<PAGE>
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, 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 0-873
________________________________________________
PACIFIC TELECOM, INC.
(Exact name of registrant as specified in its charter)
Washington 91-0644974
______________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
805 Broadway, P.O. Box 9901, Vancouver, Washington 98668 - 8701
____________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (360)905-5800
No Change
____________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
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 12 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 the past 90
days.
Yes X No
___ ___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, no par value 39,616,123 shares
____________________________________________________________________
(Title of Class) (Outstanding at May 5, 1995)
<PAGE>
PACIFIC TELECOM, INC.
INDEX
_____
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION: PAGE NO.
_____________________ ________
<S> <C>
Item 1 - Financial Statements:
Consolidated Balance Sheets -
March 31, 1995 and December 31, 1994 3
Consolidated Statements of Income -
Three months ended March 31, 1995 and 1994 4
Consolidated Statements of Cash Flows -
Three months ended March 31, 1995 and 1994 5
Condensed Notes to Consolidated Financial
Statements 6 - 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results
of Operations 8 - 11
PART II OTHER INFORMATION:
_________________
Item 6 - Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
- 2 -
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. - Financial Statements
PACIFIC TELECOM, INC.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
______
March 31, December 31,
1995 1994
_________ ____________
<S> <C> <C>
(In thousands)
Current assets:
Cash and temporary cash investments $ 36,391 $ 9,883
Accounts receivable 108,206 108,977
Accounts and notes receivable - affiliates 1,173 1,832
Material and supplies (at average cost) 14,031 14,775
Inventory - North Pacific Cable 61,719 62,777
Other 16,287 16,045
_________ _________
Total current assets 237,807 214,289
Investments 119,054 123,610
Plant in service:
Telecommunications 1,780,533 1,550,553
Other 21,947 22,115
Less accumulated depreciation 872,998 799,797
_________ __________
929,482 772,871
Construction work in progress 16,882 52,667
_________ _________
Net plant 946,364 825,538
Intangible assets - net 330,704 252,870
Deferred charges 22,993 26,644
_________ _________
Total assets $1,656,922 $1,442,951
_________ _________
_________ _________
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND CAPITALIZATION
______________________________
<S> <C> <C>
Current liabilities:
Currently maturing long-term debt $ 15,640 $ 15,601
Notes payable 232,937 21,713
Accounts payable 66,173 69,515
Income taxes payable 7,781 -
Accrued liabilities 43,034 46,371
Accrued access and unearned revenue 19,310 21,892
_________ _________
Total current liabilities 384,875 175,092
Long-term debt 375,433 376,997
Deferred income taxes 97,330 95,966
Unamortized investment tax credits 12,852 13,809
Other long-term liabilities 99,499 97,131
Minority interest 16,328 16,183
Shareholders' equity:
Common stock 19,808 19,810
Additional paid-in capital 206,140 206,231
Unearned stock compensation (1,172) (442)
Retained earnings 445,829 442,174
_________ _________
Total shareholders' equity 670,605 667,773
_________ _________
Total liabilities and capitalization $1,656,922 $1,442,951
_________ _________
_________ _________
</TABLE>
See accompanying notes to consolidated financial statements.
- 4 -
<PAGE>
PACIFIC TELECOM, INC.
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
____________________
1995 1994
_______ _______
(In thousands, except
per share data)
<S> <C> <C>
Operating revenues:
Local network service $ 27,260 $ 22,984
Network access service 47,854 41,729
Long distance network service 62,070 60,555
Private line service 15,228 14,865
Sales of cable capacity 1,560 2,235
Cellular and other 27,739 23,419
_______ _______
Total operating revenues 181,711 165,787
_______ _______
Operating expenses:
Plant support 30,243 27,069
Depreciation and amortization 27,560 26,776
Leased circuits 8,793 5,945
Access expense 22,366 22,487
Other operating expense 9,911 8,532
Cost of cable sales 1,058 1,426
Customer operations 18,560 17,602
Administrative support 19,036 17,792
Taxes other than income taxes 4,029 3,497
_______ _______
Total operating expenses 141,556 131,126
_______ _______
Operating income 40,155 34,661
_______ _______
Other income (expense):
Interest expense (9,998) (9,285)
Interest income 624 139
Other (3,669) (1,754)
_______ _______
Other income (expense) - net (13,043) (10,900)
_______ _______
Income before income taxes 27,112 23,761
Income taxes 10,385 7,961
_______ _______
Net income $ 16,727 $ 15,800
_______ _______
_______ _______
Average number of shares outstanding 39,608 39,608
_______ _______
_______ _______
Net income per share $ .42 $ .40
_______ _______
_______ _______
Cash dividends per share $ .33 $ .33
_______ _______
_______ _______
</TABLE>
See accompanying notes to consolidated financial statements.
