Tucson Electric Power 8-K Unisource Energy Reports 2010 Earnings, Increases Quarterly Dividend, and Issues Earnings Guidance for 2011

Exhibit 99.2

UniSource Energy Corporation
Supplemental Earnings & Outlook Information
February 28, 2011

TABLE OF CONTENTS

Safe Harbor and Non-GAAP Measures	1
Earnings Outlook & Assumptions	2-4
4th Quarter Earnings Variance	5
Year-End Earnings Variance	6
UniSource Energy and TEP O&M	7
TEP Operating Statistics	8
TEP Margin Revenues	9
UNS Electric Operating Statistics	10
UNS Gas Operating Statistics	11
Basic & Diluted Shares Outstanding	12

SAFE HARBOR AND NON-GAAP MEASURES

This document contains forward-looking information that involves risks and uncertainties, that 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 Operations and Maintenance (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 UniSource 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 UniSource Energy. The forecast assumptions and estimates below are not intended to be a full list of factors which could cause UniSource Energy’s future results to differ from current expectations. Please refer to UniSource 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.

1

UNISOURCE ENERGY 2011 EARNINGS OUTLOOK & ASSUMPTIONS

The table below provides key assumptions related to UniSource Energy’s estimated 2011 earnings of $2.60 to $2.90 per diluted share, as of February 28, 2011.

	Actual			Estimated
Key Assumptions	2010			2011E			2012E		2013E
UniSource Consolidated
Base O&M ($ millions)	$	265		$	272
Change vs. Prior Year		-1.6	%		2.6	%
Effective Income Tax Rate		41.0	%		38.8	%
Avg. Basic Shares Outstanding (millions)		36.4			36.8
Avg. Diluted Shares Outstanding (millions)		41.0			41.6
TEP
Retail Sales -Actual (GWh)		9,292			9,334
Change vs. Prior Year		-0.8	%		0.5	%	1.5% - 2.5% / yr
Retail Sales — Weather Normalized (GWh)		9,221
Retail Customers (Yr End)		402,793
Change vs. Prior Year		0.3	%		0.5	%	1.0% - 1.5% / yr
Long-Term Wholesale Sales (GWh)
Salt River Project (SRP)		700			785			876		876
Navajo Tribal Utility Authority (NTUA)		245			245			245		245
Long-Term Wholesale Sales-Pre-Tax Margin ($ millions)	$	28		$	19
Other Expenses ($ millions)
Capital Lease Amortization	$	14		$	13		$	13	$	14
Capital Lease Interest Expense	$	40		$	38		$	34	$	25
(Net of Interest Income on Investment in Lease Debt)
Interest Expense on Long-Term and Short-Term Debt	$	41		$	48
(Excluding Capital Lease Interest Expense)

2

	Actual			Estimated
Key Assumptions	2010			2011E			2012E	2013E
UES
UNS Gas Retail Customers (Yr End)		146,698
Change vs. Prior Year		0.3	%		0.5	%	Approx. 1.5% / yr
UNS Gas Retail Sales (Millions of Therms)		114.1			112.8
Avg. Change vs. Prior Year		5.8	%		-1.1	%	1.0 - 1.5% / yr
UNS Electric Retail Customers (Yr End)		90,881
Change vs. Prior Year		0.7	%	Flat			Approx. 1% / yr
UNS Electric Retail Sales (GWh)		1,857			1,907
Avg. Change vs. Prior Year		4.1	%		2.7	%	Approx. 1% / yr

TEP Long-Term Wholesale Sales

In 2010 and 2009, TEP’s margin on long-term wholesale sales was $28 million and $25 million, respectively. TEP’s two primary long-term wholesale contracts are with Salt River Project Agricultural Improvement and Power District (SRP) and the Navajo Tribal Utility Authority (NTUA).

