PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 AND 1996
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1997
AND 1996
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED
DECEMBER 31, 1997
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULE I: ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS
OF DECEMBER 31, 1997
SCHEDULE II: ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR
ENDED DECEMBER 31, 1997
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Portland General Holdings, Inc. Retirement
Savings Plan Benefits Administration Committee:
WE HAVE AUDITED THE ACCOMPANYING STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS OF THE PORTLAND GENERAL HOLDINGS, INC. RETIREMENT SAVINGS PLAN (THE
PLAN) AS OF DECEMBER 31, 1997 AND 1996, AND THE RELATED STATEMENT OF CHANGES
IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997.
THESE FINANCIAL STATEMENTS AND THE SCHEDULES REFERRED TO BELOW ARE THE
RESPONSIBILITY OF THE PLAN'S ADMINISTRATION. OUR RESPONSIBILITY IS TO
EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS AND SCHEDULES BASED ON OUR
AUDITS.
WE CONDUCTED OUR AUDITS IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING
STANDARDS. THOSE STANDARDS REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO
OBTAIN REASONABLE ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE
OF MATERIAL MISSTATEMENT. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS,
EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENTS.
AN AUDIT ALSO INCLUDES ASSESSING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT
ESTIMATES MADE BY MANAGEMENT, AS WELL AS EVALUATING THE OVERALL FINANCIAL
STATEMENT PRESENTATION. WE BELIEVE THAT OUR AUDITS PROVIDE A REASONABLE
BASIS FOR OUR OPINION.
IN OUR OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY, IN
ALL MATERIAL RESPECTS, THE NET ASSETS AVAILABLE FOR BENEFITS OF THE PLAN AS OF
DECEMBER 31, 1997 AND 1996, AND THE CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997, IN CONFORMITY WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.
OUR AUDITS WERE PERFORMED FOR THE PURPOSE OF FORMING AN OPINION ON THE BASIC
FINANCIAL STATEMENTS TAKEN AS A WHOLE. THE SUPPLEMENTAL SCHEDULES OF ASSETS
HELD FOR INVESTMENT PURPOSES AND REPORTABLE TRANSACTIONS ARE PRESENTED FOR THE
PURPOSE OF ADDITIONAL ANALYSIS AND ARE NOT A REQUIRED PART OF THE BASIC
FINANCIAL STATEMENTS BUT ARE SUPPLEMENTARY INFORMATION REQUIRED BY THE
DEPARTMENT OF LABOR RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE UNDER
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. THE SUPPLEMENTAL
SCHEDULES HAVE BEEN SUBJECTED TO THE AUDITING PROCEDURES APPLIED IN THE AUDITS
OF THE BASIC FINANCIAL STATEMENTS AND, IN OUR OPINION, ARE FAIRLY STATED IN
ALL MATERIAL RESPECTS IN RELATION TO THE BASIC FINANCIAL STATEMENTS TAKEN AS
A WHOLE.
Portland, Oregon,
June 26, 1998
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
ASSETS:
Investments, at fair value-
Interest in PGH Investment Trust-Master Trust
(Note 9) $311,204,568 $258,615,927
Enron common stock 86,228,592 89,019,645
Short-term investments 1,635,768 1,932,760
Loans to participants 4,488,342 4,333,579
------------ ------------
Total investments 403,557,270 353,901,911
Receivables-
Employee contributions 426,000 405,000
Employer contributions 178,000 306,500
Accrued interest 6,086 12,194
Accrued dividends - 678,299
------------ ------------
Total receivables 610,086 1,401,993
------------ ------------
Total assets 404,167,356 355,303,904
LIABILITIES:
Note payable to PGE - 2,065,185
------------ ------------
Total liabilities - 2,065,185
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $404,167,356 $353,238,719
============ ============
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C>
ADDITIONS TO PLAN ASSETS:
Investments income-
Interest $ 343,749
Dividends 2,277,261
Income from PGH Investment Trust-Master Trust, net 50,026,842
------------
Total investment income 52,647,852
Contributions-
Employee 11,647,888
Employer 3,764,127
------------
Total contributions 15,412,015
------------
Total additions 68,059,867
DEDUCTIONS FROM PLAN ASSETS:
Payments for-
Interest expense 93,527
Net depreciation in fair value of investments 2,528,945
Benefits to participants 14,508,758
------------
Total deductions 17,131,230
------------
NET INCREASE 50,928,637
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year 353,238,719
------------
NET ASSETS AVAILABLE FOR BENEFITS, end of year $404,167,356
============
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
<PAGE>
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 AND 1996
1. GENERAL DESCRIPTION OF THE PLAN:
The following brief description of the Portland General Holdings, Inc. (PGH or
the Company) Retirement Savings Plan (the Plan) provides general information
only. Readers should refer to the Plan Prospectus and Employee Handbook for a
more complete description of the Plan's provisions.
GENERAL
The Plan first became effective October 1, 1982. On July 1, 1997, Portland
General Corporation (PGC) merged into Enron Oregon Corp. (Enron). In
conjunction with the merger, the Plan, formally known as Portland General
Corporation Retirement Savings Plan, was renamed Portland General Holdings,
Inc. Retirement Savings Plan. The Plan was restated effective June 25, 1997.
Upon completion of the merger, PGC shares were converted to .9825 shares of
Enron and employer matching contributions were made in Enron stock subsequent
to the merger.
The Plan is a defined contribution plan covering substantially all employees of
PGH, Portland General Electric Company (PGE) and other affiliates who have
completed one year of service as defined by the Plan. It is administered by
the PGH Retirement Savings Plan Benefits Administration Committee. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA), as amended.
TRUSTEES
The trustee for the Stable Assets Fund, Bond Fund, Balanced Fund, Core Equity
Fund, Aggressive Equity Fund, International Equity Fund, Loan Fund, and Model
Portfolios A-E is the Northern Trust Company (Primary Trustee). The trustee
for the Enron Common Stock Fund, the PGH nonleveraged Employee Stock Ownership
Plan (ESOP), and the Portland General Electric (PGE) leveraged ESOP is Wells
Fargo (Secondary Trustee).
