Balance Sheet & Cash Flow

For the FY09-FY11 period, management reduced $720.0 million of capex, in addition to the $200.0 million cut from the FY07-FY10 period announced earlier in FY08.

PNW has a credit facility of $283.0 million, which terminates in December 2009, and two more credit facilities, which total $866.0 million and terminates in December 2010 and December 2011 for a combined total capacity of $1.15 billion as of year-end 2008. There is an additional $560.0 million in available liquidity due to short-term debt outstanding and cash on hand at both the parent and utility at year end. There are no long-term debt maturities at the company until 2011, although new debt financing will be sought in 2009.
 

Annual Meeting update

In its annual meeting (May 20, 2009) management announced that PNW is well positioned to withstand the current economic storm and build upon the Company’s long, successful legacy in Arizona, as PNW continues to add value to its shareholders, customers, employees, and communities it serves. These strategies consists of (1) preparation for Arizona’s future based on improvement in core business fundamentals, consistent innovation, long-term planning, (2) aggressively managing costs, (3) delivering outstanding operational performance, (4) new innovations; management expects to spend $26.0 million in 2009 on programs and products to help customers use energy more efficiently and save money, and (5) pursue long-term solutions to business challenges.

• PNW continues to suffer from lower earnings in the real estate segment
• Higher operating costs associated with new customer growth is hampering margin expansion
• Arizona’s restrictive regulatory environment is not conducive to PNW’s topline and bottomline growth