<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
__________________
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-5152
______
PACIFICORP
(Exact name of registrant as specified in its charter)
STATE OF OREGON 93-0246090
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
700 N.E. Multnomah
Suite 1600
Portland, Oregon 97232-4116
(Address of principal executive offices) (Zip code)
503-731-2000
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.
YES X NO
_____ _____
At October 31, 1995, there were 284,276,709 shares of registrant's common
stock outstanding.
<PAGE>1
PACIFICORP
<TABLE>
<CAPTION>
Page No.
________
<S> <C>
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements 2
Condensed Consolidated Statements of Income
and Retained Earnings 2
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 21
Item 1. Legal Proceedings 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
Signature 23
</TABLE>
<PAGE>2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Millions of Dollars, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
__________________ _________________
1995 1994 1995 1994
______ ______ ______ ______
<S> <C> <C> <C> <C>
REVENUES $ 849.7 $ 915.0 $2,511.8 $2,616.4
_______ _______ _______ _______
EXPENSES
Operations 302.2 363.1 922.4 1,041.7
Maintenance 67.7 70.1 218.3 219.4
Administrative and general 57.4 72.7 179.9 195.2
Depreciation and amortization 107.9 105.3 331.1 323.0
Taxes, other than income taxes 30.1 31.9 93.7 95.5
_______ _______ _______ _______
TOTAL 565.3 643.1 1,745.4 1,874.8
_______ _______ _______ _______
INCOME FROM OPERATION 284.4 271.9 766.4 741.6
_______ _______ _______ _______
INTEREST EXPENSE AND OTHER
Interest expense 83.2 82.6 282.2 250.3
Interest capitalized (4.0) (3.3) (11.4) (10.9)
Minority interest and other (45.9) (11.2) (56.8) (22.8)
_______ _______ _______ _______
TOTAL 33.3 68.1 214.0 216.6
_______ _______ _______ _______
Income before income taxes 251.1 203.8 552.4 525.0
Income taxes 82.1 72.0 175.1 183.4
_______ _______ _______ _______
NET INCOME 169.0 131.8 377.3 341.6
RETAINED EARNINGS BEGINNING OF PERIOD 509.1 389.0 474.3 351.3
Cash dividends declared
Preferred stock (10.2) (9.8) (30.4) (29.6)
Common stock per share: 1995 and
1994/$.27 and $.81 (76.8) (76.7) (230.1) (229.0)
_______ _______ _______ _______
RETAINED EARNINGS END OF PERIOD $ 591.1 $ 434.3 $ 591.1 $ 434.3
_______ _______ _______ _______
_______ _______ _______ _______
EARNINGS ON COMMON STOCK (Net
income less preferred dividend
requirement) $ 158.9 $ 121.8 $ 346.9 $ 311.9
Average number of common shares
outstanding (Thousands) 284,277 283,503 284,271 282,473
EARNINGS PER COMMON SHARE $ .56 $ .43 $ 1.22 $ 1.10
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>3
<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited)
ASSETS
<CAPTION>
September 30, December 31,
1995 1994
_____________ ____________
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT
Electric $10,815.1 $10,577.2
Telecommunications 1,476.7 1,572.7
Other 64.9 64.9
Accumulated depreciation and amortization (4,166.1) (4,136.9)
________ ________
Net 8,190.6 8,077.9
Construction work in progress 352.7 368.3
________ ________
TOTAL PROPERTY, PLANT AND EQUIPMENT 8,543.3 8,446.2
________ ________
CURRENT ASSETS
Cash and cash equivalents 16.0 23.3
Accounts receivable less allowance
for doubtful accounts: 1995/$7.4
and 1994/$9.4 375.8 442.7
Materials, supplies and fuel stock at
average cost 206.9 193.2
Inventory 61.4 66.3
Finance assets 26.8 27.9
Other 47.1 62.0
________ ________
TOTAL CURRENT ASSETS 734.0 815.4
________ ________
OTHER ASSETS
Investments in and advances to affiliated
companies 167.8 189.9
Intangible assets - net 382.5 237.2
Regulatory assets - net 1,087.5 1,081.2
Finance note receivable 218.4 220.7
Finance assets 454.2 481.9
Real estate investments 152.6 166.5
Deferred charges and other 214.7 206.6
________ ________
TOTAL OTHER ASSETS 2,677.7 2,584.0
________ ________
TOTAL ASSETS $11,955.0 $11,845.6
________ ________
________ ________
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>4
<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited)
<CAPTION>
CAPITALIZATION AND LIABILITIES
September 30, December 31,
1995 1994
_____________ ____________
<S> <C> <C>
COMMON EQUITY
Common shareholder capital
shares authorized 750,000,000;
shares outstanding: 1995/284,276,709
and 1994/284,251,024 $ 3,011.0 $ 3,010.6
Retained earnings 591.1 474.3
Guarantees of Employee Stock Ownership
Plan borrowings (15.3) (25.1)
________ ________
TOTAL COMMON EQUITY 3,586.8 3,459.8
________ ________
PREFERRED STOCK 367.4 367.4
________ ________
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 219.0 219.0
________ ________
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 3,707.2 3,768.2
________ ________
CURRENT LIABILITIES
Long-term debt and capital lease obligations
currently maturing 241.3 95.8
Notes payable and commercial paper 441.1 454.7
Accounts payable 240.5 338.4
Taxes, interest and dividends payable 276.9 253.3
Customer deposits and other 153.8 126.8
________ ________
TOTAL CURRENT LIABILITIES 1,353.6 1,269.0
________ ________
DEFERRED CREDITS
Income taxes 1,891.3 1,822.6
Investment tax credits 161.9 190.1
Other 646.3 641.6
________ ________
TOTAL DEFERRED CREDITS 2,699.5 2,654.3
________ ________
MINORITY INTEREST 21.5 107.9
________ ________
COMMITMENTS AND CONTINGENCIES (See Note 2)
TOTAL CAPITALIZATION AND LIABILITIES $11,955.0 $11,845.6
________ ________
________ ________
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>5
<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
_______________________
1995 1994
______ ______
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 377.3 $ 341.6
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 346.6 352.6
Deferred income taxes and investment tax
credits - net 36.0 (29.0)
Interest capitalized on equity funds .2 (1.5)
Minority interest and other (23.4) 34.2
Accounts receivable and prepayments 26.7 34.7
Materials, supplies, fuel stock and
inventory (13.8) 9.4
Accounts payable and accrued liabilities (45.5) 20.4
______ ______
NET CASH PROVIDED BY OPERATING ACTIVITIES 704.1 762.4
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Construction (435.0) (556.4)
Assets acquired (288.8) -
Purchase of minority interest
of Pacific Telecom (117.1) -
