<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
__________________
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-5152
______
PACIFICORP
(Exact name of registrant as specified in its charter)
STATE OF OREGON 93-0246090
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
700 N.E. Multnomah
Suite 1600
Portland, Oregon 97232-4116
(Address of principal executive offices) (Zip code)
503-731-2000
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.
YES X NO
_____ _____
At October 31, 1994, there were 284,251,024 shares of registrant's common
stock outstanding.
<PAGE>
PACIFICORP
Page No.
________
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements 2
Condensed Consolidated Statements of Income
and Retained Earnings 2
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 22
Item 1. Legal Proceedings 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 23
Signature 24
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Millions of Dollars, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
___________________ __________________
1994 1993 1994 1993
______ ______ ______ ______
<S> <C> <C> <C> <C>
REVENUES $ 915.0 $ 860.1 $2,616.4 $2,528.1
_______ _______ _______ _______
EXPENSES
Operations 363.1 335.8 1,041.7 991.4
Maintenance 70.1 72.2 219.4 217.5
Administrative and general 72.7 64.8 195.2 192.6
Depreciation and amortization 105.3 103.2 323.0 302.1
Taxes, other than income taxes 31.9 31.7 95.5 96.5
Financial Services' interest expense 6.5 14.0 23.5 44.5
_______ _______ _______ _______
TOTAL 649.6 621.7 1,898.3 1,844.6
_______ _______ _______ _______
INCOME FROM OPERATIONS 265.4 238.4 718.1 683.5
_______ _______ _______ _______
INTEREST EXPENSE AND OTHER
Interest expense 76.1 79.5 226.8 251.4
Interest capitalized (3.3) (2.7) (10.9) (9.0)
Minority interest and other (11.2) 1.8 (22.8) (12.0)
_______ _______ _______ _______
TOTAL 61.6 78.6 193.1 230.4
_______ _______ _______ _______
Income from continuing operations
before income taxes 203.8 159.8 525.0 453.1
Income taxes 72.0 54.6 183.4 143.5
_______ _______ _______ _______
INCOME FROM CONTINUING OPERATIONS
BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 131.8 105.2 341.6 309.6
Discontinued operations (less
applicable income tax expense
of $26.0) - 52.4 - 52.4
Cumulative effect of change in
accounting for income taxes - - - 4.0
_______ _______ _______ _______
NET INCOME 131.8 157.6 341.6 366.0
RETAINED EARNINGS BEGINNING OF PERIOD 389.0 251.2 351.3 210.4
Cash dividends declared
Preferred stock (9.8) (9.7) (29.6) (29.7)
Common stock per share: 1994
and 1993/$.27 and $.81 (76.7) (73.8) (229.0) (221.4)
_______ _______ _______ _______
RETAINED EARNINGS END OF PERIOD $ 434.3 $ 325.3 $ 434.3 $ 325.3
_______ _______ _______ _______
_______ _______ _______ _______
EARNINGS ON COMMON STOCK (Net
income less preferred dividend
requirement) $ 121.8 $ 147.8 $ 311.9 $ 336.5
Average number of common shares
outstanding (Thousands) 283,503 273,818 282,473 272,514
EARNINGS PER COMMON SHARE
Continuing operations $ .43 $ .35 $ 1.10 $ 1.03
Discontinued operations - .19 - .19
Cumulative effect on prior years
of change in accounting for
income taxes - - - .01
_______ _______ _______ _______
TOTAL $ .43 $ .54 $ 1.10 $ 1.23
_______ _______ _______ _______
_______ _______ _______ _______
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
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<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited)
ASSETS
<CAPTION>
September 30, December 31,
1994 1993
____________ ____________
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT
Electric $10,427.2 $10,000.6
Telecommunications 1,609.3 1,649.9
Other 63.2 65.8
Accumulated depreciation and amortization (4,088.4) (3,863.5)
________ ________
Net 8,011.3 7,852.8
Construction work in progress 383.8 356.8
________ ________
TOTAL PROPERTY, PLANT AND EQUIPMENT 8,395.1 8,209.6
________ ________
CURRENT ASSETS
Cash and cash equivalents 21.2 31.2
Accounts receivable less allowance
for doubtful accounts: 1994/$9.1
and 1993/$8.2 438.1 451.0
Materials, supplies and fuel stock at
average cost 198.4 203.2
Inventory 65.4 70.1
Finance assets 76.6 118.7
Other 51.3 80.5
________ ________
TOTAL CURRENT ASSETS 851.0 954.7
________ ________
OTHER ASSETS
Investments in and advances to affiliated
companies 238.3 240.5
Cost in excess of net assets of businesses
acquired 171.8 171.1
Regulatory assets - net 1,011.1 974.9
Finance note receivable 221.2 223.3
Finance assets 502.8 561.4
Real estate investments 170.4 303.7
Deferred charges and other 307.5 319.9
________ ________
TOTAL OTHER ASSETS 2,623.1 2,794.8
________ ________
TOTAL ASSETS $11,869.2 $11,959.1
________ ________
________ ________
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
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<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited)
CAPITALIZATION AND LIABILITIES
<CAPTION>
September 30, December 31,
1994 1993
____________ ____________
<S> <C> <C>
COMMON EQUITY
Common shareholder capital
shares authorized 750,000,000;
shares outstanding: 1994/284,049,755
and 1993/281,020,717 $ 3,005.8 $ 2,953.4
Retained earnings 434.3 351.3
Guarantees of Employee Stock Ownership
Plan borrowings (28.9) (42.1)
________ ________
TOTAL COMMON EQUITY 3,411.2 3,262.6
________ ________
PREFERRED STOCK 367.4 367.4
________ ________
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 219.0 219.0
________ ________
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 3,800.0 3,923.6
________ ________
CURRENT LIABILITIES
Long-term debt and capital lease obligations
currently maturing 105.0 155.6
Notes payable and commercial paper 477.9 553.5
Accounts payable 282.7 360.5
Taxes, interest and dividends payable 337.1 252.5
Customer deposits and other 120.5 121.2
________ ________
TOTAL CURRENT LIABILITIES 1,323.2 1,443.3
________ ________
DEFERRED CREDITS
Income taxes 1,812.4 1,833.3
Investment tax credits 192.5 200.0
Other 636.3 605.7
________ ________
TOTAL DEFERRED CREDITS 2,641.2 2,639.0
________ ________
MINORITY INTEREST 107.2 104.2
________ ________
CONTINGENCIES (See Note 2)
TOTAL CAPITALIZATION AND LIABILITIES $11,869.2 $11,959.1
________ ________
________ ________
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
