##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED JUNE 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 COMMISSION FILE NUMBER 001-32582
 PIKE ELECTRIC CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware(State of incorporation)
    
    20-3112047(I.R.S. Employer Identification No.)
 100 Pike Way, Mount Airy, NC 27030  (Address of principal executive office)
 (336) 789-2171  (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
 o þ
 o þ
 þ o
 o
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



PIKE ELECTRIC CORPORATION
Annual Report on Form 10-K for the year ended June 30, 2007
 Index
  
 ItemsPart IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    10Item 1B.
    
    Unresolved Staff Comments
    
    
    17Item 2.
    
    Properties
    
    
    17Item 3.
    
    Legal Proceedings
    
    
    17Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    17Part IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    18Item 6.
    
    Selected Financial Data
    
    
    20Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    22Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    33Item 8.
    
    Financial Statements and Supplementary Data
    
    
    34Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    59Item 9A.
    
    Controls and Procedures
    
    
    59Item 9B.
    
    Other Information
    
    
    59Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    59Item 11.
    
    Executive Compensation
    
    
    60Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    60Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    60Item 14.
    
    Principal Accountant Fees and Services
    
    
    60Part IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    61Signatures
    
    
    
    
    62Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1




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##### Table of Contents



PART I
 
 ITEM 1. BUSINESS
 Overview
   Industry Overview
   Industry Trends
  Growth in Demand for Electricity  and Improved Infrastructure.
 1




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##### Table of Contents



The Energy Policy Act of 2005.
 Increased Outsourcing of Infrastructure Services.
 Competitive Strengths
  
    
    Leading Pure-Play Provider of Electric Distribution and Transmission Infrastructure
Services.We are one of the largest service providers to electric utilities, cooperatives
and municipalities in the United States. We are also one of the few service providers of
scale in our industry that operates under a single, well-recognized brand over a contiguous
geographic area, providing us a distinct competitive advantage with both large and small
territory customers.
    
    Outsourced Services-Based Business Model.We provide vital services to electric
utilities, cooperatives and municipalities, which have increased their reliance on
outsourcing the maintenance and improvement of their distribution and transmission systems.
Over 95% of our revenues are derived under master service arrangements. We derive less than
5% of our revenues from fixed-price agreements relating to large-scale capital improvement
projects.
    
    Contiguous Geographic Market.We operate in a contiguous 19-state geographic market
that includes the southeastern and south central United States. Both overall and on a
state-by-state basis, our market has exhibited strong population growth and increases in
electricity consumption, thereby increasing demand for our services. Moreover, the
contiguous nature of our service territory enables us to respond nimbly to our customers
needs, particularly in situations requiring rapid response, where we are able to seamlessly
transition crews and equipment within our territory. This agility also provides the added
benefit of increased operating efficiency by enabling us to maximize the highest and best
use of our crews and equipment within our industry without significant barriers.
    
    Storm Restoration Opportunities.Our 19-state market includes the southeastern and
south central United States, generally the most affected areas of the country when
considering the impact of inclement weather, such as ice storms and hurricanes, on the
electric infrastructure. Of the competitors in our market, we believe we are the leading
provider of emergency services for storm restoration based on annual revenues.
 
 2




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##### Table of Contents




    
    Long-Standing Customer Relationships.We have a diverse, well-capitalized customer
base that includes over 150 electric companies throughout our service territory. We employ
a customer-focused philosophy that has resulted in long-standing customer relationships.
Our relationships with our top 15 customers average approximately 31 years.
    
    Major Investments in Fleet and Safety.We have made significant investments in our
business. In addition to investing in our fleet, substantially all of which we own, we
have invested in our employee safety and development programs, establishing training and
safety programs certified by the Department of Labor.
    
    Experienced Management Team with Demonstrated Operational Excellence.Our strong
management has led us to operational excellence, as demonstrated by our continuing success
in effectively growing our business, managing our costs, supervising our workforce and
deploying our fleet. Members of our senior management team have been with us for an average
of approximately 19 years and most obtained significant operating experience prior to being
promoted to their current positions.
 Business Strategy
  
    
    Increased Penetration Within Our Existing Service Territory.We intend to continue to
increase our penetration and market share within our existing service territory by
expanding our existing customer relationships, attracting new customers and pursuing
selective acquisitions. We believe our quality service, modern fleet, regional presence,
storm restoration capabilities and strong safety record will enable us to develop our
business with both existing and prospective customers as they further outsource their
servicing needs.
    
    Expand Our Service Territory.We intend to continue to grow our business by seeking new
opportunities from our existing customers that have operations outside our current service
territory, capturing new customers in other geographic markets and pursuing selective
acquisitions.
    
    Continued Focus on Distribution and Sub-500 kV Transmission.We will continue to focus
on the maintenance, upgrade and extension of electric distribution and sub-500 kV
transmission power lines. By focusing on the distribution and sub-500 kV transmission
sector of the industry and providing high-quality services to our customers, we believe
that we will be in a position to capture a significant share of the expected increased
amount of work in this market sector.
    
    Capitalize on Favorable Long-Term Industry Trends.We believe that we are well
positioned to benefit from expected long-term industry trends, which are described in more
detail above under the heading Industry Trends.
    
    Employer of choice for transmission and distribution line workers.We believe the
demand for skilled line workers will increase dramatically over the next five to ten years.
We will continue to focus on employee development and retention. This effort may include
wage and benefits review, recruitment programs, advertising, new educational programs and a
retention program including equity rewards.
    
    Continued Focus on Operating Efficiency and Customer Service.We intend to use the
scale and scope of our capabilities to achieve higher levels of operating efficiency and
productivity while further enhancing our customer service. Additionally, we intend to use
our modern fleet, repair and maintenance capabilities and skilled workforce to increase our
cost competitiveness so that we may profitably win new business.
 Our Services
  3




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##### Table of Contents



Core Powerline Services.
   Storm Restoration Services.
   StormRevenues as aStorm
    
    Total
    
    Percentage ofYear
    
    Revenues
    
    Revenues
    
    Total Revenues(In millions)
    
    (In millions)2002
    
    $
    7.0
    
    
    $
    273.2
    
    
    
    2.6
    %2003
    
    
    46.6
    
    
    
    297.5
    
    
    
    15.7
    %2004
    
    
    43.0
    
    
    
    356.7
    
    
    
    12.1
    %2005
    
    
    149.2
    
    
    
    679.2
    
    
    
    22.0
    %2006
    
    
    185.3
    
    
    
    727.5
    
    
    
    25.5
    %2007
    
    
    53.3
    
    
    
    596.8
    
    
    
    8.9
    %
 4




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##### Table of Contents



Selected Storm MobilizationsApproximateNumber ofEmployees
    
    RestorationStorm
    
    Date
    
    Mobilized
    
    PeriodHurricanesWilma (FL)
    
    October 2005
    
    
    1,600
    
    
    22 daysRita (TX, LA)
    
    September 2005
    
    
    1,500
    
    
    18 daysKatrina (LA, MS, AL)
    
    September 2005
    
    
    3,100
    
    
    30 daysDennis (FL)
    
    July 2005
    
    
    1,600
    
    
    6 daysFrances (FL, GA, NC, SC)
    
    September 2004
    
    
    1,800
    
    
    15 daysIvan (AL, FL, GA, MS, SC, NC, VA)
    
    September 2004
    
    
    1,700
    
    
    9 daysCharley (FL, NC)
    
    August 2004
    
    
    2,000
    
    
    16 daysIce StormsIce Storm (NC, VA)
    
    February 2006
    
    
    275
    
    
    4 daysIce Storm (GA, NC, SC, VA)
    
    December 2005
    
    
    2,000
    
    
    7 daysIce Storm (OH)
    
    December 2004
    
    
    880
    
    
    11 days
  Customers
   5




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Types of Service Arrangements
   Seasonality
  Proprietary Rights
  Training, Quality Assurance and Safety
  6




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Equipment
    Employees
   Risk Management and Insurance
   Competition
  7




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
    
    reputation and relationships with customers;
    
    history of service execution (for example, safety record, cost control, timing and experience);
    
    geographic presence and breadth of service offerings;
    
    price;
    
    investment in fleet and equipment, including technological capabilities;
    
    storm restoration abilities and reputation;
    
    experience of management team and crews; and
    
    the availability of qualified and/or licensed personnel.
  Government Regulation
   Environmental Matters
  8




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Available Information
  FORWARD-LOOKING STATEMENTS
   
    
    our belief that future growth in demand for services generally will be driven by
increased demand for electricity due to growth in electricity consumption and population in
the southeastern and south central regions of the United States, increased outsourcing by
power suppliers and the need to correct the inadequacy of the current electric
infrastructure;
    
    our belief that outsourcing by electric companies will continue in the future;
    
    our belief that the lawsuits, claims or other proceedings to which we are subject in the
ordinary course of business will not have a material adverse effect on the Companys
results of operation or financial position;
    
    our expectation that our capital expenditures will range from $30 million to $35 million
for the year ended June 30, 2008 and our intention to fund those expenditures from
operating cash flow;
    
    our belief that that our business will benefit from any increase in spending in the
transmission infrastructure due to the associated increases in maintenance, extension and
upgrade of distribution and sub-500 kV transmission lines;
    
    our intention to continue to increase our penetration and market share within our
existing service territory by expanding our existing customer relationships, attracting new
customers and pursuing selective acquisitions;
 