CONTRIBUTIONS
The Plan allows participating employees to contribute up to a total of 15% of
their annual base pay (before-tax and after-tax combined). The Tax Reform Act
of 1986 limits employee before-tax contributions to $9,500 for 1997 and 1996.
These amounts may be adjusted annually based upon changes in the consumer price
index.
The employer matching contribution is 100% of the first 6% of a participant's
eligible earnings, as defined by the Plan. The matching contribution is made
entirely in whole or fractional shares of Enron Common Stock through the PGH
nonleveraged ESOP or PGE leveraged ESOP. All shares of common stock were
allocated to participants and transferred out of the PGE leveraged ESOP during
1997 to the nonleveraged PGH ESOP. ESOP allocations shall be valued at a price
defined by the Plan document. The PGH nonleveraged ESOP purchased shares on
the open market totaling $3,525,046 in 1997. The PGE leveraged ESOP
transferred shares from the unallocated fund to the allocated fund valued at
$5,241,208 in 1997.
<PAGE>
-2-
INVESTMENT OPTIONS
Participants are offered the option of investing in seven investment funds and
five premixed portfolios held by the Master Trust. The premixed portfolios are
comprised of various combinations of the seven investment funds and are
designed to meet various investing needs. If a participant elects to invest in
Model Portfolios A-E described below, all their current funds (except employer
matching contributions) and future payroll deferrals must be invested in that
single portfolio. Employer matching contributions become participant directed
upon the participant reaching age 50 and having completed at least five years
of participation in the Plan. At that time, the participant may elect once
each year to transfer from his ESOP account an amount that does not exceed the
value of 25% of the shares of Enron stock credited to his ESOP account to
investment options other than employer stock.
The following is a description of the various fund options:
a. The Stable Assets Fund invests primarily in investment contracts whose
rate of interest is fixed by insurance companies. As of December 31,
1997 and 1996, there were 6 and 14 participating insurance companies,
respectively, with guaranteed investment contracts. In 1997 and 1996,
the Stable Assets fund invested in synthetic investment contracts
(Note 8). The Stable Assets Fund may invest in other stable assets
outside the insurance industry in order to diversify its holdings.
b. The Bond Fund invests in a diversified mix of fixed income investments.
The fund's assets consist primarily of Treasury bonds, Corporate bonds,
U.S. Government Agency securities, pass-through securities, and high-
yield debt securities.
c. The Balanced Fund portfolio is a combination of two funds. The Balanced
Fund targets a 60% allocation to a Common Stock Fund with the remainder
allocated to a Fixed Income Securities Fund (a bond fund).
d. The Core Equity Fund consists primarily of a diversified portfolio of
large capitalization common stocks domiciled in the United States.
e. The Aggressive Equity Fund consists primarily of a diversified portfolio
of intermediate to smaller capitalization common stocks domiciled in the
United States. In addition, this fund may also invest in stocks of
distressed companies where a turnaround is likely.
f. The International Equity Fund is a diversified portfolio issued by
companies with headquarters outside of the United States. Asset
allocation emphasizes Europe, Australia, and the Far East.
g. Model Portfolios
Portfolio A is an ultraconservative fund with the highest concentration
in the Stable Assets and Bond Funds.
Portfolio B is a conservative fund with the highest concentration in the
Stable Assets, Bond, and Core Equity Funds.
Portfolio C is a moderate fund with a higher concentration of equities
while still maintaining a high concentration of the Stable Assets and
Bond Funds.
Portfolio D is an aggressive fund with a still higher concentration in
the Core Equity, Aggressive Equity, and International Equity Funds.
Portfolio E is an ultra-aggressive fund investing only in the Core
Equity, Aggressive Equity, and International Equity Funds.
<PAGE>
-3-
h. Enron Common Stock Fund and ESOPs
The Enron Common Stock Fund invests in Enron Common Stock. Based upon
participant contributions, dividend reinvestments, transfers, and
withdrawals, the Secondary Trustee may buy or sell shares on the open
market.
The PGH Nonleveraged ESOP invests in Enron Common Stock based upon
employer matching contributions for PGH and affiliated company employee
participants.
The PGE Leveraged ESOP invested in PGC Common Stock based upon employer
matching contributions for PGE employee participants. The Leveraged ESOP
borrowed $36 million in late 1990 from PGE to fund the purchase of PGC
Common Stock for PGE employees. During 1997, all unallocated shares were
allocated to participant accounts, the remaining loan balance was paid,
and all leveraged shares were transferred to the PGH nonleveraged
account.
LOAN FUND
This fund records the issuance and repayment of loan principal and related
interest over the life of loans issued to participants. The loan program
allows active employees participating in the Plan to borrow up to one-half the
value of their account, but not more than $50,000, over a maximum term of 60
months. Participants pay interest to their account based upon the share
secured interest rate of the Electra Credit Union. The interest rate ranges on
outstanding loans at December 31, 1997 was 6.00% to 7.33% and had maturity
dates ranging from January 1998 to December 2002.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocation of (a) the Company's matching contribution (ESOP only) and (b) net
Plan earnings. Allocations are based upon participant earnings (eligible
compensation) or account balances, as defined by the Plan. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's account. Participants are immediately vested in their accounts.
PAYMENT OF BENEFITS
The full value of the account is payable upon termination of employment,
retirement, disability, or death. Retirees and former employees may choose to
leave all or part of the full value of the account in the Plan up to age
70-1/2. After age 70-1/2, the Internal Revenue Service (IRS) required minimum
distribution criteria must be met. No additional contributions may be made
after retirement, termination, or death. For the year ended December 31, 1997,
participant disbursements are transferred from the employees' investment
elections to the Stable Assets Fund for distribution. Participant
distributions of Enron common stock are disbursed directly from the ESOPs and
Enron Common Stock Fund. For cash distribution of participants' investment in
the PGE Leveraged ESOP, Enron common stock is repurchased from the participant.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying financial statements are prepared on the accrual basis of
accounting.
<PAGE>
-4-
USE OF ESTIMATES
Management makes estimates and assumptions when preparing the financial
statements in conformity with generally accepted accounting principles. These
estimates and assumptions effect the amounts reported in the accompanying
financial statements and the notes thereto. Actual results could differ from
those estimates.
