<PAGE>
THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE INFORMATION CONTAINED HEREIN ARE
SUBJECT TO COMPLETION OR AMENDMENT AND PROSPECTIVE PURCHASERS ARE REFERRED TO
THE RELATED FINAL PROSPECTUS SUPPLEMENT FOR DEFINITIVE INFORMATION ON ANY MATTER
CONTAINED HEREIN. NEITHER THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
Rule 424(b)(3)
File Number 33-55309
SUBJECT TO COMPLETION, DATED OCTOBER 25, 1994
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 17, 1994
$75,000,000
[LOGO]
% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES,
SERIES A, DUE 2024
--------------
Interest on the % Junior Subordinated Deferrable Interest Debentures,
Series A, Due 2024 (the "Series A Junior Subordinated Debentures") is payable on
June 30 and December 31 of each year, commencing December 31, 1994. The Series A
Junior Subordinated Debentures will be redeemable at the option of PacifiCorp,
an Oregon corporation ("PacifiCorp"), in whole or in part, on or after December
31, 2004 at the redemption prices set forth herein.
The Series A Junior Subordinated Debentures will be issued in the form of
one or more global certificates registered in the name of The Depository Trust
Company ("DTC"), as securities depository, or its nominee. Except as described
herein, purchasers of the Series A Junior Subordinated Debentures will not
receive certificates representing their ownership interests therein, and such
interests will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. The authorized denominations of
the Series A Junior Subordinated Debentures are $1,000 and integral multiples
thereof. See "Description of the Series A Junior Subordinated Debentures."
The obligations of PacifiCorp under the Series A Junior Subordinated
Debentures are subordinate and junior in right of payment to Senior Indebtedness
(as defined in the accompanying Prospectus) of PacifiCorp. At June 30, 1994,
Senior Indebtedness of PacifiCorp aggregated approximately $3.7 billion. Senior
Indebtedness includes only indebtedness of PacifiCorp on an unconsolidated
basis.
-------------------
SEE "INVESTMENT CONSIDERATIONS" FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE SERIES A JUNIOR SUBORDINATED DEBENTURES, INCLUDING THE PERIOD
AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF INTEREST ON THE SERIES A
JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME
TAX CONSEQUENCES.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) COMMISSION(2) PACIFICORP(1)(3)
----------------- ----------------- -----------------
<S> <C> <C> <C>
Per Series A Junior Subordinated Debenture.............. % % %
Total................................................... $ $ $
<FN>
- ------------------------
(1) Plus accrued interest, if any, from November , 1994.
(2) PacifiCorp has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated expenses of $ payable by PacifiCorp.
</TABLE>
-------------------
The Series A Junior Subordinated Debentures offered hereby are offered
severally by the Underwriters, as specified herein, subject to receipt and
acceptance by them and subject to their right to reject any order in whole or in
part. It is expected that the Series A Junior Subordinated Debentures will be
ready for delivery in book-entry form only through the facilities of DTC in New
York, New York on or about November , 1994.
-------------------
GOLDMAN, SACHS & CO. SMITH BARNEY INC.
MORGAN STANLEY & CO.
INCORPORATED
--------------------------------
The date of this Prospectus Supplement is November , 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
-------------------
S-2
<PAGE>
PACIFICORP
PacifiCorp is an electric utility that conducts a retail electric utility
business through two divisions, Pacific Power & Light Company ("Pacific Power")
and Utah Power & Light Company ("Utah Power"), and engages in power production
and sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the
indirect owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary),
of 87% of Pacific Telecom, Inc. ("Pacific Telecom") and 100% of PacifiCorp
Financial Services, Inc. ("PFS").
Pacific Power and Utah Power furnish electric service in portions of seven
western states: California, Idaho, Montana, Oregon, Utah, Washington and
Wyoming. Pacific Telecom, through its subsidiaries, provides local telephone
service and access to the long distance network in Alaska, seven other western
states and three midwestern states, provides intrastate and interstate long
distance communication services in Alaska, provides cellular mobile telephone
services, and is engaged in sales of capacity in and operation of a submarine
fiber optic cable between the United States and Japan. PFS plans to sell
substantial portions of its loan, leasing and real estate investments over the
next several years.
The principal executive offices of PacifiCorp are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
INVESTMENT CONSIDERATIONS
Prospective purchasers of Series A Junior Subordinated Debentures should
carefully review the information contained elsewhere in this Prospectus
Supplement and in the accompanying Prospectus and should particularly consider
the following matters:
SUBORDINATION OF SERIES A JUNIOR SUBORDINATED DEBENTURES. The obligations
of PacifiCorp under the Series A Junior Subordinated Debentures are subordinate
and junior in right of payment to Senior Indebtedness (as defined in the
accompanying Prospectus) of PacifiCorp. At June 30, 1994, Senior Indebtedness of
PacifiCorp aggregated approximately $3.7 billion. There are no terms in the
Series A Junior Subordinated Debentures that limit PacifiCorp's ability to incur
additional indebtedness, including indebtedness that ranks senior to the Series
A Junior Subordinated Debentures. The Indenture (as defined herein) does not
contain any cross-defaults to any other indebtedness of PacifiCorp and,
therefore, a default with respect to, or the acceleration of, any such
indebtedness will not constitute an "Event of Default" with respect to the
Series A Junior Subordinated Debentures. See "Description of the Junior
Subordinated Debentures -- Subordination" and "-- Events of Default" in the
accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD. PacifiCorp has the right under
the Indenture to extend the interest payment period from time to time on the
Series A Junior Subordinated Debentures to a period not exceeding 60 consecutive
months, and, as a consequence, interest payments on the Series A Junior
Subordinated Debentures would be deferred (but would continue to accrue with
interest thereon) during any such extended interest payment period. In the event
that PacifiCorp exercises this right, PacifiCorp may not declare or pay
dividends on, or redeem, purchase or acquire, any of its capital stock. Prior to
the termination of any such extension period, PacifiCorp may further extend the
interest payment period, provided that any such extension period together with
all such previous and further extensions thereof may not exceed 60 consecutive
months. Upon the termination of any extension period and the payment of all
amounts then due, PacifiCorp may select a new extension period, subject to the
above requirements. PacifiCorp believes that the extension of an interest
payment period on the Series A Junior Subordinated Debentures is unlikely. See
"Description of the Series A Junior Subordinated Debentures -- Option to Extend
Interest Payment Period."
Should an extended interest payment period occur, holders of the Series A
Junior Subordinated Debentures will continue to accrue income for United States
federal income tax purposes, even though interest is not being paid on a current
basis. As a result, a holder will include such interest in gross income for
United States federal income tax purposes in advance of the receipt of cash, and
will not receive the cash from PacifiCorp related to such income if such holder
disposes of his or her Series A Junior Subordinated Debentures prior to the
record date for payment of interest. See "United States Taxation -- United
States Holders."
S-3
<PAGE>
SELECTED FINANCIAL INFORMATION
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The following selected financial information for each of the three years in
the period ended December 31, 1993 and the six months ended June 30, 1993 and
1994 has been derived from the consolidated financial statements of PacifiCorp
for the respective periods. The consolidated financial statements for the
three-year period ended December 31, 1993 have been audited by Deloitte & Touche
LLP, independent auditors, and the reports of Deloitte & Touche LLP are
incorporated in the accompanying Prospectus by reference. This selected
financial information should be read in conjunction with the financial
statements and related notes thereto included in the Incorporated Documents (as
defined in the accompanying Prospectus).
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------------------------- --------------------
1991 1992 1993 1993 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues....................................................... $ 3,168 $ 3,242 $ 3,412 $ 1,668 $ 1,701
Income from Operations (1)..................................... 941 633 916 445 453
Income from Continuing Operations.............................. 447 150 423 204 210
Discontinued Operations (2).................................... 60 (491) 52 -- --
Cumulative Effect on Prior Years of a Change in Accounting for
Income Taxes.................................................. -- -- 4 4 --
Net Income (Loss).............................................. 507 (341) 479 208 210
Preferred Stock Dividend Requirements.......................... 26 37 39 19 20
Earnings (Loss) on Common Stock................................ 481 (378) 440 189 190
Earnings (Loss) per Common Share:
Continuing Operations........................................ 1.63 .42 1.40 .68 .67
Discontinued Operations...................................... .23 (1.84) .19 -- --
Cumulative Effect on Prior Years of a Change in Accounting
for Income Taxes............................................ -- -- .01 .01 --
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1994
----------------------------------------------
ACTUAL AS ADJUSTED(3)
---------------------- ----------------------
AMOUNT % AMOUNT %
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Capital Structure:
Long-Term Debt and Capital Lease Obligations............................... $ 3,814 49% $ 3,889 50%
Preferred Stock............................................................ 367 5 367 5
Preferred Stock Subject to Mandatory Redemption............................ 219 3 219 3
Common Equity.............................................................. 3,345 43 3,345 42
--------- --- --------- ---
Total.................................................................... $ 7,745 100% $ 7,820 100%
--------- --- --------- ---
--------- --- --------- ---
Short-Term Debt.............................................................. $ 528 454
Long-Term Debt and Capital Lease Obligations Currently
Maturing.................................................................... $ 164 $ 164
<FN>
- ------------------------
(1) Income before income taxes, interest, other nonoperating items,
discontinued operations and cumulative effect of a change in an accounting
principle.