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<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
_______________________
1994 1993
______ ______
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $ 341.6 $ 309.6
Adjustments to reconcile income
from continuing operations to net
cash provided by operating activities
Depreciation and amortization 352.6 334.8
Deferred income taxes and investment tax
credits - net (29.0) 59.8
Interest capitalized on equity funds (1.5) (2.5)
Minority interest and other 34.2 46.7
Accounts receivable and prepayments 34.7 41.1
Materials, supplies, fuel stock and
inventory 9.4 18.7
Accounts payable and accrued liabilities 20.4 17.7
______ ______
NET CASH PROVIDED BY OPERATING ACTIVITIES 762.4 825.9
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Construction (556.4) (496.9)
Proceeds from sales of assets 103.0 388.9
Investment in finance note - (225.0)
Proceeds from sales of finance assets
and principal payments 134.6 131.8
Proceeds from Alaska restructuring 75.0 -
Other (53.8) (8.7)
______ ______
NET CASH USED IN INVESTING ACTIVITIES (297.6) (209.9)
______ ______
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
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<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
_______________________
1994 1993
______ ______
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Changes in short-term debt (75.6) (591.2)
Proceeds from long-term debt 13.7 929.8
Proceeds from issuance of common stock 52.4 182.9
Dividends paid (258.1) (281.2)
Repayments of long-term debt and capital
lease obligations (174.3) (665.5)
Redemptions of preferred stock - (50.0)
Other (32.9) (26.3)
______ ______
NET CASH USED BY FINANCING ACTIVITIES (474.8) (501.5)
______ ______
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10.0) 114.5
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 31.2 50.2
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21.2 $ 164.7
______ ______
______ ______
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for
Interest $ 308.4 $ 347.8
Income taxes net of refunds 145.9 89.6
Noncash investing activity
IDB common stock received in the
sale of TRT Communications - 201.0
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
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<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1994
1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial
statements as of September 30, 1994 and for the periods ended September 30,
1994 and 1993, in the opinion of management, include all adjustments,
constituting only normal recording of accruals, necessary for a fair
presentation of financial position, results of operations and cash flows
for such periods. A significant part of the business of PacifiCorp (the
"Company") is of a seasonal nature; therefore, results of operations for
the period ended September 30, 1994 are not necessarily indicative of the
results for a full year. These condensed consolidated financial statements
should be read in conjunction with the financial statements and related
notes incorporated by reference in the Company's 1993 Annual Report on
Form 10-K.
The condensed consolidated financial statements of the Company
encompass two businesses primarily of a utility nature -- Electric
Operations (Pacific Power and Utah Power) and an 87%-owned
Telecommunications operation (Pacific Telecom, Inc.); and a wholly owned
Financial Services business (PacifiCorp Financial Services, Inc.). The
Company's wholly owned subsidiary, PacifiCorp Holdings, Inc. ("Holdings"),
holds all of its nonelectric utility investments. Together these
businesses are referred to herein as the Companies. Significant
intercompany transactions and balances have been eliminated. See Part II,
Item 5. "Other Information" on page 22 of this Form 10-Q for information
regarding a proposal by Holdings to acquire the 13% publicly held minority
interest of Pacific Telecom, Inc.
Investments in and advances to affiliated companies represent
investments in unconsolidated affiliated companies carried on the equity
basis, which approximates the Company's equity in their underlying net book
value.
Certain amounts from the prior period have been reclassified to
conform with the 1994 method of presentation. These reclassifications had
no effect on previously reported consolidated net income.
2. CONTINGENT LIABILITIES
The Company and its subsidiaries are parties to various legal
claims, actions and complaints, certain of which involve material amounts.
Although the Company is unable to predict with certainty whether or not it
will ultimately be successful in these legal proceedings or, if not, what
the impact might be, management presently believes that disposition of
these matters will not have a materially adverse effect on the Company's
consolidated results of operations.
The Internal Revenue Service ("IRS") has completed its
examination of the Company's federal income tax returns for the years 1983
through 1986. The Company and the IRS have agreed to a settlement on all
of the issues, except for certain matters relating to the Company's
abandonment of its 10%
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<PAGE>
interest in Washington Public Power Supply System Unit 3. The Company and
the IRS continue to discuss the remaining unagreed issue.
During 1993, the IRS completed its examination of the Company's
federal income tax returns for 1987 and 1988, and has proposed certain
adjustments increasing taxes by $26 million. The Company has appealed
adjustments totaling more than the net proposed increased tax. Conferences
with the IRS are ongoing in 1994.
In the opinion of management, the outcome of the 1983 through
1988 federal income tax examinations will not have a material effect on the
Company's consolidated financial position or results of operations.
The Company's 1989 and 1990 federal income tax returns are
currently under examination by the IRS.
Several Superfund sites have been identified where the Company
has been or may be designated as a potentially responsible party. Future
costs associated with the disposition of these matters are not expected to
be material to the Company's consolidated results of operations.
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<PAGE>
Item 2.
