<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
______________
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-5152
______
PACIFICORP
(Exact name of registrant as specified in its charter)
STATE OF OREGON 93-0246090
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
700 N.E. Multnomah
Suite 1600
Portland, Oregon 97232-4116
(Address of principal executive offices) (Zip code)
503-731-2000
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.
YES X NO
_____ _____
At April 30, 1994, there were 282,049,180 shares of registrant's common stock
outstanding.
<PAGE>
PACIFICORP
Page No.
________
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements 2
Condensed Consolidated Statements of Income
and Retained Earnings 2
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Cash Flows 5
Note to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 16
Item 1. Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 16
Signature 17
- 1 -
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Millions of Dollars, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
__________________________
1994 1993
______ ______
<S> <C> <C>
REVENUES $ 865.3 $ 861.0
_______ _______
EXPENSES
Operations 342.5 343.7
Maintenance 65.6 67.0
Administrative and general 60.3 60.0
Depreciation and amortization 105.7 97.7
Taxes, other than income taxes 31.8 33.1
Financial Services' interest expense 9.3 13.6
_______ _______
TOTAL 615.2 615.1
_______ _______
INCOME FROM OPERATIONS 250.1 245.9
_______ _______
INTEREST EXPENSE AND OTHER
Interest expense 75.1 83.6
Interest capitalized (4.6) (3.7)
Minority interest and other (4.2) (6.6)
_______ _______
TOTAL 66.3 73.3
_______ _______
Income before income taxes and cumulative
effect of change in accounting principle 183.8 172.6
Income taxes 63.3 60.1
_______ _______
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 120.5 112.5
Cumulative effect of change in
accounting for income taxes - 4.0
_______ _______
NET INCOME 120.5 116.5
RETAINED EARNINGS BEGINNING OF PERIOD 351.3 210.4
Cash dividends declared
Preferred stock (9.9) (10.2)
Common stock per share: 1994 and 1993/$.27 (75.9) (74.0)
_______ _______
RETAINED EARNINGS END OF PERIOD $ 386.0 $ 242.7
_______ _______
_______ _______
EARNINGS ON COMMON STOCK (Net income
less preferred dividend requirement) $ 110.8 $ 106.5
Average number of common shares
outstanding (Thousands) 281,449 271,152
EARNINGS PER COMMON SHARE
Before cumulative effect of change
in accounting principle $ .39 $ .38
Cumulative effect on prior years of
change in accounting for income taxes - .01
_______ _______
TOTAL $ .39 $ .39
_______ _______
_______ _______
</TABLE>
See accompanying Note to Condensed Consolidated Financial Statements
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<PAGE>
PACIFICORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
_________ ____________
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT
Electric $10,157.4 $10,000.6
Telecommunications 1,658.2 1,649.9
Other 63.1 65.8
Accumulated depreciation and amortization (3,950.5) (3,863.5)
________ ________
Net 7,928.2 7,852.8
Construction work in progress 357.9 356.8
________ ________
TOTAL PROPERTY, PLANT AND EQUIPMENT 8,286.1 8,209.6
________ ________
CURRENT ASSETS
Cash and cash equivalents 27.5 31.2
Accounts receivable less allowance
for doubtful accounts: 1994/$8.4
and 1993/$8.2 402.0 451.0
Materials, supplies and fuel stock at
average cost 203.3 203.2
Inventory 67.9 70.1
Finance assets 111.7 118.7
Other 67.8 80.5
________ ________
TOTAL CURRENT ASSETS 880.2 954.7
________ ________
OTHER ASSETS
Investments in and advances to affiliated
companies 250.9 240.5
Cost in excess of net assets of businesses
acquired 169.9 171.1
Regulatory assets - net 1,004.9 974.9
Finance note receivable 221.9 223.3
Finance assets 528.8 561.4
Real estate investments 210.3 303.7
Deferred charges and other 302.9 319.9
________ ________
TOTAL OTHER ASSETS 2,689.6 2,794.8
________ ________
TOTAL ASSETS $11,855.9 $11,959.1
________ ________
________ ________
</TABLE>
See accompanying Note to Condensed Consolidated Financial Statements
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<PAGE>
PACIFICORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited)
CAPITALIZATION AND LIABILITIES
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
_________ ____________
<S> <C> <C>
COMMON EQUITY
Common shareholder capital
shares authorized 750,000,000;
shares outstanding: 1994/281,970,965
and 1993/281,020,717 $ 2,971.8 $ 2,953.4
Retained earnings 386.0 351.3
Guarantees of Employee Stock Ownership
Plan borrowings (38.5) (42.1)
________ ________
TOTAL COMMON EQUITY 3,319.3 3,262.6