- 4 -
<PAGE>
PACIFIC TELECOM, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
__________________
1995 1994
_______ _______
(In thousands)
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 16,727 $15,800
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 29,727 28,269
Deferred income taxes and investment
tax credits, net (124) (2,875)
Loss from unconsolidated entities, net 45 -
Accounts receivable and other current assets 2,356 11,320
Inventory - North Pacific Cable 1,056 1,426
Accounts payable and accrued liabilities 1,957 4,953
Other 748 1,065
________ ______
Net cash provided by operating activities 52,492 59,958
________ ______
Cash Flows from Investing Activities:
Construction expenditures (24,618) (13,377)
Cost of business acquired (197,905) -
Investments in and advances to affiliates (16) (1,566)
Proceeds from sales of assets 750 319
_______ _______
Net cash used by investing activities (221,789) (14,624)
_______ _______
Cash Flows from Financing Activities:
Increase (decrease) in short-term debt 211,224 (21,000)
Proceeds from issuance of long-term debt - 995
Purchase of common stock (823) (324)
Dividends paid (13,072) (13,071)
Payments of long-term debt (1,524) (6,274)
_______ ______
Net cash provided (used) by
financing activities 195,805 (39,674)
_______ ______
Increase in Cash and Temporary Cash Investments 26,508 5,660
Cash and Temporary Cash Investments
at Beginning of Period 9,883 4,861
_______ ______
Cash and Temporary Cash Investments
at End of Period $ 36,391 $10,521
_______ ______
_______ ______
Supplemental Disclosures of Cash Flow Information:
Cash paid during the three months ended March 31 for:
Interest $ 13,251 $11,542
Income Taxes $ 8,912 $ 2,481
</TABLE>
See accompanying notes to consolidated financial statements.
- 5 -
<PAGE>
Notes to Consolidated Financial Statements
(Unaudited)
1. The consolidated financial statements include all normal
adjustments which, in the opinion of management, are necessary
to present fairly the consolidated financial position at March 31,
1995, and the consolidated results of operations and cash flows for
the three months ended March 31, 1995 and 1994. These consolidated
financial statements should be read in conjunction with the
financial statements and related notes included in the latest
annual report filed on Form 10-K of Pacific Telecom, Inc.
(Company). The consolidated results of operations presented herein
are not necessarily indicative of the results to be expected for
the year.
2. At March 31, 1995, approximately 87 percent of the Company's
outstanding common stock was owned by PacifiCorp Holdings, Inc.
(Holdings), a wholly-owned subsidiary of PacifiCorp. (See Part II,
Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on page 19 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1994,
for information regarding a proposal by Holdings to acquire the
remaining 13 percent minority interest in the Company.)
3. Certain loan agreements contain provisions restricting the payment
of cash dividends. Retained earnings of approximately $153 million
were available for dividends and other distributions at March 31,
1995.
The Company's ratio of earnings to fixed charges for the three
months ended March 31, 1995, calculated in accordance with Item 503
of Regulation S-K under the Securities Exchange Act of 1934, was
2.9 to 1.0.