Proceeds from sales of assets 124.0 103.0
Proceeds from sales of finance assets
and principal payments 33.1 134.6
Proceeds from the sale of Alascom 235.1 75.0
Other (29.1) (53.8)
______ ______
NET CASH USED IN INVESTING ACTIVITIES (477.8) (297.6)
______ ______
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>6
<TABLE>
PACIFICORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
_______________________
1995 1994
______ ______
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Changes in short-term debt - (75.6)
Proceeds from long-term debt 308.7 13.7
Proceeds from issuance of common stock 1.8 52.4
Dividends paid (260.7) (258.1)
Repayments of long-term debt and capital
lease obligations (226.9) (174.3)
Other (56.5) (32.9)
______ ______
NET CASH USED BY FINANCING ACTIVITIES (233.6) (474.8)
______ ______
DECREASE IN CASH AND CASH EQUIVALENTS (7.3) (10.0)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23.3 31.2
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16.0 $ 21.2
______ ______
______ ______
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for
Interest $ 319.9 $ 308.4
Income taxes net of refunds 149.3 145.9
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1995
1. FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial
statements as of September 30, 1995 and December 31, 1994 and for the periods
ended September 30, 1995 and 1994, 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
periods ended September 30, 1995 and 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 1994 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 a wholly owned (previously 87%-owned, see
below) 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 the Company's nonelectric utility investments. Together these
businesses are referred to herein as the Companies. Significant intercompany
transactions and balances have been eliminated. On September 27, 1995,
holders of a majority of the 5.3 million shares of outstanding common stock
held by minority shareholders of Pacific Telecom, Inc. ("Pacific Telecom")
voted in favor of the merger of a wholly owned subsidiary of Holdings into
Pacific Telecom. Shareholders tendering shares pursuant to the merger were
paid a total of $117 million, or $30 per share, and an accrued liability of
$42 million was established to cover estimated amounts payable to dissenters.
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 1995 method of presentation. Finance interest of
$6.5 million in the third quarter of 1994 and $23.5 million in the nine months
ended September 30, 1994 were reclassified from operating expense to interest
expense. Reclassifications had no effect on previously reported consolidated
net income.
2. CONTINGENT LIABILITIES
The Company and its subsidiaries are parties to various legal
claims, actions and complaints, certain of which involve material amounts.
Although the Company is unable to predict with certainty whether or not it
will ultimately be successful in these legal proceedings or, if not, what the
impact might be, management presently believes that disposition of these
matters will not have a materially adverse effect on the Company's
consolidated financial position or results of operations.
<PAGE>8
During the second quarter of 1995, the Company and the Internal
Revenue Service (the "IRS") agreed on a settlement of substantially all issues
related to the IRS examination of the Company's federal income tax returns for
the years 1983 through 1988, including matters relating to the Company's
abandonment of its 10% interest in Washington Public Power Supply System Unit
No. 3 ("WPPS 3"). The settlement had no effect on consolidated net income,
although it had the effect of reducing Electric Operations' earnings by
$32 million and increasing other earnings by $32 million.
The Company's 1989 and 1990 federal income tax returns are currently
under examination by the IRS.
As previously reported, several Superfund sites have been identified
where the Company has been or may be designated as a potentially responsible
party. Future costs associated with the disposition of these matters are not
expected to be material to the Company's consolidated financial position or
results of operations.
3. SALE OF A SUBSIDIARY
On August 7, 1995, Pacific Telecom closed the sale of the stock of
Alascom, Inc. ("Alascom") to AT&T Corp. ("AT&T"), in a transaction providing
$366 million in proceeds. Under terms of the agreement, AT&T paid
$291 million in cash for the Alascom stock and for settlement of all past cost
study issues. AT&T agreed to allow Pacific Telecom to retain the $75 million
transition payment made by AT&T to Alascom in July 1994 pursuant to a Federal
Communications Commission ("FCC") order. AT&T made a down payment of
$30 million to Pacific Telecom upon signing the stock purchase agreement in
October 1994. The remaining $261 million was paid when the transaction
closed.
Summarized income statement data for Alascom are as follows:
<TABLE>
<CAPTION>
Nine Months
Third Quarter Ended September 30,
_______________ ___________________
1995 1994 1995 1994
____ ____ ____ ____
<S> <C> <C> <C> <C>
(In Millions)
Revenues $28.8 $101.4 $193.1 $261.1
Income from operations 6.5 32.8 36.9 63.6
</TABLE>
<PAGE>9
Item 2.
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY RESULTS OF OPERATIONS
<CAPTION>
Nine Months
Percentage Ended Percentage
Third Quarter Increase/ September 30, Increase/
________________ _______________
1995 1994 (Decrease) 1995 1994 (Decrease)
____ ____ __________ ____ ____ __________
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Millions, except per share)
Revenues $ 849.7 $ 915.0 (7)% $2,511.8 $2,616.4 (4)%
_______ ______ _______ _______
Income from operations (1) 284.4 271.9 5 766.4 741.6 3
_______ ______ _______ _______
Net income 169.0 131.8 28 377.3 341.6 10
_______ ______ _______ _______
Earnings contribution
on common stock (2)
Electric Operations 88.1 87.4 1 191.3 233.2 (18)
Telecommunications 52.9 25.7 106 85.0 54.6 56
Other 17.9 8.7 106 70.6 24.1 *
_______ ______ _______ _______
Total $ 158.9 $ 121.8 30 $ 346.9 $ 311.9 11
_______ ______ _______ _______
_______ ______ _______ _______
Earnings per common share $ .56 $ .43 30 $ 1.22 $ 1.10 11
Average number of common shares
outstanding (thousands) 284,277 283,503 - 284,271 282,473 1
<FN>
*Not a meaningful number.