(2) Discontinued operations represents PacifiCorp's interests in NERCO, Inc.,
the disposition of which was completed pursuant to a merger in June 1993,
and an international communications subsidiary of Pacific Telecom, the
disposition of which was completed in September 1993.
(3) Adjusted to give effect to the issuance and sale of the Series A Junior
Subordinated Debentures at an assumed issue price of 100% of the principal
amount thereof and the application of the estimated net proceeds thereof to
retire short-term debt. See "Use of Proceeds."
</TABLE>
S-4
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the Series A Junior Subordinated Debentures
will be used by PacifiCorp to repay short-term borrowings and for other
corporate purposes.
DESCRIPTION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES
The following description of the Series A Junior Subordinated Debentures
supplements and should be read in conjunction with the description of the
general terms and provisions of the Junior Subordinated Debentures set forth in
the accompanying Prospectus under the caption "Description of the Junior
Subordinated Debentures." The following description does not purport to be
complete and is qualified in its entirety by reference to the description in the
accompanying Prospectus and the Indenture, dated as of November 1, 1994, between
PacifiCorp and The Bank of New York, as Trustee, as supplemented by a First
Supplemental Indenture, dated as of November 1, 1994 (such Indenture, as so
supplemented, is hereinafter referred to as the "Indenture").
GENERAL
The Series A Junior Subordinated Debentures will be issued as a series of
unsecured Junior Subordinated Debentures under the Indenture. The Series A
Junior Subordinated Debentures will be limited in aggregate principal amount to
$75 million.
The entire principal amount of the Series A Junior Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, on December 31, 2024.
The Series A Junior Subordinated Debentures will initially be issued as a
Global Security (as defined below). As described herein, under certain limited
circumstances Series A Junior Subordinated Debentures may be issued in
certificated form in exchange for a Global Security (as defined below). See "--
Book-Entry and Settlement." In the event that Series A Junior Subordinated
Debentures are issued in certificated form, such Series A Junior Subordinated
Debentures will be in denominations of $1,000 and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Payments on Series A Junior Subordinated Debentures issued as a Global
Security will be made to The Depository Trust Company (the "Depository" or
"DTC"), as the depository for the Series A Junior Subordinated Debentures. In
the event Series A Junior Subordinated Debentures are issued in certificated
form, principal of and premium, if any, and interest on the Series A Junior
Subordinated Debentures will be payable, the transfer of Series A Junior
Subordinated Debentures will be registrable and Series A Junior Subordinated
Debentures will be exchangeable for Series A Junior Subordinated Debentures of
other denominations of a like aggregate principal amount at the corporate trust
office of the Trustee in The City of New York; provided, that payment of
interest may be made at the option of PacifiCorp by check mailed to the address
of the persons entitled thereto.
OPTIONAL REDEMPTION
PacifiCorp shall have the right to redeem the Series A Junior Subordinated
Debentures, in whole or in part, from time to time, on or after December 31,
2004, upon not less than 30 nor more than 60 days' notice, at the respective
redemption prices (expressed as percentages of principal amount) set forth in
the following table, together in each case with accrued interest to the
redemption date, if redeemed during the twelve month periods commencing on
December 31 of the years indicated:
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ------------------------------- --------------- ------------------------------- ---------------
<S> <C> <C> <C>
2004........................... % 2010........................... %
2005........................... 2011...........................
2006........................... 2012...........................
2007........................... 2013...........................
2008........................... 2014 and thereafter............ 100
2009...........................
</TABLE>
S-5
<PAGE>
INTEREST
Each Series A Junior Subordinated Debenture will bear interest at the rate
of % per annum from November , 1994, payable on June 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing December 31, 1994, to
the person in whose name such Series A Junior Subordinated Debenture is
registered, subject to certain exceptions, at the close of business on the
Business Day (as defined below) next preceding such Interest Payment Date. In
the event the Series A Junior Subordinated Debentures shall not continue to
remain in book-entry-only form, PacifiCorp shall have the right to select record
dates which shall be more than one Business Day prior to an Interest Payment
Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series A Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. A "Business Day" shall mean any day other than a day on
which banking institutions in The City of New York are authorized or required by
law to close.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
PacifiCorp shall have the right at any time during the term of the Series A
Junior Subordinated Debentures to extend the interest payment period from time
to time to a period not exceeding 60 consecutive months (an "Extension Period"),
at the end of which Extension Period PacifiCorp shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Series A Junior Subordinated Debentures to the extent permitted by applicable
law); provided, that, during any such Extension Period, PacifiCorp shall not
declare or pay any dividends on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock. Prior to the
termination of any such Extension Period, PacifiCorp may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 60 consecutive
months. Upon the termination of any Extension Period and the payment of all
amounts then due, PacifiCorp may select a new Extension Period, subject to the
above requirements. No interest during an Extension Period, except at the end
thereof, shall be due and payable. PacifiCorp shall give the holders of the
Series A Junior Subordinated Debentures notice of its selection of such
Extension Period ten Business Days prior to the next Interest Payment Date.
BOOK-ENTRY AND SETTLEMENT
The Series A Junior Subordinated Debentures will be issued in the form of
one or more global certificates (each, a "Global Security") registered in the
name of the nominee of DTC. Except under the limited circumstances described
below, Series A Junior Subordinated Debentures represented by the Global
Security will not be exchangeable for, and will not otherwise be issuable as,
Series A Junior Subordinated Debentures in definitive form. The Global
Securities described above may not be transferred except by DTC to a nominee of
DTC or by a nominee of DTC to DTC or another nominee of DTC or to a successor
depository or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Series A Junior
Subordinated Debentures in definitive form and will not be considered the
Holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Series A Junior Subordinated
Debentures shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of DTC or its nominee or to
a successor depository or its nominee. Accordingly, each beneficial owner must
rely on the procedures of DTC and, if such person is not a Participant (as
defined below), on the procedures of the Participant through which such person
owns its interest to exercise any rights of a Holder under the Indenture.
S-6
<PAGE>
THE DEPOSITORY. DTC will act as securities depository for the Series A
Junior Subordinated Debentures. The Series A Junior Subordinated Debentures will
be issued only as fully-registered securities registered in the name of Cede &
Co. (DTC's nominee). One or more fully-registered global certificates will be
issued, representing in the aggregate the total number of Series A Junior
Subordinated Debentures and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Series A Junior Subordinated Debentures within the DTC system
must be made by or through Direct Participants, which will receive a credit for
the Series A Subordinated Debentures on DTC's records. The ownership interest of
each actual purchaser of each Series A Junior Subordinated Debentures
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Series A Junior Subordinated Debentures.
Transfers of ownership interests in the Series A Junior Subordinated Debentures
are to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Series A Junior Subordinated
Debentures, except in the event that use of the book-entry system for the Series
A Junior Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series A Junior
Subordinated Debentures; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Series A Junior Subordinated Debentures are
credited, which may or may not be the Beneficial Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Series A Junior Subordinated Debentures are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series to be redeemed.
Interest payments on the Series A Junior Subordinated Debentures will be
made to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payments
on such payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC or PacifiCorp, subject to any
statutory or regulatory requirements as may be in effect from time to time.
S-7
<PAGE>
Payment of interest to DTC is the responsibility of PacifiCorp, disbursement of
such payments to Direct Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Series A Junior Subordinated Debentures at any time by giving
reasonable notice to PacifiCorp. Under such circumstances, in the event that a
successor securities depository is not obtained, Series A Junior Preferred
Security certificates are required to be printed and delivered. Additionally,
PacifiCorp may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depository). In that event, certificates for the
Series A Junior Subordinated Debentures will be printed and delivered. In each
of the above circumstances, PacifiCorp will appoint a paying agent with respect
to the Series A Junior Subordinated Debentures.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that PacifiCorp believes to be reliable, but
PacifiCorp takes no responsibility for the accuracy thereof.