4. The Company's effective combined state and federal income tax rates
were 38.3 percent and 33.5 percent for the three months ended March
31, 1995 and 1994, respectively. The difference between taxes
calculated at the statutory federal tax rates and the effective
combined rates for 1995 and 1994 is reconciled as follows:
<TABLE>
<CAPTION>
1995 1994
____ ____
<S> <C> <C>
Federal statutory rate 35.0% 35.0%
State income taxes, net of federal benefit 4.4 3.2
Amortization of investment tax credits (3.6) (4.6)
Amortization of excess deferred income taxes (.7) (2.6)
Amortization of excess cost 3.6 2.5
Other (.4) -
____ ____
Effective tax rate 38.3% 33.5%
____ ____
____ ____
</TABLE>
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
__________________
1995 1994
_______ _______
(In thousands)
<S> <C> <C>
Federal income taxes $ 8,532 $ 6,773
State income taxes 1,853 1,188
______ ______
$10,385 $ 7,961
______ ______
______ ______
Income taxes currently payable $10,707 $10,958
Deferred income taxes 678 (1,871)
Amortization of deferred investment tax credits (1,000) (1,126)
______ ______
$10,385 $ 7,961
______ ______
______ ______
</TABLE>
- 6 -
<PAGE>
Notes to Consolidated Financial Statements
(Unaudited)
5. On February 15, 1995, the Company acquired assets representing 45
exchanges serving approximately 53,000 access lines from US WEST
Communications, Inc. (USWC) for approximately $200 million in cash.
"Net plant" increased $126.7 million and "Intangibles" increased
$79.7 million. Short-term debt increases of $197.9 million and an
escrow account of $4.2 million included in "Investments" provided
the cash to fund the acquisition. The Company reclassified $33.4
million from "Construction work in progress" to "Telecommunications"
plant relating to the construction and upgrade program the Company
began on these assets in 1993 after signing the definitive sale
agreement.
6. In October 1994, the Company signed an agreement to sell the stock
of Alascom, Inc. (Alascom) to AT&T Corp. (AT&T) in a transaction
providing $365 million in proceeds. Under the terms of the
agreement, AT&T will pay $290 million in cash for the Alascom stock
and for settlement of all past cost study issues. AT&T has also
agreed to allow PTI 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 the Company upon signing the stock purchase
agreement, which would be applied to the final $75 million
transition payment required in the FCC order if the transaction
failed to close. The remaining $260 million is to be paid when the
transaction closes. Closing of the sale of Alascom is subject to
certain conditions, including receipt of state and federal
regulatory approvals that are expected to be received during the
first half of 1995. See Item 5. "Other Events" of the Company's
Current Report on Form 8-K dated March 31, 1995 for information
concerning receipt of state regulatory approval for the sale.
Summarized income statement data for Alascom are as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
__________________
1995 1994
_______ _______
(In thousands)
<S> <C> <C>
Operating revenues $81,921 $78,040
Operating income 15,250 15,142
</TABLE>
The Company's consolidated cash balance increased approximately $20
million in the first quarter of 1995 due to the sale agreement
which does not allow cash to be transferred from Alascom to the
Company.
- 7 -
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Three Months Ended March 31
___________________________
Results of Operations
_____________________
The Company's net income for the first quarter of 1995 was $16.7
million or $.42 per share compared to net income of $15.8 million or
$.40 per share for the first quarter of 1994. Operating income
increased 15.8 percent or $5.5 million in the first quarter of 1995
compared to the same period in 1994. This increase was attributable
in part to the acquisition of assets on February 15, 1995 from USWC
representing 45 exchanges serving approximately 53,000 access lines
which contributed $2.6 million to operating income. Excluding the
increase relating to the acquisition, operating income grew $2.9
million, or 8.2 percent, as a result of LEC internal access line
growth, revised local exchange revenue estimates, cellular customer
growth and higher long line equipment resale and installation
activities.
