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UniSource Energy Corp. Reports Operating Results (10-Q)

August 05, 2010 | About:
10qk

10qk

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UniSource Energy Corp. (UNS) filed Quarterly Report for the period ended 2010-06-30.

Unisource Energy Corp. has a market cap of $1.17 billion; its shares were traded at around $32.54 with a P/E ratio of 11 and P/S ratio of 0.8. The dividend yield of Unisource Energy Corp. stocks is 4.8%. Unisource Energy Corp. had an annual average earning growth of 0.2% over the past 10 years.UNS is in the portfolios of Robert Bruce of Bruce & Co., Inc., Stanley Druckenmiller of Duquesne Capital Management, LLC, George Soros of Soros Fund Management LLC, First Pacific Advisors of First Pacific Advisors, LLC, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

UniSource Energy reported net income of $26 million in the second quarter of 2010 compared with $31 million in the second quarter of 2009. Results in the second quarter of 2010 include a $3 million after-tax loss related to the impairment of an investment at Millennium, while results in the second quarter of 2009 include a $4 million after-tax gain related to the sale of an investment by Millennium.

UniSource Energy reported net income of $46 million in the first six months of 2010 compared with $36 million in the same period last year. Results in first six months of 2010 include a $3 million after-tax loss related to the impairment of an investment at Millennium, while results in the first six months of 2009 include a $4 million after-tax gain related to the sale of an investment by Millennium.

In the first six months of 2010, net cash flows from operating activities were $25 million lower than the same period last year due primarily to: a $31 million decrease in cash flows from electric and gas sales, net of fuel and purchased power costs, due primarily to customer refunds of over-collected fuel and purchased power costs at UNS Gas and UNS Electric; and $17 million of income tax refunds received in 2009; partially offset by a $15 million increase in proceeds from the operation of Springerville Units 3 and 4; and an $11 million decrease in operations and maintenance costs.

Net cash flows used for investing activities decreased by approximately $40 million in the first six months of 2010 compared with the same period last year. The decrease resulted primarily from: a $21 million increase in lease debt principal received in the first six months of 2010 compared with the same period last year; a $31 million investment in lease debt made during the first six months of 2009; the sale of an interest in a Millennium investment that resulted in $5 million of proceeds in the first six months of 2009; and insurance proceeds of $4 million during the first six months of 2009.

Net cash flows from financing activities were $28 million lower in the first six months of 2010 compared with the same period last year due primarily to: a $30 million increase in payments on TEPs capital lease obligations; a $30 million decrease in proceeds from short-term debt; a $7 million increase in dividends paid to shareholders and a $15 million increase in repayments of long-term debt. Those activities were partially offset by long-term debt proceeds of $40 million; and an $11 million increase in proceeds from revolving credit facilities (net of repayments). See TEP, Liquidity and Capital Resources, Financing Activities, TEP Term Loan, and Other Non-Reportable Business Segments, Results of Operations, UED below for more information.

The UniSource Credit Agreement, which expires in August 2011, consists of a $30 million amortizing term loan facility and a $70 million revolving credit facility. Principal payments of $1.5 million on the outstanding term loan are due quarterly, with the balance due at maturity. At June 30, 2010, there was $6 million outstanding under the term loan facility and $54 million outstanding under the UniSource Energy revolving credit facility at a weighted average interest rate of 1.61%. We have the option of paying interest on the term loan and on borrowings under the revolving credit facility at adjusted LIBOR plus 1.25% or the sum of the greater of the federal funds rate plus 0.5% or the agent banks reference rate and 0.25%.

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