________ ________
PREFERRED STOCK 367.4 367.4
________ ________
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 219.0 219.0
________ ________
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 3,856.3 3,923.6
________ ________
CURRENT LIABILITIES
Long-term debt and capital lease obligations
currently maturing 168.0 155.6
Notes payable and commercial paper 455.3 553.5
Accounts payable 257.1 360.5
Taxes, interest and dividends payable 329.0 252.5
Customer deposits and other 123.2 121.2
________ ________
TOTAL CURRENT LIABILITIES 1,332.6 1,443.3
________ ________
DEFERRED CREDITS
Income taxes 1,834.8 1,833.3
Investment tax credits 196.6 200.0
Other 627.2 605.7
________ ________
TOTAL DEFERRED CREDITS 2,658.6 2,639.0
________ ________
MINORITY INTEREST 102.7 104.2
________ ________
TOTAL CAPITALIZATION AND LIABILITIES $11,855.9 $11,959.1
________ ________
________ ________
</TABLE>
See accompanying Note to Condensed Consolidated Financial Statements
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<PAGE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
______________________
1994 1993
______ ______
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income before cumulative effect of
change in accounting principle $ 120.5 $ 112.5
Adjustments to reconcile income before
cumulative effect of change in accounting
principle to net cash provided by
operating activities
Depreciation and amortization 113.0 110.3
Deferred income taxes and investment tax
credits - net (.8) 4.0
Interest capitalized on equity funds (1.3) (1.2)
Minority interest and other 15.1 34.6
Accounts receivable and prepayments 62.9 2.4
Materials, supplies, fuel stock and
inventory 1.8 (5.3)
Accounts payable and accrued liabilities (12.7) 53.6
________ ________
NET CASH PROVIDED BY OPERATING ACTIVITIES 298.5 310.9
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES
Construction (150.7) (138.5)
Proceeds from sales of finance assets
and principal payments 81.2 45.6
Other 1.7 39.7
________ ________
NET CASH USED IN INVESTING ACTIVITIES (67.8) (53.2)
________ ________
</TABLE>
See accompanying Note to Condensed Consolidated Financial Statements
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<PAGE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
_______________________
1994 1993
______ ______
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Changes in short-term debt (98.2) (177.8)
Proceeds from long-term debt 1.0 151.0
Proceeds from issuance of common stock 17.0 21.9
Dividends paid (85.8) (114.2)
Repayments of long-term debt and capital
lease obligations (51.6) (91.7)
Redemptions of preferred stock - (50.0)
Other (16.8) (18.4)
______ ______
NET CASH USED BY FINANCING ACTIVITIES (234.4) (279.2)
______ ______
DECREASE IN CASH AND CASH EQUIVALENTS (3.7) (21.5)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 31.2 50.2
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 27.5 $ 28.7
______ ______
______ ______
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for
Interest $ 121.6 $ 143.5
Income taxes net of refunds .5 2.7
</TABLE>
See accompanying Note to Condensed Consolidated Financial Statements
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<PAGE>
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1994
1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial
statements as of March 31, 1994 and for the periods ended March 31, 1994
and 1993, in the opinion of management, include all adjustments,
constituting only normal recording of accruals, necessary for a fair
presentation of financial position, results of operations and cash flows
for such periods. A significant part of the business of PacifiCorp (the
"Company") is of a seasonal nature; therefore, results of operations for
the period ended March 31, 1994 are not necessarily indicative of the
results for a full year. These condensed consolidated financial statements
should be read in conjunction with the financial statements and related
notes incorporated by reference in the Company's 1993 Annual Report on
Form 10-K.
The condensed consolidated financial statements of the Company
encompass two businesses primarily of a utility nature -- Electric
Operations (Pacific Power and Utah Power) and an 87%-owned
Telecommunications operation (Pacific Telecom, Inc.); and a wholly owned
Financial Services business (PacifiCorp Financial Services, Inc.). The
Company's wholly owned subsidiary, PacifiCorp Holdings, Inc. ("Holdings"),
holds all of its nonelectric utility investments. Together these
businesses are referred to herein as the Companies. Significant
intercompany transactions and balances have been eliminated.