Neither PacifiCorp, the Trustee, any paying agent nor any other agent of
PacifiCorp or the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Series A Junior Subordinated
Debentures or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITORY'S SERVICES. A Global Security shall be
exchangeable for Series A Junior Subordinated Debentures registered in the names
of persons other than DTC or its nominee only if (i) DTC notifies PacifiCorp
that it is unwilling or unable to continue as a depository for such Global
Security and no successor depository shall have been appointed, or if any time
DTC ceases to be a clearing agency registered under the Exchange Act at a time
when DTC is required to be so registered to act as such depository, (ii)
PacifiCorp in its sole discretion determines that such Global Security shall be
so exchangeable or (iii) there shall have occurred an Event of Default (as
defined in the Indenture) with respect to such Series A Junior Subordinated
Debentures. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Series A Junior Subordinated Debentures
registered in such names as the Depository shall direct. It is expected that
such instructions will be based upon directions received by the Depository from
its Participants with respect to ownership of beneficial interests in such
Global Security.
REGISTRAR AND TRANSFER AGENT
So long as the Series A Junior Subordinated Debentures remain in
book-entry-only form, PacifiCorp will act as registrar and transfer agent for
the Series A Junior Subordinated Debentures. See "-- General" above.
S-8
<PAGE>
UNITED STATES TAXATION
GENERAL
This section is a summary of certain United States federal income tax
considerations that may be relevant to prospective purchasers of Series A Junior
Subordinated Debentures and represents the opinion of Stoel Rives Boley Jones &
Grey, counsel to PacifiCorp, insofar as it relates to matters of law and legal
conclusions. This section is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations
thereunder and current administrative rulings and court decisions, all of which
are subject to change. Subsequent changes may cause tax consequences to vary
substantially from the consequences described below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Series A Junior
Subordinated Debentures. Moreover, the discussion focuses on holders of Series A
Junior Subordinated Debentures who are individual citizens or residents of the
United States that hold the Series A Junior Subordinated Debentures as a capital
asset and has only limited application to corporations, estates, trusts and
non-resident aliens. Accordingly, each prospective purchaser of Series A Junior
Subordinated Debentures should consult, and should depend on, his or her own tax
advisor in analyzing the federal, state, local and foreign tax consequences of
the purchase, ownership and disposition of Series A Junior Subordinated
Debentures.
UNITED STATES HOLDERS
For purposes of this discussion, a United States Holder is a Beneficial
Owner that is (i) a citizen or resident of the United States, (ii) a domestic
corporation or (iii) otherwise subject to United States federal income taxation
on a net income basis in respect of the Series A Junior Subordinated Debentures.
Because the interest payment period is extendable by PacifiCorp, the
interest on the Series A Junior Subordinated Debentures will be treated as
"original issue discount" pursuant to Code Sections 1271 ET SEQ. and the
Treasury Regulations promulgated thereunder. Therefore, interest on Series A
Junior Subordinated Debentures will be included in the income of a United States
Holder as it accrues, rather than when it is paid, regardless of the United
States Holder's regular method of accounting for tax purposes. United States
Holders may therefore include interest in income for taxable years prior to the
year in which the interest is actually received. For calendar year taxpayers,
however, this should occur only during an Extension Period or any other
nonpayment period.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Series A Junior Subordinated Debenture equal to the difference
between the amount realized from the sale or retirement and the United States
Holder's tax basis in the Series A Junior Subordinated Debenture. Such gain or
loss will be capital gain or loss, and will be long-term capital gain or loss if
the Series A Junior Subordinated Debenture has been held for more than one year.
A United States Holder's tax basis in a Series A Junior Subordinated Debenture
will generally equal the amount paid for it, increased by the amount of any
accrued but unpaid interest.
UNITED STATES ALIEN HOLDERS
For purposes of the following discussion, a "United States Alien Holder" is
any holder that is (i) a nonresident alien individual, (ii) a foreign
corporation or partnership or (iii) an estate or trust that has a foreign
fiduciary, in each case not subject to United States federal income tax on a net
income basis in respect of a Series A Junior Subordinated Debenture.
Under current United States federal income tax law, subject to the
discussion below with respect to backup withholding:
(i) payments by PacifiCorp or any of its paying agents in respect of a
Series A Junior Subordinated Debenture to a United States Alien Holder will
not be subject to United States federal withholding tax provided that (a)
the Beneficial Owner of the Series A Junior Subordinated Debenture does not
actually or constructively own 10% or more of the total combined voting
power of all classes of capital stock of PacifiCorp entitled to vote, (b)
the Beneficial Owner of the Series A Junior
S-9
<PAGE>
Subordinated Debenture is not a controlled foreign corporation that is
related to PacifiCorp through stock ownership and (c) the Beneficial Owner
provides the correct certification of United States Alien Holder status
(which may generally be satisfied by providing an IRS Form W-8 certifying
that the Beneficial Owner is a United States Alien Holder and providing the
name and address of the Beneficial Owner); and
(ii) a United States Alien Holder will not be subject to United States
federal withholding tax, and generally will not be subject to United States
federal income tax, on gain realized from the sale or exchange of a Series A
Junior Subordinated Debenture. Under certain conditions, a United States
Alien Holder may be subject to United States federal income tax on gain or
income received with respect to the sale or exchange of a Series A Junior
Subordinated Debenture. Such income taxation may occur, for example, if the
United States Alien Holder (a) is engaged in a trade or business in the
United States and gain or income is effectively connected with the conduct
of that trade or business or (b) is an individual present in the United
States for 183 days or more during the taxable year, and certain other
conditions are met. Such taxation is beyond the scope of this summary and
should be discussed with a tax advisor. If income is effectively connected
with the conduct of a trade or business in the United States by a United
States Alien Holder, withholding of United States federal income tax may be
required unless the United States Alien Holder files with PacifiCorp or its
paying agent an IRS form to the effect that the income is so effectively
connected.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
principal of and premium, if any, and interest on a Series A Junior Subordinated
Debenture and to the proceeds from the sale of a Series A Junior Subordinated
Debenture prior to maturity within the United States, with respect to
non-corporate United States Holders, and "backup withholding" at a rate of 31%
will apply to such payments if the United States Holder fails to provide an
accurate taxpayer identification number or to report all interest required to be
shown on its federal income tax returns.
Information reporting and backup withholding will not apply to payments of
principal, premium and interest made by PacifiCorp or a paying agent to a United
States Alien Holder on a Series A Junior Subordinated Debenture if the
certification described in clause (i)(c) under "United States Alien Holders"
above is received, provided that the payor does not have actual knowledge that
the holder is a United States Holder.
Payments of the proceeds from the sale by a United States Alien Holder of a
Series A Junior Subordinated Debenture made to or through a foreign office of a
broker generally will not be subject to information reporting or backup
withholding, except that, if the broker is a United States person, a controlled
foreign corporation for United States tax purposes, or a foreign person 50% or
more of whose gross income is effectively connected with a United States trade
or business for a specified three-year period, information reporting may apply
to such payments. Payments of the proceeds from the sale of a Series A Junior
Subordinated Debenture to or through the United States office of a broker is
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and backup withholding.
S-10
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
PacifiCorp has agreed to sell to each of the Underwriters named below (the
"Underwriters"), and each of the Underwriters has severally agreed to purchase
from PacifiCorp, the principal amount of Series A Junior Subordinated Debentures
set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
SERIES A JUNIOR
UNDERWRITER SUBORDINATED DEBENTURES
- ----------------------------------------------------------------- -----------------------
<S> <C>
Goldman, Sachs & Co.............................................. $
Smith Barney Inc.................................................
Morgan Stanley & Co. Incorporated................................
------------
Total.......................................................... $ 75,000,000
------------
------------
</TABLE>
The Underwriters have advised PacifiCorp that they propose to offer the
Series A Junior Subordinated Debentures in part directly to the public at the
initial public offering price set forth on the cover page of this Prospectus
Supplement, and in part to certain securities dealers at such price less a
concession of % of the principal amount of the Series A Junior Subordinated
Debentures. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of % of the principal amount of the Series A Junior
Subordinated Debentures to certain brokers and dealers. After the Series A
Junior Subordinated Debentures are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriters.
PacifiCorp has agreed, during the period beginning from the date of the
Underwriting Agreement and continuing to and including 30 days after the closing
date, not to offer, sell, contract to sell or otherwise dispose of any Series A
Junior Subordinated Debentures or any other securities of PacifiCorp that are
substantially similar to the Series A Junior Subordinated Debentures, without
the prior written consent of the Underwriters.