Operating revenues for the first quarter of 1995 were $181.7 million,
an increase of $16.0 million, or 9.6 percent. Colorado acquisition
revenues of $2.1 million, revenue from LEC internal access line growth
of $.9 million and enhanced service revenue growth of $.5 million
combined to contribute most of the $4.3 million increase in local
network service revenue. Network access service revenue grew by $6.1
million, with $4.7 million resulting from the Colorado acquisition and
$1.2 million resulting from revised LEC revenue estimates. Long
distance network service revenue increased $1.5 million due to long
lines interstate revenue being recognized based on interim cash
settlement amounts provided for in the stock sale agreement with AT&T.
Sales of cable capacity declined by $.7 million due to lower sales of
cable capacity in 1995. Cellular and other revenue increased $4.3
million, including increased cellular revenue of $2.0 million due to
growth in customers, $1.3 million due to restoration services resulting
from the cable outage in the first quarter of 1995, and long lines
equipment resale and installation activities revenue of $1.4 million.
On February 5, 1995, the North Pacific Cable, including the Alaska
Spur, experienced an outage. Commercial traffic was restored by way
of satellite. The cable was repaired and released for traffic
normalization on February 28, 1995 and was returned to commercial
service on March 1, 1995. In accordance with existing contractual
obligations, the cable manufacturers are conducting an investigation
into the causes of the outage, and will render a written report
addressing, among other matters, the origin of the outage. Based on
preliminary information, management believes that at least the repair
cost of the outage will be covered under warranty.
Operating expenses for the first quarter of 1995 were $141.6 million,
an increase of $10.4 million, or 8.0 percent, compared to the first
quarter of 1994. Plant support grew by $3.2 million due to increases
of $.9 million relating to the Colorado acquisition, $.7 million due
to increased LEC project work, $.6 million for long lines equipment
resale activities and $.4 million due to growth in cellular operations.
Leased circuits expense increased by $2.8 million, of which $1.7
million related to restoration services subsequent to the cable outage
in the first quarter of 1995 and $.8 million related to long lines
retroactive and advance payments. Depreciation expense was higher by
$.8 million, which included increases of $1.6 million due to the
Colorado assets acquisition and $.9 million for increased LEC
depreciable plant balances. The increases were offset in part by a
$1.6 million reduction due to the Alaska LEC rate decrease ordered in
December 1994 and a $1.1 million reduction due to the
decrease in long lines depreciable plant balances resulting from the
$75 million transition payment received from AT&T in July 1994.
- 8 -
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Other operating expense increased $1.4 million due to increases of
$.9 million for long lines operations and $.4 million relating to
the Colorado acquisition. Long lines marketing efforts were the main
reason customer operations expense increased by $1.0 million.
Administrative support was higher by $1.2 million mainly due to a $.7
million increase relating to the Colorado acquisition.
Other income (expense) - net for the first quarter of 1995 was $13.0
million, an increase of $2.1 million from the first quarter of 1994.
Interest expense increased $.7 million due to the short-term
borrowings used to fund the Colorado asset acquisition. The Company
plans to repay the amounts borrowed with the proceeds from the sale of
its long lines subsidiary in the first half of 1995. Other expense
included $.9 million in costs relating to PacifiCorp Holdings, Inc.'s
offer to purchase the minority interest in the Company.
Income taxes increased due to higher taxable income and reductions in
tax benefits relating to amortization of investment tax credits and
excess deferred taxes.
Acquisitions
____________
See Part I, Item 1. "Business - Telecommunications Operations - Local
Exchange Companies" on page 4 of the Annual Report on Form 10-K for the
year ended December 31, 1994 for information concerning the pending
acquisition of assets from USWC in Oregon and Washington.
See Part I, Item 1. "Business - Acquisition Program" on page 15 of the
Company's Annual Report on Form 10-K for the year ended December 31,
1994 for information on the Company's acquisition strategy.
Dispositions
____________
See Part I, Item 1. "Business - Telecommunications Operations - Alaska
Market Restructuring" on page 7 of the Company's Annual Report on Form
10-K for the year ended December 31, 1994 and Item 5. "Other Events"
in the Company's Current Report on Form 8-K dated March 31, 1995 for
information concerning the sale of Alascom, Inc. to AT&T Corp.