INVESTMENT VALUATION
Investments are recorded at quoted market prices or at estimated fair value.
Many factors are considered in arriving at fair value. In general, however,
corporate bonds are valued based on yields currently available on comparable
securities of issuers with similar credit ratings. Investments in certain
restricted common stocks are valued at the quoted market price of the issuer's
unrestricted common stock less an appropriate discount. If a quoted market
price for unrestricted common stock of the issuer is not available, restricted
common stocks are valued at a multiple of current earnings less an appropriate
discount. The multiple chosen is consistent with multiples of similar
companies based on current market prices. Investment contracts with insurance
companies are stated at contract value (Note 7). Participant loans are stated
at cost, which approximates fair value.
INCOME RECOGNITION
The difference in fair value from one period to the next is recognized and
included in net depreciation in fair value of investments in the accompanying
statement of changes in net assets available for plan benefits. The net
depreciation in fair value of investments also included realized gains and
losses.
For assets held outside the Master Trust, interest income is recorded on the
accrual basis and dividend income is recorded on the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
ADMINISTRATIVE EXPENSES
The Company pays administrative fees of the Plan, including trustee, record
keeper and audit fees. The Master Trust pays investment management fees,
brokerage fees, commissions and other costs associated with the administration
of the Master Trust. Participants pay recordkeeper fees associated with their
loans.
3. TAX STATUS:
The IRS has determined and informed the Company by a letter dated May 23, 1995
that the Plan and related trust are designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan has been amended since
that date. In the opinion of the Plan's administrator, the Plan is designed
and is currently being operated in compliance with the applicable provisions of
the IRC.
4. RELATED PARTY TRANSACTIONS:
Certain Plan investments are shares in funds managed by Northern Trust Company
and Wells Fargo. Northern Trust Company and Wells Fargo are the trustees as
defined by the Plan and, therefore, these investments and investment
transactions qualify as party-in-interest transactions. As the Plan holds
common stock of Enron as an investment, these investments and investment
transactions also qualify as party-in-interest transactions.
<PAGE>
-5-
5. RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS BY INVESTMENT OPTION:
Following are PGH Retirement Savings Plan financial statements with investment
fund option information as of December 31, 1997 and 1996, and for the year
ended December 31, 1997.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Participant Directed
Loan Stable Bond Balanced Core Equity Aggressive
FUND ASSETS FUND FUND FUND FUND EQUITY FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH Investment Trust-Master Trust $ - $70,243,695 $2,789,070 $8,963,389 $73,314,440 $20,290,164
Enron common stock - - - - - -
Short-term investments - 97,964 22,847 34,418 133,574 106,155
Loans to participants 4,488,342 - - - - -
---------- ----------- ---------- ---------- ----------- -----------
Total investments 4,488,342 70,341,659 2,811,917 8,997,807 73,448,014 20,396,319
Receivables-
Employee contributions - 55,000 2,000 13,000 80,000 31,000
Employer contributions - - - - - -
Accrued interest - 794 103 190 727 479
---------- ----------- ---------- ---------- ----------- -----------
Total receivables - 55,794 2,103 13,190 80,727 31,479
---------- ----------- ---------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $4,488,342 $70,397,453 $2,814,020 $9,010,997 $73,528,741 $20,427,798
========== =========== ========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
Inter- Model Portfolios
national ---------------------------------------------------------------
EQUITY A B C D E
FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH Investment Trust-Master Trust $5,174,031 $2,029,058 $7,249,056 $35,125,204 $56,377,746 $29,648,715
Enron common stock - - - - - -
Short-term investments 53,798 20,239 40,518 94,594 261,033 177,599
Loans to participants - - - - - -
---------- ---------- ---------- ----------- ----------- -----------
Total investments 5,227,829 2,049,297 7,289,574 35,219,798 56,638,779 29,826,314
Receivables-
Employee contributions 9,000 2,000 9,000 49,000 105,000 64,000
Employer contributions - - - - - -
Accrued interest 219 106 173 498 1,171 636
---------- ---------- ---------- ----------- ----------- -----------
Total receivables 9,219 2,106 9,173 49,498 106,171 64,636
---------- ---------- ---------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $5,237,048 $2,051,403 $7,298,747 $35,269,296 $56,744,950 $29,890,950
========== ========== ========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed Nonparticipant
Directed
Enron --------------
Common Nonleveraged Nonleveraged
STOCK FUND PGH ESOP PGH ESOP TOTAL
<S> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH Investment Trust-Master Trust - $ - $ - $311,204,568
Enron common stock $6,546,048 5,971,000 73,711,544 86,228,592
Short-term investments 137,566 - 455,463 1,635,768
Loans to participants - - - 4,488,342
---------- ---------- ----------- ------------
Total investments 6,683,614 5,971,000 74,167,007 403,557,270
Receivables-
Employee contributions 7,000 - - 426,000
Employer contributions - - 178,000 178,000
Accrued interest 380 - 610 6,086
---------- ---------- ----------- ------------
Total receivables 7,380 - 178,610 610,086
---------- ---------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $6,690,994 $5,971,000 $74,345,617 $404,167,356
========== ========== =========== ============
</TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Participant Directed
Loan Stable Bond Balanced Core Equity Aggressive
FUND ASSETS FUND FUND FUND FUND EQUITY FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH
Investment
Trust-Master Trust $ - $69,845,954 $2,579,690 $5,336,580 $52,200,125 $16,613,676
PGH common stock - - - - - -
Short-term investments - 573,628 44,324 51,159 296,577 128,691
Loans to participants 4,333,579 - - - - -
---------- ----------- ---------- ---------- ----------- -----------
Total investments 4,333,579 70,419,582 2,624,014 5,387,739 52,496,702 16,742,367
Receivables-
Employee contributions - 61,000 2,000 10,000 73,000 30,000
Employer contributions - - - - - -
Accrued interest - 1,844 121 187 966 438
Accrued dividends - - - - - -
---------- ----------- ---------- ---------- ----------- -----------
Total receivables - 62,844 2,121 10,187 73,966 30,438
---------- ----------- ---------- ---------- ----------- -----------
Total assets 4,333,579 70,482,426 2,626,135 5,397,926 52,570,668 16,772,805
LIABILITIES:
Note payable to PGE - - - - - -
---------- ----------- ---------- ---------- ----------- -----------
Total liabilities - - - - - -
---------- ----------- ---------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS $4,333,579 $70,482,426 $2,626,135 $5,397,926 $52,570,668 $16,772,805
========== =========== ========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
Inter- Model Portfolios
national -------------------------------------------------------------------- PGH Common
EQUITY FUND A B C D E STOCK FUND
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH
Investment
Trust-Master Trust $4,267,337 $2,471,839 $5,493,763 $30,693,816 $46,316,257 $22,796,890 $ -
PGH common stock - - - - - - 7,845,657
Short-term investments 46,595 33,686 43,625 191,298 320,090 172,376 18,320
Loans to participants - - - - - - -
---------- ---------- ---------- ----------- ----------- ----------- ----------
Total investments 4,313,932 2,505,525 5,537,388 30,885,114 46,636,347 22,969,266 7,863,977
Receivables-
Employee contributions 9,000 3,000 8,000 50,000 98,000 54,000 7,000
Employer contributions - - - - - - -
Accrued interest 186 109 177 672 1,138 653 115
Accrued dividends - - - - - - 59,776
---------- ---------- ---------- ----------- ----------- ----------- ----------
Total receivables 9,186 3,109 8,177 50,672 99,138 54,653 66,891
---------- ---------- ---------- ----------- ----------- ----------- ----------
Total assets 4,323,118 2,508,634 5,545,565 30,935,786 46,735,485 23,023,919 7,930,868
LIABILITIES:
Note payable to PGE - - - - - - -
---------- ---------- ---------- ----------- ----------- ----------- ----------
Total liabilities - - - - - - -
---------- ---------- ---------- ----------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS $4,323,118 $2,508,634 $5,545,565 $30,935,786 $46,735,485 $23,023,919 $7,930,868
========== ========== ========== =========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed Nonparticipant Directed
Nonleveraged PGE Leveraged ESOP
Nonleveraged Leveraged ------------ ---------------------------
PGH ESOP PGE ESOP PGH ESOP ALLOCATED UNALLOCATED TOTAL
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment, at fair value-
Interest in PGH
Investment
Trust-Master Trust $ $ - $ - $ - $ - $258,615,927
PGH common stock 257,000 5,681,000 3,045,959 66,980,964 5,209,065 89,019,645
Short-term investments - - 12,391 - - 1,932,760
Loans to participants - - - - - 4,333,579
-------- ---------- ---------- ----------- ----------- ------------
Total investments 257,000 5,681,000 3,058,350 66,980,964 5,209,065 353,901,911
Receivables-
Employee contributions - - - - - 405,000
Employer contributions - - 8,500 - 298,000 306,500
Accrued interest - - 29 - 5,559 12,194
Accrued dividends - - 25,165 553,615 39,743 678,299
-------- ---------- ---------- ----------- ----------- ------------
Total receivables - - 33,694 553,615 343,302 1,401,993
-------- ---------- ---------- ----------- ----------- ------------
Total assets 257,000 5,681,000 3,092,044 67,534,579 5,552,367 355,303,904
LIABILITIES:
Note payable to PGE - - - - 2,065,185 2,065,185
-------- ---------- ---------- ----------- ----------- ------------
Total liabilities - - - - 2,065,185 2,065,185
-------- ---------- ---------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS $257,000 $5,681,000 $3,092,044 $67,534,579 $ 3,487,182 $353,238,719
======== ========== ========== =========== =========== ============
</TABLE>
<PAGE>
-6-
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Participant Directed
Loan Stable Bond Balanced Core Equity Aggressive
FUND ASSETS FUND FUND FUND FUND EQUITY FUND
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO PLAN ASSETS:
Investment income-
Interest $ 225,960 $ 18,906 $ 1,870 $ 2,680 $ 16,583 $ 5,288
Dividends - - - - - -
Net appreciation
(depreciation) in fair value
of investments - - - - - -
Income from PGH Investment
Trust-
Master Trust, net - 4,292,606 264,500 1,422,228 18,095,292 3,819,110
---------- ----------- ---------- ---------- ----------- -----------
Total investment income 225,960 4,311,512 266,370 1,424,908 18,111,875 3,824,398
Contributions-
Employee - 1,677,208 66,434 327,216 2,205,452 857,357
Employer - - - - - -
---------- ----------- ---------- ---------- ----------- -----------
Total contributions - 1,677,208 66,434 327,216 2,205,452 857,357
---------- ----------- ---------- ---------- ----------- -----------
Total additions 225,960 5,988,720 332,804 1,752,124 20,317,327 4,681,755
DEDUCTIONS FROM PLAN ASSETS:
Payments for-
Interest expense - - - - - -
Benefits to participants (71,197) (5,615,325) (42,806) (132,834) (2,485,228) (620,774)
---------- ----------- ---------- ---------- ----------- -----------
Total deductions (71,197) (5,615,325) (42,806) (132,834) (2,485,228) (620,774)
---------- ----------- ---------- ---------- ----------- -----------
NET INCREASE (DECREASE) 154,763 373,395 289,998 1,619,290 17,832,099 4,060,981
INTERFUND TRANSFERS, NET - (458,368) (102,113) 1,993,781 3,125,974 (405,988)
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of year 4,333,579 70,482,426 2,626,135 5,397,926 52,570,668 16,772,805