 9




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
    
    our belief that our quality service, modern fleet, regional presence, storm restoration
capabilities and strong safety record will enable us to develop our business with both
existing and prospective customers as they further outsource their servicing needs;
    
    our intention to continue to grow our business by seeking new opportunities from our
existing customers that have operations outside our current service territory, capturing
new customers in other geographic markets and pursuing selective acquisitions;
    
    our belief that we will be in a position to capture a significant share of the expected
increased amount of work in our target market by focusing on the distribution and sub-500
kV transmission sector of the industry and providing high-quality services to our
customers;
    
    our belief that we are well positioned to benefit from expected long-term industry
trends;
    
    our belief that the demand for skilled line workers will increase dramatically over the
next five to ten years and our intention to continue to focus on employee development and
retention;
    
    our consideration of different alternatives for implementing a comprehensive information
technology solution that would improve and enhance our information systems and give us a
technological advantage over competitors in our industry;
    
    our belief that provisions in the Energy Policy Act of 2005 (i) will lead to a more
efficient permitting process, which should encourage investment in the transmission system,
(ii) could spur investment interest from non-utility entities, which are likely to focus on
reducing costs, while enabling utilities to focus on their core competencies, and (iii)
could lead to increased interest in outsourcing solutions;
    
    our belief that there is continued growth for third-party services providers such as our
company based on our estimates that utilities and cooperatives outsource approximately 30%
to 50% of their total infrastructure servicing needs;
    
    our expectation that a substantial portion of our total revenues will continue to be
derived from a limited group of customers given the composition of the utilities,
cooperatives and municipalities in our geographical market;
    
    our belief that core powerline revenues will decline in periods of storm restoration;
and
    
    our belief that our cash flow from operations, available cash and cash equivalents, and
borrowings available under our senior credit facility will be adequate to meet our ordinary
course liquidity needs for the foreseeable future.
  
 ITEM 1A. RISK FACTORS
 Forward-Looking Statements.
 We derive a significant portion of our revenues from a small group of customers. The loss of
or a significant decrease in services to one or more of these customers could negatively impact our
business and results of operations.
 10




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Our customers often have no obligation to assign work to us, and many of our arrangements may
be terminated on short notice. As a result, we are at risk of losing significant business on short
notice.
 Our storm restoration services are highly volatile and unpredictable, which could result in
substantial variations in, and uncertainties regarding, the levels of our financial results from
period to period.
 Our business is subject to numerous hazards that could subject us to substantial monetary and
other liabilities. If accidents occur, they could materially and adversely affect our business and
results of operations.
  Our current insurance coverage may not be adequate, and we may not be able to obtain insurance
at acceptable rates, or at all.
 11




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Record high fuel costs could materially and adversely affect our operating results.
 Demand for some of our services is cyclical and vulnerable to industry and economic downturns,
which could materially and adversely affect our business and results of operations.
 The Energy Policy Act may fail to result in increased spending in the electric power
transmission infrastructure, which could slow our expected growth
 Failure to maintain effective internal control over financial reporting could have a material
adverse effect on our business, operating results and stock price.
 To be successful, we need to attract and retain qualified personnel, and any inability to do
so would adversely affect our business.
  12




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The slowdown in the housing market could negatively affect our revenues from distribution
work.
 We are dependent on our senior management and other key personnel, the loss of which could
have a material adverse effect on our business.
 Our industry is highly competitive and we may be unable to compete effectively, retain our
customers or win new customers, which could result in reduced profitability and loss of market
share.
 We may be unsuccessful at acquiring companies or at integrating companies that we may acquire,
and as a result, we may not achieve the expected benefits and our profitability could materially
suffer.
 We have incurred indebtedness under a senior credit facility, which may restrict our business
and operations, adversely affect our cash flow, and restrict our future access to sufficient
funding to finance desired growth.
 13




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We are in the process of investigating a company-wide information technology (IT) solution
which could temporarily disrupt our day-to-day operations.
 During the ordinary course of our business, we may become subject to lawsuits or indemnity
claims, which could materially and adversely affect our business and results of operations.
 14




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Our failure to comply with or the imposition of liability under, environmental laws and
regulations could result in significant costs.
 Weather conditions can adversely affect our operations and, consequently, revenues.
The electric infrastructure servicing business is subject to seasonal variations, which
may cause our operating results to vary significantly from period to period and could cause the
market price of our stock to fall.
 Our results of operations could be adversely affected as a result of the impairment of
goodwill or other intangibles. Business Combinations
 Goodwill and Other Intangible Assets,
  15




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The market price of our stock may be influenced by many factors, some of which are beyond our
control.
 
    
    the failure of securities analysts to continue to cover our common stock or changes in
financial estimates or recommendations by analysts;
    
    announcements by us or our competitors of significant contracts, acquisitions or capital commitments;
    
    changes in market valuation or earnings of our competitors;
    
    variations in quarterly operating results;
    
    availability of capital;
    
    general economic conditions;
    
    terrorist acts;
    
    legislation;
    
    future sales of our common stock; and
    
    investor perception of us and the electric utility industry.
  Shares eligible for future sale may cause the market price of our common stock to drop
significantly, even if our business is doing well.
    The concentration of our capital stock will limit other stockholders ability to influence
corporate matters.
 16




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Anti-takeover provisions of our charter and bylaws may reduce the likelihood of any potential
change of control or unsolicited acquisition proposal that stockholders might consider favorable.
 
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  17




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PART II
 
 ITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
 Market Information
  High
    
    LowFiscal 2007:First Quarter
    
    $
    19.90
    
    
    $
    14.35Second Quarter
    
    
    18.95
    
    
    
    14.45Third Quarter
    
    
    19.25
    
    
    
    15.31Fourth Quarter
    
    
    23.79
    
    
    
    17.72Fiscal 2006:First Quarter (beginning July 27, 2005)
    
    $
    20.40
    
    
    $
    13.60Second Quarter
    
    
    20.25
    
    
    
    15.50Third Quarter
    
    
    21.42
    
    
    
    16.12Fourth Quarter
    
    
    21.80
    
    
    
    15.95
  Dividend Policy
  Recent Sales of Unregistered Securities
  Performance Graph
 The following Performance Graph and related information shall not be deemed soliciting
material or to be filed with the Securities and Exchange Commission, nor shall such information
be incorporated by reference into any future filing under the Securities Act of 1933 or Securities
Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by
reference into such filing.
  18




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27-Jul-
    
    30-Sep-
    
    31-Dec-
    
    31-Mar-
    
    30-Jun-
    
    30-Sep-
    
    31-Dec-
    
    31-Mar-
    
    30-Jun-05
    
    05
    
    05
    
    06
    
    06
    
    06
    
    06
    
    07
    
    07Pike Electric Corp.
    
    $
    100
    
    
    $
    134
    
    
    $
    116
    
    
    $
    148
    
    
    $
    138
    
    
    $
    106
    
    
    $
    117
    
    
    $
    129
    
    
    $
    160S&P 500®
    
    $
    100
    
    
    $
    100
    
    
    $
    102
    
    
    $
    106
    
    
    $
    105
    
    
    $
    110
    
    
    $
    118
    
    
    $
    119
    
    
    $
    126Russell 2000
    
    $
    100
    
    
    $
    99
    
    
    $
    100
    
    
    $
    114
    
    
    $
    109
    
    
    $
    109
    
    
    $
    119
    
    
    $
    121
    
    
    $
    126Custom Composite
Index
(4 Stocks)
    
    $
    100
    
    
    $
    107
    
    
    $
    108
    
    
    $
    129
    
    
    $
    133
    
    
    $
    126
    
    
    $
    142
    
    
    $
    176
    
    
    $
    217
 19




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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
   Year Ended June 30,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(in thousands, except per share amounts)Statement of Operations Data:Revenues
    
    $
    596,837
    
    
    $
    727,470
    
    
    $
    679,197
    
    
    $
    356,697
    
    
    $
    297,514Cost of operations(l)
    
    
    499,422
    
    
    
    599,247
    
    
    
    585,354
    
    
    
    300,313
    
    
    
    247,204Gross profit
    
    
    97,415
    
    
    
    128,223
    
    
    
    93,843
    
    
    
    56,384
    
    
    
    50,310General and administrative expenses(2)
    
    
    46,486
    
    
    
    45,228
    
    
    
    47,867
    
    
    
    18,812
    
    
    
    16,783Recapitalization expenses(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386Loss on sale of property and equipment
    
    
    1,052
    
    
    
