1.5		12.9	%
Wholesale Transmission Revenues	7.6		7.8		(0.2		)	(2.6	)%
Short-term Wholesale Revenues	43.2		32.6		10.6			32.5	%
Electric Wholesale Sales (GAAP)	$	63.9	$	52.0	$	11.9		22.9	%

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

UNS ELECTRIC—OPERATING STATISTICS



	Three Months Ended June 30,
	2013			2012			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential	81,338			80,795			543			0.7	%
Commercial	10,562			10,448			114			1.1	%
Industrial	18			21			(3		)	(14.3	)%
Mining	2			2			—			—	%
Other	533			475			58			12.2	%
Total	92,453			91,741			712			0.8	%
RETAIL SALES—MWH
Residential	201,169			204,528			(3,359		)	(1.6	)%
Commercial	169,498			167,466			2,032			1.2	%
Industrial	49,030			55,202			(6,172		)	(11.2	)%
Mining	16,032			27,584			(11,552		)	(41.9	)%
Other	372			378			(6		)	(1.6	)%
Total	436,101			455,158			(19,057		)	(4.2	)%
RETAIL USAGE—KWH/CUSTOMER
Residential	2,473			2,531			(58		)	(2.3	)%
Commercial	16,048			16,029			19			0.1	%
Industrial	2,723,889			2,628,667			95,222			3.6	%
Mining	8,016,000			13,792,000			(5,776,000		)	(41.9	)%
Other	698			796			(98		)	(12.3	)%
Total	4,717			4,961			(244		)	(4.9	)%
RETAIL REVENUES—MILLIONS
Retail Margin Revenues:
Residential	$	7.8		$	7.9		$	(0.1	)	(1.3	)%
Commercial	7.7			7.8			(0.1		)	(1.3	)%
Industrial	2.0			2.3			(0.3		)	(13.0	)%
Mining	1.0			1.7			(0.7		)	(41.2	)%
Other	0.1			0.1			—			—	%
Total Retail Margin Revenues (Non-GAAP)⁽¹⁾	$	18.6		$	19.8		$	(1.2	)	(6.1	)%
RES & DSM Revenues	2.0			2.7			(0.7		)	(25.9	)%
Fuel and Purchased Power Revenues	21.2			21.8			(0.6		)	(2.8	)%
Total Retail Revenues	$	41.8		$	44.3		$	(2.5	)	(5.6	)%
WEATHER—COOLING DEGREE DAYS
Actual	1,221			1,227			(6		)	(0.5	)%
10-Year Average	1,029			1,056
% Change Actual vs. 10-Year Avg.	18.7		%	16.2		%

⁽¹⁾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.

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

UNS ELECTRIC—OPERATING STATISTICS



	Six Months Ended June 30,
	2013			2012			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential	81,339			80,792			547			0.7	%
Commercial	10,547			10,433			114			1.1	%
Industrial	19			21			(2		)	(9.5	)%
Mining	2			2			—			—	%
Other	532			455			77			16.9	%
Total	92,439			91,703			736			0.8	%
RETAIL SALES—MWH
Residential	391,381			375,226			16,155			4.3	%
Commercial	297,123			298,526			(1,403		)	(0.5	)%
Industrial	91,379			108,445			(17,066		)	(15.7	)%
Mining	29,232			55,185			(25,953		)	(47.0	)%
Other	927			808			119			14.7	%
Total	810,042			838,190			(28,148		)	(3.4	)%
RETAIL USAGE—KWH/CUSTOMER
Residential	4,812			4,644			168			3.6	%
Commercial	28,171			28,614			(443		)	(1.5	)%
Industrial	4,809,421			5,164,048			(354,627		)	(6.9	)%
Mining	14,616,000			27,592,500			(12,976,500		)	(47.0	)%
Other	1,742			1,776			(34		)	(1.9	)%
Total	8,763			9,140			(377		)	(4.1	)%
RETAIL REVENUES—MILLIONS
Retail Margin Revenues:
Residential	$	15.1		$	14.5		$	0.6		4.1	%
Commercial	14.0			14.1			(0.1		)	(0.7	)%
Industrial	3.9			4.6			(0.7		)	(15.2	)%
Mining	2.5			3.4			(0.9		)	(26.5	)%
Other	0.1			0.1			—			—	%
Total Retail Margin Revenues (Non-GAAP)⁽¹⁾	$	35.6		$	36.7		$	(1.1	)	(3.0	)%
RES & DSM Revenues	3.7			5.6			(1.9		)	(33.9	)%
Fuel and Purchased Power Revenues	38.5			41.1			(2.6		)	(6.3	)%
Total Retail Revenues	$	77.8		$	83.4		$	(5.6	)	(6.7	)%
WEATHER—COOLING DEGREE DAYS
Actual	1,304			1,274			30			2.4	%
10-Year Average	1,074			1,101
% Change Actual vs. 10-Year Avg.	21.4		%	15.7		%