Investments in and advances to affiliated companies represent
investments in unconsolidated affiliated companies carried on the equity
basis, which approximates the Company's equity in their underlying net book
value.
Certain amounts from the prior period have been reclassified to
conform with the 1994 method of presentation. These reclassifications had
no effect on previously reported consolidated net income.
- 7 -
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Percentage
First Quarter Increase/
_________________
1994 1993 (Decrease)
____ ____ __________
(Millions of Dollars, except per share)
<S> <C> <C> <C>
Revenues $ 865.3 $ 861.0 -%
______ ______
Income from operations 250.1 245.9 2
______ ______
Net income 120.5 116.5 3
______ ______
Earnings contribution
on common stock (1)
Electric Operations 89.8 94.8 (5)
Telecommunications 13.7 11.7 17
Other 7.3 (4.0) *
______ ______
Earnings before cumulative
effect of change in accounting
principle 110.8 102.5 8
Cumulative effect of change in
accounting for income taxes (2) - 4.0 *
______ ______
Total $ 110.8 $ 106.5 4
______ ______
______ ______
Earnings per common share
Before cumulative effect of change
in accounting principle $ .39 $ .38 3
Cumulative effect of change in
accounting for income taxes - .01 *
______ ______
Total $ .39 $ .39 -
______ ______
______ ______
Average number of common shares
outstanding (thousands) 281,449 271,152 4
<FN>
*Not a meaningful number.
(1) Earnings contribution on common stock by segment: (a) does not
reflect elimination for interest on intercompany borrowing
arrangements; (b) includes income taxes on a separate company basis,
with any benefit or detriment of consolidation reflected in Other; (c)
amounts are net of preferred dividend requirements and minority
interest.
(2) Represents the net effect on prior years of the adoption of Statement
of Financial Accounting Standards 109, "Accounting for Income Taxes."
</TABLE>
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<PAGE>
Comparison of the first quarters of 1994 and 1993.
_________________________________________________
. Earnings contribution on common stock before cumulative effect of change
in accounting principle increased $8 million or 8%.
.. Electric Operations' earnings contribution decreased $5 million or
5% primarily due to a warmer than normal winter heating season that
led to a 7% decline in residential energy sales and increased fuel
costs due to increased thermal generation, partially offset by
decreased purchased power expense resulting from a lower energy
requirement to serve retail loads.
.. Telecommunications' earnings contribution increased $2 million or
17% primarily due to decreased operating expenses of $6 million and
decreased interest expense of $2 million that more than offset
decreased revenues of $4 million.
.. The earnings contribution of other businesses increased $11 million
primarily due to $7 million of interest revenue in 1994 from a note
received in connection with the 1993 sale of NERCO, Inc. and a
decrease in interest expense as a result of a decrease in debt
outstanding.
. The average number of common shares outstanding increased 4% due to the
issuance of 6 million shares in a September 1993 public offering and
issuances under dividend reinvestment and employee stock ownership
plans.
- 9 -
<PAGE>
RESULTS OF OPERATIONS
Electric Operations
___________________
<TABLE>
<CAPTION>
Percentage
First Quarter Increase/
_________________
1994 1993 (Decrease)
____ ____ __________
(Millions of Dollars)
<S> <C> <C> <C>
Revenues
Residential $208.1 $211.0 (1)%
Commercial 139.4 136.0 3
Industrial 168.5 163.4 3
Other 7.4 7.3 1
_____ _____
Retail sales 523.4 517.7 1
Wholesale sales 118.7 121.3 (2)
Other 11.7 9.7 21
_____ _____
Total 653.8 648.7 1
Operating expenses 443.4 432.4 3
_____ _____
Income from operations 210.4 216.3 (3)
_____ _____
Net income 99.5 104.8 (5)
Preferred dividend requirement 9.7 10.0 (3)
_____ _____
Earnings contribution $ 89.8 $ 94.8 (5)
_____ _____
_____ _____
Energy sales (millions of kWh)
Residential 3,482 3,739 (7)
Commercial 2,567 2,525 2
Industrial 4,684 4,590 2
Other 153 151 1
______ ______
Retail sales 10,886 11,005 (1)
Wholesale sales 3,537 3,534 -
______ ______
Total 14,423 14,539 (1)
______ ______
______ ______
Residential average usage (kWh) 3,057 3,352 (9)
Total customers (end of period) 1,316,230 1,287,937 2
</TABLE>
Comparison of the first quarters of 1994 and 1993.