    2,250
    
    
    
    585
    
    
    
    265
    
    
    
    539Income from operations
    
    
    49,877
    
    
    
    80,745
    
    
    
    45,391
    
    
    
    37,307
    
    
    
    32,602Other expense (income):Interest expense(4)
    
    
    19,799
    
    
    
    24,272
    
    
    
    40,217
    
    
    
    9,192
    
    
    
    11,862Other, net
    
    
    (236
    )
    
    
    (220
    )
    
    
    (109
    )
    
    
    (19
    )
    
    
    (46
    )Total other expense
    
    
    19,563
    
    
    
    24,052
    
    
    
    40,108
    
    
    
    9,173
    
    
    
    11,816Income before income taxes from continuing
operations
    
    
    30,314
    
    
    
    56,693
    
    
    
    5,283
    
    
    
    28,134
    
    
    
    20,786Income tax expense
    
    
    11,957
    
    
    
    22,324
    
    
    
    8,469
    
    
    
    11,276
    
    
    
    8,335Income (loss) from continuing operations
    
    
    18,357
    
    
    
    34,369
    
    
    
    (3,186
    )
    
    
    16,858
    
    
    
    12,451Loss from discontinued operations, net of
taxes(5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (330
    )
    
    
    (621
    )Net income (loss)
    
    $
    18,357
    
    
    $
    34,369
    
    
    $
    (3,186
    )
    
    $
    16,528
    
    
    $
    11,830Decrease in redemption value of mandatorily
redeemable preferred stock(6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,071Net income (loss) available (attributable) to
common stockholders
    
    $
    18,357
    
    
    $
    34,369
    
    
    $
    (3,186
    )
    
    $
    16,528
    
    
    $
    23,901Basic earnings from continuing operations per
common share:Weighted average basic common shares
outstanding
    
    
    32,416
    
    
    
    31,023
    
    
    
    27,709
    
    
    
    24,437
    
    
    
    24,437Income (loss) from continuing operations
    
    $
    0.57
    
    
    $
    1.11
    
    
    $
    (0.11
    )
    
    $
    0.69
    
    
    $
    0.51Diluted earnings from continuing operations per
common share:Weighted average diluted common shares
outstanding
    
    
    33,366
    
    
    
    32,252
    
    
    
    27,709
    
    
    
    24,437
    
    
    
    24,437Income (loss) from continuing operations
    
    $
    0.55
    
    
    $
    1.07
    
    
    $
    (0.11
    )
    
    $
    0.69
    
    
    $
    0.51
 20




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##### Table of Contents



As of June 30,2007
    
    2006
    
    2005
    
    2004
    
    2003(in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    1,467
    
    
    $
    3,391
    
    
    $
    3,106
    
    
    $
    4,937
    
    
    $
    3,637Working capital
    
    
    64,078
    
    
    
    78,995
    
    
    
    69,421
    
    
    
    41,497
    
    
    
    41,372Property and equipment, net
    
    
    267,740
    
    
    
    284,452
    
    
    
    281,842
    
    
    
    190,600
    
    
    
    171,488Total assets
    
    
    545,497
    
    
    
    589,966
    
    
    
    592,455
    
    
    
    287,096
    
    
    
    245,248Total current liabilities
    
    
    69,906
    
    
    
    73,884
    
    
    
    82,307
    
    
    
    38,502
    
    
    
    20,810Total long-term liabilities
    
    
    279,530
    
    
    
    345,350
    
    
    
    509,665
    
    
    
    199,311
    
    
    
    192,103Mandatorily redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,810
    
    
    
    5,429Total stockholders equity(7)
    
    
    196,061
    
    
    
    170,732
    
    
    
    483
    
    
    
    49,283
    
    
    
    32,335Cash dividend per share of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Cost of operations for fiscal 2005 includes $21.1 million in deferred compensation charges
related to our acquisition of Red Simpson in July 2004.(2)
    
    General and administrative expenses for fiscal 2007 and 2006 includes stock compensation
expense of approximately $1.9 million and $2.3 million, respectively, related to the adoption
of SFAS 123R as of July 1, 2005. General and administrative expenses for fiscal 2005 include:
(i) $4.2 million of compensation expense for common stock options repurchased from our
management in connection with our December 2004 recapitalization, (ii) a $4.0 million charge
for the termination of our management agreement with Lindsay Goldberg & Bessemer, and (iii)
$2.6 million related to the purchase by members of Red Simpsons management of restricted
shares of common stock in connection with the acquisition of Red Simpson, due to the
acceleration of deferred compensation benefits and the subsequent repurchase of a portion of
that restricted stock in the December 2004 recapitalization.(3)
    
    Recapitalization expenses represent costs incurred in connection with a recapitalization that
we effected in 2002.(4)
    
    Interest expense primarily includes interest expense related to outstanding debt as well as
(a) a $14.0 million charge in fiscal 2005 for the redemption of preferred stock and (b) the
write-off of unamortized deferred loan costs of $1.1 million, $3.2 million and $6.7 million
for fiscal 2007, 2006 and 2005, respectively, resulting from the prepayment of debt.(5)
    
    Loss from discontinued operations, net of taxes, represents losses from our industrial
division, which ceased operations during the year ended June 30, 2004.(6)
    
    The $12.1 million decrease in the redemption value of our Series A preferred stock during
fiscal 2003 occurred because we adjusted the carrying value of the Series A preferred stock to
$5.4 million from its original carrying value of $17.5 million at issuance in accordance with
the terms of the Series A preferred stock.(7)
    
    Total stockholders equity was effected in fiscal 2006 by our IPO, completed on August 1,
2005, of 10.0 million shares of common stock, in which we received approximately $122.0
million in net proceeds. Total stockholders equity was effected in fiscal 2005 by our sale of
common stock on July 1, 2004 for $71.0 million in connection with our acquisition of Red
Simpson, which was offset by our recapitalization in December 2004, pursuant to which we
acquired shares of our common stock for a total purchase price of $123.3 million. 
 21




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our historical consolidated financial statements and
related notes thereto in Item 8 Financial Statements and Supplementary Data. The discussion below
contains forward-looking statements that are based upon our current expectations and are subject to
uncertainty and changes in circumstances. Actual results may differ materially from these
expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including
those identified in Risk Factors.
 Overview
  Business Drivers and Measures
  Industry Trends.
 
    
    Growth in demand for electricity.Demand for electricity is a direct driver of spending
on electric distribution and transmission infrastructure, which is driven by population
growth, economic expansion and the proliferation of electrical devices. The southern census
region of the United States, which forms the majority of our market, has exhibited, and is
forecasted to continue to exhibit, more than double the population growth rate of the
midwest and northeast census regions, driving both increased investment in the distribution
and transmission infrastructure and the related increase in maintenance requirements in our
service territory.
    
    Passage of the Energy Policy Act of 2005. The Energy Policy Act of 2005 was designed to
improve electric transmission capacity and reliability and to encourage investment in the
transmission infrastructure. We believe that provisions in this Act will lead to a more
efficient permitting process, which should encourage investment in the transmission system.
Additionally, we believe that provisions of this Act could spur investment interest from
non-utility entities, which are likely to focus on reducing costs, while enabling utilities
to focus on their core competencies. Finally, we believe that this Act could lead to
increased interest in outsourcing solutions.
    
    Increased outsourcing of infrastructure services.There has been an increase in
outsourcing of electrical infrastructure maintenance and system improvements by electric
companies over the last decade as they have increasingly focused on their core
competencies. We believe outsourcing enables electric companies to manage their labor costs
more flexibly, improve the reliability of their systems and deploy their capital more
efficiently, and we expect the outsourcing trend to continue.
 Operational and Other Factors.
 22




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##### Table of Contents




    
    When we add new customers and contracts, we generally experience an increase in costs,
including the costs of training and outfitting our crews and spending on equipment and
specialized tools and supplies. Once the crews and equipment are fully utilized, our
margins generally increase over the life of the contract.
    
    Industry-wide insurance costs for workmens compensation, medical and general liability
have risen in the past several years and could continue to rise at a rate faster than our
revenues. We have implemented several safety initiatives designed to reduce incident rates
and corresponding insurance costs as well as introduced an employee safety bonus in fiscal
2005.
    
    There are a limited number of skilled workers that can perform our work, and during
historic periods of increased demand, labor costs have tended to increase. We are currently
experiencing shortages of skilled personnel in certain markets. While shortages have caused
our labor costs to increase, we historically have been able to obtain increases when we
renegotiate rates with our customers to offset these cost increases.
    