The Series A Junior Subordinated Debentures will not have an established
trading market when issued. The Series A Junior Subordinated Debentures will not
be listed on any securities exchange. PacifiCorp has been advised by the
Underwriters that they intend to make a market in the Series A Junior
Subordinated Debentures but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Series A Junior Subordinated Debentures.
PacifiCorp has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make on respect
thereof.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for, PacifiCorp and its subsidiaries in the
ordinary course of business.
LEGAL MATTERS
The validity of the Indenture and the Series A Junior Subordinated
Debentures will be passed upon on behalf of PacifiCorp by Stoel Rives Boley
Jones & Grey, Portland, Oregon and on behalf of the Underwriters by Winthrop,
Stimson, Putnam & Roberts, New York, New York. Statements as to United States
taxation in this Prospectus Supplement under the caption "United States
Taxation" have been passed upon by Stoel Rives Boley Jones & Grey, and are
stated herein on their authority.
S-11
<PAGE>
$150,000,000
[LOGO]
JUNIOR SUBORDINATED DEBENTURES
PACIFICORP DELAWARE
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
[LOGO]
---------------------
PacifiCorp, an Oregon corporation ("PacifiCorp"), may from time to time
offer its junior subordinated deferrable interest debentures (the "Junior
Subordinated Debentures") in one or more series and in amounts, at prices and on
terms to be determined at the time of the offering. The Junior Subordinated
Debentures when issued will be unsecured and subordinate and junior in right of
payment to Senior Indebtedness (as defined herein) of PacifiCorp. See
"Description of the Junior Subordinated Debentures."
PacifiCorp Delaware, L.P. ("PacifiCorp Delaware"), a Delaware special
purpose limited partnership in which PacifiCorp is the general partner, may
offer, from time to time, its preferred securities, representing limited partner
interests (the "Preferred Securities"), in one or more series. The payment of
periodic cash distributions ("dividends") with respect to Preferred Securities
of any series, out of moneys held by PacifiCorp Delaware, and payments on
liquidation or redemption with respect to the Preferred Securities are
guaranteed by PacifiCorp to the extent described herein (the "Guarantee").
PacifiCorp's obligations under the Guarantee are subordinate and junior in right
of payment to all other liabilities of PacifiCorp and PARI PASSU with the most
senior preferred stock issued by PacifiCorp. Junior Subordinated Debentures also
may be issued and sold from time to time in one or more series by PacifiCorp to
PacifiCorp Delaware in connection with the investment of the proceeds from the
offering of Preferred Securities. The Junior Subordinated Debentures
subsequently may be distributed pro rata to holders of Preferred Securities in
connection with the dissolution of PacifiCorp Delaware upon the occurrence of
certain events as may be described in an accompanying Prospectus Supplement (the
"Prospectus Supplement").
Specific terms of the particular Junior Subordinated Debentures and
Preferred Securities of any series in respect of which this Prospectus is being
delivered (the "Offered Securities") will be set forth in an accompanying
Prospectus Supplement with respect to such series, which will describe, without
limitation and where applicable, the following: (i) in the case of Junior
Subordinated Debentures, the specific designation, aggregate principal amount,
denomination, maturity, premium, if any, interest rate or rates (or the method
of determining such rate or rates), if any, dates on which premium, if any, and
interest will be payable, any redemption provisions, any sinking fund
provisions, the initial public offering price, any listing on a securities
exchange and any other terms and (ii) in the case of Preferred Securities, the
specific designation, number of Preferred Securities, dividend rate or rates (or
the method of determining such rate or rates), dates on which dividends will be
payable, liquidation preference, voting rights, any redemption provisions, terms
for any conversion or exchange into other securities, the initial public
offering price, any listing on a securities exchange, and any other rights,
preferences, privileges, limitations and restrictions.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
initial public offering price of all Offered Securities shall not exceed
$150,000,000.
The Prospectus Supplement relating to any series of Offered Securities will
contain information concerning certain United States federal income tax
considerations, if applicable to the Offered Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Offered Securities will be sold directly, through agents, underwriters
or dealers as designated from time to time, or through a combination of such
methods. If any agents, dealers or underwriters are involved in the sale of the
Offered Securities in respect of which this Prospectus is being delivered, the
names of such agents, dealers or underwriters and any applicable commissions or
discounts will be set forth in or may be calculated from the Prospectus
Supplement with respect to such Offered Securities. See "Plan of Distribution."
------------------------
THE DATE OF THIS PROSPECTUS IS OCTOBER 17, 1994.
<PAGE>
AVAILABLE INFORMATION
PacifiCorp is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information (including
proxy and information statements) filed by PacifiCorp can be inspected and
copied at public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the following Regional
Offices of the Commission: New York Regional Office, 7 World Trade Center, 13th
Floor, New York, New York 10046, and Chicago Regional Office, 500 W. Madison
Street, 14th Floor, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of the prescribed rates. The
Common Stock of PacifiCorp is listed on the New York and Pacific Stock
Exchanges. Reports, proxy statements and other information concerning PacifiCorp
can be inspected at their respective offices: New York Stock Exchange, 20 Broad
Street, New York, New York 10005, and Pacific Stock Exchange, 301 Pine Street,
San Francisco, California.
PacifiCorp Delaware and PacifiCorp have filed with the Commission a joint
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in such
Registration Statement and the exhibits thereto. For further information with
respect to PacifiCorp, PacifiCorp Delaware and the Offered Securities, reference
is hereby made to such Registration Statement, including the exhibits thereto,
which may be examined at the Commission's principal office, 450 Fifth Street,
N.W., Washington, D.C. 20549, or copies of which may be obtained from the
Commission at such office upon payment of the fees prescribed by the Commission.
No separate financial statements of PacifiCorp Delaware have been included
herein. PacifiCorp and PacifiCorp Delaware do not consider that such financial
statements would be material to holders of Preferred Securities offered hereby
because PacifiCorp Delaware is a newly formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and does
not propose to engage in, any activity other than as set forth below. PacifiCorp
Delaware is a limited partnership formed under the laws of the State of
Delaware. PacifiCorp is the sole general partner of PacifiCorp Delaware and, as
of the date hereof, directly or indirectly beneficially owns all of PacifiCorp
Delaware's partnership interests. See "PacifiCorp Delaware, L.P."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by PacifiCorp with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
(1) PacifiCorp's Annual Report on Form 10-K for the year ended December
31, 1993 (as amended by Form 10-K/A dated June 7, 1994);
(2) PacifiCorp's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994 and June 30, 1994; and
(3) PacifiCorp's Current Reports on Form 8-K dated January 18 and May
24, 1994.
All documents filed by PacifiCorp pursuant to Section 13, 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination of
this offering shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents (such
documents, and the documents enumerated above, being hereinafter referred to as
"Incorporated Documents"; provided, however, that all documents filed by
PacifiCorp pursuant to Section 13 or 14 of the Exchange Act in each year during
which the offering made by this Prospectus is in effect prior to the filing with
the Commission of PacifiCorp's Annual Report on Form 10-K covering such year
shall not be Incorporated Documents or be incorporated by reference in this
Prospectus or be a part hereof from and after such filing of such Annual Report
on Form 10-K).
2
<PAGE>
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
PACIFICORP HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO RICHARD T.
O'BRIEN, VICE PRESIDENT, PACIFICORP, 700 NE MULTNOMAH, SUITE 1600, PORTLAND,
OREGON 97232, TELEPHONE NUMBER (503) 731-2000. THE INFORMATION RELATING TO
PACIFICORP CONTAINED IN THIS PROSPECTUS DOES NOT PURPORT TO BE COMPREHENSIVE AND
SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE INCORPORATED
DOCUMENTS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY PACIFICORP DELAWARE OR PACIFICORP. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PACIFICORP OR ITS
SUBSIDIARIES SINCE THE DATE OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT, AS
THE CASE MAY BE.
PACIFICORP
PacifiCorp is an electric utility that conducts a retail electric utility
business through two divisions, Pacific Power & Light Company ("Pacific Power")
and Utah Power & Light Company ("Utah Power"), and engages in power production
and sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the
indirect owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary),
of 87% of Pacific Telecom, Inc. ("Pacific Telecom") and 100% of PacifiCorp
Financial Services, Inc. ("PFS").
Pacific Power and Utah Power furnish electric service in portions of seven
western states: California, Idaho, Montana, Oregon, Utah, Washington, and
Wyoming. Pacific Telecom, through its subsidiaries, provides local telephone
service and access to the long distance network in Alaska, seven other western
states and three midwestern states, provides intrastate and interstate long
distance communication services in Alaska, provides cellular mobile telephone
services, and is engaged in sales of capacity in and operation of a submarine
fiber optic cable between the United States and Japan. PFS plans to sell
substantial portions of its loan, leasing and real estate investments over the
next several years.