_________________________________________________
. Revenues increased $5 million or 1%.
.. Residential revenues decreased $3 million or 1% and kWh volume
declined 7%. Warmer temperatures and nonweather related decreases
in customer average usage in 1994 resulted in revenue declines of
$15 million and $4 million, respectively. The decreases were
partially offset by an $11 million revenue increase resulting from
the pass-through of a BPA price increase that was effective in
October 1993 and a 2% increase in the number of customers which
added $5 million.
.. Commercial revenues increased $3 million or 3% primarily due to a 2%
increase in the number of customers and an increase in customer
average usage, partially offset by the $3 million effect of warmer
temperatures in 1994.
- 10 -
<PAGE>
.. Industrial revenues increased $5 million or 3% due to a 2% increase
in kWh volume primarily due to increased sales to customers in the
paper and pulp industry.
.. Wholesale revenues decreased $3 million or 2%. Mild weather in 1994
resulted in a 14% reduction in secondary sales, lower prices and an
$11 million revenue reduction. This reduction was offset in part by
an $8 million increase in firm contract revenue; $4 million from
price increases and $4 million from additional volume sold.
. Operating expenses increased $11 million or 3%.
.. Fuel expense increased $10 million or 8% due to an 8% increase in
thermal generation primarily resulting from unscheduled outages and
planned maintenance at plants in 1993.
.. Purchased power expense decreased $5 million or 7%. The effect of
mild weather in 1994 on energy requirements resulted in a 42%
reduction in kWh volume purchased and reduced expense of
$21 million. This decrease was offset in part by the effects of an
$11 million decrease in BPA exchange benefits and a $3 million price
increase relating to a BPA peaking purchase contract.
.. Depreciation and amortization expense increased $4 million or 6%
primarily due to additional plant in service.
. Earnings contribution decreased $5 million or 5%.
.. Income from operations decreased $6 million or 3%.
.. Interest expense decreased $2 million or 3% due to the $4 million
effect of refinancing long-term debt in 1993 at lower interest
rates, partially offset by the $2 million effect of higher levels of
debt outstanding.
.. Other income decreased $3 million primarily due to a $5 million gain
on a property sale in 1993.
- 11 -
<PAGE>
Telecommunications
__________________
<TABLE>
<CAPTION>
Percentage
First Quarter Increase/
_________________
1994 1993 (Decrease)
____ ____ __________
(Millions of Dollars)
<S> <C> <C> <C>
Revenues
Local network service $ 23.0 $ 19.3 19%
Network access service 41.7 44.4 (6)
Long distance network service 60.6 66.4 (9)
Private line service 14.9 16.6 (10)
Sales of cable capacity 2.2 1.1 100
Other 23.4 22.0 6
_____ _____
Total 165.8 169.8 (2)
Operating expenses 131.1 137.5 (5)
_____ _____
Income from operations 34.7 32.3 7
_____ _____
Net Income 15.8 14.2 11
Minority interest and other 2.1 2.5 (16)
_____ _____
Earnings contribution $ 13.7 $ 11.7 17
_____ _____
_____ _____
Telephone access lines (end
of period) 403,045 382,097 5
Long lines originating billed
minutes (thousands) 174,025 168,927 3
</TABLE>
Comparison of the first quarters of 1994 and 1993.
_________________________________________________
. Revenues decreased $4 million or 2%.
.. Local network service revenues increased $4 million or 19% primarily
due to $2 million of revenues from extended calling area service and
the $1 million revenue effect of a 5% increase in access lines.
.. Network access service revenues decreased $3 million or 6% primarily
due to a $2 million decrease as a result of extended area calling
service offered by local exchange companies and lower out-of-period
revenue adjustments of $1 million.
.. Long distance network service revenues decreased $6 million or 9%
primarily due to the $2 million revenue effect of recoverable
expense reductions and a $2 million decrease in out-of-period
revenue adjustments. Revenues decreased an additional $2 million as
a result of the exit of an Alaskan local exchange company from the
national access charge pools, which also lowered recoverable access
expense.
In November 1993, Pacific Telecom's long lines subsidiary, Alascom,
Inc. ("Alascom") filed an Application for Review of the Final
Recommended Decision with the Federal Communications Commission
concerning the restructuring of the interstate telecommunications
market for Alaska, including changes to the existing joint service
agreement between Alascom and American Telephone and Telegraph
Company. Pacific Telecom derived 17% of its first quarter 1994
revenues and 18%
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<PAGE>
of its first quarter 1993 revenues under provisions of the joint
services agreement.