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY RESULTS OF OPERATIONS
<CAPTION>
Nine Months
Percentage Ended Percentage
Third Quarter Increase/ September 30, Increase/
________________ _______________
1994 1993 (Decrease) 1994 1993 (Decrease)
____ ____ __________ ____ ____ __________
(Dollars in Millions, except per share)
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 915.0 $ 860.1 6% $2,616.4 $2,528.1 3%
_______ ______ _______ _______
Income from operations 265.4 238.4 11 718.1 683.5 5
_______ ______ _______ _______
Net income 131.8 157.6 (16) 341.6 366.0 (7)
_______ ______ _______ _______
Earnings contribution
on common stock <F1>
Continuing operations
Electric Operations 87.4 78.4 11 233.2 235.4 (1)
Telecommunications 25.7 12.2 111 54.6 36.0 52
Other 8.7 4.8 81 24.1 8.7 *
_______ ______ _______ _______
Total 121.8 95.4 28 311.9 280.1 11
Discontinued operations <F2> - 52.4 * - 52.4 *
Cumulative effect of change in
accounting for income taxes <F3> - - - - 4.0 *
_______ ______ _______ _______
Total $ 121.8 $ 147.8 (18) $ 311.9 $ 336.5 (7)
_______ ______ _______ _______
_______ ______ _______ _______
Earnings per common share
Continuing operations $ .43 $ .35 23 $ 1.10 $ 1.03 7
Discontinued operations <F2> - .19 * - .19 *
Cumulative effect of change in
accounting for income taxes <F3> - - - - .01 *
_______ ______ _______ _______
Total $ .43 $ .54 (20) $ 1.10 $ 1.23 (11)
_______ ______ _______ _______
_______ ______ _______ _______
Average number of common shares
outstanding (thousands) 283,503 273,818 4 282,473 272,514 4
<FN>
*Not a meaningful number.
<F1>
(1) Earnings contribution on common stock by segment: (a) does not
reflect elimination for interest on intercompany borrowing
arrangements; (b) includes income taxes on a separate company basis,
with any benefit or detriment of consolidation reflected in Other; (c)
amounts are net of preferred dividend requirements and minority
interest.
<F2>
(2) Represents the Company's interest in an international communications
subsidiary.
<F3>
(3) Represents the net effect on prior years of the adoption of Statement
of Financial Accounting Standards 109, "Accounting for Income Taxes."
</FN>
</TABLE>
Comparison of the third quarters of 1994 and 1993.
_________________________________________________
. Earnings contribution on common stock decreased $26 million or 18%.
.. Electric Operations' earnings contribution increased $9 million or
11% primarily due to the effects in 1994 of warmer summer weather
and a gain on the sale of sulfur dioxide emission allowances.
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<PAGE>
.. Telecommunications' earnings contribution increased $14 million or
111% primarily due to long lines settlement revenues, customer
growth in cellular operations and decreased interest expense.
.. The earnings contribution of other businesses increased $4 million
or 81% primarily due to the $4 million effect of accruals in 1993
for legal and other corporate expenses. The continued downsizing of
Financial Services led to a $17 million decrease in revenues, offset
by an $8 million decrease in finance interest expense, a $4 million
decrease in other operating expenses and increased income tax
benefits.
.. Discontinued operations earnings decreased $52 million due to a gain
recorded in 1993 relating to the sale of an international communica-
tions subsidiary.
. The average number of common shares outstanding rose 4% due to the
issuance of 6 million shares in a September 1993 public offering and
issuances under dividend reinvestment and employee stock ownership
plans.
Comparison of the nine-month periods ended September 30, 1994 and 1993
______________________________________________________________________
. Earnings contribution on common stock decreased $25 million or 7%.
.. Electric Operations' earnings contribution decreased $2 million or
1% primarily due to the effects in 1994 of a warmer than normal
winter heating season, poor hydro conditions in the region and a
higher effective income tax rate.
.. Telecommunications' earnings contribution increased $19 million or
52% primarily due to long lines settlement revenue, decreased
interest expense and customer growth in cellular operations.
.. The earnings contribution of other businesses increased $15 million
primarily due to a $12 million increase in interest revenue from the
note received in connection with the June 1993 sale of NERCO, Inc.
The continued downsizing of Financial Services led to a $28 million
decrease in revenues, offset by a $21 million decrease in finance
interest expense and a $5 million decrease in other operating
expenses.
.. Discontinued operations earnings decreased $52 million due to a gain
recorded in 1993 relating to the sale of an international communica-
tions subsidiary.
. The average number of common shares outstanding rose 4% due to the same
factors described above.
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<PAGE>
RESULTS OF OPERATIONS
<TABLE>
Electric Operations
___________________
<CAPTION>
Nine Months
Percentage Ended Percentage
Third Quarter Increase/ September 30, Increase/
________________ _______________
1994 1993 (Decrease) 1994 1993 (Decrease)
____ ____ __________ ____ ____ __________
(Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C>
Revenues
Residential $158.1 $139.2 14% $ 511.8 $ 491.1 4%
Commercial 147.3 137.1 7 421.6 402.4 5
Industrial 199.0 187.2 6 553.7 521.8 6
Other 8.0 7.6 5 23.1 22.4 3
_____ _____ _______ ________
Retail sales 512.4 471.1 9 1,510.2 1,437.7 5
Wholesale sales 150.6 140.5 7 392.3 381.4 3
Other 16.9 9.9 71 44.1 28.3 56
_____ _____ _______ ________
Total 679.9 621.5 9 1,946.6 1,847.4 5
Operating expenses 472.4 427.6 10 1,364.3 1,268.8 8
_____ _____ _______ ________
Income from operations 207.5 193.9 7 582.3 578.6 1
_____ _____ _______ ________
Net income 97.4 88.2 10 262.9 264.9 (1)
Preferred dividend requirement 10.0 9.8 2 29.7 29.5 1
_____ _____ _______ ________
Earnings contribution $ 87.4 $ 78.4 11 $ 233.2 $ 235.4 (1)
_____ _____ _______ ________
_____ _____ _______ ________
Energy sales (millions of kWh)
Residential 2,604 2,365 10 8,580 8,588 -
Commercial 2,828 2,579 10 7,893 7,477 6
Industrial 5,633 5,336 6 15,575 14,791 5
Other 165 151 9 470 453 4
______ _____ _______ ________
Retail sales 11,230 10,431 8 32,518 31,309 4
Wholesale sales 4,363 4,197 4 11,314 11,311 -
______ _____ _______ ________
Total 15,593 14,628 7 43,832 42,620 3
______ ______ _______ ________
______ ______ _______ ________
Residential average usage (kWh) 2,262 2,101 8 7,499 7,667 (2)
Total customers (end of period) 1,347,018 1,318,029 2 1,347,018 1,318,029 2
</TABLE>
Comparison of the third quarters of 1994 and 1993.