(1) Finance interest of $6.5 million in the third quarter of 1994 and
$23.5 million in the nine months ended September 30, 1994 was
reclassified from operating expense to interest expense.
Reclassifications had no effect on previously reported consolidated net
income.
(2) 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.
</FN>
</TABLE>
Comparison of the third quarters of 1995 and 1994
_________________________________________________
. Earnings contribution on common stock increased $37 million or 30%.
.. Electric Operations' earnings contribution increased $1 million or 1%.
Reductions in fuel and purchased power expenses of $17 million offset
the revenue decrease of $12 million caused primarily by weak wholesale
energy prices and well closures by certain industrial customers.
Increases in depreciation expense of $5 million and interest expense of
$3 million were partially offset by additional cost reductions.
.. Telecommunications' earnings contribution increased $27 million or 106%
primarily due to the $37 million gain on the sale of Alascom to AT&T in
August 1995. Excluding the effect of the Alascom gain and Alascom's
earnings contribution in these periods, Telecommunication's
contribution increased $5 million or 54% primarily due to the
acquisition of local exchange assets in Colorado in 1995.
<PAGE>10
.. The earnings contribution of other businesses increased $9 million or
106% primarily due to increased gains of $8 million resulting from
sales of finance assets and reduced interest expense resulting from
lower debt levels.
Comparison of the nine-month periods ended September 30, 1995 and 1994
______________________________________________________________________
. Earnings contribution on common stock increased $35 million or 11%.
.. Electric Operations' earnings contribution decreased $42 million or 18%
primarily due to the $32 million settlement with the IRS relating to
the abandonment of WPPS 3 and the resolution of substantially all other
tax issues for the years 1983 through 1988. Excluding this settlement,
Electric Operations' earnings contribution decreased $10 million or 4%.
Lower prices and volumes sold in the wholesale market resulting from
increased competition and mild temperatures in the region and lower
sales to industrial customers were offset by reductions in fuel and
purchased power expenses. Increases in depreciation and interest
expenses also reduced earnings.
.. Telecommunications' earnings contribution increased $30 million or 56%
primarily due to the $37 million gain from the sale of Alascom.
Excluding the effect of the Alascom gain and Alascom's earnings
contribution in these periods, Telecommunications' contribution
increased $10 million or 51% due to the acquisition of local exchange
assets in Colorado, growth in existing local exchange and cellular
operations and revised local exchange revenue estimates for prior
years. These increases were partially offset by increased interest
expense resulting from higher levels of short-term debt outstanding.
.. The earnings contribution of other businesses increased $47 million
primarily due to the release of $32 million of tax accruals relating to
the settlement with the IRS described above, increased income of
$11 million resulting from sales of finance assets and reduced interest
expense resulting from lower debt levels.
. The average number of common shares outstanding rose 1% due to issuances
under dividend reinvestment and employee stock ownership plans. In
November 1994, the Company ceased issuing new shares to meet the
requirements under the plans. The Company periodically evaluates the
advantages of common share issuances in the context of its current capital
structure, financing needs and market price and may consider future
issuances.
<PAGE>11
RESULTS OF OPERATIONS
<TABLE>
Electric Operations
___________________
<CAPTION>
Nine Months
Percentage Ended Percentage
Third Quarter Increase/ September 30, Increase/
________________ _______________
1995 1994 (Decrease) 1995 1994 (Decrease)
____ ____ __________ ____ ____ __________
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Millions)
Revenues
Residential $158.1 $158.1 -% $ 516.1 $ 511.8 1%
Commercial 150.3 147.3 2 427.2 421.6 1
Industrial 191.3 199.0 (4) 528.5 553.7 (5)
Other 7.8 8.0 (3) 22.5 23.1 (3)
_____ _____ _______ _______
Retail sales 507.5 512.4 (1) 1,494.3 1,510.2 (1)
Wholesale sales 144.7 150.6 (4) 370.2 392.3 (6)
Other 15.9 16.9 (6) 45.0 44.1 2
_____ _____ _______ _______
Total 668.1 679.9 (2) 1,909.5 1,946.6 (2)
Operating expenses 452.5 472.4 (4) 1,325.4 1,364.3 (3)
_____ _____ _______ _______
Income from operations 215.6 207.5 4 584.1 582.3 -
Interest expense 70.3 67.5 4 238.1 200.2 19
Other income - net (13.1) (15.1) 13 (33.9) (32.0) (6)
Income taxes 60.2 57.7 4 158.2 151.2 5
_____ _____ _______ _______
Net income 98.2 97.4 1 221.7 262.9 (16)
Preferred dividend requirement 10.1 10.0 1 30.4 29.7 2
_____ _____ _______ _______
Earnings contribution $ 88.1 $ 87.4 1 $ 191.3 $ 233.2 (18)
_____ _____ _______ _______
_____ _____ _______ _______
Energy sales (millions of kWh)
Residential 2,594 2,604 - 8,662 8,580 1
Commercial 2,870 2,828 1 8,018 7,893 2
Industrial 5,446 5,633 (3) 15,002 15,575 (4)
Other 156 165 (5) 447 470 (5)
______ ______ _______ _______
Retail sales 11,066 11,230 (1) 32,129 32,518 (1)
Wholesale sales 4,348 4,363 - 10,872 11,314 (4)
______ ______ _______ _______
Total 15,414 15,593 (1) 43,001 43,832 (2)
______ ______ _______ _______
______ ______ _______ _______
Residential average usage (kWh) 2,223 2,262 (2) 7,450 7,499 (1)
Total customers (end of period) 1,368,520 1,347,018 2 1,368,520 1,347,018 2
</TABLE>
Comparison of the third quarters of 1995 and 1994
_________________________________________________
. Revenues decreased $12 million or 2%.
