UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 11, 2003
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification Number
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1-13739 UNISOURCE ENERGY CORPORATION 86-0786732
(An Arizona Corporation)
One South Church, Suite 100
Tucson, AZ 85701
(520) 571-4000
Item 2. Acquisition or Disposition of Assets
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On August 11, 2003, UniSource Energy Corporation (UniSource Energy)
completed the purchase of the Arizona gas and electric system assets from
Citizens Communications Company (Citizens) for a total of $224 million,
comprised of the base purchase price plus other operating capital
adjustments. The purchase price was determined through arms-length
negotiations between UniSource Energy and Citizens. Additional post-
closing adjustments may be made to the purchase price during a 90-day
period following the closing date.
UniSource Energy formed two new operating companies called UNS
Electric, Inc. (UNS Electric) and UNS Gas, Inc. (UNS Gas) to acquire
these assets, as well as an intermediate holding company called UniSource
Energy Services, Inc., to hold the common stock of UNS Electric and
UNS Gas.
The gas transmission and distribution system acquired by UNS Gas
from Citizens consists of approximately 168 miles of steel transmission
mains, 2,459 miles of steel and plastic distribution mains, and 127,015
customer service lines. The acquisition adds approximately 126,000 retail
gas customers in Mohave, Yavapai, Coconino, Navajo, and Santa Cruz
counties to UniSource Energy's customer base.
The electric transmission and distribution system acquired by UNS
Electric from Citizens consists of approximately 56 circuit-miles of 115
kilovolts (kV) transmission lines, 229 circuit-miles of 69 kV
transmission lines, and 3,116 circuit-miles of underground and overhead
distribution lines. UNS Electric also acquired 38 substations having a
total installed capacity of 1,077,300 kilovoltamperes and the Valencia
Power Plant in Nogales, Arizona, which consists of three diesel-fueled
combustion turbine units and provides 48 MW of peaking resources. The
acquisition adds approximately 77,500 retail electric customers in Mohave
and Santa Cruz counties to UniSource Energy's customer base.
The investment was funded by $160 million aggregate principal amount
of senior unsecured notes issued by UNS Electric and UNS Gas to John
Hancock Life Insurance Company, Teachers Insurance and Annuity
Association of America, Allstate Life Insurance Company, and CIT
Communications Finance Corporation, and certain other affiliates of these
institutional purchasers, in a private placement, $35 million from short-
term bridge financing debt issued by UniSource Energy to Union Bank of
California, N.A., and approximately $49 million in cash from UniSource
Energy.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of business acquired: To be filed, if
required, by UniSource Energy by amendment within the time permitted by
this item.
(b) Pro forma financial information: To be filed by UniSource Energy by
amendment within the time permitted by this item.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
UNISOURCE ENERGY CORPORATION
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(Registrant)
Date: August 26, 2003 /s/ Kevin P. Larson
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Kevin P. Larson
Vice President and Principal
Financial Officer
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