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

UNS GAS —OPERATING STATISTICS



	Three Months Ended June 30,
	2013			2012			Incr (Decr)			% Change
AVG. GAS CUSTOMERS
Residential	136,028			134,618			1,410			1.0	%
Commercial	11,368			11,287			81			0.7	%
Industrial	22			22			—			—	%
All Other	1,105			1,123			(18		)	(1.6	)%
Total	148,523			147,050			1,473			1.0	%
RETAIL SALES—THOUSANDS OF THERMS
Residential	8,815			8,621			194			2.3	%
Commercial	5,141			5,015			126			2.5	%
Industrial	554			462			92			19.9	%
All Other	715			652			63			9.7	%
Total	15,225			14,750			475			3.2	%
RETAIL USAGE—THERMS/CUSTOMER
Residential	65			64			1			1.6	%
Commercial	452			444			8			1.8	%
Industrial	25,182			21,000			4,182			19.9	%
All Other	647			581			66			11.4	%
Total	103			100			3			3.0	%
RETAIL REVENUES—MILLIONS
Retail Margin Revenues:
Residential	$	7.1		$	6.9		$	0.2		2.9	%
Commercial	2.1			2.1			—			—	%
All Other	0.4			0.3			0.1			33.3	%
Total Retail Margin Revenues (Non-GAAP)⁽¹⁾	$	9.6		$	9.3		$	0.3		3.2	%
DSM Revenues	0.2			0.2			—			—	%
Transport/NSP Revenues	4.4			3.8			0.6			15.8	%
Fuel Revenues:
Recovered from Customers	7.6			8.2			(0.6		)	(7.3	)%
Total Gas Revenues	$	21.8		$	21.5		$	0.3		1.4	%
WEATHER—HEATING DEGREE DAYS
Actual	480			437			43			9.8	%
10-Year Average	560			551
% Change Actual vs. 10-Year Avg.	(14.3		)%	(20.7		)%

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

UNS GAS —OPERATING STATISTICS



	Six Months Ended June 30,
	2013			2012			Incr (Decr)			% Change
AVG. GAS CUSTOMERS
Residential	136,233			134,852			1,381			1.0	%
Commercial	11,426			11,327			99			0.9	%
Industrial	22			22			—			—	%
All Other	1,111			1,122			(11		)	(1.0	)%
Total	148,792			147,323			1,469			1.0	%
RETAIL SALES—THOUSANDS OF THERMS
Residential	43,701			39,378			4,323			11.0	%
Commercial	16,891			15,818			1,073			6.8	%
Industrial	1,284			1,075			209			19.4	%
All Other	3,859			3,505			354			10.1	%
Total	65,735			59,776			5,959			10.0	%
RETAIL USAGE—THERMS/CUSTOMER
Residential	321			292			29			9.9	%
Commercial	1,478			1,396			82			5.9	%
Industrial	58,364			48,864			9,500			19.4	%
All Other	3,473			3,124			349			11.2	%
Total	442			406			36			8.9	%
RETAIL REVENUES—MILLIONS
Retail Margin Revenues:
Residential	$	22.9		$	20.8		$	2.1		10.1	%
Commercial	6.1			5.6			0.5			8.9	%
All Other	1.4			1.2			0.2			16.7	%
Total Retail Margin Revenues (Non-GAAP)⁽¹⁾	$	30.4		$	27.6		$	2.8		10.1	%
DSM Revenues	0.5			0.4			0.1			25.0	%
Transport/NSP Revenues	8.7			7.4			1.3			17.6	%
Fuel Revenues:
Recovered from Customers	33.8			36.7			(2.9		)	(7.9	)%
Total Gas Revenues	$	73.4		$	72.1		$	1.3		1.8	%
WEATHER—HEATING DEGREE DAYS
Actual	2,668			2,450			218			8.9	%
10-Year Average	2,643			2,654
% Change Actual vs. 10-Year Avg.	0.9		%	(7.7		)%

⁽¹⁾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.

Note: Some items above are calculated on un-rounded data and may not precisely correspond to data shown in table.

BASIC AND DILUTED SHARES OUTSTANDING



	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	Thousands of Dollars
Numerator:
Net Income	$	34,618	$	26,273	$	45,963	$	32,749
Income from Assumed Conversion of Convertible Senior Notes ⁽¹⁾	—		237		—		1,100
Adjusted Net Income Available for Diluted Common Stock Outstanding	$	34,618	$	26,510	$	45,963	$	33,849

	Thousands of Shares
Denominator:
Weighted Average Shares of Common Stock Outstanding:
Common Shares Issued	41,427		40,322		41,404		39,107
Fully Vested Deferred Stock Units	171		149		165		144
Total Weighted Average Common Stock Outstanding – Basic	41,598		40,471		41,569		39,251
Effect of Dilutive Securities:
Convertible Senior Notes ⁽¹⁾	—		909		—		2,125
Options and Stock Issuable Under Share-Based Compensation Plans	323		250		329		270
Total Weighted Average Common Stock Outstanding – Diluted	41,921		41,630		41,898		41,646

⁽¹⁾ In 2012, the Convertible Senior Notes were converted to Common Stock or redeemed for cash.

We excluded the following outstanding stock options, with an exercise price above market, from our diluted EPS computation as their effect would be anti-dilutive:



	Three Months Ended June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
	Thousands of Shares
Stock Options	—	101	—	101

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