---------- ----------- ---------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $4,488,342 $70,397,453 $2,814,020 $9,010,997 $73,528,741 $20,427,798
========== =========== ========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
INTERNATIONAL MODEL PORTFOLIOS
EQUITY FUND A B C D E
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO PLAN ASSETS:
Investment income-
Interest $ 2,124 $ 2,894 $ 2,712 $ 9,362 $ 16,727 $ 9,054
Dividends - - - - - -
Net appreciation
(depreciation) in fair value
of investments - - - - - -
Income from PGH Investment
Trust-
Master Trust, net 318,656 248,476 838,958 5,531,366 9,801,195 5,394,455
---------- ---------- ----------- ----------- ----------- -----------
Total investment income 320,780 251,370 841,670 5,540,728 9,817,922 5,403,509
Contributions-
Employee 242,483 62,245 221,259 1,359,996 2,808,110 1,583,552
Employer - 494 - - - -
---------- ---------- ----------- ----------- ----------- -----------
Total contributions 242,483 62,739 221,259 1,359,996 2,808,110 1,583,552
---------- ---------- ----------- ----------- ----------- -----------
Total additions 563,263 314,109 1,062,929 6,900,724 12,626,032 6,987,061
DEDUCTIONS FROM PLAN ASSETS:
Payments for-
Interest expense - - - - - -
Benefits to participants (73,358) (697,231) (114,232) (1,297,668) (769,319) (333,938)
---------- ---------- ---------- ----------- ----------- -----------
Total deductions (73,358) (697,231) (114,232) (1,297,668) (769,319) (333,938)
---------- ---------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) 489,905 (383,122) 948,697 5,603,056 11,856,713 6,653,123
INTERFUND TRANSFERS, NET 424,025 (74,109) 804,485 (1,269,546) (1,847,248) 213,908
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of year 4,323,118 2,508,634 5,545,565 30,935,786 46,735,485 23,023,919
---------- ---------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $5,237,048 $2,051,403 $7,298,747 $35,269,296 $56,744,950 $29,890,950
========== ========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed Nonparticipant Directed
Enron Nonleveraged Leveraged
Common Nonleveraged Leveraged ------------ -------------
STOCK FUND PGH ESOP PGE ESOP PGH ESOP PGE ESOP TOTAL
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO PLAN ASSETS:
Investment income-
Interest $ 2,372 $ - $ - $ 2,518 $ 24,699 $ 343,749
Dividends 186,868 - - 528,035 1,562,358 2,277,261
Net appreciation
(depreciation) in fair value
of investments (326,656) - - (3,036,395) 834,106 (2,528,945)
Income from PGH Investment
Trust-
Master Trust, net - - - - - 50,026,842
----------- ---------- ----------- ----------- ------------ ------------
Total investment income (137,416) - - (2,505,842) 2,421,163 50,118,907
Contributions-
Employee 236,576 - - - - 11,647,888
Employer - - - 3,694,546 69,087 3,764,127
----------- ---------- ----------- ----------- ------------ ------------
Total contributions 236,576 - - 3,694,546 69,087 15,412,015
----------- ---------- ----------- ----------- ------------ ------------
Total additions 99,160 - - 1,188,704 2,490,250 65,530,922
DEDUCTIONS FROM PLAN ASSETS:
Payments for-
Interest expense - - - - (93,527) (93,527)
Benefits to participants (277,470) - - (384,345) (1,593,033) (14,508,758)
----------- ---------- ----------- ----------- ------------ ------------
Total deductions (277,470) - - (384,345) (1,686,560) (14,602,285)
----------- ---------- ----------- ----------- ------------ ------------
NET INCREASE (DECREASE) (178,310) - - 804,359 803,690 50,928,637
INTERFUND TRANSFERS, NET (1,061,564) 5,714,000 (5,681,000) 70,449,214 (71,825,451) -
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of year 7,930,868 257,000 5,681,000 3,092,044 71,021,761 353,238,719
----------- ---------- ----------- ----------- ------------ ------------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $ 6,690,994 $5,971,000 $ - $74,345,617 $ - $404,167,356
=========== ========== =========== =========== ============ ============
</TABLE>
<PAGE>
-7-
6. BANK-ADMINISTERED INVESTMENTS:
The Plan's investments are held by bank-administered trust funds. The
following table presents the fair values of investments as determined by quoted
market price. The investment contracts with insurance companies included in
the Stable Assets Fund and Model Portfolios A-E are presented in further detail
in Note 7. Investments that represent 5% or more of the total Plan assets are
separately identified.
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
------------------------- ---------------------------------
Number of Shares or Number of Shares or
UNITS UNITS
INVESTMENTS AT FAIR VALUE FAIR VALUE FAIR VALUE
<S> <C> <C> <C> <C>
Enron common stock 2,074,648 $ 86,228,592 - $ -
PGC common stock - - 2,119,688 89,019,645
PGH Investment Trust 19,699,108 311,204,568 19,095,292 258,615,927
Other 6,124,110 - 6,266,339
------------ ------------
Total investments at fair
value $403,557,270 $353,901,911
============ ============
</TABLE>
7. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES:
The Stable Assets Fund of the Master Trust invests in a diversified portfolio
of guaranteed investment contracts (GICs) issued by major U.S. and Canadian
life insurance companies.
The estimated fair value of all GICs at December 31, 1997 and 1996 was
approximately $39,285,455 and $60,531,591, respectively. Even though the total
fair value of GICs varies from contract value, participants will only realize
the contract value since these GICs are not negotiable on an open market.
The total fair value of the GICs was estimated using various discount rates
based upon an average maturity.
In December 1995, the Confederation Life contracts with face value totaling
$2,085,000 were assigned to a third party for $1,423,000. The proceeds plus
approximately $2 million in cash were used to purchase a three year, separate
account GIC with Pacific Mutual. The loss on the Confederation Life assignment
of $662,000 will be deferred over the three year contract period of the Pacific
Mutual contract, resulting in a net fixed interest rate of .78%.
<PAGE>
-8-
Following are the contract values of these contracts at December 31, 1997 and
1996.