. Operating expenses decreased $6 million or 5%.
.. Operations expense decreased $2 million or 4% primarily due to a
$2 million decrease in long lines leased circuit expense and a
$2 million decrease in access expense relating to the exit of the
Alaskan local exchange company from national access charge pools.
The decreases were partially offset by a $1 million increase as a
result of cellular customer growth.
.. Maintenance expense decreased $2 million or 8%. The timing of
maintenance work decreased expense $2 million and the exit from
noncore businesses resulted in a $1 million decrease.
.. Administrative and general expense decreased $2 million or 11%
primarily due to reduced Corporate support costs, the 1993 cost of a
director compensation plan and diminished activities for noncore
businesses.
. Earnings contribution increased $2 million or 17%.
.. Income from operations increased $2 million or 7%.
.. Interest expense decreased $2 million or 19% as a result of lower
borrowing levels in 1994.
.. Income tax expense increased $2 million or 35% due to higher taxable
income and the effects of the increased federal income tax rate
effective in mid-1993.
- 13 -
<PAGE>
FINANCIAL CONDITION -
For the three months ended March 31, 1994:
Net cash flows of $299 million were provided by operating
activities during the period. Uses for cash were: $151 million for
construction program expenditures and $86 million for dividends.
During the period, the Company issued 950,248 shares of its
common stock under the Dividend Reinvestment and Employee Stock Purchase
Plans.
At March 31, 1994, the Company had $321 million of commercial
paper and bank borrowings outstanding at an average weighted rate of 3.7%.
These borrowings are supported by a $500 million revolving credit
agreement. At March 31, 1994, the consolidated subsidiaries had access to
$814 million of short-term funds through committed bank revolving credit
agreements. Subsidiaries had $50 million of commercial paper outstanding
at March 31, 1994, as well as borrowings of $144 million under bank
revolving credit facilities. At March 31, 1994, subsidiaries had
$60 million of short-term debt classified as long-term debt as they have
the intent and ability to support short-term borrowings through the various
revolving credit facilities on a long-term basis. The Company and its
subsidiaries have intercompany borrowing arrangements providing for loans
of funds between parties at short-term market rates.
In May 1994, Standard & Poor's Corporation raised the ratings on
Holdings' senior unsecured long-term debt to BBB- from BB+ and short-term
debt to A3 from B. This action will reduce fees payable under Holdings'
credit agreement.
Pacific Telecom has definitive agreements with US West Communi-
cations, Inc. to purchase local telephone properties in Colorado for
approximately $207 million and similar properties in Oregon and Washington
for approximately $183 million. Pacific Telecom expects to fund these
acquisitions through the issuance of external debt and internally generated
funds.
The Company believes that its existing and available capital
resources are sufficient to meet working capital, dividend and the majority
of construction needs in 1994.
___________________________________________________________________________
The condensed consolidated financial statements as of March 31,
1994 and for the three-month period then ended have been reviewed by
Deloitte & Touche, independent accountants, in accordance with standards
established by the American Institute of Certified Public Accountants. A
copy of their report is included herein.
- 14 -
<PAGE>
Deloitte & Touche
_________________ _____________________________________________________
3900 US Bancorp Tower Telephone:(503)222-1341
111 SW Fifth Avenue Facsimile:(503)224-2172
Portland, Oregon 97204-3698
INDEPENDENT ACCOUNTANTS' REPORT
_______________________________
PacifiCorp:
We have reviewed the accompanying condensed consolidated balance sheet of
PacifiCorp and subsidiaries as of March 31, 1994, and the related condensed
consolidated statements of income and retained earnings and of cash flows
for the three-month periods ended March 31, 1994 and 1993. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and of making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of PacifiCorp and subsidiaries as
of December 31, 1993, and the related consolidated statements of income and
retained earnings and of cash flows for the year then ended (not presented
herein); and in our report dated February 18, 1994 (which contains a
paragraph describing the Company's change of accounting in 1993 for income
taxes and other postretirement benefits), we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance
sheet as of December 31, 1993 is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been
derived.
DELOITTE & TOUCHE
May 12, 1994
- 15 -
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
______ _________________
In Duval, et al. v. Gleason, et al., U.S. District Court for the
________________________________
Northern District of California (see "Item 3. Legal Proceedings,"
___
at page 14 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1993), on April 22, 1994, the court
granted the PacifiCorp defendants' motion to dismiss with leave
for plaintiffs to amend their complaint in 30 days.