    Fuel costs have risen and may continue to rise at a rate faster than our revenues. We
have a large fleet of vehicles and equipment that primarily use diesel fuel. We have
implemented bulk purchasing in certain areas to lower our fuel costs. In addition, we have
entered into two diesel fuel swaps that cover, based on current volumes, approximately 30%
of our diesel requirements through February 2008.
 Services
    Storm Revenue DataCore
    
    Percentage
    
    Storm
    
    PercentagePowerline
    
    of Total
    
    Restoration
    
    of Total
    
    TotalYear
    
    Services
    
    Revenues
    
    Services
    
    Revenues
    
    Revenues(In millions)
    
    
    
    
    
    (In millions)
    
    
    
    
    
    (In millions)2002
    
    $
    266.2
    
    
    
    97.4
    %
    
    $
    7.0
    
    
    
    2.6
    %
    
    $
    273.22003
    
    
    250.9
    
    
    
    84.3
    %
    
    
    46.6
    
    
    
    15.7
    %
    
    
    297.52004
    
    
    313.7
    
    
    
    87.9
    %
    
    
    43.0
    
    
    
    12.1
    %
    
    
    356.72005
    
    
    530.0
    
    
    
    78.0
    %
    
    
    149.2
    
    
    
    22.0
    %
    
    
    679.22006
    
    
    542.2
    
    
    
    74.5
    %
    
    
    185.3
    
    
    
    25.5
    %
    
    
    727.52007
    
    
    543.6
    
    
    
    91.1
    %
    
    
    53.2
    
    
    
    8.9
    %
    
    
    596.8
 Seasonality; Fluctuations of Results
  23




---



##### Table of Contents



Inflation
  Basis of Reporting
 Revenues.
  Cost of Operations.
 General and Administrative Expenses.
 Interest Expense and Other, Net.
 Critical Accounting Policies
  24




---



##### Table of Contents



Revenue Recognition.
  Allowance for Doubtful Accounts.
 Property, Plant and Equipment and Impairment of Long-Lived Assets.
 Accounting for the Impairment or Disposal of Long-Lived Assets.
  Valuation of Goodwill and Other Intangible Assets. Business
Combinations
 25




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##### Table of Contents



Recognition of Customer Relationship
Intangible Assets Acquired in a Business Combination.
 Goodwill and Other Intangible Assets
   Insurance and Claims Accruals.
  Stock-Based Compensation. Share-Based Payment Accounting for Stock Based Compensation Accounting for Stock Issued to Employees Statement
 26




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##### Table of Contents



of Cash Flows
    Results of Operations
  Year Ended June 30,2007
    
    2006
    
    2005(Dollars in millions)Revenues:Core powerline services
    
    $
    543.6
    
    
    
    91.1
    %
    
    $
    542.2
    
    
    
    74.5
    %
    
    $
    530.0
    
    
    
    78.0
    %Storm restoration services
    
    
    53.2
    
    
    
    8.9
    
    
    
    185.3
    
    
    
    25.5
    
    
    
    149.2
    
    
    
    22.0Total
    
    
    596.8
    
    
    
    100.0
    %
    
    
    727.5
    
    
    
    100.0
    %
    
    
    679.2
    
    
    
    100.0
    %Cost of operations
    
    
    499.4
    
    
    
    83.7
    
    
    
    599.3
    
    
    
    82.4
    
    
    
    585.3
    
    
    
    86.2Gross profit
    
    
    97.4
    
    
    
    16.3
    
    
    
    128.2
    
    
    
    17.6
    
    
    
    93.9
    
    
    
    13.8General and administrative expenses
    
    
    46.5
    
    
    
    7.8
    
    
    
    45.2
    
    
    
    6.2
    
    
    
    47.9
    
    
    
    7.0Loss on sale of property and equipment
    
    
    1.0
    
    
    
    0.2
    
    
    
    2.3
    
    
    
    0.3
    
    
    
    0.6
    
    
    
    0.1Income from Operations
    
    
    49.9
    
    
    
    8.4
    %
    
    
    80.7
    
    
    
    11.1
    %
    
    
    45.4
    
    
    
    6.7
    %Interest expense and other
    
    
    19.6
    
    
    
    3.3
    
    
    
    24.0
    
    
    
    3.3
    
    
    
    40.1
    
    
    
    5.9Income before income tax
    
    
    30.3
    
    
    
    5.1
    
    
    
    56.7
    
    
    
    7.8
    
    
    
    5.3
    
    
    
    0.8Income tax expense
    
    
    11.9
    
    
    
    2.0
    
    
    
    22.3
    
    
    
    3.1
    
    
    
    8.5
    
    
    
    1.3Net income (loss)
    
    $
    18.4
    
    
    
    3.1
    %
    
    $
    34.4
    
    
    
    4.7
    %
    
    $
    (3.2
    )
    
    
    -0.5
    %
 Year Ended June 30, 2007 Compared to Year Ended June 30, 2006
 Revenues.
  27




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##### Table of Contents



Gross Profit.
 General and Administrative Expenses.
 Loss on Sale of Property and Equipment .
 Interest
Expense and Other, Net.
 Income Tax Expense.
 Net Income .
 Year Ended June 30, 2006 Compared to Year Ended June 30, 2005
 Revenues.
   Gross Profit.
 28




---



##### Table of Contents



General and Administrative Expenses.
 Loss on Sale of Property and Equipment .
 Interest Expense and Other, Net.
 Income Tax Expense.
 Net Income (Loss).
 Liquidity and Capital Resources
    29




---



##### Table of Contents



Changes in Cash Flows: 2007 Compared to 2006
 Year Ended June 30,2007
    
    2006(in millions)Net cash provided by operating activities
    
    $
    78.5
    
    
    $
    74.9Net cash used in investing activities
    
    $
    (22.6
    )
    
    $
    (40.9
    )Net cash used in financing activities
    
    $
    (57.8
    )
    
    $
    (33.7
    )
    Changes in Cash Flows: 2006 Compared to 2005
 Year Ended June 30,2006
    
    2005(in millions)Net cash provided by operating activities from continuing operations
    
    $
    74.9
    
    
    $
    53.2Net cash used in investing activities from continuing operations
    
    $
    (40.9
    )
    
    $
    (241.5
    )Net cash (used in) provided by financing activities from continuing operations
    
    $
    (33.7
    )
    
    $
    186.5
    Capital Expenditures
  30




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##### Table of Contents



Senior Credit Facility
   
    
    a minimum cash interest coverage ratio, based upon the ratio of consolidated EBITDA to
consolidated cash interest expense, of at least 3.50 to 1.00; and
    
    a maximum leverage ratio, based upon the ratio of consolidated funded debt to
consolidated EBITDA, of 4.25 to 1.00 for the quarter ending June 30, 2007, and declining
ratios thereafter.
  Preferred Stock
  Contractual Obligations and Other Commitments
  Payment Obligations by Fiscal Year Ended June 30,Total
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter(in millions)Long-term debt obligations(1)
    
    $
    191.5
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    191.5Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest payment obligations(2)
    
    
    77.3
    
    
    
    14.1
    
    
    
    14.1
    
    
    
    14.1
    
    
    
    13.3
    
    
    
    13.3
    
    
    
    8.4Operating lease obligations
    
    
    14.6
    
    
    
    2.2
    
    
    
    1.9
    
    
    
    1.9
    
    
    
    1.8
    
    
    
    1.8
    
    
    
    5.0Purchase obligations(3)
    
    
    11.5
    
    
    
    11.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation(4)
    
    
    17.8
    
    
    
    3.6
    
    
    
    3.9
    
    
    
    1.4
    
    
    
    
    
    
    
    
    
    
    
    8.9Total
    
    $
    312.7
    
    
    $
    31.4
    
    
    $
    19.9
    
    
    $
    17.4
    
    
    $
    15.1
    
    
    $
    15.1
    
    
    $
    213.8
 
 (1)
    
    Includes only obligations to pay principal not interest expense. 31




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##### Table of Contents



(2)
    
    Represents estimated interest payments to be made on our variable rate debt. All interest
payments assume that principal payments are made as originally scheduled. Interest rates
utilized to determine interest payments for variable rate debt are based upon our current term
loan interest rate of 6.88%.(3)
    
    Consists of obligations to purchase vehicles and other machinery and equipment.(4)
    
    For a description of the deferred compensation obligation, see Note 15 of the Notes to
Consolidated Financial Statements.
 Off-Balance Sheet Arrangements
    Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 Fair Value Measurements
  Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans an amendment of FASB Statements No. 87, 88, 106, and
132(R)
 32




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##### Table of Contents



The Fair Value Option for Financial Assets and
Financial Liabilities, including an amendment of FASB Statement No. 115
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
   Fleet Diesel Fuel Risk
   33




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageManagements Report on Internal Control Over Financial Reporting
    
    35Report of Independent Registered Public Accounting Firm on:Consolidated Financial Statements
    
    36Internal Controls over Financial Reporting
    
    37Consolidated Balance Sheets
    
    38Consolidated Statements of Operations
    
    39Consolidated Statements of Stockholders Equity
    
    40Consolidated Statements of Cash Flows
    
    41Notes to Consolidated Financial Statements
    
    42
 34




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
     35




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 To the Board of Directors and Stockholders of  Pike Electric Corporation
     Internal Control-
Integrated Framework
  