The principal executive offices of PacifiCorp are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
PACIFICORP DELAWARE, L.P.
PacifiCorp Delaware is a limited partnership formed under the laws of the
State of Delaware. PacifiCorp Delaware exists for the sole purpose of issuing
its limited partnership interests and investing the net proceeds thereof in
Junior Subordinated Debentures. Such Junior Subordinated Debentures will be the
only assets of PacifiCorp Delaware and the only revenues of PacifiCorp Delaware
will be the interest in such Junior Subordinated Debentures. PacifiCorp is the
sole general partner in PacifiCorp Delaware (the "General Partner"). PacifiCorp
Preferred Capital, Inc., a Delaware corporation and a wholly owned subsidiary of
PacifiCorp, is, as of the date hereof, the sole limited partner in PacifiCorp
Delaware. Upon the issuance of Preferred Securities, which securities represent
limited partner interests in PacifiCorp Delaware, PacifiCorp Preferred Capital,
Inc. will remain as a limited partner, but will have no interest in the profits
and dividends or in the assets of PacifiCorp Delaware. PacifiCorp Delaware has a
term of approximately 45 years, subject to extension by the General Partner for
an additional 40 years, unless earlier dissolved. PacifiCorp Delaware's
3
<PAGE>
registered office in the State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801, telephone: (302) 658-7581. All of PacifiCorp Delaware's business
and affairs will be conducted by PacifiCorp, as the sole general partner. The
principal place of business of PacifiCorp Delaware is c/o PacifiCorp, 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232, telephone number (503) 731-2000.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of PacifiCorp for the years ended
December 31, 1989 through 1993 and for the six months ended June 30, 1994
calculated as required by the Commission, are 2.3x, 2.3x, 2.4x, 1.6x, 2.5x and
2.8x, respectively. Excluding the effect of special charges, the ratio was 1.9x
for the year 1992. For the purpose of computing such ratios, "earnings"
represents 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 losses (income) of less than 50% owned affiliates without loan
guarantees. "Fixed charges" represents consolidated interest charges, an
estimated amount representing the interest factor in rents and preferred stock
dividend requirements of majority-owned subsidiaries, and excludes discontinued
operations.
CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The ratios of earnings to combined fixed charges and preferred stock
dividends of PacifiCorp for the years ended December 31, 1989 through 1993 and
for the six months ended June 30, 1994, calculated as required by the
Commission, are 2.1x, 2.2x, 2.2x, 1.4x, 2.2x and 2.4x, respectively. Excluding
the effect of special charges, the ratio was 1.8x for the year 1992. For the
purpose of computing such ratios, "earnings" represents 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 losses (income)
of less than 50% owned affiliates without loan guarantees. "Fixed charges"
represents consolidated interest charges, an estimated amount representing the
interest factor in rents and preferred stock dividend requirements of
majority-owned subsidiaries, and excludes discontinued operations. "Preferred
stock dividends" represents preferred dividend requirements multiplied by the
ratio which pre-tax income from continuing operations bears to income from
continuing operations.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds to
be received by PacifiCorp from the sale of Junior Subordinated Debentures will
become part of the general funds of PacifiCorp and will be used to repay its
short-term borrowings and for other corporate purposes. Reference is made to the
Incorporated Documents with respect to PacifiCorp's capital requirements and its
general financing plans. PacifiCorp Delaware will invest all proceeds received
from the sale of Preferred Securities in Junior Subordinated Debentures.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures may be issued from time to time in one or
more series under an Indenture, dated as of November 1, 1994 (the "Indenture"),
between PacifiCorp and The Bank of New York, as Trustee (the "Trustee").
PacifiCorp may issue the Junior Subordinated Debentures to the public or to
institutional investors as described under "Plan of Distribution" or to
PacifiCorp Delaware in connection with the issuance of Preferred Securities. The
following summary does not purport to be complete and is subject in all respects
to the provisions of and is qualified in its entirety by reference to the
Indenture, which is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Whenever particular provisions or defined terms in
the Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein. Section and Article references used herein are
references to provisions of the Indenture unless otherwise noted.
4
<PAGE>
GENERAL
The Junior Subordinated Debentures will be unsecured, subordinated
obligations of PacifiCorp. The Indenture does not limit the aggregate principal
amount of Junior Subordinated Debentures which may be issued thereunder and
provides that the Junior Subordinated Debentures may be issued thereunder from
time to time in one or more series. PacifiCorp's Second Restated Articles of
Incorporation, as amended (the "Articles"), limit the amount of unsecured debt
that PacifiCorp may issue to the equivalent of 30% of the total of all secured
indebtedness and total equity. Under this provision, approximately $1.16 billion
of additional unsecured debt could have been issued as of June 30, 1994.
The Junior Subordinated Debentures are issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of
PacifiCorp's Board of Directors (each, a "Supplemental Indenture") (Section
2.01). The aggregate principal amount of Junior Subordinated Debentures relating
to Preferred Securities of any series will be set forth in the Prospectus
Supplement for such series. With respect to any issuance of Junior Subordinated
Debentures to PacifiCorp Delaware in connection with the issuance of Preferred
Securities, the aggregate principal amount of the Junior Subordinated Debentures
will be equal to the sum of the aggregate liquidation preference of the
Preferred Securities for such series and the General Partner's capital
contribution with respect to the Preferred Securities for such series. Junior
Subordinated Debentures relating to Preferred Securities of any series
subsequently may be distributed pro rata to holders of Preferred Securities of
such series in connection with the dissolution of PacifiCorp Delaware upon the
occurrence of certain events described in the Prospectus Supplement relating to
the Preferred Securities of such series.
Reference is made to the Prospectus Supplement which will accompany this
Prospectus for the following terms of the series of Junior Subordinated
Debentures being offered thereby: (i) the specific title of such Junior
Subordinated Debentures; (ii) any limit on the aggregate principal amount of
such Junior Subordinated Debentures; (iii) the date or dates on which the
principal of such Junior Subordinated Debentures is payable; (iv) the rate or
rates at which such Junior Subordinated Debentures will bear interest or the
manner of calculation of such rate or rates; (v) the date or dates from which
such interest shall accrue, the interest payment dates on which such interest
will be payable or the manner of determination of such interest payment dates
and the record dates for the determination of holders to whom interest is
payable on any such interest payment dates; (vi) the right, if any, to extend
the interest payment periods and the duration of such extension; (vii) the
period or periods within which, the price or prices at which and the terms and
conditions upon which such Junior Subordinated Debentures may be redeemed, in
whole or in part, at the option of PacifiCorp; (viii) the obligation, if any, of
PacifiCorp to redeem or purchase such Junior Subordinated Debentures pursuant to
any sinking fund or analogous provisions or at the option of the holder thereof
and the period or periods, the price or prices at which, and the terms and
conditions upon which such Junior Subordinated Debentures shall be redeemed or
purchased, in whole or part, pursuant to such obligation; (ix) the form of such
Junior Subordinated Debentures; (x) if other than denominations of $25 or any
integral multiple thereof, the denominations in which such Junior Subordinated
Debentures shall be issuable; (xi) any and all other terms with respect to such
series; and (xii) whether such Junior Subordinated Debentures are issuable as a
global security, and in such case, the identity of the depository. (Section
2.01.)
The Indenture does not contain any provisions that afford holders of Junior
Subordinated Debentures protection in the event of a highly leveraged
transaction involving PacifiCorp.
SUBORDINATION
The Indenture provides that the Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of PacifiCorp as provided in the Indenture. No payment of
principal of (including redemption and sinking fund payments), or premium, if
any, or interest on, the Junior Subordinated Debentures may be made if any
Senior Indebtedness is not paid when due, any applicable grace period with
respect to such default has ended and such default has not been cured or waived,
or if the maturity of any Senior Indebtedness has been accelerated because of a
default. Upon any distribution of assets of PacifiCorp to creditors upon any
dissolution, winding-up, liquidation or reorganization, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
5
<PAGE>
principal of and premium, if any, and interest due or to become due on all
Senior Indebtedness must be paid in full before the holders of the Junior
Subordinated Debentures are entitled to receive or retain any payment. The
rights of the holders of the Junior Subordinated Debentures will be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Junior Subordinated Debentures are paid in full. (Sections 14.01 to 14.03.)