SRP

Prior to June 1, 2011, under the terms of the SRP contract, TEP receives a monthly demand charge of approximately $1.8 million, or $22 million annually, and sells the energy at a price based on TEP’s average fuel cost. Beginning June 1, 2011, SRP will be required to purchase 73,000 MWhs per month, or 876,000 MWhs annually. TEP will not receive a monthly demand charge and the price of energy will be based on a slight discount to the Palo Verde Market Index. As of February 15, 2011, the average around-the-clock forward price of power on the Palo Verde Market Index for June through December 2011 was $34 MWh.

NTUA

TEP serves the portion of NTUA’s load that is not served from NTUA’s allocation of federal hydroelectric power. Over the last three years, sales to NTUA averaged 225,000 MWh. Since 2010, the price of 50% of the MWh sales from June to September has been based on the Palo Verde Market Index. In 2010, approximately 25% of the total energy sold to NTUA was priced based on the Palo Verde Market Index.

3

UNISOURCE ENERGY 2011 EARNINGS ESTIMATE SENSITIVITIES

2011 Sensitivities	Pre-Tax (millions)			After-Tax (millions)			Per Diluted Share
1% Change in Total Utility Retail Sales (Based on average margin rate across all customer classes)	$	6.0		$	3.6		$	0.09
1% Change in UNS Consolidated Base O&M	$	2.7		$	1.6		$	0.04
$5 / MWh Change in Wholesale Power Prices — SRP Contract (Contract to be market-based beginning June 2011)	$	2.6		$	1.6		$	0.04
1% Increase in Rate on TEP’s Un-hedged Long-Term Variable Rate Debt ($365 million outstanding at 12/31/10 of which $50 million is hedged)	$	(3.2	)	$	(1.9	)	$	(0.05	)

4

UNISOURCE ENERGY 4TH QUARTER EARNINGS VARIANCE EXPLANATION

4th Quarter 2009 UniSource Energy Net Income													$10.4
	4th Quarter						Change
TEP	2010			2009			Pre-Tax			After Tax
	-millions of dollars-
Retail Margin Revenues	$	117.4		$	117.5			($0.1	)		($0.1	)
L-T Wholesale Margin Revenues		7.9			6.3			1.6			0.9
Transmission Revenues		5.3			6.5			(1.2	)		(0.7	)
TEP Utility Gross Margin (Non-GAAP)		130.6			130.3			0.3			0.2
Provision for Wholesale Refunds		0.0			(4.2	)		4.2			2.5
Base O&M		65.3			57.4			7.9			4.7
Depreciation		25.4			28.4			(3.0	)		(1.8	)
Amortization		8.2			10.0			(1.8	)		(1.1	)
Operating synergies — Springerville Units 3&4		5.8			3.7			2.1			1.2
Total Other Income		1.9			2.3			(0.4	)		(0.2	)
Total Interest Expense		23.9			21.6			2.3			1.4
Other Line Item Changes		3.9			2.1			1.8			1.1
Income Tax Expense		1.6			4.6			(3.0	)		(3.0	)
TEP Net Income (GAAP)	$	10.0		$	8.0		NM			$	2.0
Change in TEP Net Income													2.0
Other Business Segments — After Tax Amounts
UNS Electric Net Income	$	2.1		$	0.0		NM			$	2.1
UNS Gas Net Income		3.3			3.8		NM				(0.5	)
Millennium Energy Holdings		(4.2	)		(1.1	)	NM				(3.1	)
Other and Consolidating Adj.		(0.1	)		(0.3	)	NM				0.2
Total Income (Loss) from Other Business Segments and Consolidating Adjustments	$	1.1		$	2.4		NM				($1.3	)
Change in UNS Electric, UNS Gas and Other													(1.3	)
4th Quarter 2010 UniSource Energy Net Income													$11.1