Liquidity and Capital Resources
_______________________________
During the three months ended March 31, 1995, construction expenditures
amounted to $24.6 million. These expenditures pertained mainly to
network upgrades and growth in the Company's operations. The Company
does not have any major construction projects underway at the present
time. The construction expenditures were funded primarily using cash
from operations. In 1995, total construction expenditures estimated
at $127.5 million are expected to be funded primarily through cash from
operations.
The Company has access to funds through its $300 million revolving
credit agreement. At March 31, 1995, $35.0 million was outstanding
under this agreement. The revolving credit agreement also serves as
backup for a $100 million commercial paper program, under which
$79.7 million was outstanding at March 31, 1995. The Company had
$137.0 million outstanding under other available banking
arrangements, $4.3 million due to GE American Communications,
Inc. for the purchase of a satellite transponder and $1.9
million due to the minority owner of a Company subsidiary at March
31, 1995. Short-term borrowings from the commercial paper program at
- 9 -
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 1995 of $25 million have been classified as long-term debt
based on management's intent and the Company's ability to support
this debt on a long-term basis. The Colorado asset acquisition in
February 1995 was funded through short-term bank borrowings. Short-
term debt outstanding is anticipated to be repaid during the first half
of 1995 with proceeds estimated at $260 million from the sale of
Alascom to AT&T.
The Company has a $150 million Series B Medium-Term Note program, under
which $72.5 million of notes were outstanding at March 31, 1995, with
terms of one to 12 years and an average annual interest rate of 7.9
percent. The Company has $75.5 million of Medium-Term Notes available
for issuance. The Company also has approval from the Rural Telephone
Bank to borrow $20.9 million in additional REA debt for certain
construction projects.
The Company has an agreement that allows temporary cash advances to or
from its majority shareholder, PacifiCorp Holdings, Inc. (Holdings).
Interest rates on advances from Holdings are based on Holdings' cost
of short-term funds plus 3/8 percent. Interest rates on advances to
Holdings are based on Holdings' cost of short-term funds. At March 31,
1995, the Company had nothing outstanding or advanced to Holdings. The
Company has definitive agreements with USWC to purchase local telephone
properties in Oregon and Washington for approximately $180 million.
The Company expects to fund these acquisitions through the issuance of
external debt and internally generated funds.
Any temporary cash or liquidity requirements during 1995 will be met
through utilization of funds available under the revolving credit
agreement or temporary advances from Holdings. Long-term liquidity
requirements will be met through utilization of funds available under
the revolving credit agreement, which terminates in November 1999, the
issuance of additional Series B Medium-Term Notes and the possible
establishment of an additional Medium-Term Note program.
Pro Forma Financial Information (Unaudited)
___________________________________________
The accompanying unaudited pro forma consolidated balance sheet as of
March 31, 1995 reflects the Company's consolidated financial position
excluding the assets and liabilities of Alascom and including the local
exchange assets to be acquired in Oregon and Washington. The Company
signed a definitive agreement dated as of October 1, 1994 to sell the
stock of Alascom to AT&T for $365 million (including the $75 million
transition payment received in July 1994). The Company expects to
close the purchase of assets in Oregon and Washington for approximately
$180 million before the end of 1995 after the receipt of certain
regulatory approvals and subject to certain purchase price adjustments
at closing. The pro forma balance sheet assumes the sale and purchases
occurred on March 31, 1995. See Item 1. "Business - Telecommunications
Operations - Alaska Market Restructuring" and Note 16 "Pending Sale of
Alascom, Inc." of the notes to the consolidated financial statements
in Item 8. "Financial Statements and Supplementary Data" of the
Company's Annual Report on Form 10-K for the year ended December 31,
1994 for additional information relating to the pending sale of
Alascom. See "Acquisitions" above and Item 1. "Business -
Telecommunications Operations - Local Exchange Companies" of the
Company's Annual Report on Form 10-K for the year ended December 31,
1994 for additional information relating to the acquisitions of local
exchange assets from USWC.
The unaudited pro forma consolidated balance sheet and related notes
should be read in conjunction with the consolidated financial
statements and related notes included in Item 1 hereof and in Item 8.