The term "Senior Indebtedness" shall mean the principal of and premium, if
any, and interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of PacifiCorp evidenced by notes, debentures, bonds
or other securities sold by PacifiCorp for money;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by PacifiCorp or in effect
guaranteed by PacifiCorp; and
(c) all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses (a) and (b);
unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is PARI PASSU
with the Junior Subordinated Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness and entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness. (Section 1.01.)
The Indenture does not limit the aggregate amount of Senior Indebtedness
which may be issued. As of June 30, 1994, Senior Indebtedness of PacifiCorp
aggregated approximately $3.7 billion.
As the Junior Subordinated Debentures will be issued by PacifiCorp, the
Junior Subordinated Debentures effectively will be subordinate to all
obligations of PacifiCorp's subsidiaries, and the rights of PacifiCorp's
creditors, including holders of the Junior Subordinated Debentures, to
participate in the assets of such subsidiaries upon liquidation or
reorganization will be junior to the rights of the holders of all preferred
stock, indebtedness and other liabilities of such subsidiaries, which may
include trade payables, obligations to banks under credit facilities,
guarantees, pledges, support arrangements, bonds, capital leases, notes and
other obligations. With respect to Pacific Telecom, the rights of PacifiCorp's
creditors, including holders of the Junior Subordinated Debentures, will also be
limited to PacifiCorp's 87% ownership interest in Pacific Telecom.
CERTAIN COVENANTS OF PACIFICORP
PacifiCorp will covenant that it will not declare or pay any dividend on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its capital stock, if at such time (a) there shall have
occurred any event that would constitute an Event of Default under the Indenture
or (b) PacifiCorp shall have given notice of its selection of an extended
interest payment period as provided in the Indenture and such period, or any
extension thereof, shall be continuing. (Section 4.06.) With respect to any
issuance of Junior Subordinated Debentures to PacifiCorp Delaware in connection
with the issuance of Preferred Securities, PacifiCorp will also covenant (i) not
to declare or pay any dividend on or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to any of its capital stock, if
at such time PacifiCorp shall be in default with respect to its payment of any
obligations under the Guarantee, (ii) to remain the sole general partner of
PacifiCorp Delaware and maintain 100% ownership of the general partner interests
thereof; provided that any permitted successor of PacifiCorp under the Indenture
may succeed to PacifiCorp's duties as General Partner, (iii) to contribute
capital to the extent required to maintain its capital at an amount equal to at
least 3% of the total capital contributions to PacifiCorp Delaware, (iv) not to
voluntarily dissolve, wind-up or terminate PacifiCorp Delaware, except in
connection with the distribution of Junior Subordinated Debentures to the
holders of Preferred Securities in liquidation of PacifiCorp Delaware and in
connection with certain mergers, consolidations or amalgamations permitted
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by the Limited Partnership Agreement (as defined herein), (v) to timely perform
all of its duties as the general partner in PacifiCorp Delaware (including the
duty to pay dividends on the Preferred Securities) and (vi) to use its
reasonable efforts to cause PacifiCorp Delaware to remain a limited partnership
and otherwise continue to be treated as a partnership for United States federal
income tax purposes.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Junior Subordinated Debentures of each series will be issued in registered
form and in certificated form or will be represented by one or more global
securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Debenture Registrar or at the office of any transfer agent designated by
PacifiCorp for such purpose with respect to any series of Junior Subordinated
Debentures and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be effected upon the
Debenture Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request.
PacifiCorp has appointed the Trustee as Debenture Registrar with respect to the
Junior Subordinated Debentures. (Section 2.05.) If a Prospectus Supplement
refers to any transfer agent (in addition to the Debenture Registrar) initially
designated by PacifiCorp with respect to any series of Junior Subordinated
Debentures, PacifiCorp may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that PacifiCorp will be required to maintain a
transfer agent in each Place of Payment for such series. (Section 4.02.)
PacifiCorp may at any time designate additional transfer agents with respect to
any series of Junior Subordinated Debentures.
In the event of any redemption in part, PacifiCorp shall not be required to
(i) issue, register the transfer of or exchange any Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures of like tenor and
of the series of which such Junior Subordinated Debenture is a part, and ending
at the close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05.)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium (if any) on any Junior Subordinated Debenture will
be made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in an applicable Prospectus Supplement,
principal of and any premium and interest, if any, on Junior Subordinated
Debentures will be payable, subject to any applicable laws and regulations, at
the office of such Paying Agent or Paying Agents as PacifiCorp may designate
from time to time, except that at the option of PacifiCorp payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Debenture Register with respect to
such Junior Subordinated Debentures. (Section 4.03.) Unless otherwise indicated
in an applicable Prospectus Supplement, payment of interest on a Junior
Subordinated Debenture on any Interest Payment Date will be made to the person
in whose name such Junior Subordinated Debenture (or Predecessor Security) is
registered at the close of business on the Regular Record Date for such interest
payment. (Section 2.03.)
PacifiCorp will act as Paying Agent with respect to the Junior Subordinated
Debentures. PacifiCorp may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents or approve a change in the office
through which any Paying Agent acts, except that PacifiCorp will be required to
maintain a Paying Agent in each Place of Payment for each series of the
respective Junior Subordinated Debentures. (Sections 4.02 and 4.03.)
All moneys paid by PacifiCorp to a Paying Agent for the payment of the
principal of or premium, if any, or interest on any Junior Subordinated
Debenture of any series which remain unclaimed at the end of two
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years after such principal, premium, if any, or interest shall have become due
and payable will be repaid to PacifiCorp and the holder of such Junior
Subordinated Debenture will thereafter look only to PacifiCorp for payment
thereof. (Section 11.05.)
GLOBAL DEBENTURES
If any Junior Subordinated Debentures of a series are represented by one or
more global securities, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
Global Debenture may exchange such interests for Junior Subordinated Debentures
of such series and of like tenor and principal amount in any authorized form and
denomination. Principal of and any premium and interest on a Global Debenture
will be payable in the manner described in the applicable Prospectus Supplement.
(Section 2.11.)
The specific terms of the depository arrangement with respect to any portion
of a series of Junior Subordinated Debentures to be represented by a Global
Debenture will be described in the applicable Prospectus Supplement.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting PacifiCorp and the Trustee,
with the consent of the holders of not less than a majority in principal amount
of the Junior Subordinated Debentures of each series which are affected by the
modification, to modify the Indenture or any supplemental indenture affecting
that series or the rights of the holders of that series of Junior Subordinated
Debentures; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture affected thereby, (i)
extend the fixed maturity of any Junior Subordinated Debentures of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Junior Subordinated Debenture
so affected or (ii) reduce the percentage of Junior Subordinated Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Junior Subordinated Debenture then
outstanding and affected thereby. (Section 9.02.)
In addition, PacifiCorp and the Trustee may execute, without the consent of
any holder of Junior Subordinated Debentures, any supplemental indenture for
certain other usual purposes including the creation of any new series of Junior
Subordinated Debentures. (Sections 2.01, 9.01 and 10.01.)
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to each series of Junior Subordinated Debentures:
(a) failure for 10 days to pay interest on the Junior Subordinated
Debentures of that series, including any Additional Interest in respect
thereof, when due; or
(b) failure to pay principal of or premium, if any, on the Junior
Subordinated Debentures of that series when due whether at maturity, upon
redemption, by declaration or otherwise, or to make any sinking fund payment
with respect to that series; or
(c) failure to observe or perform any other covenant (other than those
specifically relating to one or more other series) contained in the
Indenture for 90 days after notice; or
(d) certain events of bankruptcy, insolvency or reorganization of
PacifiCorp. (Section 6.01.)
With respect to any issuance of Junior Subordinated Debentures to PacifiCorp
Delaware in connection with the issuance of Preferred Securities, the Indenture
will also provide that the dissolution, winding-up or termination of PacifiCorp
Delaware, except in connection with the distribution of Junior Subordinated
Debentures to the holders of Preferred Securities in liquidation of PacifiCorp
Delaware and in connection with certain mergers, consolidations or amalgamations
permitted by the Limited Partnership Agreement, shall constitute an "Event of
Default" with respect to each series of Junior Subordinated Debentures.
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The holders of a majority in aggregate outstanding principal amount of any
series of the Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee for that series. (Section 6.06.) The Trustee or the holders of not less
than 25% in aggregate outstanding principal amount of any particular series of
the Junior Subordinated Debentures may declare the principal due and payable
immediately upon an Event of Default with respect to such series, but the
holders of a majority in aggregate outstanding principal amount of such series
may annul such declaration and waive such Event of Default if it has been cured
and a sum sufficient to pay all matured installments of interest and principal
and any premium has been deposited with the Trustee. (Sections 6.01 and 6.06.)