.. Residential revenues and related kWh volume sold were virtually
unchanged. The $3 million effect of a 1% increase in the average number
of customers was partially offset by the $1 million effect of lower
average prices due to changes in customer mix and a $1 million decrease
resulting from the sale of Sandpoint, Idaho distribution facilities.
.. Commercial revenues increased $3 million or 2% primarily due to the
$6 million effect of increased customer usage and a 1% increase in the
average number of commercial customers, partially offset by $2 million
of weather-related decreases and a $1 million decrease associated with
the sale of Sandpoint, Idaho distribution facilities.
.. Industrial revenues decreased $8 million or 4% and related kWh volume
decreased 3% primarily due to a $7 million decrease resulting from
permanent oil and gas well closures in Wyoming.
.. Wholesale revenues decreased $6 million or 4% while kWh volume was
virtually unchanged. Lower short-term and spot market volumes and
prices decreased wholesale revenues by $9 million and $7 million,
respectively.
<PAGE>12
The lower prices resulted from increased competition, surplus hydro
generation in the region and low natural gas prices. Partially
offsetting the declines were new long-term firm contracts, adding
$7 million, and increases in prices and volumes under existing long-
term firm wholesale contracts totaling $3 million.
. Operating expenses decreased $20 million or 4%.
.. Fuel expense decreased $9 million or 7%. Thermal generation declined
569,000 mWh or 4% due to a 174,000 mWh or 36% increase in hydro
generation, unplanned outages, reduced demand and the availability of
lower-cost purchased power in the spot market.
.. Purchased power expense decreased $8 million or 10% and purchased kWh
volume decreased 5%. Significantly lower spot market prices and a 24%
reduction in volumes purchased in the spot market resulted in expense
reductions of $8 million and $7 million, respectively. These declines
were partially offset by increased firm purchase expense of $4 million,
of which $2 million was due to higher prices and $2 million to
increased kWh volumes purchased.
Bonneville Power Administration ("BPA"), a wholesale power and wheeling
supplier, increased its rates effective October 1, 1995. The new rates
will increase Electric Operations' capacity and wheeling expenses by
approximately $4 million annually and will reduce the exchange benefits
directly received by Electric Operations' residential and small farm
customers by approximately $10 million annually. Electric Operations
has received approval for price increases that will allow it to recover
the loss of exchange benefits.
On July 10, 1995, BPA issued its initial 1996 rate case proposal. This
proposal will be subject to a rate hearing which is expected to
conclude April 30, 1996, with final wholesale power and wheeling rates
to be effective October 1, 1996.
.. Other operations expense decreased $5 million or 6% primarily due to
timing of distribution system expenses relating to removing and
resetting transformers and meters.
.. Administrative and general expense decreased $2 million or 5% primarily
due to an $8 million decrease resulting from reduced employee incentive
plan accruals, partially offset by increases in labor, employee
expenses, computer services, filing fees and various other expenses.
.. Depreciation and amortization expense increased $5 million or 6%
primarily due to additional plant in service.
. Earnings contribution increased $1 million or 1%.
.. Income from operations increased $8 million or 4%.
.. Interest expense increased $3 million or 4% primarily due to the
effects of higher levels of debt outstanding in 1995.
<PAGE>13
.. Other income decreased $3 million primarily due to a $7 million
decrease in sales of surplus sulphur dioxide emission allowances,
partially offset by a $3 million gain from sales of assets in 1995.
.. Income tax expense increased $2 million or 4% primarily due to a higher
effective tax rate resulting from the reversal of deductions flowed
through to ratepayers in prior years.
Comparison of the nine-month periods ended September 30, 1995 and 1994
______________________________________________________________________
. Revenues decreased $37 million or 2%.
.. Residential revenues increased $4 million or 1% and related kWh volume
increased 1% primarily due to the $10 million effect of a 2% increase
in the average number of residential customers, partially offset by a
$5 million decrease resulting from the sale of the Sandpoint, Idaho
distribution facilities.
.. Commercial revenues increased $6 million or 1% primarily due to a 2%
increase in the average number of commercial customers and increased
customer usage adding $8 million and $6 million, respectively.
Partially offsetting these increases were weather-related decreases of
$4 million and a $3 million decrease resulting from the sale of
Sandpoint, Idaho distribution facilities.
.. Industrial revenues decreased $25 million or 5% due to a 4% decrease in
kWh volume. Sales to oil and gas customers in Wyoming decreased
$14 million due to permanent well closures. Additionally, sales to
irrigation customers decreased $10 million due to increased rainfall
and mild temperatures in 1995 and $2 million resulting from the sale of
the Sandpoint, Idaho distribution facilities.
.. Wholesale revenues decreased $22 million or 6% and related kWh volume
decreased 4%. Spot and short-term market revenues decreased
$20 million due to lower prices and $12 million due to lower volumes
sold. The lower prices resulted from increased competition, the effect
of lower natural gas prices, moderate winter heating temperatures and
an abundance of hydro generation in the region. The decreases were
partially offset by a $10 million increase in firm sales resulting
primarily from higher volumes sold.
. Operating expenses decreased $39 million or 3%.
.. Fuel expense decreased $39 million or 11%. Thermal generation declined
2,631,000 mWh or 7% due to a 978,000 mWh or 42% increase in hydro
generation, reduced demand and the availability of lower-cost purchased
power in the spot market.
.. Purchased power expense decreased $11 million or 5%. A $25 million
decrease resulting from lower spot market prices was partially offset
by a $6 million increase in prices for firm purchases, decreased BPA
exchange benefits of $5 million and an increase of $3 million resulting
from higher volumes purchased.
<PAGE>14
.. Maintenance expense decreased $5 million or 4% primarily due to
lengthening the intervals between thermal plant overhauls and extending
the duration of maintenance overhaul periods at some plants, thereby
reducing the use of contract employees and overtime pay.
.. Depreciation and amortization expense increased $15 million or 7%
primarily due to additional plant in service.
. Earnings contribution decreased $42 million or 18%.
.. Income from operations increased $2 million.