 36




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Stockholders of
Pike Electric Corporation
        
 37




---



##### Table of Contents



PIKE ELECTRIC CORPORATION
 
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except par value amounts)
 June 30,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,467
    
    
    $
    3,391Accounts receivable from customers, net
    
    
    59,603
    
    
    
    66,629Work completed not billed
    
    
    44,527
    
    
    
    56,430Inventories
    
    
    8,535
    
    
    
    8,041Prepaid expenses and other
    
    
    6,219
    
    
    
    5,928Deferred income taxes
    
    
    13,633
    
    
    
    12,460Total current assets
    
    
    133,984
    
    
    
    152,879Property and equipment, net
    
    
    267,740
    
    
    
    284,452Goodwill
    
    
    94,402
    
    
    
    94,402Other intangibles, net
    
    
    43,228
    
    
    
    49,978Deferred loan costs, net
    
    
    4,482
    
    
    
    6,265Other assets
    
    
    1,661
    
    
    
    1,990Total assets
    
    $
    545,497
    
    
    $
    589,966LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    8,503
    
    
    $
    9,706Accrued compensation
    
    
    20,597
    
    
    
    24,954Accrued expenses and other
    
    
    4,447
    
    
    
    5,186Income taxes payable
    
    
    6,146
    
    
    
    57Current portion of deferred compensation
    
    
    3,544
    
    
    
    10,614Current portion of insurance and claim accruals
    
    
    26,669
    
    
    
    18,867Revolving credit facility
    
    
    
    
    
    
    4,500Total current liabilities
    
    
    69,906
    
    
    
    73,884Long-term debt, net of current portion
    
    
    191,500
    
    
    
    249,000Insurance and claim accruals, net of current portion
    
    
    10,894
    
    
    
    13,439Deferred compensation, net of current portion
    
    
    9,315
    
    
    
    10,378Deferred income taxes
    
    
    67,259
    
    
    
    72,333Other liabilities
    
    
    562
    
    
    
    200Commitments and contingenciesStockholders equity:Preferred stock, par value $0.001 per share;
100,000 authorized
shares; no shares issued and outstanding
    
    
    
    
    
    
    Common stock, par value $0.001 per share;
100,000 authorized
shares; 32,916 and 32,577 shares issued and
outstanding at June
30, 2007 and 2006, respectively
    
    
    6,426
    
    
    
    6,426Additional paid-in capital
    
    
    142,849
    
    
    
    135,869Accumulated other comprehensive loss
    
    
    (8
    )
    
    
    Retained earnings
    
    
    46,794
    
    
    
    28,437Total stockholders equity
    
    
    196,061
    
    
    
    170,732Total liabilities and stockholders equity
    
    $
    545,497
    
    
    $
    589,966
  38




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##### Table of Contents



PIKE ELECTRIC CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share amounts)
 Years Ended June 30,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    596,837
    
    
    $
    727,470
    
    
    $
    679,197Cost of operations
    
    
    499,422
    
    
    
    599,247
    
    
    
    585,354Gross profit
    
    
    97,415
    
    
    
    128,223
    
    
    
    93,843General and administrative expenses
    
    
    46,486
    
    
    
    45,228
    
    
    
    47,867Loss on sale of property and equipment
    
    
    1,052
    
    
    
    2,250
    
    
    
    585Income from operations
    
    
    49,877
    
    
    
    80,745
    
    
    
    45,391Other expense (income):Interest expense
    
    
    19,799
    
    
    
    24,272
    
    
    
    40,217Other, net
    
    
    (236
    )
    
    
    (220
    )
    
    
    (109
    )Total other expense
    
    
    19,563
    
    
    
    24,052
    
    
    
    40,108Income before income taxes
    
    
    30,314
    
    
    
    56,693
    
    
    
    5,283Income tax expense
    
    
    11,957
    
    
    
    22,324
    
    
    
    8,469Net income (loss)
    
    $
    18,357
    
    
    $
    34,369
    
    
    $
    (3,186
    )Earnings (loss) per share:Basic
    
    $
    0.57
    
    
    $
    1.11
    
    
    $
    (0.11
    )Diluted
    
    $
    0.55
    
    
    $
    1.07
    
    
    $
    (0.11
    )Shares used in computing earnings
(loss) per share:Basic
    
    
    32,416
    
    
    
    31,023
    
    
    
    27,709Diluted
    
    
    33,366
    
    
    
    32,252
    
    
    
    27,709
  39




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##### Table of Contents



PIKE ELECTRIC CORPORATION
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (in thousands)
 Common
    
    
    
    
    
    
    Additional
    
    
    Unearned
    
    
    Other
    
    
    
    
    
    
    TotalStock
    
    
    Common
    
    
    Paid-In
    
    
    Stock
    
    
    Comprehensive
    
    
    Retained
    
    
    StockholdersShares
    
    
    Stock
    
    
    Capital
    
    
    Compensation
    
    
    Loss
    
    
    Earnings
    
    
    EquityBalance June 30, 2004
    
    
    24,437
    
    
    $
    1,656
    
    
    $
    928
    
    
    
    
    
    
    
    
    
    
    $
    46,699
    
    
    $
    49,283Net proceeds from the sale of common stock
    
    
    11,498
    
    
    
    76,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,000Purchase of common stock
    
    
    (14,758
    )
    
    
    (73,241
    )
    
    
    (1,138
    )
    
    
    
    
    
    
    
    
    
    
    (48,905
    )
    
    
    (123,284
    )Employee stock compensation plans, net
    
    
    307
    
    
    
    2,000
    
    
    
    315
    
    
    $
    (879
    )
    
    
    
    
    
    
    234
    
    
    
    1,670Net loss and comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,186
    )
    
    
    (3,186
    )Balance June 30, 2005
    
    
    21,484
    
    
    $
    6,415
    
    
    $
    105
    
    
    $
    (879
    )
    
    
    
    
    
    $
    (5,158
    )
    
    $
    483Reclassification upon adoption of SFAS 123R
    
    
    
    
    
    
    
    
    
    
    (105
    )
    
    
    879
    
    
    
    
    
    
    
    (774
    )
    
    
    Net proceeds from the sale of common stock
    
    
    10,000
    
    
    
    10
    
    
    
    124,930
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124,940Employee stock compensation plans, net
    
    
    1,093
    
    
    
    1
    
    
    
    10,939
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,940Net income and comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,369
    
    
    
    34,369Balance June 30, 2006
    
    
    32,577
    
    
    $
    6,426
    
    
    $
    135,869
    
    
    $
    
    
    
    
    
    
    
    $
    28,437
    
    
    $
    170,732Employee stock compensation plans, net
    
    
    339
    
    
    
    
    
    
    
    6,980
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,980Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,357
    
    
    
    18,357Loss on derivative instruments, net of income
taxes of $4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (8
    )
    
    
    
    
    
    
    (8
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    18,357
    
    
    
    18,349Balance June 30, 2007
    
    
    32,916
    
    
    $
    6,426
    
    
    $
    142,849
    
    
    $
    
    
    
    $
    (8
    )
    
    $
    46,794
    
    
    $
    196,061
  40




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##### Table of Contents



PIKE ELECTRIC CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 Years ended June 30,2007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net income (loss)
    
    $
    18,357
    
    
    $
    34,369
    
    
    $
    (3,186
    )Adjustments
to reconcile net income (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    39,791
    
    
    
    37,582
    
    
    
    38,286Non-compete litigation settlement
    
    
    3,551
    
    
    
    
    
    
    
    Non-cash interest expense
    
    
    3,241
    
    
    
    4,962
    
    
    
    21,787Deferred income taxes
    
    
    (6,243
    )
    
    
    (5,571
    )
    
    
    5,945Loss on sale of property and equipment
    
    
    1,052
    
    
    
    2,250
    
    
    
    585Equity compensation expense
    
    
    2,629
    
    
    
    3,241
    
    
    
    1,670Excess tax benefit from stock-based compensation
    
    
    (1,335
    )
    
    
    (4,024
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable and work completed not billed
    
    
    18,929
    
    
    
    1,592
    
    
    
    (18,091
    )Inventories, prepaid expenses and other
    
    
    1,196
    
    
    
    5,236
    
    
    
    (5,388
    )Insurance and claim accruals
    
    
    5,258
    
    
    
    13,884
    
    
    
    (3,201
    )Accounts payable and other
    
    
    1,475
    
    
    
    (9,800
    )
    
    
    14,590Deferred compensation
    
    
    (9,428
    )
    
    
    (8,793
    )
    
    
    158Net cash provided by operating activities
    
    
    78,473
    
    
    
    74,928
    
    
    
    53,155Cash flows from investing activities:Purchases of property and equipment
    
    
    (32,117
    )
    
    
    (50,245
    )
    
    
    (49,988
    )Business acquisitions, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (193,928
    )Net proceeds from sale of property and equipment
    
    
    9,532
    
    
    