The holders of a majority in aggregate outstanding principal amount of all
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive any
past default, except a default in the payment of principal, premium, if any, or
interest. (Section 6.06.) PacifiCorp is required to file annually with the
Trustee a certificate as to whether or not PacifiCorp is in compliance with all
the conditions and covenants under the Indenture. (Section 5.03(d).)
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant which restricts PacifiCorp's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any person, firm or corporation
or otherwise engage in restructuring transactions. (Section 10.01.)
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, PacifiCorp will be discharged from any and
all obligations in respect of the Junior Subordinated Debentures of any series
(except in each case for certain obligations to register the transfer or
exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated
Junior Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if PacifiCorp deposits with the Trustee, in trust, moneys or
Government Obligations, in an amount sufficient to pay all the principal of, and
interest on, the Junior Subordinated Debentures of such series on the dates such
payments are due in accordance with the terms of such Junior Subordinated
Debentures and, in certain circumstances, delivers to the Trustee an Opinion of
Counsel to the effect that the holders of Junior Subordinated Debentures of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit and discharge had not occurred. In addition
to discharging certain obligations under the Indenture as stated above, if the
Company delivers to the Trustee an Opinion of Counsel (in lieu of the Opinion of
Counsel referred to above) to the effect that (a) the Company has received from,
or there has been published by the Internal Revenue Service a ruling or (b)
since the date of the Indenture there has been a change in applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the holders of Junior Subordinated
Debentures of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge and
will be subject to federal income tax on the same amount and in the same manner
and at the same times, as would have been the case if such deposit, defeasance
and discharge had not occurred, and (c) the trust resulting from the defeasance
is a valid trust and will not constitute a regulated investment company under
the Investment Company Act of 1940, as amended, then, in such event, the Company
will be deemed to have paid and discharged the entire indebtedness on the Junior
Subordinated Debentures. In the event of any such defeasance and discharge of
Junior Subordinated Debentures of such series, holders of Junior Subordinated
Debentures of such series would be able to look only to such trust fund for
payment of principal of (and premium, if any) and interest, if any, on the
Junior Subordinated Debentures of such series. (Sections 11.01, 11.02 and
11.03.)
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the laws of the State of New York. (Section
13.04.)
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INFORMATION CONCERNING THE TRUSTEE
The Trustee, prior to default, undertakes to perform only such duties as are
specifically set forth in the Indenture and, after default, shall exercise the
same degree of care as a prudent individual would exercise in the conduct of his
or her own affairs. (Section 7.01.) Subject to such provision, the Trustee is
under no obligation to exercise any of the powers vested in it by the Indenture
at the request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. (Section 7.02.) The Trustee is not required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Trustee reasonably believes that repayment
or adequate indemnity is not reasonably assured to it. (Section 7.01.)
PacifiCorp maintains a banking relationship with The Bank of New York. The
Bank of New York serves as trustee under other indentures pursuant to which
unsecured debt securities issued on behalf of PacifiCorp are outstanding.
MISCELLANEOUS
PacifiCorp will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of PacifiCorp; provided that, in the event of any such assignment, PacifiCorp
will remain liable for all such obligations. PacifiCorp Delaware may not assign
any of its rights under the Indenture without the prior written consent of
PacifiCorp. Subject to the foregoing, the Indenture will be binding upon and
inure to the benefit of the parties thereto and their respective successors and
assigns. The Indenture provides that it may not otherwise be assigned by the
parties thereto. (Section 13.11.)
DESCRIPTION OF THE PREFERRED SECURITIES
PacifiCorp Delaware may issue, from time to time, Preferred Securities, in
one or more series, having terms described in the Prospectus Supplement relating
thereto. The limited partnership agreement of PacifiCorp Delaware will be
amended and restated (as so amended and restated, the "Limited Partnership
Agreement") to authorize the establishment of one or more series of Preferred
Securities, having such terms, including dividends, redemption, voting,
liquidation rights and such other preferred or other special rights or such
restrictions, as shall be set forth therein or otherwise established by the
General Partner pursuant thereto. Reference is made to the Prospectus Supplement
relating to the Preferred Securities of a particular series for specific terms,
including (i) the distinctive designation of such series which shall distinguish
it from other series; (ii) the number of Preferred Securities included in such
series, which number may be increased or decreased from time to time unless
otherwise provided by the General Partner in creating the series; (iii) the
annual dividend rate or rates (or method of determining such rate or rates) for
Preferred Securities of such series and the date or dates upon which such
dividends shall be payable; provided, however, dividends on any series of
Preferred Securities shall be payable on a monthly basis to holders of such
series of Preferred Securities as of a record date in each month during which
such series of Preferred Securities are outstanding; (iv) the right, if any, to
extend the dividend payment periods and the duration of any such extension; (v)
whether dividends on Preferred Securities of such series shall be cumulative,
and, in the case of Preferred Securities of any series having cumulative
dividend rights, the date or dates or method of determining the date or dates
from which dividends on Preferred Securities of such series shall be cumulative;
(vi) the amount or amounts which shall be paid out of the assets of PacifiCorp
Delaware to the holders of Preferred Securities of such series upon voluntary or
involuntary dissolution, winding-up or termination of PacifiCorp Delaware; (vii)
the price or prices at which, the period or periods within which and the terms
and conditions upon which Preferred Securities of such series may be redeemed or
purchased, in whole or in part, at the option of PacifiCorp Delaware or the
General Partner; (viii) the obligation, if any, of PacifiCorp Delaware to
purchase or redeem Preferred Securities of such series and the price or prices
at which, the period or periods within which and the terms and conditions upon
which Preferred Securities of such series shall be purchased or redeemed, in
whole or in part, pursuant to such obligation; (ix) the voting rights, if any,
of Preferred Securities of such series in addition to those required by law,
including the number of votes per Preferred Security and any requirement for the
approval by the holders of Preferred Securities, or of Preferred Securities of
one of more series, or of both, as a condition to
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specified action or amendments to the Limited Partnership Agreement; and (x) any
other relative rights, preferences, privileges, limitations or restrictions of
Preferred Securities of the series not inconsistent with the Limited Partnership
Agreement or with applicable law. All Preferred Securities offered hereby will
be guaranteed by PacifiCorp to the extent set forth below under "Description of
the Guarantee." Any applicable federal income tax considerations applicable to
any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee which
will be executed and delivered by PacifiCorp for the benefit of the holders from
time to time of Preferred Securities. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part.
GENERAL
PacifiCorp will irrevocably and unconditionally agree, to the extent set
forth in the Guarantee, to pay in full, to the holders of the Preferred
Securities of each series, the Guarantee Payments (as defined below) (except to
the extent paid by PacifiCorp Delaware), as and when due, regardless of any
defense, right of set-off or counterclaim which PacifiCorp Delaware may have or
assert. The following payments with respect to any series of Preferred
Securities to the extent not paid by PacifiCorp Delaware (the "Guarantee
Payments") will be subject to the Guarantee (without duplication): (i) any
accrued and unpaid dividends which are required to be paid on the Preferred
Securities of such series, to the extent PacifiCorp Delaware shall have funds
legally available therefor, (ii) the redemption price, including all accrued and
unpaid dividends (the "Redemption Price"), payable out of funds legally
available therefor with respect to any Preferred Securities called for
redemption by PacifiCorp Delaware and (iii) upon a liquidation of PacifiCorp
Delaware, the lesser of (a) the aggregate of the liquidation preference and all
accrued and unpaid dividends on the Preferred Securities of such series to the
date of payment and (b) the amount of assets of PacifiCorp Delaware remaining
available for distribution to holders of Preferred Securities of such series in
liquidation of PacifiCorp Delaware. PacifiCorp's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by PacifiCorp
to the holders of Preferred Securities or by causing PacifiCorp Delaware to pay
such amounts to such holders.
CERTAIN COVENANTS OF PACIFICORP
In the Guarantee, PacifiCorp will covenant that, so long as any Preferred
Securities remain outstanding, PacifiCorp will not declare or pay any dividend
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock or make any guarantee payment with respect to the
foregoing if at such time PacifiCorp shall be in default with respect to its
payment or other obligations under the Guarantee or there shall have occurred
any event that would constitute an Event of Default under the Indenture
described above. See "Description of the Junior Subordinated Debentures."
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required), the
Guarantee may be changed only with the prior approval of the holders of not less
than 66 2/3% in liquidation preference of the outstanding Preferred Securities.
The manner of obtaining any such approval of holders of the Preferred Securities
of each series will be as set forth in an accompanying Prospectus Supplement.