"Financial Statements and Supplementary Data" of the Company's Annual
Report on Form 10-K for the year ended December 31, 1994.
- 10 -
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
<TABLE>
<CAPTION>
PRO FORMA BALANCE SHEET
(UNAUDITED, IN MILLIONS)
Historical (a) (b) US WEST Pro forma
Consolidated Historical Elimination Sale of Asset Consolidated
March 31, 1995 PTI Alascom Reversal Alascom Acquisitions PTI
_________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets $ 237.8 $(98.8) $ 13.2 $ 43.4 $(53.4)(c) $ 142.2
Investments 119.0 (0.3) 212.9 (212.9) (4.0) 114.7
Net plant in service 946.4 (179.8) - - 114.5 881.1
Intangible and other
other assets 353.7 (7.2) - - 76.0 422.5
_______ _____ _____ _____ _____ _______
Total assets $1,656.9 $(286.1) $226.1 $(169.5) $133.1 $1,560.5
_______ _____ _____ _____ _____ _______
_______ _____ _____ _____ _____ _______
LIABILITIES AND CAPITALIZATION
Current
liabilities $ 384.9 $(72.1) $ 20.8 $(214.5)(c)$ - $ 119.1
Long-term debt 375.4 - - - 133.1(c) 508.5
Deferred income taxes and
unamortized investment
tax credits 110.2 (1.5) - - - 108.7
Other long-term
liabilities 115.8 (7.2) - (30.0) - 78.6
Shareholders' equity 670.6 (205.3) 205.3 75.0 - 745.6
_______ _____ _____ _____ _______ _______
Total liabilities and
capitalization $1,656.9 $(286.1) $226.1 $(169.5) $133.1 $1,560.5
_______ _____ _____ _____ _____ _______
_______ _____ _____ _____ _____ _______
</TABLE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
PRO FORMA ADJUSTMENTS - The accompanying pro forma consolidated balance
sheet as of March 31, 1995 consists of the historical balance sheet of
the Company (after elimination of affiliated transactions and
interest), less the historical balance sheet of Alascom, plus an
estimate for the assets to be purchased in Oregon and Washington and
certain liabilities related to these acquisitions, plus certain pro
forma adjustments described below:
a. Affiliated balances between the Company and its subsidiaries and
Alascom eliminated in the consolidation process were restored on
the pro forma balance sheet. The affiliated balances between PTI
and Alascom were added to PTI's investment in Alascom. The
affiliated balances between the other PTI subsidiaries and Alascom
were reclassified to the proper nonaffiliated line item.
b. Cash proceeds of $260 million to be received at closing the sale
of Alascom and the $30 million deposit in "Other long-term
liabilities" received in October 1994 were offset by the Company's
basis in Alascom which will increase as Alascom's earnings are
recognized and affiliated account balances change between March 31,
1995 and closing.
c. Cash proceeds received from the sale of Alascom have been applied
to short-term debt used to purchase assets in Colorado, Oregon and
Washington from USWC. Amounts needed for the asset purchases in
excess of the Alascom proceeds and cash on hand were assumed to be
borrowed on a long-term basis.
- 11 -
<PAGE>
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
12 Statements re Computation of Ratios
27 Financial Data Schedule (filed electronically
only)
(b) Reports on Form 8-K
On Form 8-K dated February 6, 1995, under Item 5.
"Other Events," the Company reported that litigation
brought by certain minority shareholders of the Company
in connection with the pending offer of PacifiCorp
Holdings, Inc. to acquire the outstanding minority
interest in the Company had been dismissed.
On Form 8-K dated February 15, 1995, under Item 2.
"Acquisition and Disposition of Assets," the Company
reported the purchase of local exchange assets in
Colorado from US WEST Communications, Inc.
On Form 8-K dated March 9, 1995, under Item 5. "Other
Events," the Company reported an Agreement and Plan of
Merger with PacifiCorp Holdings, Inc. and PXYZ
Corporation pursuant to which the Company would become
a wholly-owned subsidiary of PacifiCorp Holdings, Inc.
and minority shareholders of PTI common stock would
receive $30 per share in cash for each share held.