.. Interest expense increased $38 million or 19% primarily due to the
$28 million interest portion of the tax settlement with the IRS
referred to above. The remaining $10 million increase was primarily due
to the effects of higher short-term interest rates and higher levels of
long-term debt outstanding in 1995.
.. Income tax expense increased $7 million or 5% primarily due to the net
effects of the tax settlement ($15 million of additional taxes due,
partially offset by an $11 million tax benefit from related interest
expense). Additionally, income taxes rose due to a higher effective
tax rate associated with the reversal of deductions flowed through to
ratepayers in prior years.
<PAGE>15
<TABLE>
Telecommunications
__________________
<CAPTION>
Nine Months
Percentage Ended Percentage
Third Quarter Increase/ September 30, Increase/
________________ _______________
1995 1994 (Decrease) 1995 1994 (Decrease)
____ ____ __________ ____ ____ __________
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Millions)
Revenues
Local network service $ 30.7 $ 24.7 24% $ 87.9 $ 70.9 24%
Network access service 54.5 42.1 29 155.2 125.5 24
Long distance network service 23.6 82.8 (71) 149.9 208.3 (28)
Private line service 4.7 14.5 (68) 34.3 43.7 (22)
Sales of cable capacity .7 1.7 (59) 3.4 4.3 (21)
Cellular and other 29.3 28.7 2 86.8 78.1 11
_____ _____ _____ _____
Total 143.5 194.5 (26) 517.5 530.8 (3)
Operating expenses 104.3 139.5 (25) 392.7 406.4 (3)
_____ _____ _____ _____
Income from operations 39.2 55.0 (29) 124.8 124.4 -
Interest expense 8.8 8.7 1 30.3 26.6 14
Other (income) expense - net (66.7) 2.0 * (63.0) 2.9 *
Income taxes 12.8 14.6 (12) 36.1 31.8 14
_____ _____ _____ _____
Net Income 84.3 29.7 * 121.4 63.1 92
Minority interest and other 31.4 4.0 * 36.4 8.5 *
_____ _____ _____ _____
Earnings contribution $ 52.9 $ 25.7 106 $ 85.0 $ 54.6 56
_____ _____ _____ _____
_____ _____ _____ _____
Telephone access lines (end
of period) 508,847 414,821 23 508,847 414,821 23
<FN>
*Not a meaningful number.
</FN>
</TABLE>
See Note 1 to Condensed Consolidated Financial Statements for information
regarding Holdings' acquisition of the 13% publicly held minority interest in
Pacific Telecom.
See Note 3 to Condensed Consolidated Financial Statements for information
regarding the sale of Alascom to AT&T. The Company recognized an after-tax
gain of approximately $37 million from the sale, based on its 87% ownership
interest of Pacific Telecom when the sale occurred. The table below contains
summarized income statement data for Alascom and the effects of the sale of
Alascom in August 1995, which included a $67 million gain realized by Pacific
Telecom from the sale, the write off of $20 million of goodwill related to
Alascom and $9 million of minority interest associated with the sale. The
table below does not include interest allocations made by Pacific Telecom in
these periods.
<TABLE>
<CAPTION>
Nine Months
Ended
Third Quarter September 30,
_____________ _____________
1995 1994 1995 1994
____ ____ ____ ____
<S> <C> <C> <C> <C>
(In Millions)
Revenues
Long distance network service $ 23.2 $ 82.6 $148.8 $207.3
Private line service 4.7 14.5 34.3 43.7
Other .9 4.3 10.0 10.1
_____ _____ _____ _____
Total 28.8 101.4 193.1 261.1
Operating expenses 22.3 68.6 156.2 197.5
_____ _____ _____ _____
Income from operations 6.5 32.8 36.9 63.6
Other income - net (66.2) (.5) (65.9) (2.7)
Income taxes 2.5 13.3 14.0 25.0
_____ _____ _____ _____
Net income 70.2 20.0 88.8 41.3
Minority interest and other 30.2 2.7 32.3 5.6
_____ _____ _____ _____
Earnings contribution $ 40.0 $ 17.3 $ 56.5 $ 35.7
_____ _____ _____ _____
_____ _____ _____ _____
</TABLE>
<PAGE>16
The discussion below is presented excluding the effect of the Alascom gain and
Alascom's earnings contribution in these periods.
Comparison of the third quarters of 1995 and 1994.
_________________________________________________
. Revenues increased $22 million or 23%.
.. Local network service revenues increased $6 million or 24% primarily
due to $4 million from local exchange assets acquired in Colorado and
increases of $2 million from increased extended area service revenue
and the effects of internal access line growth.
.. Network access service revenues increased $12 million or 29% primarily
due to $10 million from the Colorado acquisition and a $1 million
increase resulting from a 5% growth in access lines, exclusive of the
acquisition.
.. Cellular and other revenues increased $4 million or 16% due to the
$3 million effect of cellular customer growth and $1 million of other
revenues due to the Colorado acquisition.
. Operating expenses increased $11 million or 16%.
.. Operations expense increased $2 million or 12% primarily due to
increases of $2 million resulting from cellular customer growth and
$1 million from the Colorado acquisition.
.. Maintenance expense increased $4 million or 22% due to increases of
$2 million from the Colorado acquisition, $1 million due to local
exchange customer growth and upgrades and $1 million due to cellular
customer growth.
.. Depreciation expense increased $3 million or 17% primarily due to the
Colorado acquisition.
. Earnings contribution increased $5 million or 54%.
.. Income from operations increased $11 million or 47% primarily due to a
$7 million increase from the Colorado acquisition. Excluding the
effect of the acquisition, income from operations increased $4 million
or 16%.
.. Income tax expense increased $9 million due to higher taxable income
and a $4 million increase resulting from the effect of benefits of
consolidation realized in 1994.
Comparison of the nine-month periods ended September 30, 1995 and 1994.
______________________________________________________________________
. Revenues increased $55 million or 20%.
.. Local network service revenues increased $17 million or 24% primarily
due to $10 million of revenue from the Colorado acquisition, the
$4 million effect of internal access line growth and a $2 million
increase in extended area and enhanced services.