_________________________________________________
. Revenues increased $58 million or 9%.
.. Residential revenues increased $19 million or 14% primarily due to
the $8 million effect of warmer temperatures in 1994, a 2% increase
in the number of customers and increased customer usage. In
addition, the pass-through of a BPA price increase that was
effective in October 1993 increased revenue $4 million.
.. Commercial revenues increased $10 million or 7% primarily due to the
$5 million effect of warmer temperatures in 1994, a 2% increase in
the number of customers and an increase in customer average usage.
.. Industrial revenues increased $12 million or 6% due to a 6% increase
in kWh volume. Irrigation revenues increased $5 million due to the
effects of drier weather in 1994. Revenues from other industrial
customers increased $7 million, primarily due to customer growth and
increased sales to customers in the paper and pulp and oil and gas
industries.
.. Wholesale revenues increased $10 million or 7% while energy
sales increased 4%. Higher volumes sold in the secondary market and
under firm sales contracts added revenue of $5 million and
$3 million,
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<PAGE>
respectively, and higher prices for these sales increased revenues
$2 million.
.. Other revenues increased $7 million or 71% primarily due to deferred
regulatory revenues and increased rental revenues.
. Operating expenses increased $45 million or 10%.
.. Fuel expense increased $6 million or 5% due to a 5% increase in
thermal generation, primarily resulting from increased kWh sold, and
a 27% reduction in hydro generation.
.. Purchased power expense increased $23 million or 41% primarily due
to a $13 million increase resulting from 32% higher kWh purchases, a
$7 million increase due to higher prices, including a $3 million
price increase relating to a BPA peaking purchase contract, and a
$3 million decrease in BPA exchange benefits.
.. Other operations expense increased $6 million or 8% primarily due to
$3 million of increased distribution system expenses and $2 million
of increased wheeling expense, largely the result of higher volumes
wheeled.
.. Depreciation and amortization expense increased $6 million or 8%
primarily due to additional plant in service.
. Earnings contribution increased $9 million or 11%.
.. Income from operations increased $14 million or 7%.
.. Other income increased $8 million primarily due to state regulatory
approval of the recognition of a $9 million gain on the sale of
sulphur dioxide emission allowances, which sale occurred in 1993.
.. Income tax expense increased $14 million or 33% primarily due to the
$9 million effect of higher taxable income and a $5 million
reduction in 1993 resulting from an adjustment of 1992 taxes.
Comparison of the nine-month periods ended September 30, 1994 and 1993
______________________________________________________________________
. Revenues increased $99 million or 5%.
.. Residential revenues increased $21 million or 4% while kWh volume
remained constant. Revenues increased $18 million due to the pass-
through of a BPA price increase that was effective in October 1993
and $11 million due to a 2% increase in the number of customers.
Unseasonably warm winter temperatures early in the year created a
revenue decline which was reduced to $9 million by the effects of
continuing warm temperatures, often at record highs, through the
summer months.
.. Commercial revenues increased $19 million or 5% primarily due to a
2% increase in the number of customers and an increase in customer
average usage.
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<PAGE>
.. Industrial revenues increased $32 million or 6% primarily due to a
5% increase in kWh volume. Irrigation revenues increased $14 million
due to effects of drier weather in 1994. Revenues from other
industrial customers increased $18 million due to customer growth
and increased sales to customers in the paper and pulp and oil and
gas industries.
.. Wholesale revenues increased $11 million or 3% while kWh volume
remained constant. Firm contract revenue increased $22 million,
$13 million from additional volume sold and $9 million from price
increases. Secondary sales revenue decreased $12 million due to a
15% reduction in kWh volume and lower prices. The adverse effect of
mild weather in early 1994 on secondary sales was reduced but not
offset by the effect of warmer summer weather.
.. Other revenues increased $16 million or 56% primarily due to
increases in rental revenue, deferred regulatory revenue and
revenue from sales of timber.
. Operating expenses increased $96 million or 8%.
.. Fuel expense increased $28 million or 8% due to a 7% increase in
thermal generation primarily resulting from increased kWh sales and
a 23% decrease in hydro generation.
.. Purchased power expense increased $33 million or 17% while kWh
volume purchased declined 7%. The increased expense was due to a
decrease in BPA exchange benefits of $15 million, a price increase
relating to a BPA peaking contract of $8 million, volume and price
increases on other firm purchase contracts of $10 million and
secondary purchase price increases of $8 million. Partially
offsetting these increases was an $8 million decrease in short-term
firm and secondary energy purchases primarily due to an 18%
reduction in kWh volume purchased.
.. Other operations expense increased $13 million or 6% primarily due
to a $6 million increase in wheeling expense consisting of: $4
million from increased volumes wheeled and $2 million from a BPA
price increase. Customer accounting and service expenses increased
$4 million and distribution system expenses increased $1 million.
.. Maintenance expense increased $8 million or 6% due to the timing of
plant maintenance and start-up costs of $3 million to bring a gas
plant back on-line.
.. Depreciation and amortization expense increased $15 million or 7%
primarily due to additional plant in service.
. Earnings contribution decreased $2 million or 1%.
.. Income from operations increased $4 million or 1%.
.. Other income increased $6 million primarily due to the recognition
of a $9 million gain in 1994 on the sale of sulphur dioxide emission
allowances, partially offset by a gain of $5 million in 1993 on a
property sale.
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<PAGE>
.. Interest expense decreased $11 million or 5% due to an $11 million
decrease resulting from the effect of refinancing long-term debt
during 1993 at lower interest rates and the effect of a $6 million
accrual in 1993 for a possible settlement of certain coal issues,
partially offset by the $5 million effect of higher levels of short-
term debt outstanding at higher interest rates in 1994.