5 - Q4 Variance Explanation

UNISOURCE ENERGY YEAR OVER YEAR EARNINGS VARIANCE EXPLANATION

December 31, 2009 UniSource Energy Net Income													$104.3
	Year End							Change
TEP	2010			2009			Pre-Tax			After Tax
	-millions of dollars-
Retail Margin Revenues	$	550.6		$	556.0			($5.4	)		($3.2	)
L-T Wholesale Margin Revenues		28.2			25.3			2.9			1.7
Transmission Revenues		20.9			19.0			1.9			1.1
TEP Utility Gross Margin (Non-GAAP)		599.7			600.3			(0.6	)		(0.4	)
Provision for Wholesale Refunds		(3.0	)		(4.2	)		1.2			0.7
Base O&M		227.6			231.0			(3.4	)		(2.0	)
Depreciation (1)		99.5			110.0			(10.5	)		(6.2	)
Amortization (1)		32.2			38.9			(6.7	)		(4.0	)
Operating synergies — Springerville Units 3&4		23.8			12.5			11.3			6.7
Total Other Income (1)		8.9			16.6			(7.7	)		(4.5	)
Total Interest Expense (1)		87.7			87.3			0.4			0.2
Other Line Item Changes		14.3			13.7			0.6			0.4
Income Tax Expense		61.1			55.1			6.0			6.0
TEP Net Income (GAAP)	$	107.0		$	89.2		NM			$	17.8
Change in TEP Net Income													17.8
Other Business Segments — After Tax Amounts
UNS Electric Net Income (2)	$	10.3		$	5.9		NM			$	4.4
UNS Gas Net Income		8.6			7.4		NM				1.2
Millennium Energy Holdings		(13.5	)		2.4		NM				(15.9	)
Other and Consolidating Adj.		(0.9	)		(0.6	)	NM				(0.3	)
Total Other Income and Consolidating Adjustments	$	4.5		$	15.1		NM				($10.6	)
Change in UNS Electric, UNS Gas and Other													(10.6	)
December 31, 2010 UniSource Energy Net Income													$111.5

(1)

In June 2009, TEP adjusted its accounting for a 2006 investment in 14.14% of Springerville Unit 1 lease equity. As a result, TEP recorded a net increase to the income statement of $0.6 million, before tax. The adjustment recorded included additional depreciation expense of $7 million; a reduction of amortization expense of $3 million; a reduction of interest expense on capital leases of $2 million; and $3 million of equity in earnings which is included in Other Income on the income statement. For comparison purposes, these amounts have been excluded from 2009 depreciation, amortization, interest expense and other income shown above.

(2)

UNS Electric’s results in 2010 include a after-tax gain of $1.8 million related to the settlement of a dispute over transactions with the CPX.

6 - YE Variance Explanation

UNISOURCE ENERGY AND TEP O&M

UniSource Energy	4th Quarter						Year End
O&M Components	2010			2009			2010			2009
	-millions of dollars-						-millions of dollars-
TEP Base O&M (Non-GAAP)	$	65.3		$	57.4		$	227.6		$	231.0
UNS Gas Base O&M (Non-GAAP)		6.9			6.4			25.3			24.7
UNS Electric Base O&M (Non-GAAP)		5.5			6.5			20.8			20.8
Consolidating Adjustments & Other		(1.9	)		(1.4	)		(8.5	)		(7.0	)
UniSource Energy Base O&M (Non-GAAP)	$	75.8		$	68.9		$	265.2		$	269.5
Reimbursed O&M Related to Springerville Units 3 and 4		24.0			11.2			64.5			40.9
O&M Related to Customer-funded Renewable Energy and DSM Programs		11.3			10.4			40.4			23.5
UniSource Energy O&M (GAAP)	$	111.1		$	90.5		$	370.1		$	333.9