<PAGE>17
.. Network access service revenues increased $30 million or 24% due to
$24 million of revenue from the Colorado acquisition and $4 million
from revised local exchange revenue estimates for prior years.
.. Cellular and other revenues increased $9 million or 13% primarily due
to the $8 million effect of cellular customer growth and $2 million of
revenue from the Colorado acquisition.
. Operating expenses increased $28 million or 13%.
.. Operations expense increased $5 million or 10% primarily due to
increases of $3 million from the Colorado acquisition and $3 million
from growth in cellular operations.
.. Maintenance expense increased $10 million or 19% primarily due to
increases of $5 million from the Colorado acquisition, $3 million from
other local exchange company project work, growth in access lines and
network upgrades and $1 million due to growth in cellular operations.
.. Administrative and general expense increased $2 million or 6% primarily
due to the Colorado acquisition.
.. Depreciation expense increased $9 million or 15% primarily due to
increases of $9 million from the Colorado acquisition and $3 million
from increased local exchange company depreciable plant balances.
These increases were partially offset by a decrease of $5 million from
an Alaskan local exchange rate decrease ordered in December 1994.
. Earnings contribution increased $10 million or 51%.
.. Income from operations increased $27 million or 45% primarily due to a
$15 million increase from the Colorado acquisition. Excluding the
acquisition, income from operations increased $12 million or 20%.
.. Interest expense increased $3 million or 13% due to increased short-
term borrowings used to fund the acquisition of Colorado assets.
.. Income tax expense increased $15 million due to higher taxable income
and a $4 million increase resulting from the effect of benefits of
consolidation realized in 1994.
<PAGE>18
FINANCIAL CONDITION -
For the nine months ended September 30, 1995:
Net cash flows of $704 million were provided by operating activities
during the period. Uses for cash were: $435 million for construction program
expenditures and $261 million for dividends.
During 1995, the Company sold certain of its demand-side
receivables, realizing net proceeds of $23 million.
In May 1995, the Company issued $120 million of 8 3/8% Junior
Subordinated Deferrable Interest Debentures, Series A due June 30, 2035, for
net proceeds of $116 million. The proceeds were used to repay short-term
debt. In June 1995, the Company issued $100 million of 6 5/8% First Mortgage
and Collateral Trust Bonds ("FMB") due June 1, 2007. A portion of the
proceeds, initially used to repay short-term debt, was used in July 1995 to
retire $56 million of previously issued FMB, with interest rates ranging from
7% to 7 3/4% and maturities from 1998 to 2002.
In October 1995, the Company exchanged $56 million of 8.55% Junior
Subordinated Deferrable Interest Debentures, Series B due 2025 for 2,233,037
shares of its $1.98 No Par Serial Preferred Stock, Series 1992.
At September 30, 1995, the Company had $349 million of commercial
paper and bank borrowings outstanding at an average weighted rate of 5.9%.
These borrowings are supported by a $500 million revolving credit agreement.
At September 30, 1995, the consolidated subsidiaries had access to
$650 million of short-term funds through committed bank revolving credit
agreements. Subsidiaries had $78 million of commercial paper outstanding at
September 30, 1995, as well as borrowings of $89 million under bank revolving
credit facilities. At September 30, 1995, the Companies had $75 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.
On September 27, 1995, holders of a majority of the 5.3 million
shares of outstanding common stock held by minority shareholders of Pacific
Telecom voted in favor of the merger of a wholly owned subsidiary of Holdings
into Pacific Telecom. Shareholders tendering shares pursuant to the merger
were paid a total of $117 million, or $30 per share, and an accrued liability
of $42 million was established to cover estimated amounts payable to
dissenters. The cash payments were funded by Holdings with proceeds from the
issuance of short-term debt.
On February 15, 1995, Pacific Telecom acquired certain rural
telephone exchange assets in Colorado from U.S. West Communications, Inc.
("USWC") for $200 million in cash. To fund the acquisition, Pacific Telecom
used short-term debt.
On August 7, 1995, Pacific Telecom closed the sale of the stock of
Alascom to AT&T for proceeds of $366 million. Pacific Telecom received
$105 million in advance of the sale, and the remaining $261 million was paid
when
<PAGE>19
the transaction closed. Proceeds were used to retire short-term debt. See
Note 3 to Condensed Consolidated Financial Statements for information
regarding the sale of Alascom.
On September 30, 1995, Pacific Telecom acquired certain local
exchange assets representing 26 exchanges serving approximately 20,000 access
lines in Washington from USWC for $86 million in cash. Pacific Telecom
primarily used short-term debt to fund the acquisition.
On October 20, 1995 Pacific Telecom acquired certain rural exchange
assets representing 23 exchanges serving approximately 16,000 access lines in
Oregon from USWC for $82 million in cash. Pacific Telecom primarily used
proceeds of $76 million from the issuance of medium-term notes to fund the
acquisition.
The Company believes that its existing and available capital
resources are sufficient to meet working capital, dividend and the majority of
construction needs in 1995.
______________________________________________________________________________
The condensed consolidated financial statements as of September 30,
1995 and December 31, 1994 and for the three-month and nine-month periods
ended September 30, 1995 and 1994 have been reviewed by Deloitte & Touche LLP,
independent accountants, in accordance with standards established by the
American Institute of Certified Public Accountants. A copy of their report is
included herein.
<PAGE>20
Deloitte & Touche LLP
_____________________ _____________________________________________________
3900 US Bancorp Tower Telephone:(503)222-1341
111 SW Fifth Avenue Facsimile:(503)224-2172
Portland, Oregon 97204-3698
INDEPENDENT ACCOUNTANTS' REPORT
PacifiCorp:
We have reviewed the accompanying condensed consolidated balance sheet of
PacifiCorp and subsidiaries as of September 30, 1995, and the related
condensed consolidated statements of income and retained earnings for the
three-month and nine-month periods ended September 30, 1995 and 1994 and the
condensed consolidated statements of cash flows for the nine-month periods
ended September 30, 1995 and 1994. 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, 1994, 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 17, 1995 (March 9, 1995 as to the
agreement to acquire the minority interest in Pacific Telecom, Inc. described
in Note 1), 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, 1994 is
fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Portland, Oregon
November 10, 1995
<PAGE>21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
______ _________________
In Sierra Club v. Public Service Company of Colorado, Inc., Salt
_____________________________________________________________
River Project Agricultural Improvement and Power District and
_____________________________________________________________
PacifiCorp, Case No. 93-B-1749, United States District Court for the
__________
District of Colorado (see "Item 1. Legal Proceedings," at page 24
of the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 and "Item 1. Business--Electric Utility Business--
Environment," at page 6 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994), the defendants' petition to
the Tenth Circuit Court of Appeals for interlocutory review was
denied. Trial regarding the plaintiff's request for injunctive
relief is scheduled for May 20, 1996.