All guarantees and agreements contained in the Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of PacifiCorp and
shall inure to the benefit of the holders of the Preferred Securities then
outstanding.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect as to the
Preferred Securities of any series upon full payment of the Redemption Price of
all Preferred Securities of such series, and will terminate completely upon full
payment of the amounts payable upon liquidation of PacifiCorp Delaware.
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The Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of Preferred Securities of any series must
restore payment of any sums paid under such series of Preferred Securities or
the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of PacifiCorp and will
rank (i) subordinate and junior in right of payment to all liabilities of
PacifiCorp, (ii) PARI PASSU with the most senior preferred or preference stock
now or hereafter issued by PacifiCorp and with any guarantee now or hereafter
entered into by PacifiCorp in respect of any preferred or preference stock of
any affiliate of PacifiCorp and (iii) senior to PacifiCorp's common stock. The
Limited Partnership Agreement provides that each holder of Preferred Securities
by acceptance thereof agrees to the subordination provisions and other terms of
the Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection.
The Guarantee will be deposited with the General Partner to be held for the
benefit of the holders of each series of the Preferred Securities. In the event
of the appointment of a special representative of PacifiCorp Delaware and the
limited partners (a "Special Representative") to, among other things, enforce
the Guarantee, the Special Representative may take possession of the Guarantee
for such purpose. If no Special Representative has been appointed to enforce the
Guarantee, the General Partner has the right to enforce the Guarantee on behalf
of the holders of each series of the Preferred Securities. The holders of not
less than 10% in aggregate liquidation preference of the Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available in respect of the Guarantee, including the giving of
directions to the General Partner or the Special Representative, as the case may
be. If the General Partner or the Special Representative fails to enforce the
Guarantee as above provided, any holder of Preferred Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under the
Guarantee, without first instituting a legal proceeding against PacifiCorp
Delaware or any other person or entity. The Guarantee will not be discharged
except by payment of the Guarantee Payments in full to the extent not paid by
PacifiCorp Delaware and by complete performance of all obligations under the
Guarantee.
EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As set forth in the Limited Partnership Agreement, the sole purpose of
PacifiCorp Delaware is to issue limited partnership interests in PacifiCorp
Delaware and to invest the proceeds thereof in Junior Subordinated Debentures of
PacifiCorp.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures issued in connection with Preferred Securities,
such payments will be sufficient to cover dividends and payments due on the
Preferred Securities primarily because (i) the aggregate principal amount of
such Junior Subordinated Debentures will be equal to the sum of the aggregate
stated liquidation preference of the Preferred Securities and the General
Partner's capital contribution with respect to the Preferred Securities; (ii)
the interest rate and interest and other payment dates on such Junior
Subordinated Debentures of each series will match the dividend rate and dividend
and other payment dates for the Preferred Securities of such series; (iii) the
Limited Partnership Agreement provides that PacifiCorp, as General Partner,
shall pay for all, and PacifiCorp Delaware shall not be obligated to pay,
directly or indirectly, for any, costs and expenses of PacifiCorp Delaware; and
(iv) the Limited Partnership Agreement further provides that the General Partner
shall not cause or permit PacifiCorp Delaware to, among other things, engage in
any activity that is not consistent with the purposes of PacifiCorp Delaware.
If PacifiCorp fails to make interest or other payments on the Junior
Subordinated Debentures issued in connection with Preferred Securities when due,
the Limited Partnership Agreement provides a mechanism whereby the holders of
the Preferred Securities may appoint a Special Representative to enforce the
rights of PacifiCorp Delaware under such Junior Subordinated Debentures.
Payments of dividends and other payments due on the Preferred Securities out of
moneys held by PacifiCorp Delaware are guaranteed by PacifiCorp to the extent
set forth under "-- General" above. The Limited Partnership Agreement also
provides, and PacifiCorp, under the Guarantee, acknowledges, that a Special
Representative may be appointed to enforce the Guarantee if PacifiCorp is in
default on any of its payment obligations under the
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Guarantee. In addition, if the General Partner or the Special Representative
fails to enforce the Guarantee, a holder of a Preferred Security may institute a
legal proceeding directly against PacifiCorp to enforce its rights under the
Guarantee without first instituting a legal proceeding against PacifiCorp
Delaware or any other person or entity.
PacifiCorp and PacifiCorp Delaware believe that the Guarantee, taken
together with related covenants contained in the Limited Partnership Agreement
and PacifiCorp's obligations under the Junior Subordinated Debentures described
above, are equivalent to a full and unconditional guarantee by PacifiCorp of
payments due on the Preferred Securities.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
PLAN OF DISTRIBUTION
PacifiCorp may sell any series of Junior Subordinated Debentures, and
PacifiCorp Delaware may sell any series of Preferred Securities, in one or more
of the following ways at any time or from time to time: (i) to underwriters for
resale to the public or to institutional investors; (ii) directly to
institutional investors; or (iii) through agents to the public or to
institutional investors. The Prospectus Supplement with respect to each series
of Offered Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters or agents, the
purchase price of such Offered Securities and the proceeds to PacifiCorp or
PacifiCorp Delaware, as the case may be, from such sale, any underwriting
discounts or agency fees and other items constituting underwriters' or agents'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
such Offered Securities may be listed.
If underwriters are used in the sale, such Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase any series of Offered Securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of such series of Offered Securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
PacifiCorp and/or PacifiCorp Delaware to indemnification by PacifiCorp and/or
PacifiCorp Delaware against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments which the
underwriters or agents may be required to make in respect thereof. Underwriters
and agents may be customers of, engage in transactions with, or perform services
for PacifiCorp and its subsidiaries in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom Offered Securities
are sold by PacifiCorp or PacifiCorp Delaware for public offering and sale may
make a market in such Offered Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. The Offered Securities may or may not be listed on a national securities
exchange.
EXPERTS
The audited consolidated financial statements of PacifiCorp and subsidiaries
and supplemental schedules incorporated by reference in this Prospectus have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports included in or incorporated by reference in PacifiCorp's Annual Report
on Form 10-K incorporated by reference herein, and have been so incorporated
herein in reliance upon such reports given upon the authority of that firm as
experts in accounting and auditing.
With respect to any unaudited interim financial information that is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a
13
<PAGE>
review of such information. However, as stated in their reports included in any
Quarterly Reports on Form 10-Q incorporated by reference herein, they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
Registration Statement to which this Prospectus is a part prepared or certified
by an accountant within the meaning of Sections 7 and 11 of said Securities Act.
LEGAL OPINIONS
Certain legal matters in connection with the Offered Securities, including
the validity of the Indenture, the Guarantee and the Junior Subordinated
Debentures, will be passed upon for PacifiCorp and PacifiCorp Delaware by Stoel
Rives Boley Jones & Grey, Portland, Oregon, and for the underwriters by
Winthrop, Stimson, Putnam & Roberts, New York, New York. Certain matters of
Delaware law relating to the validity of the Preferred Securities, the validity
of the Limited Partnership Agreement and the formation of PacifiCorp Delaware
will be passed upon by Richards, Layton & Finger, P.A., as special Delaware
counsel to PacifiCorp and PacifiCorp Delaware. Certain tax matters in connection
with the Preferred Securities will be passed upon for PacifiCorp and PacifiCorp
Delaware by Stoel Rives Boley Jones & Grey. John M. Schweitzer and John Detjens
III, who are assistant secretaries of PacifiCorp, are partners in the firm of
Stoel Rives Boley Jones & Grey.
14
<PAGE>
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- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
<S> <C>
PacifiCorp........................... S-3
Investment Considerations............ S-3
Selected Financial Information....... S-4
Use of Proceeds...................... S-5
Description of the Series A Junior
Subordinated Debentures............. S-5
United States Taxation............... S-9
Underwriting......................... S-11
Legal Matters........................ S-11
<CAPTION>
PROSPECTUS
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference........................... 2
PacifiCorp........................... 3
PacifiCorp Delaware, L.P............. 3
Consolidated Ratios of Earnings to
Fixed Charges....................... 4
Consolidated Ratios of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends..................... 4
Use of Proceeds...................... 4
Description of the Junior
Subordinated Debentures............. 4
Description of the Preferred
Securities.......................... 10
Description of the Guarantee......... 11
Plan of Distribution................. 13
Experts.............................. 13
Legal Opinions....................... 14
</TABLE>
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- --------------------------------------------------------------------------------
<PAGE>
$75,000,000
[LOGO]
% JUNIOR SUBORDINATED
DEFERRABLE INTEREST
DEBENTURES,
SERIES A, DUE 2024
------------------
PROSPECTUS SUPPLEMENT
------------------
GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
MORGAN STANLEY & CO.
INCORPORATED