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
ALLSTATE LIFE GA-5356 6.500% MATURES 9/30/97 $ - $ 2,627,665
ALLSTATE LIFE GA-5382 6.700% MATURES 12/23/97 - 1,312,378
ALLSTATE LIFE GA-5926 5.660% MATURES 12/31/01 7,751,082 7,335,870
BUSINESSMEN'S COMPANY 1131 5.810% MATURES 3/22/99 4,006,194 4,007,434
CANADA LIFE P-45543 7.830% MATURES 2/28/97 - 3,295,594
COMMONWEALTH LIFE ADA-00757FR 6.320% MATURES 12/22/2000 5,830,284 5,483,713
JOHN HANCOCK CONTRACT GAC-8553 7.120% MATURES 9/30/99 5,519,759 5,152,874
JOHN HANCOCK LIFE GAC-6110 7.000% MATURES 4/1/97 - 4,206,733
JOHN HANCOCK CONTRACT GAC-9600 5.78% MATURES 6/1/01 5,024,000 -
NATIONWIDE LIFE INSURANCE CO. GA-P7192 6.550% MATURES
12/23/97 - 1,304,435
NEW YORK LIFE INSURANCE CO. GA-30505 6.670% MATURES
6/30/00 5,235,066 5,235,066
OHIO NATIONAL GA-5353 8.690% MATURES 1/2/97 - 1,963,038
PACIFIC MUTUAL SEPARATE ACCOUNT GIC G-26219 .78% MATURES
12/29/98 5,978,396 5,743,708
PENN MUTUAL LIFE GVC-91215 7.000% MATURES 11/3/97 - 2,705,018
PRINCIPAL MUTUAL GA4-750 7.450% MATURES 3/21/97 - 4,331,704
PROVIDENT NATIONAL 027-05310 6.820% MATURES 10/31/97 - 4,028,608
SUN LIFE ASSURANCE S-0713-G 8.810% MATURES 12/26/96 - 1,970,351
----------- -----------
TOTAL INVESTMENT CONTRACTS WITH INSURANCE COMPANIES $39,344,781 $60,704,189
=========== ===========
</TABLE>
THE TOTAL CREDITING INTEREST RATE AND AVERAGE YIELD WERE APPROXIMATELY 5.5% IN
1997 AND 7% IN 1996.
8. OTHER INVESTMENT CONTRACTS:
In December 1995 and 1996, the Plan allocated $10,000,000 and $10,500,000,
respectively, of the Stable Asset Fund for investment in synthetic investment
contracts. These contracts operate similarly to a guaranteed investment
contract, except that the assets are held by the Primary Trustee. Under these
contracts, the Plan has authorized Dwight Asset Management Company (the
Manager) to make investment decisions as governed by the Management Guidelines
approved by the Plan Administrator. Two separate financially responsible third
parties guarantee that plan transactions within each of the contracts will be
executed at contract value. As of December 31, 1997, these investments are
reported at contract value in the accompanying statement of master trust assets
with fund information totaling $37,032,690, which approximates fair value
(Note 9). The crediting interest rates for the two contracts are reset
quarterly and are a function of the Manager's performance against an
appropriate industry benchmark. In no event shall the crediting interest rate
be less than 0%. The first contract, effective December 1995 and totaling
$10,005,229, includes approximately $5 million of shares in a fund offered by
PIMCO Capital Management with the remaining $5 million of shares in a fund
offered by Lotsoff Capital. At December 31, 1997 and 1996, the crediting
interest rate was 6.411% and 5.495%, respectively. The second contract,
effective December 1996 and totaling $27,027,461, includes a portfolio of AAA
rated bonds consisting primarily of U.S. Government obligations, agency
passthroughs and asset-backed securities. At December 31, 1997, the crediting
interest rate was 6.94%.
<PAGE>
-9-
9. PORTLAND GENERAL HOLDINGS, INC. INVESTMENT TRUST - MASTER TRUST:
The Master Trust invests for the benefit of the PGH Pension Plan and this Plan.
Units are purchased by these Plans based on the market value of units in the
Master Trust. Income of the Master Trust is allocated to the Plan based on
units of participation and is shown in the following statements of changes in
master trust assets with fund information.
As of December 31, 1997, the participant directed investment funds shown in the
following statements of master trust assets with fund information are comprised
of funds in those investment options and funds from the premixed investment
options, Model Portfolios A-E. The nonparticipant directed funds represent the
portion of Master Trust assets held by the PGH Pension Plan. The following
table summarizes the percentage of each participant directed investment option
relative to the Plan's portion of the Master Trust fund balance on the
following page. When these percentages are applied to the Plan investments in
the Master Trust, they approximate the by-fund investments shown in Note 5.
<TABLE>
<CAPTION>
Stable Core Aggressive
Assets Bond Equity Equity International
INVESTMENT OPTION FUND FUND FUND FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
Stable Assets Fund 80.57% - % - % - % - %
Bond Fund - 12.98 - - -
Balanced Fund - 16.41 4.17 - -
Core Equity Fund - - 56.19 - -
Aggressive Equity Fund - - - 47.31 -
International Equity Fund - - - - 17.74
Portfolio A .98 3.61 .16 .22 .34
Portfolio B 2.59 9.88 1.15 1.55 2.44
Portfolio C 9.31 33.09 8.08 10.60 16.44
Portfolio D 6.55 24.03 18.42 24.31 37.86
Portfolio E - - 11.83 16.01 25.18
------ ------ ------ ------ ------
Total 100.00% 100.00% 100.00% 100.00% 100.00%
====== ====== ====== ====== ======
</TABLE>
<PAGE>
-10-
STATEMENT OF MASTER TRUST ASSETS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Retirement Savings Plan
----------------------------------------------------------------------
Participant Participant Participant Participant Participant
Directed Directed Directed Directed Directed
Stable Bond Core Aggressive International
ASSETS FUND FUND EQUITY FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and shares in registered investment
companies $ - $ 2,215 $126,768,077 $38,955,941 $28,188,237
Insurance contracts 39,344,781 - - - -
Preferred stock - - - - -
Convertible preferred stock - - 222,108 - -
Corporate bonds 6,083,282 10,455,759 - - -
Corporate convertible bonds - - - - -
U.S. Government and agencies issues 23,826,717 10,099,081 - - -
Short-term investments 17,610,956 630,293 3,255,181 3,899,595 90,909
----------- ----------- ------------ ----------- -----------
Total investments 86,865,736 21,187,348 130,245,366 42,855,536 28,279,146
Receivables-