TEP	4th Quarter				Year End
O&M Components	2010		2009		2010		2009
	-millions of dollars-				-millions of dollars-
Wages, A&G, Other	$	42.9	$	40.4	$	152.4	$	149.7
Generating Plant Maintenance Expense		19.0		13.0		61.0		64.0
Pension and Postretirement Benefits Expense		3.4		4.0		14.2		17.3
TEP Base O&M (Non-GAAP)	$	65.3	$	57.4	$	227.6	$	231.0
Reimbursed O&M Related to Springerville Units 3 and 4		24.0		11.2		64.5		40.9
O&M Related to Customer-funded Renewable Energy and DSM Programs		9.8		8.1		31.4		17.9
TEP O&M (GAAP)	$	99.1	$	76.7	$	323.5	$	289.8

7 - O&M

TEP — OPERATING STATISTICS

	Three Months Ended December 31,												Year End
	2010			2009			Incr (Decr)			% Change			2010			2009			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		366,174			364,847			1,327			0.4	%		365,768			364,755			1,013			0.3	%
Commercial		35,885			35,746			139			0.4	%		35,860			35,660			200			0.6	%
Industrial		637			629			8			1.3	%		633			630			3			0.5	%
Mining		3			3			—			0.0	%		2			2			—			0.0	%
Other		62			61			1			1.6	%		62			61			1			1.6	%
Total		402,761			401,286			1,475			0.4	%		402,325			401,108			1,217			0.3	%
RETAIL SALES — MWH
Residential		760,533			776,536			(16,003	)		-2.1	%		3,869,540			3,905,696			(36,156	)		-0.9	%
Commercial		447,568			443,842			3,726			0.8	%		1,963,469			1,988,356			(24,887	)		-1.3	%
Industrial		499,249			494,167			5,082			1.0	%		2,138,749			2,160,946			(22,197	)		-1.0	%
Mining		272,755			272,039			716			0.3	%		1,079,327			1,064,830			14,497			1.4	%
Other		62,635			62,556			79			0.1	%		240,703			250,915			(10,212	)		-4.1	%
Total		2,042,740			2,049,140			(6,400	)		-0.3	%		9,291,788			9,370,743			(78,955	)		-0.8	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,077			2,128			(51	)		-2.4	%		10,579			10,708			(129	)		-1.2	%
Commercial		12,472			12,417			56			0.4	%		54,754			55,759			(1,005	)		-1.8	%
Industrial		783,750			785,639			(1,889	)		-0.2	%		3,378,750			3,430,073			(51,323	)		-1.5	%
Mining		90,918,333			90,679,667			238,667			0.3	%		539,663,500			532,415,000			7,248,500			1.4	%
Other		1,010,242			1,025,508			(15,266	)		-1.5	%		3,882,306			4,113,361			(231,054	)		-5.6	%
Total		5,072			5,106			(35	)		-0.7	%		23,095			23,362			(267	)		-1.1	%
WEATHER —COOLING DEGREE DAYS
Actual		53			28			25			89.3	%		1,543			1,599			(56	)		-3.5	%
10-Year Average		35			35									1,468			1,469
% Change Actual vs. 10-Year Avg.		51.4	%		-20.0	%								5.1	%		8.8	%
WEATHER — HEATING DEGREE DAYS
Actual		500			577			(77	)		-13.3	%		1,469			1,287			182			14.1	%
10-Year Average		559			585									1,430			1,434
% Change Actual vs. 10-Year Avg.		-10.6	%		-1.4	%								2.7	%		-10.3	%
ENERGY MARKET INDICATORS
Avg. Wholesale Power Prices
Palo Verde Index — $/MWh
On Peak	$	34.49		$	40.13			($5.64	)		-14.1	%	$	38.93		$	34.89		$	4.04			11.6	%
Off Peak	$	26.21		$	30.49			($4.28	)		-14.0	%	$	28.00		$	24.35		$	3.65			15.0	%
Avg. Natural Gas Prices
Permian Index — $/MMBtu	$	3.58		$	4.03			($0.45	)		-11.2	%	$	4.18		$	3.34		$	0.84			25.1	%

* Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table

8 - TEP Operating Stats

TEP — RETAIL AND WHOLESALE MARGIN REVENUES

	Three Months Ended December 31,										Year End
	2010		2009		Incr (Decr)			% Change			2010		2009		Incr (Decr)			% Change
RETAIL REVENUES — $ MILLIONS
Margin Revenues:
Residential	$	48.1	$	49.2		($1.1	)		-2.2	%	$	251.5	$	253.7		($2.2	)		-0.9	%
Commercial		35.7		35.3		0.4			1.2	%		159.1		159.9		(0.7	)		-0.5	%
Industrial		22.7		22.4		0.3			1.3	%		96.8		99.9		(3.1	)		-3.1	%
Mining		7.8		7.5		0.3			3.6	%		31.0		30.1		0.9			3.0	%
Other		3.1		3.1		0.0			1.0	%		12.2		12.5		(0.3	)		-2.4	%
Total	$	117.4	$	117.5		($0.1	)		-0.1	%	$	550.6	$	556.0		($5.4	)		-1.0	%
DSM / REST		8.0		15.5		(7.5	)		-48.4	%		37.8		25.4		12.4			48.7	%
Fuel Revenues:
Recovered from Customers		57.5		59.4		(1.9	)		-3.1	%		279.8		286.1		(6.3	)		-2.2	%
Total Retail Revenues	$	182.9	$	192.3		($9.4	)		-4.9	%	$	868.1	$	867.5	$	0.6			0.1	%
RETAIL REVENUES — CENTS / KWH
Margin Revenues:
Residential		6.32		6.33		(0.01	)		-0.2	%		6.50		6.49		0.00			0.1	%
Commercial		7.98		7.95		0.03			0.4	%		8.10		8.04		0.06			0.8	%
Industrial		4.54		4.53		0.01			0.3	%		4.53		4.62		(0.10	)		-2.1	%
Mining		2.86		2.77		0.09			3.3	%		2.87		2.82		0.05			1.6	%
Other		5.00		4.96		0.04			0.8	%		5.07		4.98		0.09			1.7	%
Total		5.75		5.73		0.01			0.3	%		5.93		5.93		(0.01	)		-0.1	%
DSM / REST		0.39		0.76		(0.36	)		-48.2	%		0.41		0.27		0.14			50.0	%
Fuel Revenues:
Recovered from Customers		2.81		2.90		(0.08	)		-2.8	%		3.01		3.05		(0.04	)		-1.4	%
Total Retail Revenues		8.95		9.38		(0.43	)		-4.6	%		9.34		9.26		0.09			0.9	%
LONG-TERM WHOLESALE MARGIN — $ MILLIONS
Long-term Wholesale Revenues	$	13.9	$	13.6	$	0.3			2.2	%	$	55.7	$	48.2	$	7.5			15.6	%
Fuel and Purchased Power Expense		6.0		7.3		(1.3	)		-17.8	%		27.5		22.9		4.6			20.1	%
Net	$	7.9	$	6.3	$	1.6			25.4	%	$	28.2	$	25.3	$	2.9			11.5	%

Note: Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table.