.. Income tax expense increased $24 million or 19% primarily due to the
$8 million effect of higher taxable income, a $5 million reversal of
tax depreciation on vintages previously flowed through to customers,
a $5 million reduction in 1993 resulting from an adjustment of 1992
taxes and a nonrecurring 1993 tax benefit of $4 million.
- 14 -
<PAGE>
<TABLE>
Telecommunications
__________________
<CAPTION>
Nine Months
Percentage Ended Percentage
Third Quarter Increase/ September 30, Increase/
________________ _______________
1994 1993 (Decrease) 1994 1993 (Decrease)
____ ____ __________ ____ ____ __________
(Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C>
Revenues
Local network service $ 24.7 $ 21.2 17% $ 70.9 $ 60.5 17%
Network access service 42.1 45.5 (7) 125.5 134.8 (7)
Long distance network service 82.8 67.4 23 208.3 199.6 4
Private line service 14.5 16.6 (13) 43.7 50.2 (13)
Sales of cable capacity 1.7 .8 113 4.3 3.3 30
Other 28.7 29.8 (4) 78.1 76.7 2
_____ _____ _____ _____
Total 194.5 181.3 7 530.8 525.1 1
Operating expenses 139.5 144.9 (4) 406.4 422.0 (4)
_____ _____ _____ _____
Income from operations 55.0 36.4 51 124.4 103.1 21
_____ _____ _____ _____
Net Income 29.7 14.0 112 63.1 42.2 50
Minority interest and other 4.0 1.8 122 8.5 6.2 37
_____ _____ _____ _____
Earnings contribution $ 25.7 $ 12.2 111 $ 54.6 $ 36.0 52
_____ _____ _____ _____
_____ _____ _____ _____
Telephone access lines (end
of period) 414,821 395,147 5 414,821 395,147 5
Long lines originating billed
minutes (thousands) 199,488 188,903 6 559,523 536,901 4
</TABLE>
See Part II, Item 5. "Other Information" on page 22 of this Form 10-Q for
information regarding a proposal by Holdings to acquire the 13% publicly
held minority interest of Pacific Telecom.
In October 1994, Pacific Telecom signed an agreement to sell the stock of
Alascom, Inc. ("Alascom") to AT&T Corp. ("AT&T"), in a transaction
providing $365 million in proceeds. Under terms of the agreement, AT&T
will pay $290 million in cash for the Alascom stock and for settlement of
all past cost study issues. AT&T has also agreed to allow Pacific Telecom
to retain the $75 million transition payment made by AT&T to Alascom in
July 1994 pursuant to a Federal Communications Commission ("FCC") order.
AT&T made a down payment of $30 million to Pacific Telecom upon signing the
stock purchase agreement, which would be applied to the final $75 million
transition payment required in the FCC order if the transaction failed to
close. Pursuant to the FCC order, the first transition payment was used to
reduce Alascom's rate base, which will result in lower revenues and
depreciation expense in future periods. The remaining $260 million is to
be paid when the transaction closes. Closing of the sale of Alascom is
subject to certain conditions, including receipt of state and federal
regulatory approvals that are expected to be received during the first half
of 1995.
In September 1994, settlement revenues of $16 million were recognized in
long distance network service relating to the settlement of past cost study
issues.
- 15 -
<PAGE>
Summarized income statement data for Alascom are as follows:
<TABLE>
<CAPTION>
Nine months ended
Third Quarter September 30
_______________ ________________
1994 1993 1994 1993
____ ____ ____ ____
(Dollars in Millions)
<S> <C> <C> <C> <C>
Operating revenues $101.4 $88.8 $261.1 $254.4
Operating income 32.9 15.5 63.6 42.8
</TABLE>
Comparison of the third quarters of 1994 and 1993.
_________________________________________________
. Revenues increased $13 million or 7%.
.. Local network service revenues increased $4 million or 17% primarily
due to $2 million of revenue from extended calling area service and
the $1 million revenue effect of access line growth of 5%. The
implementation of extended calling area service routes shift
revenues from network access revenue, long distance revenue and
other revenue to local network service revenue.
.. Network access service revenues decreased $3 million or 7% primarily
due to a $2 million decrease as a result of the shift of extended
calling area service to local exchange companies and lower revenue
adjustments of $2 million.
.. Long distance network service revenues increased $15 million or 23%
due to an increase of $19 million relating to the settlement of all
open revenue studies. See description relating to the sale of
Alascom above. Partially offsetting these increases were $2 million
relating to the decline in long lines rate base and a $2 million
decrease in interstate access revenue. The Anchorage Telephone
Utility ("ATU") exited the National Exchange Carrier Association
("NECA") traffic sensitive pools, which resulted in a reduction in
access charge expense that is recovered in interstate access
revenue.
Other revenue decreased $1 million or 4% primarily due to the effect
of a $3 million one-time charge in 1993 relating to service provided
in Saudi Arabia, offset in part by a $3 million increase in cellular
revenues relating to customer growth in 1994.
. Operating expenses decreased $5 million or 4%.
.. Maintenance expense decreased $4 million or 11% primarily due to the
effect of a $3 million one-time charge in 1993 relating to service
provided in Saudi Arabia.
. Earnings contribution increased $14 million or 111%.
.. Income from operations increased $19 million or 51%.
.. Interest expense decreased $3 million or 23% as a result of lower
borrowing levels in 1994.
- 16 -
<PAGE>
.. Income tax expense increased $6 million or 64% due to higher taxable
income.
Comparison of the nine-month periods ended September 30, 1994 and 1993
______________________________________________________________________
. Revenues increased $6 million or 1%.
.. Local network service revenues increased $10 million or 17%
primarily due to $6 million of revenue from extended calling area
service, the $3 million effect of 5% access line growth and
$1 million as a result of a rate increase.
.. Network access service revenues decreased $9 million or 7% primarily
due to a $5 million decrease as a result of the shift to extended
calling area service in local exchange companies and lower revenue
adjustments of $5 million.
.. Long distance network service revenues increased $9 million or 4%
primarily due to long lines interstate revenues of $18 million
relating to the settlement of open revenue studies and a $2 million
improvement in intrastate revenue relating to increased billed
minutes. These increases were offset in part by a $6 million
decrease as a result of the exit of ATU from the NECA traffic
sensitive pools, the $5 million revenue effect of recoverable
expense reductions and the $3 million effect of reduced rate base.
