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Tucson Electric Power

TEP and its predecessor companies have served the greater Tucson metropolitan area for 127 years. TEP was incorporated in the State of Arizona in 1963. TEP is a regulated electric utility company serving approximately 429,000 retail customers. TEP’s service territory covers 1,155 square miles and includes a population of over one million people in Pima County, as well as parts of Cochise County. TEP's principal business operations include generating, transmitting, and distributing electricity to its retail customers. In addition to retail sales, TEP sells electricity, transmission, and ancillary services to other utilities, municipalities, and energy marketing companies on a wholesale basis. TEP is subject to comprehensive state and federal regulation. The regulated electric utility operation is TEP's only segment. TEP is a wholly owned subsidiary of UNS Energy, a utility services holding company. UNS Energy is an indirect wholly owned subsidiary of Fortis which is a leader in the North American electric and gas utility business.

Calendar

12 Feb 21
21 Apr 21
31 Dec 21
Quarter (USD)
Dec 20 Sep 20 Jun 20 Mar 20
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD)
Dec 20 Dec 19 Dec 18 Dec 17
Revenue
Cost of revenue
Operating income
Operating margin
Net income
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Diluted EPS

Financial data from company earnings reports.

Cash burn rate (estimated) Burn method: Change in cash Burn method: Operating income/loss Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 82M 82M 82M 82M 82M 82M
Cash burn (monthly) 32.82M (positive/no burn) (positive/no burn) (positive/no burn) (positive/no burn) (positive/no burn)
Cash used (since last report) 121.5M n/a n/a n/a n/a n/a
Cash remaining -39.5M n/a n/a n/a n/a n/a
Runway (months of cash) -1.2 n/a n/a n/a n/a n/a

Beta Read what these cash burn values mean

Financial report summary

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Risks
  • A significant decrease in the demand for electricity in TEP's service area would negatively impact retail sales and adversely affect results of operations, net income, and cash flows at TEP.
  • The revenues, results of operations, and cash flows of TEP are seasonal and are subject to weather conditions and customer usage patterns, which are beyond the Company’s control.
  • TEP is dependent on a small number of customers for a significant portion of future revenues. A reduction in the electricity sales to these customers would negatively affect results of operations, net income, and cash flows at TEP.
  • TEP's business is significantly impacted by government legislation, regulation and oversight. TEP's inability to recover its costs, earn a reasonable return on its investments, or comply with current regulations would negatively affect its results of operations, net income, and cash flows.
  • Changes made to legislation, regulation, or regulatory structure could negatively affect TEP's results of operations, net income, and cash flows.
  • Early closure of TEP's coal-fired generation facilities could result in TEP recognizing regulatory impairments or increased cost of operations if recovery of TEP's remaining investments in such facilities and the costs associated with early closures are not permitted through rates charged to customers.
  • Volatility or disruptions in the financial markets, rising interest rates, or unanticipated financing needs, could increase TEP's financing costs, limit access to the credit or bank markets, affect the Company's ability to comply with financial covenants in debt agreements, and increase TEP's pension funding obligations. Such outcomes may negatively affect liquidity and TEP's ability to carry out the Company's financial strategy.
  • Generation facility closings or changes in power flows into TEP's service territory could require us to redeem or defease some or all of the tax-exempt bonds issued for the Company's benefit, which could result in increased financing costs.
  • The operation of generation facilities and transmission and distribution systems involves risks and uncertainties that could result in reduced generation capability or unplanned outages that could negatively affect TEP’s results of operations, net income, and cash flows.
  • The operation of generation facilities and transmission systems on Indian lands may create operational and financial risks for TEP that, if realized, could negatively affect TEP’s results of operations, net income, and cash flows.
  • TEP receives power from certain generation facilities that are jointly-owned with, or operated by, third parties. Therefore, TEP may not have the ability to affect the management or operations at such facilities which could negatively affect TEP’s results of operations, net income, and cash flows.
  • The effects of climate change may create operational and financial risks for TEP that, if realized, could negatively affect TEP's results of operations, net income, and cash flows.
  • TEP is subject to physical attacks which could have a negative impact on the Company's business and results of operations.
  • TEP is subject to cyber-attacks which could have a negative impact on the Company's business and results of operations.
  • The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the COVID-19 pandemic, could adversely affect our business, results of operations and financial condition.
  • Changes in tax regulation may negatively affect the results of operations, net income, and cash flows of TEP.
Management Discussion
  • TEP reported net income of $191 million in 2020 compared with $187 million in 2019. The increase of $4 million, or 2%, was primarily due to:
  • •$9 million in higher AFUDC due to an increase in construction projects and a FERC Order that provided for an adjustment in the AFUDC calculation.
  • •$4 million decrease in value of investments used to support certain post-employment benefits as a result of less favorable market conditions.
Content analysis
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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
8th grade Avg
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