    9,369
    
    
    
    2,397Net cash used in investing activities
    
    
    (22,585
    )
    
    
    (40,876
    )
    
    
    (241,519
    )Cash flows from financing activities:Principal payments on long-term debt
    
    
    (57,500
    )
    
    
    (159,000
    )
    
    
    (179,000
    )Proceeds from long-term debt
    
    
    
    
    
    
    
    
    
    
    450,000Payments on revolving credit facility, net
    
    
    (4,500
    )
    
    
    (7,000
    )
    
    
    (1,500
    )Redemption of mandatorily redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    (20,000
    )Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    (123,284
    )Net proceeds from sale of common stock
    
    
    3,015
    
    
    
    128,865
    
    
    
    72,571Excess tax benefit from stock-based compensation
    
    
    1,335
    
    
    
    4,024
    
    
    
    Deferred loan costs
    
    
    (162
    )
    
    
    (656
    )
    
    
    (12,254
    )Net cash (used in) provided by financing activities
    
    
    (57,812
    )
    
    
    (33,767
    )
    
    
    186,533Net (decrease) increase in cash and cash equivalents
    
    
    (1,924
    )
    
    
    285
    
    
    
    (1,831
    )Cash and cash equivalents beginning of year
    
    
    3,391
    
    
    
    3,106
    
    
    
    4,937Cash and cash equivalents end of period
    
    $
    1,467
    
    
    $
    3,391
    
    
    $
    3,106
  41




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##### Table of Contents



PIKE ELECTRIC CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 For the years ended June 30, 2007, 2006 and 2005
(in thousands, except per share amounts)
 1. Organization and Business
     For the Year Ended June 30,2007
    
    
    2006
    
    
    2005Core powerline services
    
    $
    543,570
    
    
    
    91.1
    %
    
    $
    542,166
    
    
    
    74.5
    %
    
    $
    529,924
    
    
    
    78.0
    %Storm restoration services
    
    
    53,267
    
    
    
    8.9
    
    
    
    185,304
    
    
    
    25.5
    
    
    
    149,273
    
    
    
    22.0Total
    
    $
    596,837
    
    
    
    100.0
    %
    
    $
    727,470
    
    
    
    100.0
    %
    
    $
    679,197
    
    
    
    100.0
    %
  2. Summary of Significant Accounting Policies
 Principles of Consolidation
  Use of Estimates
  42




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##### Table of Contents



Reclassifications
  Cash and Cash Equivalents
  Revenue Recognition
   Allowance for Doubtful Accounts
   Inventories
  Property and Equipment
  43




---



##### Table of Contents



Accounting for the Impairment or Disposal of Long-Lived Assets.
 Valuation of Goodwill and Other Intangible Assets
 Business Combinations Recognition of Customer Relationship Intangible Assets Acquired in a
Business Combination.
 Goodwill and Other Intangible Assets,
  Insurance and Claim Accruals
  44




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##### Table of Contents



Stock-Based Compensation
 Share-Based Payment Accounting for Stock Based Compensation (APB No. 25) Accounting for Stock Issued to Employees Statement of Cash Flows
   Earnings Per Share
  Deferred Loan Costs
  Derivatives
 Accounting for Derivative Instruments and Hedging Activities
 45




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##### Table of Contents



Income Taxes
 Accounting for Income Taxes.
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
 Fair Value Measurements
  Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans an amendment of FASB Statements No. 87, 88, 106, and
132(R)
 The Fair Value Option for Financial Assets and
Financial Liabilities, including an amendment of FASB Statement No. 115
 46




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##### Table of Contents



3. Acquisition
 Business
Combinations.
  Accounts receivable
    
    $
    35,042Work completed not billed
    
    
    7,027Other current assets
    
    
    18,569Property, plant & equipment
    
    
    76,048Goodwill (non-deductible)
    
    
    91,399Identified intangible assets
    
    
    60,810Other non-current assets
    
    
    1,383Accounts payable and accrued expenses
    
    
    (18,368
    )Insurance payable
    
    
    (14,121
    )Deferred compensation
    
    
    (28,948
    )Deferred income taxes
    
    
    (34,913
    )Total net assets acquired
    
    $
    193,928
 4. Change in Capital Structure, Recapitalization and Initial Public Offering
    47




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##### Table of Contents



5. Property and Equipment
  EstimatedUsefulLives in
    
    June 30,Years
    
    2007
    
    
    2006Land
    
    
    
    $
    3,088
    
    
    $
    3,123Buildings
    
    15-39
    
    
    26,744
    
    
    
    26,671Vehicles
    
    5-12
    
    
    294,997
    
    
    
    298,107Machinery and equipment
    
    3-19
    
    
    100,291
    
    
    
    104,160Office equipment, furniture and software
    
    3-7
    
    
    8,329
    
    
    
    6,736Total
    
    
    
    
    433,449
    
    
    
    438,797Less: accumulated depreciation
    
    
    
    
    165,709
    
    
    
    154,345Property and equipment, net
    
    
    
    $
    267,740
    
    
    $
    284,452
    6. Other Intangible Assets
  Customer
    
    Customer
    
    Non-CompeteRelationships
    
    Arrangements
    
    Agreements
    
    TotalJune 30,
    
    June 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006Gross carrying value
    
    $
    43,220
    
    
    $
    43,220
    
    
    $
    6,990
    
    
    $
    6,990
    
    
    $
    5,500
    
    
    $
    10,600
    
    
    $
    55,710
    
    
    $
    60,810Accumulated
amortization
    
    
    (3,658
    )
    
    
    (1,617
    )
    
    
    (6,990
    )
    
    
    (6,592
    )
    
    
    (1,833
    )
    
    
    (2,623
    )
    
    
    (12,482
    )
    
    
    (10,832
    )Net intangible
assets
    
    $
    39,562
    
    
    $
    41,603
    
    
    $
    
    
    
    $
    398
    
    
    $
    3,667
    
    
    $
    7,977
    
    
    $
    43,228
    
    
    $
    49,978
   48




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##### Table of Contents



Year Ended June 30,
    
    Amount2008
    
    $
    3,1642009
    
    
    3,1322010
    
    
    3,0442011
    
    
    2,8882012
    
    
    2,763Thereafter
    
    
    28,237Total
    
    $
    43,228
 7. Debt
  June 30,2007
    
    
    2006Revolving credit facility
    
    $
    
    
    
    $
    4,500Long-term debt:$300 million term loan
    
    $
    122,034
    
    
    $
    158,676$150 million term loan
    
    
    69,466
    
    
    
    90,324191,500
    
    
    
    249,000Less: current portion
    
    
    
    
    
    
    Long-term debt
    
    $
    191,500
    
    
    $
    249,000
      49




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##### Table of Contents



8. Mandatorily Redeemable Preferred Stock
   9. Derivative Instruments and Comprehensive Income
       50




---



##### Table of Contents



10. Income Taxes
  Years Ended June 30,2007
    
    
    2006
    
    
    2005Current
    
    $
    18,200
    
    
    $
    27,895
    
    
    $
    2,551Deferred
    
    
    (6,243
    )
    
    
    (5,571
    )
    
    
    5,918Total
    
    $
    11,957
    
    
    $
    22,324
    
    
    $
    8,469
  June 30,2007
    
    
    2006Deferred tax liabilities:Tax over book depreciation
    
    $
    (67,042
    )
    
    $
    (71,364
    )Tax over book amortization
    
    
    (11,330
    )
    
    
    (13,411
    )Other
    
    
    (299
    )
    
    
    (524
    )Total deferred tax liabilities
    
    
    (78,671
    )
    
    
    (85,299
    )Deferred tax assets:Deferred compensation
    
    
    5,023
    
    
    
    8,332Self-insurance accruals
    
    
    13,463
    
    
    
    10,619Accrued vacation
    
    
    2,277
    
    
    
    2,374Other
    
    
    4,282
    
    
    
    4,101Total deferred tax assets
    
    
    25,045
    
    
    
    25,426Net deferred tax liabilities
    
    $
    (53,626
    )
    
    $
    (59,873
    )
  June 30,2007
    
    
    2006Current assets
    
    $
    13,633
    
    
    $
    12,460Non-current liabilities
    
    
    (67,259
    )
    
    
    (72,333
    )Net deferred tax liabilities
    
    $
    (53,626
    )
    
    $
    (59,873
    )
  Years Ended June 30,2007
    
    
    2006
    
    
    2005Computed tax at federal statutory rate
    
    $
    10,610
    
    
    
    35.0
    %
    
    $
    19,843
    
    
    
    35.0
    %
    
    $
    1,849
    
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    1,269
    
    
    
    4.2
    %
    
    
    2,352
    
    
    
    4.2
    %
    
    
    875
    
    
    
    16.6
    %Accretion of preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,967
    
    
    
    94.0
    %Allowance for income tax uncertainties
    
    
    150
    
    
    
    0.5
    %
    
    
    300
    
    
    