See the description of the sale of Alascom above.
.. Private line service revenues decreased $7 million or 13% mainly
resulting from Pacific Telecom's exit of certain noncore businesses.
.. Other revenues increased $1 million or 2% primarily due to customer
growth and acquisitions in cellular operations, partially offset by
the effect of a $3 million one-time charge in 1993 relating to
providing service in Saudi Arabia.
Operating expenses decreased $16 million or 4%.
.. Operations expense decreased $3 million or 2% primarily due to a
$6 million decrease in intrastate access expense relating to the
exit of ATU from NECA traffic sensitive pools and a $3 million
decrease in leased circuit expense relating to noncore businesses
that were sold, partially offset by $4 million of increased cellular
expense due to customer growth.
.. Maintenance expense decreased $6 million or 7% primarily due to the
sale of noncore businesses and the effect of a $3 million one-time
charge in 1993 relating to service provided in Saudi Arabia.
.. Administrative and general expense decreased $6 million or 10%
primarily due to $4 million of reduced corporate support and
employee benefit costs relating to long lines and diminished
activities for noncore businesses.
- 17 -
<PAGE>
. Earnings contribution increased $19 million or 52%.
.. Income from operations increased $21 million or 21%.
.. Interest expense decreased $8 million or 22% as a result of lower
borrowing levels in 1994.
.. Other income increased $4 million primarily due to a $3 million gain
on the sale of noncore businesses and a $1 million valuation
adjustment to a lease liability.
.. Income tax expense increased $11 million or 52% due to higher
taxable income.
- 18 -
<PAGE>
FINANCIAL CONDITION -
For the nine months ended September 30, 1994:
Net cash flows of $762 million were provided by operating
activities during the period. Uses for cash were: $556 million for
construction program expenditures and $258 million for dividends.
During the period, the Company issued 3,029,038 shares of its
common stock under the Dividend Reinvestment and Employee Stock Purchase
Plans. The Company plans to change from new issuances to open market
purchases of shares for these plans.
At September 30, 1994, the Company had $421 million of commercial
paper and bank borrowings outstanding at an average weighted rate of 5.01%.
These borrowings are supported by revolving credit agreements totaling
$500 million. At September 30, 1994, the consolidated subsidiaries had
access to $671 million of short-term funds through committed bank revolving
credit agreements. Subsidiaries had $50 million of commercial paper
outstanding at September 30, 1994, as well as borrowings of $51 million
under bank revolving credit facilities. At September 30, 1994, the
Companies had $78 million of short-term debt classified as long-term debt
as they have the intent and ability to support short-term borrowings
through the various revolving credit facilities on a long-term basis. The
Company and its subsidiaries have intercompany borrowing arrangements
providing for loans of funds between parties at short-term market rates.
Pacific Telecom has definitive agreements with US West Communi-
cations, Inc. to purchase local telephone properties in Colorado for
approximately $200 million and similar properties in Oregon and Washington
for approximately $180 million. The Colorado Public Utilities Commission
order approving the acquisition of the Colorado properties with conditions
became final in June 1994. Pacific Telecom expects to close the
transaction in late 1994. Completion of the transaction relating to the
Oregon and Washington properties is dependent on corporate, regulatory and
governmental approvals, receipt of which is expected to occur prior to the
end of 1995. Pacific Telecom expects to fund these acquisitions through
proceeds received on the sale of Alascom, the issuance of external debt and
internally generated funds.
On July 8, 1994, Pacific Telecom's subsidiary, Alascom, received
the first of two $75 million transition payments from AT&T. In October
1994, Pacific Telecom signed an agreement to sell Alascom to AT&T. The
transition payment received in July is being applied to the purchase of
Alascom by AT&T. Net cash provided by operating activities was reduced by
$43 million for taxes paid on the transition payments received and to be
received from AT&T totaling $150 million. Pacific Telecom believes the
cash used to make this tax payment directly relates to the $75 million in
cash received in July 1994, included in cash flow from investing
activities. However, generally accepted accounting principles require
income tax expenses to be offset against cash from operating activities.
See Item 2. Results of Operations - Telecommunications on page 15.
- 19 -
<PAGE>
See Part II, Item 5. "Other Information" on page 22 of this Form
10-Q for information regarding a proposal by Holdings to acquire the 13%
publicly held minority interest of Pacific Telecom.
The Company believes that its existing and available capital
resources are sufficient to meet working capital, dividend and the majority
of construction needs in 1994.
__________________________________________________________________________
The condensed consolidated financial statements as of
September 30, 1994 and for the three- and nine-month periods then ended
have been reviewed by Deloitte & Touche LLP, independent accountants, in
accordance with standards established by the American Institute of
Certified Public Accountants. A copy of their report is included herein.
- 20 -
<PAGE>
Deloitte & Touche LLP
_____________________ _____________________________________________________
3900 US Bancorp Tower Telephone:(503)222-1341
111 SW Fifth Avenue Facsimile:(503)224-2172
Portland, Oregon 97204-3698
INDEPENDENT ACCOUNTANTS' REPORT
_______________________________
PacifiCorp:
We have reviewed the accompanying condensed consolidated balance sheet of
PacifiCorp and subsidiaries as of September 30, 1994, and the related
condensed consolidated statements of income and retained earnings for the
three- and nine-month periods ended September 30, 1994 and 1993 and of cash
flows for the nine-month periods ended September 30, 1994 and 1993. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and of making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of PacifiCorp and subsidiaries as
of December 31, 1993, and the related consolidated statements of income and
retained earnings and of cash flows for the year then ended (not presented
herein); and in our report dated February 18, 1994 (which contains a
paragraph describing the Company's change of accounting in 1993 for income
taxes and other postretirement benefits), we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance
sheet as of December 31, 1993 is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been
derived.