The parties participated in an initial settlement conference before
the District Court pursuant to which the defendants expressed a
willingness, subject to a number of conditions, to install pollution
control equipment at both units of the Hayden Generating Station.
Further settlement discussions are scheduled for early 1996. The
Company is unable to predict the outcome of these discussions, the
level of penalties or other remedies the Court may impose upon the
joint owners of the Station if a settlement is not reached, or what
portion of any such liability would ultimately be borne by the
Company.
Item 5. Other Information
______ _________________
On September 1, 1995, the Company filed a request with the Oregon
Public Utility Commission ("PUC") to raise prices in Oregon by an
average of 3.8%. The proposed rate increase amounts to $25 million
annually. The Company expects that any changes to prices under this
filing would not occur until July 1996. This would be PacifiCorp's
first general rate increase since 1987.
Under the proposal, future price increases would be limited to the
change in a broad, producer price inflation index less a
productivity offset of 0.5%. Additionally, the maximum amount of
any annual price change would be limited to 3% in any given year.
The Company is proposing that it be allowed to change prices
annually, based on the index-related formula described above, as
long as its normalized earnings are within a specific range of
return on equity.
The Company is proposing an earnings range of 5 percentage points
above and below a benchmark rate of return on equity. PacifiCorp
has requested that the initial benchmark rate of return on equity be
12.25%. PacifiCorp is proposing a five-year trial period for its
plan.
If approved, PacifiCorp's Oregon filing would result in a 5.6% price
increase for residential customers, a 3.7% increase for general
service commercial customers, a 1.8% increase for larger commercial
and industrial customers and a 3.9% increase for agricultural
pumping customers. Prices would not increase uniformly among all
customer
<PAGE>22
classes because the cost of serving some customers is different than
others. Oregon customers accounted for 31% of PacifiCorp's total
retail electric operating revenues in 1994.
On November 8, 1995, the Company filed a request with the Wyoming
Public Service Commission ("PSC") for an overall price increase
averaging approximately 4% for its Wyoming customers.
The proposed rate increase amounts to $10 million annually. The
Company expects that any changes in prices under this current filing
to occur during the third quarter of 1996, subject to approval from
the Wyoming PSC. This would be PacifiCorp's first price increase
filing in Wyoming since 1986.
Other aspects of the filing are similar in concept to that proposed
in the filing with the Oregon PUC.
Item 6. Exhibits and Reports on Form 8-K
______ ________________________________
(a) Exhibits.
Exhibit 12(a): Statements of Computation of Ratio of Earnings to
Fixed Charges.
Exhibit 12(b): Statements of Computation of Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends.
Exhibit 15: Letter re unaudited interim financial information of
awareness of incorporation by reference.
Exhibit 27: Financial Data Schedule for the quarter ended September
30,1995 (filed electronically only).
(b) Reports on Form 8-K.
On Form 8-K dated September 27, 1995, under Item 5. "Other Events,"
the Company filed its new release reporting the consummation of the
previously announced merger agreement pursuant to which PacifiCorp
Holdings, Inc. acquired the minority interest of Pacific Telecom,
Inc.
On Form 8-K dated November 3, 1995, under Item 5. "Other Events,"
the Company filed a press release reporting financial results for
the three- and nine months ended September 30, 1995.
<PAGE>23
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFICORP
Date November 13, 1995 By RICHARD T. O'BRIEN
___________________________ _________________________________
Richard T. O'Brien
Senior Vice President
(Chief Financial Officer)
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
_______ ___________ ____
<S> <C> <C>
Exhibit 12(a): Statements of Computation of Ratio of
Earnings to Fixed Charges.
Exhibit 12(b): Statements of Computation of Ratio of
Earnings to Combined Fixed Charges and Preferred Stock
Dividends.
Exhibit 15: Letter re unaudited interim financial
information of awareness of incorporation by reference.
Exhibit 27: Financial Data Schedule for the quarter
ended September 30, 1995 (filed electronically only).
</TABLE>
<PAGE>
<TABLE>
EXHIBIT (12)(a)
PACIFICORP
STATEMENTS OF COMPUTATION OF RATIO
OF EARNINGS TO FIXED CHARGES
(IN MILLIONS OF DOLLARS)
<CAPTION>
YEAR ENDED DECEMBER 31, Nine Months
_______________________________________________ Ended
1990 1991 1992 1993 1994 Sept. 30, 1995
____ ____ ____ ____ ____ ______________
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges, as defined:*
Interest expense..................... $ 431.2 $ 428.0 $ 409.7 $ 377.8 $ 336.8 $ 282.2
Estimated interest portion
of rentals charged to expense...... 23.3 20.4 17.1 20.1 19.5 13.8
Preferred dividend requirement of
majority-owned subsidiary.......... 4.2 - - - - -
_______ _______ _______ _______ _______ _____
Total fixed charges.......... $ 458.7 $ 448.4 $ 426.8 $ 397.9 $ 356.3 $296.0
_______ _______ _______ _______ _______ _____
_______ _______ _______ _______ _______ _____
Earnings, as defined:*
Income from continuing
operations......................... $ 413.4 $ 446.8 $ 150.2 $ 422.7 $ 468.0 $377.3
Add (deduct):
Provision for income taxes......... 179.1 176.7 90.8 187.4 249.8 175.1
Minority interest.................. 18.1 14.1 8.4 11.3 13.3 18.1
Undistributed income of
less than 50% owned affiliates... - (1.8) (5.7) (16.2) (14.7) (10.4)
Fixed charges as above............. 458.7 448.4 426.8 397.9 356.3 296.0
_______ _______ _______ _______ _______ _____
Total earnings............... $1,069.3 $1,084.2 $ 670.5 $1,003.1 $1,072.7 $856.0
_______ _______ _______ _______ _______ _____
_______ _______ _______ _______ _______ _____
Ratio of Earnings to Fixed Charges..... 2.3x 2.4x 1.6x 2.5x 3.0x 2.9x
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
<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.
