Healthy cash flow that has been used to fund capital expenditures and accelerate the repayment of debt; Owned generation capacity that is sufficient to meet most of Tucson Electric Power's (TEP) very high summer peaking loads; Solid service territory with good growth that has been enhanced with UniSource's purchase of Citizens Communications' electric and gas assets in 2003, coupled with no customer loss despite the introduction of full retail competition in 2002; and Reasonably supportive regulatory environment that allows TEP to continue operations as a vertically integrated utility. A weak overall financial profile as a result of the high debt levels, which will increase on a consolidated basis if the leveraged buy-out (LBO) led by Kohlberg Kravis Roberts&Co.
