Discontinued Operations

9 Months Ended

Sep. 30, 2011

Discontinued Operations

Discontinued Operations

13.          Discontinued Operations

SunCor (real estate segment) — In July 2010, SunCor sold land parcels, commercial assets and a master planned home-building community for approximately $70 million, which approximated the carrying value of these assets, resulting in a net gain of zero.  All activity for the income statement and prior comparative period income statement amounts are included in discontinued operations.  In 2010, SunCor recorded real estate impairment charges totaling $17 million in the first and second quarter.

APSES (other) — On August 19, 2011, Pinnacle West sold its investment in APSES.  The sale resulted in an after-tax gain from discontinued operations of approximately $10 million.  In June 2010, APSES sold its district cooling business consisting of operations in downtown Phoenix, Tucson, and on certain Arizona State University campuses.  As a result of that sale, we recorded an after-tax gain from discontinued operations of approximately $25 million.  Prior period income statement amounts related to these sales and the associated revenues and costs are reflected in discontinued operations.

The following table provides revenue, income (loss) before income taxes and income (loss) after taxes classified as discontinued operations in Pinnacle West’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2011 and 2010 (dollars in millions):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Revenue:
SunCor	$	1		$	4	$	4		$	25
APSES	11			22		36			55
Total revenue	$	12		$	26	$	40		$	80
Income (loss) before taxes:
SunCor	$	(2	)	$	14	$	(2	)	$	(10	)
APSES	18			1		20			48
Total income before taxes	$	16		$	15	$	18		$	38
Income (loss) after taxes:
SunCor (a)	$	(1	)	$	8	$	(1	)	$	(6	)
APSES	10			1		12			29
Total income after taxes	$	9		$	9	$	11		$	23

(a) Includes a tax benefit (expense) recognized by the parent company in accordance with an intercompany tax sharing agreement of $1 million and $(6) million for the three months ended September 30, 2011 and 2010, respectively; $1 million and $4 million for the nine months ended September 30, 2011 and 2010, respectively.