Accrued income 316,196 304,385 225,081 33,442 892,332
----------- ----------- ------------ ----------- -----------
Total receivables 316,196 304,385 225,081 33,442 892,332
----------- ----------- ------------ ----------- -----------
Total assets $87,181,932 $21,491,733 $130,470,447 $42,888,978 $29,171,478
=========== =========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Pension Plan
---------------------------------------------------------------------------
Nonparticipant Nonparticipant Nonparticipant Nonparticipant
Directed Directed Directed Directed Total
Bond Core Aggressive International Investment
FUND EQUITY FUND EQUITY FUND EQUITY FUND TRUST
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and shares in registered
investment companies $ 44,304 $116,827,316 $53,958,310 $14,574,392 $379,318,792
Insurance contracts - - - - 39,344,781
Preferred stock 1,211,544 - - - 1,211,544
Convertible preferred stock 1,839,524 262,923 - - 2,324,555
Corporate bonds 26,734,270 - - - 43,273,311
Corporate convertible bonds 900,000 - - - 900,000
U.S. Government and agencies issues 47,694,143 - - - 81,619,941
Short-term investments 1,364,068 2,696,125 5,339,009 (555,368) 34,330,768
----------- ----------- ----------- ------------ ------------
Total investments 79,787,853 119,786,364 59,297,319 14,019,024 582,323,692
Receivables-
Accrued income 1,154,096 223,392 45,250 555,859 3,750,033
----------- ----------- ----------- ------------ ------------
Total receivables 1,154,096 223,392 45,250 555,859 3,750,033
Total assets $80,941,949 $120,009,756 $59,342,569 $14,574,883 $586,073,725
=========== ============ =========== ============ ============
</TABLE>
STATEMENT OF MASTER TRUST ASSETS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Retirement Savings Plan
----------------------------------------------------------------- ----------------
Participant Participant Participant Participant Participant Nonparticipant
Directed Directed Directed Directed Directed Directed
Stable Bond Core Aggressive International Bond
ASSETS FUND FUND EQUITY FUND EQUITY FUND EQUITY FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and shares in registered
investment companies $ - $ 31,555 $95,410,357 $31,731,020 $23,803,799 $ -
Preferred stock - - - 1,879,700 - -
Corporate bonds 13,315,142 6,993,765 - - - 16,511,396
U.S. Government and agencies issues 6,194,342 9,184,848 - - - 44,359,210
Foreign and miscellaneous securities 433,602 140,962 - - - 1,029,007
Short-term investments 3,159,273 561,469 1,643,273 2,870,021 656 2,308,625
At contract value:
Investment contracts with insurance
companies 60,704,189 - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Total investments 83,806,548 16,912,599 97,053,630 36,480,741 23,804,455 64,208,238
Receivables-
Accrued income 104,749 302,214 121,029 25,648 4,314 1,021,513
----------- ----------- ------------ ----------- ----------- ----------
Total receivables 104,749 302,214 121,029 25,648 4,314 1,021,513
----------- ----------- ------------ ----------- ----------- ----------
Total assets $83,911,297 $17,214,813 $97,174,659 $36,506,389 $23,808,769 $65,229,751
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Pension Plan
-------------------------------------------------
Nonparticipant Nonparticipant
Nonparticipant Directed Directed Total
Directed Core Aggressive International Investment
EQUITY FUND EQUITY FUND EQUITY FUND TRUST
<S> <C> <C> <C> <C>
ASSETS:
Investments-
At fair value:
Common stock and shares in registered investment $ 99,322,776 $46,910,715 $14,840,196 $312,050,418
companies
Preferred stock - 2,760,470 - 4,640,170
Corporate bonds - - - 36,820,303
U.S. Government and agencies issues - - - 59,738,400
Foreign and miscellaneous securities - - - 1,603,571
Short-term investments 1,528,824 4,239,306 772 16,312,219
At contract value:
Investment contracts with insurance companies - - - 60,704,189
------------ ----------- ----------- ------------
Total investments 100,851,600 53,910,491 14,840,968 491,869,270
Receivables-
Accrued income 108,239 37,798 4 1,725,508
------------ ----------- ----------- ------------
Total receivables 108,239 37,798 4 1,725,508
Total assets $100,959,839 $53,948,289 $14,840,972 $493,594,778
============ =========== =========== ============
</TABLE>
<PAGE>
-11-
STATEMENT OF CHANGES IN MASTER TRUST ASSETS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Retirement Savings Plan
---------------------------------------------------------------------------------
Participant Participant Participant Participant Participant
Directed Directed Directed Directed Directed
Stable Bond Core Aggressive International
ASSETS FUND FUND EQUITY FUND EQUITY FUND EQUITY FUND
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Net investment gains
(losses) $ - $ 471,378 $ 30,912,232 $ 8,723,654 $ 1,606,920
Interest 5,371,572 1,502,130 268,063 259,294 17,147
Dividends - - 1,652,943 150,039 83,999
Investment fees (149,618) (77,576) (389,002) (357,229) (19,104)
----------- ----------- ------------ ----------- -----------
Total investment
income 5,221,954 1,895,932 32,444,236 8,775,758 1,688,962
Funds (withdrawn)
invested by-
Pension plan - - - - -
Retirement savings
plan (1,951,319) 2,380,988 851,552 (2,393,169) 3,673,747
----------- ----------- ------------ ----------- -----------
Total funds
(withdrawn)
invested (1,951,319) 2,380,988 851,552 (2,393,169) 3,673,747
----------- ----------- ------------ ----------- -----------
INCREASE (DECREASE) IN NET
ASSETS 3,270,635 4,276,920 33,295,788 6,382,589 5,362,709
NET ASSETS, beginning of
year 83,911,297 17,214,813 97,174,659 36,506,389 23,808,769
----------- ----------- ------------ ----------- -----------
NET ASSETS, end of year $87,181,932 $21,491,733 $130,470,447 $42,888,978 $29,171,478
=========== =========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Pension Plan
------------------------------------------------------------------
