Uns Energy (UNS) 8-K Uns Energy Reports 2012 Earnings, Declares Dividend

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
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	)
TEP Net Income (GAAP)	$	0.5		$	1.6			NM		($	1.1	)
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
Total Net Income from Other Business Segments and Consolidating Adjustments	$	7.0		$	6.6			NM		$	0.4
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	)
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	)
TEP Net Income (GAAP)	$	65.5		$	85.3			NM		($	19.8	)
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
Total Net Income from Other Business Segments and Consolidating Adjustments	$	25.4		$	24.7			NM		$	0.7
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
UNS Energy O&M (GAAP)	$	100.1		$	97.3		$	383.7		$	379.2
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
TEP O&M (GAAP)	$	86.5		$	84.4		$	334.6		$	330.8

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	%
Total		406,197			403,957			2,240			0.6	%		405,153			403,340			1,813			0.4	%
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	%
									��
Total		2,029,291			2,060,017			(30,726	)		-1.5	%		9,264,819			9,332,108			(67,289	)		-0.7	%
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	%
Total		4,996			5,100			(104	)		-2.0	%		22,867			23,137			(270	)		-1.2	%
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	%
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	%
Total Retail Revenues	$	198.9	$	189.7	$	9.2			4.8	%	$	915.9	$	903.9	$	12.0			1.3	%
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	%
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	%
Total Retail Revenues		9.80		9.21		0.59			6.4	%		9.88		9.69		0.19			2.0	%
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	%
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	%
Electric Wholesale Sales (GAAP)	$	33.7	$	33.2	$	0.5			1.5	%	$	111.2	$	129.9	($	18.7	)		-14.4	%

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	%
Total		92,045			91,350			695			0.8	%		91,821			91,255			566			0.6	%
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	%
Total		376,744			397,076			(20,332	)		-5.1	%		1,755,541			1,852,904			(97,363	)		-5.3	%
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	%
Total		4,093			4,347			(254	)		-5.8	%		19,119			20,305			(1,186	)		-5.8	%
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	%
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	%
Total Retail Revenues	$	37.4		$	40.0			(2.6	)		-6.5	%	$	171.4		$	181.9			(10.5	)		-5.8	%
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	%
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	%

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	%
Total		148,204			147,099			1,105			0.8	%		147,442			146,609			833			0.6	%
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	%
Total		34,921			39,106			(4,185	)		-10.7	%		104,264			114,004			(9,740	)		-8.5	%
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	%
Total		236			266			(30	)		-11.3	%		707			778			(71	)		-9.1	%
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	%
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	%
Total Gas Revenues	$	38.0		$	46.5		($	8.5	)		-18.3	%	$	128.1		$	147.6		($	19.5	)		-13.2	%
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	%

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
Adjusted Numerator	$	92,019	$	114,365	$	117,374
Denominator:
Weighted-Average Shares of Common Stock Outstanding:
Common Shares Issued		40,212		36,780		36,200
Participating Securities		—		53		92
Fully Vested Deferred Stock Units		150		129		123
Total Weighted-Average Shares of Common Stock Outstanding and Participating Securities—Basic		40,362		36,962		36,415
Effect of Dilutive Securities:
Convertible Senior Notes		1,062		4,281		4,178
Options and Stock Issuable Under Share-Based Compensation Plans		331		366		448
Total Shares—Diluted		41,755		41,609		41,041

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