DELOITTE & TOUCHE LLP
November 10, 1994
- 21 -
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
______ _________________
In Duval et al. v. Gleason et al., U.S. District Court for the
______________________________
Northern District of California (see "Item 3. Legal Proceedings,"
___
at page 14 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1993; "Item 1. Legal Proceedings," at
page 16 of the Company's Quarterly Report for the period ended
March 31, 1994), on July 25, 1994, while PacifiCorp's motion to
dismiss was pending, a settlement conference was held to resolve
all remaining claims in both the state and federal cases. The
parties reached a tentative settlement, which requires final
court approval.
In Loewen, et al. v. Galligan, et al., Circuit Court for the
__________________________________
State of Oregon, County of Multnomah; United States District
Court, District of Oregon (see "Item 3. Legal Proceedings" at
page 13 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1993) on September 14, 1994, the Court of
Appeals affirmed the trial court's judgment in all respects. On
October 19, 1994, plaintiffs filed a petition for review of the
Court of Appeals' decision with the Oregon Supreme Court.
In the Matter of Pacific Corporation, Docket No. 1092-05-32-2615,
____________________________________
EPA Region 10 (see "Item 1. Legal Proceedings" at page 16 of the
Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1994), the parties signed a settlement agreement and
the administrative complaint was dismissed.
In October 1994, the parties in the In re Equitec Roll-up
_____________________
Litigation, United States District Court for the N.D. of
__________
California and in Aaberg v. Equitec Financial Group, Inc. et al.,
______________________________________________
United States District Court for the N.D. of California (see
"Item 3. Legal Proceedings" at page 14 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1993),
stipulated to a judgment of dismissal without costs or attorneys'
fees to any party. The Court approved the stipulated judgment
and entered a judgment of dismissal.
Item 5. Other Information
______ _________________
The board of directors of PacifiCorp Holdings, Inc. has approved
a proposal to acquire the 13% publicly held minority interest of
Pacific Telecom (NASD:PTCM) for $28.00 per share. Holdings
currently owns the remaining 87% of the outstanding stock of
Pacific Telecom.
Under the terms of the proposal, a newly formed, wholly-owned
subsidiary of Holdings would merge into Pacific Telecom and the
holders of approximately 5.3 million shares of common stock of
Pacific Telecom not held by Holdings would receive cash in the
amount of $28.00 in exchange for each share of Pacific Telecom
common stock. As a result of the merger, Pacific Telecom would
become a wholly-owned subsidiary of Holdings.
- 22 -
<PAGE>
The merger requires approval by Pacific Telecom's board of
directors, a majority of which is not affiliated with PacifiCorp,
and is subject to regulatory approvals and other conditions
customary in such transactions.
Item 6. Exhibits and Reports on Form 8-K
______ ________________________________
(a) Exhibits.
Exhibit 12(a): Statement of Computation of Ratio of Earnings to
Fixed Charges.
Exhibit 12(b): Statements of Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends.
Exhibit 15: Letter re unaudited interim financial information of
awareness of incorporation by reference.
Exhibit 27: Financial Data Schedule (filed electronically only).
(b) Reports on Form 8-K.
On Form 8-K dated October 17, 1994, under Item 5. "Other Events,"
the Company reported that its 87%-owned subsidiary, Pacific
Telecom, Inc., signed an agreement to sell the stock of Alascom,
Inc. to AT&T.
On Form 8-K dated October 26, 1994, under Item 5. "Other Events,"
the Company filed a press release reporting financial results for
the three- and nine-months ended September 30, 1994.
On Form 8-K dated November 1, 1994, under Item 5. "Other Events,"
the Company announced that the board of directors of PacifiCorp
Holdings, Inc. has approved a proposal to acquire the 13%
publicly held minority interest of Pacific Telecom, Inc. (NASD:
PTCM) for $28.00 per share.
- 23 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
PACIFICORP
Date November 10, 1994 By DANIEL L. SPALDING
_________________________ ________________________________
Daniel L. Spalding
Senior Vice President
(Chief Accounting Officer)
- 24 -
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
_______ ___________ ____
<S> <C> <C>
12(a) Statement of Computation of Ratio of Earnings
to Fixed Charges
12(b) Statements of Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends
15 Letter re unaudited interim financial information
of awareness of incorporation by reference
27 Financial Data Schedule (filed electronically only)
</TABLE>
<PAGE>
<TABLE>
EXHIBIT (12)(a)
PACIFICORP
STATEMENTS OF COMPUTATION OF RATIO
OF EARNINGS TO FIXED CHARGES
(IN MILLIONS OF DOLLARS)
<CAPTION>
Nine Months
YEAR ENDED DECEMBER 31, Ended
_______________________________________________________
1989 1990 1991 1992 1993 September 30, 1994
____ ____ ____ ____ ____ __________________
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges, as defined:*
Interest expense....................... $ 473.1 $ 431.2 $ 428.0 $ 409.7 $ 377.8 $252.5
Estimated interest portion
of rentals charged to expense........ 29.9 23.3 20.4 17.1 20.1 13.7
Preferred dividend requirement of
majority-owned subsidiary............ 4.5 4.2 - - - -
_______ _______ _______ _______ _______ _____
Total fixed charges............ $ 507.5 $ 458.7 $ 448.4 $ 426.8 $ 397.9 $266.2
_______ _______ _______ _______ _______ _____
_______ _______ _______ _______ _______ _____
Earnings, as defined:*
Income from continuing
operations........................... $ 403.0 $ 413.4 $ 446.8 $ 150.2 $ 422.7 $341.6
Add (deduct):
Provision for income taxes........... 207.1 179.1 176.7 90.8 187.4 183.4
Minority interest.................... 12.3 18.1 14.1 8.4 11.3 10.6
Undistributed income of
less than 50% owned affiliates..... 14.7 - (1.8) (5.7) (16.2) (11.6)
Fixed charges as above............... 507.5 458.7 448.4 426.8 397.9 266.2
_______ _______ _______ _______ _______ _____
Total earnings................. $1,144.6 $1,069.3 $1,084.2 $ 670.5 $1,003.1 $790.2
_______ _______ _______ _______ _______ _____
_______ _______ _______ _______ _______ _____
Ratio of Earnings to Fixed Charges....... 2.3x 2.3x 2.4x 1.6x 2.5x 3.0x
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
<FN>
_______________
*"Fixed charges" represents consolidated interest charges, an estimated amount representing the interest factor in rents
and preferred stock dividend requirements of majority-owned subsidiaries. "Earnings" represent the aggregate of (a)
income from continuing operations, (b) taxes based on income from continuing operations, (c) minority interest in the
income of majority-owned subsidiaries that have fixed charges, (d) fixed charges and (e) undistributed (income) losses
of less than 50% owned affiliates without loan guarantees.