    0.5
    %
    
    
    600
    
    
    
    11.4
    %Permanent differences
    
    
    78
    
    
    
    0.2
    %
    
    
    (35
    )
    
    
    (0.1
    )%
    
    
    312
    
    
    
    5.9
    %Credits and other
    
    
    (150
    )
    
    
    (0.5
    )%
    
    
    (136
    )
    
    
    (0.2
    )%
    
    
    (134
    )
    
    
    (2.6
    )%Net income tax expense
    
    $
    11,957
    
    
    
    39.4
    %
    
    $
    22,324
    
    
    
    39.4
    %
    
    $
    8,469
    
    
    
    160.3
    %
  11. Employee Benefit Plans
  51




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##### Table of Contents



12. Stock-Based Compensation
 Overview
      Stock Options
  Years ended June 30,2007
    
    
    2006
    
    
    2005Dividend yield
    
    
    
    
    
    
    
    
    
    
    Risk-free interest rate
    
    
    4.64% - 4.92
    %
    
    
    4.06% - 5.05
    %
    
    
    3.75
    %Expected volatility
    
    
    0.29 - 0.30
    
    
    
    0.29
    
    
    
    0.45Expected life
    
    5.0 - 6.5 years
    
    6.5 years
    
    6.0 years
  52




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##### Table of Contents



WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Life
    
    
    IntrinsicOptions
    
    
    Price
    
    
    (years)
    
    
    ValueOptions outstanding, June 30, 2006
    
    
  2,966
    
    
    $
    8.12Exercised
    
    
    (344
    )
    
    
    5.67Forfeited
    
    
    (223
    )
    
    
    11.14Granted
    
    
    345
    
    
    
    17.92Options outstanding, June 30, 2007
    
    
    2,744
    
    
    $
    9.41
    
    
    
    6.9
    
    
    $
    36,655Options vested and expected to vest, June 30, 2007
    
    
    2,616
    
    
    $
    9.23
    
    
    
    6.9
    
    
    $
    35,429Options exercisable, June 30, 2007
    
    
    1,421
    
    
    $
    5.89
    
    
    
    5.8
    
    
    $
    23,977
    Other Stock-Based Compensation
  Weighted AverageGrant-Date FairShares
    
    
    ValueNon-vested shares, June 30, 2006
    
    
    369
    
    
    $
    10.72Granted
    
    
    62
    
    
    $
    15.62Vested
    
    
    (6
    )
    
    $
    17.31Forfeited
    
    
    (122
    )
    
    $
    8.66Non-vested shares, June 30, 2007
    
    
    303
    
    
    $
    12.60
   53




---



##### Table of Contents



Employee Stock Purchase Plans
   Fair Value of Equity Instruments
   Pro Forma Disclosure
  Net loss, as reported
    
    $
    (3,186
    )Add: Stock-based employee compensation expense included in
reported net loss, net of related income tax effects
    
    
    2,985Less: Stock-based employee compensation expense determined under
fair value based method, net of related income tax effects
    
    
    (1,880
    )Pro forma net loss
    
    $
    (2,081
    )Net loss  basic and diluted, as reported
    
    $
    (0.11
    )Net loss  basic and diluted, pro forma
    
    $
    (0.08
    )
 54




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##### Table of Contents



13. Earnings Per Share
  Year Ended June 30,2007
    
    
    2006
    
    
    2005Basic:Net income (loss)
    
    $
    18,357
    
    
    $
    34,369
    
    
    $
    (3,186
    )Weighted average common shares
    
    
    32,416
    
    
    
    31,023
    
    
    
    27,709Basic earnings (loss) per share
    
    $
    0.57
    
    
    $
    1.11
    
    
    $
    (0.11
    )Diluted:Net income (loss)
    
    $
    18,357
    
    
    $
    34,369
    
    
    $
    (3,186
    )Weighted average common shares
    
    
    32,416
    
    
    
    31,023
    
    
    
    27,709Potential common stock arising from stock options and
restricted stock
    
    
    950
    
    
    
    1,229
    
    
    
    Weighted average common shares  diluted
    
    
    33,366
    
    
    
    32,252
    
    
    
    27,709Diluted earnings (loss) per share
    
    $
    0.55
    
    
    $
    1.07
    
    
    $
    (0.11
    )
  14. Leases
  2008
    
    $
    2,2472009
    
    
    1,9282010
    
    
    1,8882011
    
    
    1,8342012
    
    
    1,744Thereafter
    
    
    5,016$
    14,657
  15. Deferred Compensation
   55




---



##### Table of Contents



2008
    
    $
    3,6432009
    
    
    3,8682010
    
    
    1,3882011
    
    
    2012
    
    
    Thereafter
    
    
    8,880Total
    
    
    17,779Less amount representing interest
    
    
    (4,920
    )Present value of expected payments
    
    
    12,859Less current portion
    
    
    (3,544
    )Deferred compensation, net of current portion
    
    $
    9,315
 16. Financial Instruments
 Concentrations of Credit Risk
   56




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##### Table of Contents



Off-Balance Sheet Risk
  Fair Value of Financial Instruments
  17. Related Party Transactions and Agreements
 Stockholders Agreement
  Restrictions on Transfer of Shares.
 Corporate Governance.
 Registration Rights.
 Management Agreement
  18. Commitments and Contingencies
 Litigation
  57




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##### Table of Contents



Performance Bonds
  19. Quarterly DataUnaudited
  Quarter EndedSeptember 30,
    
    December 31,
    
    March 31,
    
    June 30,Fiscal 2007:Revenues
    
    $
    149,855
    
    
    $
    148,369
    
    
    $
    154,272
    
    
    $
    144,341Gross profit
    
    
    19,740
    
    
    
    24,512
    
    
    
    27,521
    
    
    
    25,641Net income
    
    
    1,602
    
    
    
    5,220
    
    
    
    5,964
    
    
    
    5,571Basic earnings per share
    
    $
    0.05
    
    
    $
    0.16
    
    
    $
    0.18
    
    
    $
    0.17Diluted earnings per share
    
    $
    0.05
    
    
    $
    0.16
    
    
    $
    0.18
    
    
    $
    0.17Fiscal 2006:Revenues
    
    $
    218,431
    
    
    $
    195,725
    
    
    $
    157,202
    
    
    $
    156,112Gross profit
    
    
    48,655
    
    
    
    39,434
    
    
    
    17,300
    
    
    
    22,834Net income
    
    
    17,515
    
    
    
    13,571
    
    
    
    288
    
    
    
    2,995Basic earnings per share
    
    $
    0.61
    
    
    $
    0.43
    
    
    $
    0.01
    
    
    $
    0.09Diluted earnings per share
    
    $
    0.58
    
    
    $
    0.41
    
    
    $
    0.01
    
    
    $
    0.09
  58




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
    
 ITEM 9B.
    
    OTHER INFORMATION
  
 Part III
 
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    59




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##### Table of Contents



ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  60




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##### Table of Contents



Part IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 a)
    
    Financial Information
 (1)
    
    Financial Statements: See Index to Consolidated
Financial Statements in Part II, Item 8 of this
Form 10-K.(2)
    
    Financial Statement Schedule: See Schedule II 
Valuation and Qualifying Accounts of this Form
10-K.(3)
    
    Exhibits

See (b) below.
 b)
    
    ExhibitsSee Exhibit Index on page 64.
 61




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##### Table of Contents



SIGNATURES
  PIKE ELECTRIC CORPORATION 
(Registrant)Date: August 31, 2007
    By:
    /s/ J. Eric PikeJ. Eric PikeChairman, Chief Executive Officer and President  Signature
    
    Title
    
    Date/s/ J. Eric Pike

J. Eric Pike
    
    Chairman, Chief Executive Officer
and President
    
    August 31, 2007/s/ Anthony K. Slater

Anthony K. Slater
    
    Chief Financial Officer
    
    August 31, 2007/s/ Gary D. Waldman
    
    Chief Accounting Officer
    
    August 31, 2007Gary D. Waldman/s/ Charles E. Bayless

Charles E. Bayless
    
    Director
    
    August 31, 2007/s/ Adam P. Godfrey

Adam P. Godfrey
    
    Director
    
    August 31, 2007/s/ James R. Helvey III

James R. Helvey III
    
    Director
    
    August 31, 2007/s/ Robert D. Lindsay

Robert D. Lindsay
    
    Director
    
    August 31, 2007/s/ Daniel J. Sullivan

Daniel J. Sullivan
    
    Director
    
    August 31, 2007/s/ Louis F. Terhar

Louis F. Terhar
    
    Director
    
    August 31, 2007
 62




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##### Table of Contents



SCHEDULE II
 PIKE ELECTRIC CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JUNE 30 2007, 2006 AND 2005
 Balance at
    
    
    Charged toBeginning of
    
    
    Revenue or
    
    
    
    
    
    
    Balance at EndDescription
    
    Period
    
    
    Expense
    
    
    Deductions
    
    
    of Period(in thousands)Year ended June 30, 2007:Allowance for doubtful accounts
    
    $
    2,432
    
    
    $
    520
    
    
    $
    (2,010
    ) (1)
    
    $
    942Insurance claim reserve
    
    
    32,306
    
    
    
    29,317
    
    
    
    (24,060
    ) (2)
    
    
    37,563Year ended June 30, 2006:Allowance for doubtful accounts
    
    $
    236
    
    
    $
    4,133
    
    
    $
    (1,937
    ) (1)
    
    $
    2,432Insurance claim reserve
    
    
    18,422
    
    
    
    41,407
    
    
    
    (27,523
    ) (2)
    
    
    32,306Year ended June 30, 2005:Allowance for doubtful accounts
    
    $
    
    
    
    $
    2,816
    
    
    $
    (2,580
    ) (1)
    
    $
    236Insurance claim reserve
    
    
    7,501
    
    
    
    47,124
    
    
    
    (36,203
    ) (2)
    
    
    18,422
 
 (1)
    
    Represents uncollectible accounts written off, net of recoveries.(2)
    
    Represents claim payments for self-insured claims. 63




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##### Table of Contents



EXHIBIT INDEX
 EXHIBITNO.
    