In May 1994, the Company was served with an administrative
complaint of the Environmental Protection Agency ("EPA") seeking
$130,000 in civil penalties for alleged violations in 1990 of the
Toxic Substances Control Act at the Company's transformer repair
facility in Medford, Oregon. Based upon an inspection of the
facility, the EPA has alleged that the Company violated several
labeling and storage requirements in connection with the handling
of PCB fluids removed from transformers. The Company has changed
its processes at the facility and is seeking to negotiate a
resolution of the complaint.
Item 6. Exhibits and Reports on Form 8-K
______ ________________________________
(a) Exhibits.
Exhibit 12: Statement of Computation of Ratio of Earnings to
Fixed Charges.
Exhibit 15: Letter re unaudited interim financial information of
awareness of incorporation by reference.
(b) Reports on Form 8-K.
None
- 16 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
PACIFICORP
Date May 13, 1994 By /s/Daniel L. Spalding
_______________________ ________________________________
Daniel L. Spalding
Senior Vice President
(Chief Accounting Officer)
- 17 -
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
_______ ___________ ____
12 Statements of Computation of Ratio of Earnings
to Fixed Charges
15 Deloitte & Touche Audit Opinion
<PAGE>
<TABLE>
EXHIBIT 12
PACIFICORP
STATEMENTS OF COMPUTATION OF RATIO
OF EARNINGS TO FIXED CHARGES
(IN MILLIONS OF DOLLARS)
<CAPTION>
Three Months
YEAR ENDED DECEMBER 31, Ended
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1990 1991 1992 1993 March 31, 1994
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<S> <C> <C> <C> <C> <C>
Fixed Charges, as defined:*
Interest expense....................... $ 431.2 $ 428.0 $ 409.7 $ 377.8 $ 85.0
Estimated interest portion
of rentals charged to expense........ 23.3 20.4 17.1 20.1 4.5
Preferred dividend requirement of
majority-owned subsidiary............ 4.2 - - - -
_______ _______ _______ _______ _____
Total fixed charges............ $ 458.7 $ 448.4 $ 426.8 $ 397.9 $ 89.5
_______ _______ _______ _______ _____
_______ _______ _______ _______ _____
Earnings, as defined:*
Income from continuing
operations........................... $ 413.4 $ 446.8 $ 150.2 $ 422.7 $120.5
Add (deduct):
Provision for income taxes........... 179.1 176.7 90.8 187.4 63.3
Minority interest.................... 18.1 14.1 8.4 11.3 2.3
Undistributed income of
less than 50% owned affiliates..... - (1.8) (5.7) (16.2) (1.1)
Fixed charges as above............... 458.7 448.4 426.8 397.9 89.5
_______ _______ _______ _______ _____
Total earnings................. $1,069.3 $1,084.2 $ 670.5 $1,003.1 $274.5
_______ _______ _______ _______ _____
_______ _______ _______ _______ _____
Ratio of Earnings to Fixed Charges....... 2.3x 2.4x 1.6x 2.5x 3.1x
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<FN>
_______________
*"Fixed charges" represents consolidated interest charges, an estimated amount representing the interest factor in rents
and preferred stock dividend requirements of majority-owned subsidiaries. "Earnings" represent the aggregate of (a) income
from continuing operations, (b) taxes based on income from continuing operations, (c) minority interest in the income of
majority-owned subsidiaries that have fixed charges, (d) fixed charges and (e) undistributed income of less than 50% owned
affiliates without loan guarantees.
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Deloitte & Touche
_________________ _____________________________________________________
3900 US Bancorp Tower Telephone:(503)222-1341
111 SW Fifth Avenue Facsimile:(503)224-2172
Portland, Oregon 97204-3698
EXHIBIT 15
May 12, 1994
PacifiCorp
700 N.E. Multnomah
Portland, Oregon
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of PacifiCorp and subsidiaries for the periods ended
March 31, 1994 and 1993, as indicated in our report dated May 12, 1994;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, is
incorporated by reference in Registration Statement Nos. 33-36452, 33-49607,
and 33-51163, all on Form S-3; in Registration Statement Nos. 33-32211,
33-39195, 33-49479 and Post-Effective Amendment No. 1 to Registration
Statement No. 33-17970, all on Form S-8; and in Registration Statement No.
33-36239 on Form S-4.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that
Act.
DELOITTE & TOUCHE