On Form 8-K dated March 31, 1995, under Item 5. "Other
Events," the Company reported that the Alaska Public
Utilities Commission issued a bench order approving the
application of AT&T to acquire all of the shares of
Alascom, Inc., subject to certain conditions.
- 12 -
<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.
Pacific Telecom, Inc.
_____________________________
(Registrant)
Date: May 11, 1995 /s/James H. Huesgen
___________________________________
James H. Huesgen
Executive Vice President and
Chief Financial Officer
- 13 -
<PAGE>
<TABLE>
EXHIBIT 12
Pacific Telecom, Inc.
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in millions)
<CAPTION>
Three Months
Ended
March 31, Year Ended December 31,
__________________________________________
1995 1994 1993 1992 1991 1990
___________ ______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Earnings, as defined*:
Income from continuing operations
before income taxes $27.1 $122.2 $ 82.9 $ 99.8 $120.4 $137.5
Add:
Fixed charges 14.5 48.6 59.5 63.2 67.7 49.2
Equity losses of less than 50%
owned persons - - - 0.9 0.5 0.7
Minority interest 0.2 1.0 0.6 0.1 2.0 4.0
_____ _____ _____ _____ _____ _____
Total earnings $41.8 $171.8 $143.0 $164.0 $190.6 $191.4
_____ _____ _____ _____ _____ _____
_____ _____ _____ _____ _____ _____
Fixed charges:
Interest $10.0 $34.7 $44.3 $52.1 $55.0 $40.1
Interest portion of rental expense 4.5 13.9 15.2 11.1 12.7 9.1
____ ____ ____ ____ ____ ____
Total fixed charges $14.5 $48.6 $59.5 $63.2 $67.7 $49.2
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
Ratio of earnings to fixed charges 2.9 3.5 2.4 2.6 2.8 3.9
____ ____ ____ ____ ____ ____
____ ____ ____ ____ ____ ____
* For the purpose of computing these ratios, "earnings" represents the aggregate of (a) income from
continuing operations before income taxes, (b) fixed charges, (c) equity losses of less than 50%
owned persons and (d) minority interest. Equity losses of less than 50% owned persons are added
to income from continuing operations before income taxes since the Company does not guarantee the
debt of such persons. "Fixed Charges" consist of interest charges and an estimated amount
representing the interest portion of rental expense.
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1995 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 929353
<OTHER-PROPERTY-AND-INVEST> 136065
<TOTAL-CURRENT-ASSETS> 237807
<TOTAL-DEFERRED-CHARGES> 22993
<OTHER-ASSETS> 330704
<TOTAL-ASSETS> 1656922
<COMMON> 19808
<CAPITAL-SURPLUS-PAID-IN> 204968
<RETAINED-EARNINGS> 445829
<TOTAL-COMMON-STOCKHOLDERS-EQ> 670605
0
0
<LONG-TERM-DEBT-NET> 350433
<SHORT-TERM-NOTES> 178760
<LONG-TERM-NOTES-PAYABLE> 25000
<COMMERCIAL-PAPER-OBLIGATIONS> 54177
<LONG-TERM-DEBT-CURRENT-PORT> 15640
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 362307
<TOT-CAPITALIZATION-AND-LIAB> 1656922
<GROSS-OPERATING-REVENUE> 181711
<INCOME-TAX-EXPENSE> 10385
<OTHER-OPERATING-EXPENSES> 141556
<TOTAL-OPERATING-EXPENSES> 151941
<OPERATING-INCOME-LOSS> 29770
<OTHER-INCOME-NET> (3045)
<INCOME-BEFORE-INTEREST-EXPEN> 26725
<TOTAL-INTEREST-EXPENSE> (9998)
<NET-INCOME> 16727
0
<EARNINGS-AVAILABLE-FOR-COMM> 16727
<COMMON-STOCK-DIVIDENDS> 13072
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 52492
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
</TABLE>