9 — TEP Margin Revenues

UNS ELECTRIC — OPERATING STATISTICS

	Three Months Ended December 31,												Year End
	2010			2009			Incr (Decr)			% Change			2010			2009			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		80,224			79,553			671			0.8	%		80,168			79,483			685			0.9	%
Commercial		10,343			10,328			15			0.1	%		10,345			10,330			15			0.1	%
Industrial		22			24			(2	)		-8.3	%		23			22			1			4.5	%
Mining		2			1			1			100.0	%		2			1			1			100.0	%
Other		258			266			(8	)		-3.0	%		264			264			—			0.0	%
Total		90,849			90,172			677			0.8	%		90,802			90,100			702			0.8	%
RETAIL SALES — MWH
Residential		167,895			162,218			5,677			3.5	%		820,352			813,796			6,556			0.8	%
Commercial		136,381			129,300			7,081			5.5	%		606,241			607,928			(1,687	)		-0.3	%
Industrial		53,770			52,712			1,058			2.0	%		219,241			196,985			22,256			11.3	%
Mining		60,054			46,831			13,223			28.2	%		209,307			163,474			45,833			28.0	%
Other		498			634			(136	)		-21.5	%		2,018			2,220			(202	)		-9.1	%
Total		418,598			391,695			26,903			6.9	%		1,857,159			1,784,403			72,756			4.1	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,093			2,039			54			2.6	%		10,233			10,239			(6	)		-0.1	%
Commercial		13,186			12,519			666			5.3	%		58,602			58,851			(248	)		-0.4	%
Industrial		2,444,091			2,196,333			247,758			11.3	%		9,532,217			8,953,864			578,354			6.5	%
Mining		NM			NM			NM			NM			NM			NM			NM			NM
Other		1,930			2,383			(453	)		-19.0	%		7,644			8,409			(765	)		-9.1	%
Total		4,608			4,344			264			6.1	%		20,453			19,805			648			3.3	%
RETAIL REVENUES — MILLIONS
Margin Revenues:
Residential	$	5.4		$	4.3		$	1.1			24.5	%	$	21.7		$	20.5		$	1.2			5.8	%
Commercial		5.9			5.1			0.8			15.7	%		22.9			22.3			0.6			2.7	%
Industrial		1.9			1.7			0.2			13.2	%		7.4			6.5			0.9			14.2	%
Mining		1.3			0.9			0.4			45.5	%		4.5			3.3			1.2			35.9	%
Other		0.0			0.1			(0.1	)		-57.3	%		0.2			0.2			0.0			0.8	%
Total Margin Revenues	$	14.5		$	12.1		$	2.4			20.1	%	$	56.7		$	52.8		$	3.9			7.4	%
DSM / REST		1.7			3.4			(1.7	)		-50.0	%		8.5			6.3			2.2			35.9	%
Fuel Revenues:
Recovered from Customers		27.2			22.3			4.9			22.0	%		117.6			121.0			(3.4	)		-2.8	%
Total Retail Revenues	$	43.4		$	37.8		$	5.6			14.9	%	$	182.8		$	180.1		$	2.8			1.5	%
WEATHER — COOLING DEGREE DAYS
Actual		580			473			107			22.6	%		8,815			9,183			(368	)		-4.0	%
10-Year Average		569			558									9,030			9,059
% Change Actual vs. 10-Year Avg.		1.9	%		-15.2	%								-2.4	%		1.4	%
WEATHER — HEATING DEGREE DAYS
Actual		2,389			2,684			(295	)		-11.0	%		6,562			6,228			334			5.4	%
10-Year Average		2,529			2,601									6,411			6,388
% Change Actual vs. 10-Year Avg.		-5.5	%		3.2	%								2.4	%		-2.5	%

* Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table

10 — UNS Electric Op. Stats

UNS GAS — OPERATING STATISTICS

	Three Months Ended December 31												Year End
	2010			2009			Incr (Decr)			% Change			2010			2009			Incr (Decr)			% Change
AVG. GAS CUSTOMERS
Residential		133,729			133,285			444			0.3	%		133,337			132,776			561			0.4	%
Commercial		11,178			11,364			(186	)		-1.6	%		11,231			11,372			(141	)		-1.2	%
Industrial		22			23			(1	)		-4.3	%		23			24			(1	)		-4.2	%
Public Authority		1,105			1,092			13			1.2	%		1,095			1,087			8			0.7	%
Total		146,034			145,764			270			0.2	%		145,686			145,259			427			0.3	%
RETAIL SALES — THOUSANDS OF THERMS
Residential		23,434			25,088			(1,654	)		-6.6	%		73,083			69,641			3,442			4.9	%
Commercial		9,273			10,018			(745	)		-7.4	%		30,209			29,622			587			2.0	%
Industrial		575			657			(82	)		-12.5	%		1,932			2,104			(172	)		-8.2	%
Public Authority		2,163			2,466			(302	)		-12.3	%		6,628			6,521			107			1.6	%
Total		35,445			38,228			(2,783	)		-7.3	%		111,852			107,888			3,965			3.7	%
RETAIL USAGE — THERMS/CUSTOMER
Residential		175			188			(13	)		-6.9	%		548			524			24			4.5	%
Commercial		830			882			(52	)		-5.9	%		2,690			2,605			85			3.3	%
Industrial		26,134			28,559			(2,425	)		-8.5	%		84,018			87,667			(3,648	)		-4.2	%
Public Authority		1,958			2,258			(300	)		-13.3	%		6,053			5,999			54			0.9	%
Total		243			262			(20	)		-7.5	%		768			743			25			3.4	%
RETAIL REVENUES — MILLIONS
Margin Revenues:
Residential	$	11.2		$	11.7			($0.5	)		-3.9	%	$	38.5		$	36.2		$	2.3			6.4	%
Commercial		3.0			3.2			(0.2	)		-5.6	%		10.1			9.7			0.5			4.8	%
Industrial		0.1			0.1			(0.0	)		-20.0	%		0.3			0.3			(0.0	)		-6.0	%
Public Authority		0.6			0.7			(0.1	)		-17.4	%		1.8			1.8			0.0			2.7	%
Total Margin Revenues	$	14.9		$	15.6			($0.8	)		-5.0	%	$	50.7		$	47.9		$	2.8			5.9	%
DSM Revenues		0.3			0.2			0.1			50.0	%		0.9			0.7			0.2			27.1	%
Transport/NSP Revenues		4.2			4.0			0.2			5.8	%		17.5			16.3			1.2			7.4	%
Fuel Revenues:
Recovered from Customers		25.7			26.3			(0.6	)		-2.3	%		76.8			84.5			(7.7	)		-9.1	%
Total Gas Revenues	$	45.1		$	46.1			($1.0	)		-2.3	%	$	145.9		$	149.4			($3.5	)		-2.3	%
WEATHER — HEATING DEGREE DAYS
Actual		9,368			10,582			(1,214	)		-11.5	%		26,257			25,487			770			3.0	%
10-Year Average		9,847			9,980									25,566			25,234
% Change Actual vs. 10-Year Avg.		-4.9	%		6.0	%								2.7	%		1.0	%

* Totals and percent changes calculated on un-rounded data; may not correspond to data shown in table

11 — UNS Gas Op. Stats

BASIC AND DILUTED SHARES OUTSTANDING

	Years Ended December 31,
		2010			2009		2008
			-In Thousands-
Numerator:
Net Income	$	111,477		$	104,258	$	14,021
Income from Assumed Conversion of Convertible Senior Notes		4,390			4,390		0
Adjusted Numerator	$	115,867		$	108,648	$	14,021
Denominator:
Weighted-average Shares of Common Stock Outstanding
Common Shares Issued		36,200			35,653		35,415
Participating Securities		92			100		0
Fully Vested Deferred Stock Units		123			105		217
Total Weighted-average Shares of Common Stock Outstanding and Participating Securities — Basic		36,415			35,858		35,632
Effect of Diluted Securities
Convertible Senior Notes		4,178			4,093		0
Options and Stock Issuable under Employee Benefit Plans and the Directors’ Plan		447			499		537
Total Shares		41,040			40,450		36,169

For the year ended December 31, 2008, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $4 million was not included in the computation of diluted EPS because to do so would be anti-dilutive.

Stock options to purchase an average of 212,000, 395,000 and 312,000 shares of Common Stock were outstanding during 2010, 2009 and 2008, respectively, but were not included in the computation of EPS because the stock option’s exercise price was greater than the average market price of the Common Stock at year end.

12 — Diluted Share Count