</FN>
</TABLE>
<PAGE>
<TABLE>
PACIFICORP EXHIBIT (12)(b)
STATEMENTS OF COMPUTATION OF RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(IN MILLIONS OF DOLLARS)
<CAPTION>
Nine Months
YEAR ENDED DECEMBER 31, Ended
_______________________________________________________
1989 1990 1991 1992 1993 September 30, 1994
____ ____ ____ ____ ____ __________________
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges, as defined:*
Interest expense.................... $ 473.1 $ 431.2 $ 428.0 $ 409.7 $ 377.8 $ 252.5
Estimated interest portion
of rentals charged to expense..... 29.9 23.3 20.4 17.1 20.1 13.7
Preferred dividend requirement
of majority-owned subsidiary...... 4.5 4.2 - - - -
_______ _______ _______ _______ _______ ______
Total fixed charges......... 507.5 458.7 448.4 426.8 397.9 266.2
Preferred Stock Dividends,
as defined:*...................... 31.9 31.7 37.4 59.9 56.8 45.5
_______ _______ _______ _______ _______ ______
Total fixed charges and
preferred dividends....... $ 539.4 $ 490.4 $ 485.8 $ 486.7 $ 454.7 $ 311.7
_______ _______ _______ _______ _______ ______
_______ _______ _______ _______ _______ ______
Earnings, as defined:*
Net income from continuing
operations........................ $ 403.0 $ 413.4 $ 446.8 $ 150.2 $ 422.7 $ 341.6
Add (deduct):
Provision for income taxes........ 207.1 179.1 176.7 90.8 187.4 183.4
Minority interest................. 12.3 18.1 14.1 8.4 11.3 10.6
Undistributed losses
(income) of less than
50% owned affiliates............ 14.7 - (1.8) (5.7) (16.2) (11.6)
Fixed charges as above............ 507.5 458.7 448.4 426.8 397.9 266.2
_______ _______ _______ _______ _______ ______
Total earnings.............. $1,144.6 $1,069.3 $1,084.2 $ 670.5 $1,003.1 $ 790.2
_______ _______ _______ _______ _______ ______
_______ _______ _______ _______ _______ ______
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.. 2.1x 2.2x 2.2x 1.4x 2.2x 2.5x
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
<FN>
_______________
*"Fixed charges" represent consolidated interest charges, an estimated amount representing the interest factor in rents
and preferred stock dividend requirements of majority-owned subsidiaries. "Preferred Stock Dividends" represent
preferred dividend requirements multiplied by the ratio which pre-tax income from continuing operations bears to income
from continuing operations. "Earnings" represent the aggregate of (a) income from continuing operations, (b) taxes
based on income from continuing operations, (c) minority interest in the income of majority-owned subsidiaries that have
fixed charges, (d) fixed charges and (e) undistributed (income) losses of less than 50% owned affiliates without loan
guarantees.
</FN>
</TABLE>
<PAGE>
Deloitte & Touche LLP
_____________________ _____________________________________________________
3900 US Bancorp Tower Telephone:(503)222-1341
111 SW Fifth Avenue Facsimile:(503)224-2172
Portland, Oregon 97204-3698
EXHIBIT 15
November 10, 1994
PacifiCorp
700 N.E. Multnomah
Portland, Oregon
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of PacifiCorp and subsidiaries for the periods ended
September 30, 1994 and 1993, as indicated in our report dated November 10,
1994; because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, is
incorporated by reference in Registration Statement Nos. 33-36452, 33-49607,
33-51163 and 33-55309, all on Form S-3; in Registration Statement Nos.
33-39195 and 33-49479, and Post-Effective Amendment No. 1 to Registration
Statement No. 33-17970, all on Form S-8; and in Registration Statement No.
33-36239 on Form S-4.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that
Act.
DELOITTE & TOUCHE LLP
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PACIFICORP'S
SEPTEMBER 30, 1994 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000075594
<NAME> PACIFICORP
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 8158000
<OTHER-PROPERTY-AND-INVEST> 647200
<TOTAL-CURRENT-ASSETS> 851000
<TOTAL-DEFERRED-CHARGES> 307500
<OTHER-ASSETS> 1905500
<TOTAL-ASSETS> 11869200
<COMMON> 2976900
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 434300
<TOTAL-COMMON-STOCKHOLDERS-EQ> 3411200
367400
219000
<LONG-TERM-DEBT-NET> 3773100
<SHORT-TERM-NOTES> 130900
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 347100
<LONG-TERM-DEBT-CURRENT-PORT> 102500
0
<CAPITAL-LEASE-OBLIGATIONS> 26900
<LEASES-CURRENT> 2500
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3488600
<TOT-CAPITALIZATION-AND-LIAB> 11869200
<GROSS-OPERATING-REVENUE> 2616400
<INCOME-TAX-EXPENSE> 183400
<OTHER-OPERATING-EXPENSES> 1898300
<TOTAL-OPERATING-EXPENSES> 2081700
<OPERATING-INCOME-LOSS> 534700
<OTHER-INCOME-NET> 33700
<INCOME-BEFORE-INTEREST-EXPEN> 568400
<TOTAL-INTEREST-EXPENSE> 226800
<NET-INCOME> 341600
29700
<EARNINGS-AVAILABLE-FOR-COMM> 311900
<COMMON-STOCK-DIVIDENDS> 228500
<TOTAL-INTEREST-ON-BONDS> 214000
<CASH-FLOW-OPERATIONS> 762400
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
</TABLE>