Nonparticipant Nonparticipant Nonparticipant Nonparticipant
Directed Directed Directed Directed Total
Bond Core Aggressive International Investment
FUND EQUITY FUND EQUITY FUND EQUITY FUND TRUST
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Net investment gains
(losses) $ 5,556,014 $ 28,763,252 $12,629,046 $ (381,898) $ 88,280,598
Interest 4,412,090 256,494 354,035 192 12,441,017
Dividends 27,028 1,538,823 216,111 - 3,668,943
Investment fees (232,934) (258,652) (500,212) - (1,984,327)
----------- ------------ ----------- ----------- ------------
Total investment
income 9,762,198 30,299,917 12,698,980 (381,706) 102,406,231
Funds (withdrawn)
invested by-
Pension plan 5,950,000 (11,250,000) (7,304,700) 115,617 (12,489,083)
Retirement savings
plan - - - - 2,561,799
----------- ------------ ----------- ----------- ------------
Total funds
(withdrawn)
invested 5,950,000 (11,250,000) (7,304,700) 115,617 (9,927,284)
----------- ------------ ----------- ----------- ------------
INCREASE (DECREASE) IN NET
ASSETS 15,712,198 19,049,917 5,394,280 (266,089) 92,478,947
NET ASSETS, beginning of
year 65,229,751 100,959,839 53,948,289 14,840,972 493,594,778
----------- ------------ ----------- ----------- ------------
NET ASSETS, end of year $80,941,949 $120,009,756 $59,342,569 $14,574,883 $586,073,725
=========== ============ =========== =========== ============
</TABLE>
<PAGE>
-12-
ALLOCATION OF THE ASSETS OF THE MASTER TRUST TO PARTICIPATING PLANS AT
DECEMBER 31, 1997 AND 1996 ARE:
<TABLE>
<CAPTION>
1997 PERCENT
<S> <C> <C>
Plan fund balance, beginning of year $258,615,927
Funds invested by the Plan 2,561,799
Investment income 50,026,842
------------
Plan fund balance, end of year 311,204,568 53.1%
Pension Plan fund balance, end of year 274,869,157 46.9%
------------ ------
Total $586,073,725 100.0%
============ ======
</TABLE>
<TABLE>
<CAPTION>
1996 PERCENT
<S> <C> <C>
Plan fund balance, beginning of year $228,080,365
Funds invested by the Plan 2,270,440
Investment income 28,265,122
------------
Plan fund balance, end of year 258,615,927 52.4%
Pension Plan fund balance, end of year 234,978,851 47.6%
------------ ------
Total $493,594,778 100.0%
============ ======
</TABLE>
The net appreciation in the fair value of investments in the Master Trust
by major investment category for the year ended December 31, 1997
is as follows:
<TABLE>
<CAPTION>
<S> <C>
Common stock and shares in Registered
Investment Companies $81,391,319
Preferred stock (192,378)
Corporate bonds 2,136,169
U.S. government and agency issues 2,878,067
Foreign and miscellaneous securities 1,955,244
-----------
Total $88,168,421
===========
</TABLE>
10. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions
at any time and to terminate the Plan subject to the provisions of ERISA.
11. RECONCILIATION TO FORM 5500:
As of December 31, 1997, the Plan had approximately $2,530,332 of pending
distributions to participants who elected to withdraw
from the operation and earnings of the Plan. These amounts are recorded as a
liability in the Plan's Form 5500; however, these
amounts are not recorded as a liability in the accompanying statements of
net assets available for plan benefits in accordance
with generally accepted accounting principles.
The following table reconciles the financial statements to the Form 5500
as filed by the Company for the plan year ended December 31, 1997:
<TABLE>
<CAPTION>
Net Assets Available
Benefits Payable to Benefits For Plan Benefits
PARTICIPANTS PAID 1997
<S> <C> <C> <C>
Per financial statements $ - $14,508,758 $404,167,356
Plus- 1997 amounts pending
distribution to
participants 2,530,332 2,530,332 (2,530,332)
Less- 1996 amounts pending
paid in 1997 - (1,904,763) -
---------- ----------- ------------
Per Form 5500 $2,530,332 $15,134,327 $401,637,024
========== =========== ============
</TABLE>
<PAGE>
SCHEDULE I
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
EIN 93-0925597
PLAN 003
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(Note 4)
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Description of Investment, Including Maturity Date,
LESSOR OR SIMILAR PARTY RATE OF INTEREST, COLLATERAL, PAR OR MATURITY
VALUE COST CURRENT VALUE
<S> <C> <C> <C>
*Northern Trust Company PGH Investment Trust - Master Trust (19,699,108 units) $209,169,180 $311,204,568
*Enron Corporation Common Stock (2,074,648 shares) 38,616,262 86,228,592
*Northern Trust Company COLTV Short-Term Investment Fund (1,039,248 units) 1,039,248 1,039,248
*Wells Fargo Bank Financial Square Prime (593,029 shares) 593,029 593,029
*Northern Trust Company Noninterest-bearing cash 3,491 3,491
*Plan Participants Participant loans, interest rates from 6.00% to 7.33%,
maturing from 1998-2002 4,488,342 4,488,342
------------ ------------
Total investments $253,909,552 $403,557,270
============ ============
<FN>
*Represents a party-in-interest transaction as of December 31, 1997.
NOTE: Cost is calculated on a moving average cost basis.
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<PAGE>
SCHEDULE II
PORTLAND GENERAL HOLDINGS, INC.
RETIREMENT SAVINGS PLAN
EIN 93-0925597
PLAN 003
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Note 4)
<TABLE>
<CAPTION>
SERIES OF TRANSACTIONS OF THE SAME ISSUE THAT EXCEED 5% OF
NET PLAN ASSETS AT THE BEGINNING OF THE YEAR: PURCHASES SALES
------------------------- ------------------------------------
Number Number
of PURCHASE of SELLING NET Gain
Identity of Party Involved DESCRIPTION OF ASSET TRANSACTIONS PRICE TRANSACTIONS PRICE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C>
*Northern Trust Company COLTV Short-Term Investment Fund 635 $22,219,623 169 $23,067,198 $ -
(a common and collective trust)
<FN>
*Represents a party-in-interest transaction as of December 31, 1997.
NOTE: Net gain or (loss) is calculated using a moving average cost.
The accompanying notes are an integral part of this schedule.
</FN>
</TABLE>
<PAGE>