    DESCRIPTION3.1
    
    Certificate of Incorporation of Pike Electric Corporation
(Incorporated by reference to Exhibit 3.1 on our Registration
Statement on Form S-1/A filed July 11, 2005)3.2
    
    Bylaws of Pike Electric Corporation (Incorporated by reference to
Exhibit 3.2 on our Registration Statement on Form S-1/A filed July
11, 2005)4.1
    
    Specimen Stock Certificate (Incorporated by reference to Exhibit
4.1 on our Registration Statement on Form S-1/A filed July 22,
2005)10.1*
    
    2005 Employee Stock Purchase Plan (Incorporated by reference to
Exhibit 10.1 on our Registration Statement on Form S-1/A filed
June 3, 2005)10.2*
    
    2002 Stock Option Plan A (Incorporated by reference to Exhibit
10.2 on our Registration Statement on Form S-1/A filed June 3,
2005)10.3*
    
    2002 Stock Option Plan B (Incorporated by reference to Exhibit
10.3 on our Registration Statement on Form S-1/A filed June 3,
2005)10.4
    
    Amended and Restated Credit Agreement, dated as of July 1, 2004,
among Pike Holdings, Inc., Pike Electric, Inc. and the lenders
party thereto (Incorporated by reference to Exhibit 10.4 on our
Registration Statement on Form S-1/A filed June 3, 2005)10.5
    
    First Amendment to the Amended and Restated Credit Agreement,
dated as of December 10, 2004, among Pike Holdings, Inc., Pike
Electric, Inc. and the lenders party thereto (Incorporated by
reference to Exhibit 10.5 on our Registration Statement on Form
S-1/A filed June 3, 2005)10.6
    
    Stockholders Agreement, dated April 18, 2002, among Pike Holdings,
Inc., LGB Pike LLC, certain rollover holders and certain
management stockholders (Incorporated by reference to Exhibit 10.6
on our Registration Statement on Form S-1/A filed June 3, 2005)10.7
    
    Management Advisory Services Agreement, dated April 18, 2002,
between Pike Electric, Inc. and Goldberg Lindsay & Co. LLC
(Incorporated by reference to Exhibit 10.7 on our Registration
Statement on Form S-1/A filed June 3, 2005)10.8
    
    Amendment Agreement, dated as of July 1, 2004, to the Management
Advisory Services Agreement, dated April 18, 2002, between Pike
Electric, Inc. and Goldberg Lindsay & Co. LLC (Incorporated by
reference to Exhibit 10.8 on our Registration Statement on Form
S-1/A filed June 3, 2005)10.9*
    
    Amended and Restated Employment Agreement, dated as of July 20,
2005, between J. Eric Pike and Pike Electric Corporation
(Incorporated by reference to Exhibit 10.9 on our Registration
Statement on Form S-1/A filed July 22, 2005)10.10*
    
    Letter Agreement, dated as of March 15, 2002, between Joe B. Pike
and LGB Pike LLC (Incorporated by reference to Exhibit 10.10 on
our Registration Statement on Form S-1/A filed June 3, 2005)10.11
    
    Second Amendment to the Amended and Restated Credit Agreement,
dated as of June 27, 2005, among Pike Holdings, Inc., Pike
Electric, Inc. and the lenders party thereto (Incorporated by
reference to Exhibit 10.11 on our Registration Statement on Form
S-1/A filed July 11, 2005)10.12
    
    Termination Agreement, dated as of June 23, 2005, between Pike
Electric, Inc. and Goldberg Lindsay & Co. LLC (Incorporated by
reference to Exhibit 10.12 on our Registration Statement on Form
S-1/A filed July 11, 2005)10.13
    
    Addendum, dated June 13, 2005, to the Stockholders Agreement dated
April 18, 2002, among Pike Holdings, Inc., LGB Pike LLC, certain
rollover holders and certain management stockholders (Incorporated
by reference to Exhibit 10.13 on our Registration Statement on
Form S-1/A filed July 11, 2005)
 64




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##### Table of Contents



EXHIBITNO.
    
    DESCRIPTION10.14*
    
    2005 Omnibus Incentive Compensation Plan (Incorporated by
reference to Exhibit 10.15 on our Registration Statement on Form
S-1/A filed July 22, 2005)10.15*
    
    Amendment, dated July 21, 2005, to the Stockholders Agreement
dated April 18, 2002, among Pike Electric Corporation as successor
to Pike Holdings, Inc., LGB Pike II LLC as successor to LGB Pike
LLC, certain rollover holders and certain management stockholders
(Incorporated by reference to Exhibit 10.16 on our Registration
Statement on Form S-1/A filed July 22, 2005)10.16
    
    Third Amendment to the Amended and Restated Credit Agreement,
dated as of December 9, 2005, among Pike Holdings, Inc., Pike
Electric, Inc. and the lenders party thereto (Incorporated by
reference to Exhibit 10.1 on our Form 8-K filed December 13, 2005)10.17
    
    Revolving Commitment Increase Agreement, dated December 12, 2005,
by and between Pike Electric, Inc. and Bank of America, N.A.
(Incorporated by reference to Exhibit 10.2 on our Form 8-K filed
December 13, 2005)10.18
    
    Revolving Commitment Increase Agreement, dated December 12, 2005,
by and between Pike Electric, Inc. and First Tennessee Bank,
National Association (Incorporated by reference to Exhibit 10.3 on
our Form 8-K filed December 13, 2005)10.19
    
    Fourth Amendment to the Amended and Restated Credit Agreement,
dated February 28, 2006, among Pike Electric Corporation, Pike
Electric, Inc. and the lenders party thereto (Incorporated by
reference to Exhibit 10.1 on our Form 10-Q filed May 12, 2006)10.20*
    
    Employment Agreement, dated October 10, 2006, by and between James
R. Fox, Pike Electric, Inc. and Pike Electric Corporation
(Incorporated by reference to Exhibit 10.1 on our Form 8-K filed
October 10, 2006)10.21*
    
    Employment Agreement, dated October 10, 2006, by and between
Anthony K. Slater, Pike Electric, Inc. and Pike Electric
Corporation (Incorporated by reference to Exhibit 10.2 on our Form
8-K filed October 10, 2006)10.22*
    
    Separation Agreement and General Release, dated October 31, 2006,
by and between Mark Castaneda and Pike Electric, Inc.
(Incorporated by reference to Exhibit 10.1 on our Form 8-K filed
November 6, 2006)10.23
    
    Fifth Amendment to the Amended and Restated Credit Agreement,
dated as of December 9, 2005, among Pike Holdings, Inc., Pike
Electric, Inc. and the lenders party thereto (Incorporated by
reference to Exhibit 10.1 on our Form 8-K filed November 16, 2006)10.24*
    
    Employment Agreement, dated November 20, 2006, by and between
Audie Simmons, Pike Electric, Inc. and Pike Electric Corporation
(Incorporated by reference to Exhibit 10.1 on our Form 8-K filed
November 27, 2006)10.25*
    
    Employment Agreement, dated November 27, 2006, by and between Mark
P. Thomson, Pike Electric, Inc. and Pike Electric Corporation
(Incorporated by reference to Exhibit 10.1 on our Form 8-K filed
November 30, 2006)21.1
    
    List of subsidiaries of Pike Electric Corporation (filed herewith)23.1
    
    Consent of Ernst & Young LLP (filed herewith)31.1
    
    Certification of Periodic Report by Chief Executive Officer
pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith)31.2
    
    Certification of Periodic Report by Chief Financial Officer
pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith)32.1
    
    Certification of Periodic Report by Chief Executive Officer and
Chief Financial Officer pursuant to U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(filed herewith)
 
 *
    
    Indicates a management contract or compensatory plan or arrangement. 65