</FN>
</TABLE>
<PAGE>
<TABLE>
PACIFICORP EXHIBIT (12)(b)
STATEMENTS OF COMPUTATION OF RATIO
OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(IN MILLIONS OF DOLLARS)
<CAPTION>
YEAR ENDED DECEMBER 31, Nine Months
_______________________________________________ Ended
1990 1991 1992 1993 1994 Sept. 30, 1995
____ ____ ____ ____ ____ ______________
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges, as defined:*
Interest expense..................... $ 431.2 $ 428.0 $ 409.7 $ 377.8 $ 336.8 $ 282.2
Estimated interest portion
of rentals charged to expense...... 23.3 20.4 17.1 20.1 19.5 13.8
Preferred dividend requirement
of majority-owned subsidiary....... 4.2 - - - - -
_______ _______ _______ _______ _______ _____
Total fixed charges.......... 458.7 448.4 426.8 397.9 356.3 296.0
Preferred Stock Dividends,
as defined:*....................... 31.7 37.4 59.9 56.8 60.8 44.5
_______ _______ _______ _______ _______ _____
Total fixed charges and
preferred dividends........ $ 490.4 $ 485.8 $ 486.7 $ 454.7 $ 417.1 $340.5
_______ _______ _______ _______ _______ _____
_______ _______ _______ _______ _______ _____
Earnings, as defined:*
Income from continuing
operations......................... $ 413.4 $ 446.8 $ 150.2 $ 422.7 $ 468.0 $377.3
Add (deduct):
Provision for income taxes......... 179.1 176.7 90.8 187.4 249.8 175.1
Minority interest.................. 18.1 14.1 8.4 11.3 13.3 18.1
Undistributed income of less than
50% owned affiliates............. - (1.8) (5.7) (16.2) (14.7) (10.4)
Fixed charges as above............. 458.7 448.4 426.8 397.9 356.3 296.0
_______ _______ _______ _______ _______ _____
Total earnings............... $1,069.3 $1,084.2 $ 670.5 $1,003.1 $1,072.7 $856.0
_______ _______ _______ _______ _______ _____
_______ _______ _______ _______ _______ _____
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends...................... 2.2x 2.2x 1.4x 2.2x 2.6x 2.5x
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
<FN>
_______________
*"Fixed charges" represent consolidated interest charges, an estimated amount representing the interest factor
in rents and preferred stock dividend requirements of majority-owned subsidiaries. "Preferred Stock Dividends"
represent preferred dividend requirements multiplied by the ratio which pre-tax income from continuing
operations bears to income from continuing operations. "Earnings" represent the aggregate of (a) income from
continuing operations, (b) taxes based on income from continuing operations, (c) minority interest in the income
of majority-owned subsidiaries that have fixed charges, (d) fixed charges and (e) undistributed income of less
than 50% owned affiliates without loan guarantees.
</FN>
</TABLE>
<PAGE>
Deloitte & Touche LLP
_____________________ _____________________________________________________
3900 US Bancorp Tower Telephone:(503)222-1341
111 SW Fifth Avenue Facsimile:(503)224-2172
Portland, Oregon 97204-3698
EXHIBIT 15
November 10, 1995
PacifiCorp
700 N.E. Multnomah
Portland, Oregon
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of PacifiCorp and subsidiaries for the periods ended
September 30, 1995 and 1994, as indicated in our report dated November 10,
1995; because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995, is
incorporated by reference in Registration Statement Nos. 33-36452, 33-51163,
33-55309, and 33-62095, all on Form S-3; in Registration Statement Nos.
33-58461, 33-51277, 33-54169, 33-56625, 33-57043, and Post-Effective Amendment
No. 1 to Registration Statement No. 33-17970, all on Form S-8; and in
Registration Statement Nos. 33-36239 and 33-58569 on Form S-4.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that
Act.
DELOITTE & TOUCHE LLP
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
PACIFICORP'S SEPTEMBER 30, 1995 FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000075594
<NAME> PACIFICORP
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 8377300
<OTHER-PROPERTY-AND-INVEST> 716300
<TOTAL-CURRENT-ASSETS> 734000
<TOTAL-DEFERRED-CHARGES> 214700
<OTHER-ASSETS> 1912700
<TOTAL-ASSETS> 11955000
<COMMON> 2995700
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 591100
<TOTAL-COMMON-STOCKHOLDERS-EQ> 3586800
367400
219000
<LONG-TERM-DEBT-NET> 3680300
<SHORT-TERM-NOTES> 91900
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 349200
<LONG-TERM-DEBT-CURRENT-PORT> 239600
0
<CAPITAL-LEASE-OBLIGATIONS> 26900
<LEASES-CURRENT> 1700
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3392200
<TOT-CAPITALIZATION-AND-LIAB> 11955000
<GROSS-OPERATING-REVENUE> 2511800
<INCOME-TAX-EXPENSE> 175100
<OTHER-OPERATING-EXPENSES> 1745400
<TOTAL-OPERATING-EXPENSES> 1920500
<OPERATING-INCOME-LOSS> 591300
<OTHER-INCOME-NET> 68200
<INCOME-BEFORE-INTEREST-EXPEN> 659500
<TOTAL-INTEREST-EXPENSE> 282200
<NET-INCOME> 377300
30400
<EARNINGS-AVAILABLE-FOR-COMM> 346900
<COMMON-STOCK-DIVIDENDS> 230300
<TOTAL-INTEREST-ON-BONDS> 213100
<CASH-FLOW-OPERATIONS> 704100
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
</TABLE>
