-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, U53HPO2b6l4wbm4SVICMb8p7MtvF52ReA47YiDzzx9ggAiAm2ug5r2twxkAC6DGV Jt5TJZ3GxtGVjrRhlPoAPA== 0000075594-94-000004.txt : 19940516 0000075594-94-000004.hdr.sgml : 19940516 ACCESSION NUMBER: 0000075594-94-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFICORP /OR/ CENTRAL INDEX KEY: 0000075594 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 930246090 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05152 FILM NUMBER: 94528201 BUSINESS ADDRESS: STREET 1: 700 NE MULTNOMAH STE 1600 CITY: PORTLAND STATE: OR ZIP: 97232 BUSINESS PHONE: 5037312000 FORMER COMPANY: FORMER CONFORMED NAME: PACIFICORP /ME/ DATE OF NAME CHANGE: 19890628 FORMER COMPANY: FORMER CONFORMED NAME: PC/UP&L MERGING CORP DATE OF NAME CHANGE: 19890628 10-Q 1 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. 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 - 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)
Three Months Ended March 31, __________________________ 1994 1993 ______ ______ 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 _______ _______ _______ _______
See accompanying Note to Condensed Consolidated Financial Statements - 2 - PACIFICORP CONDENSED CONSOLIDATED BALANCE SHEETS (Millions of Dollars) (Unaudited) ASSETS
March 31, December 31, 1994 1993 _________ ____________ 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 ________ ________ ________ ________
See accompanying Note to Condensed Consolidated Financial Statements - 3 - PACIFICORP CONDENSED CONSOLIDATED BALANCE SHEETS (Millions of Dollars) (Unaudited) CAPITALIZATION AND LIABILITIES
March 31, December 31, 1994 1993 _________ ____________ 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 ________ ________ ________ ________
See accompanying Note to Condensed Consolidated Financial Statements - 4 - PACIFICORP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of Dollars) (Unaudited)
Three Months Ended March 31, ______________________ 1994 1993 ______ ______ 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) ________ ________
See accompanying Note to Condensed Consolidated Financial Statements - 5 - PACIFICORP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of Dollars) (Unaudited)
Three Months Ended March 31, _______________________ 1994 1993 ______ ______ 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
See accompanying Note to Condensed Consolidated Financial Statements - 6 - 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 - Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SUMMARY RESULTS OF OPERATIONS
Percentage First Quarter Increase/ _________________ 1994 1993 (Decrease) ____ ____ __________ (Millions of Dollars, except per share) 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 *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."
- 8 - 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 - RESULTS OF OPERATIONS Electric Operations ___________________
Percentage First Quarter Increase/ _________________ 1994 1993 (Decrease) ____ ____ __________ (Millions of Dollars) 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
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 - .. 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 - Telecommunications __________________
Percentage First Quarter Increase/ _________________ 1994 1993 (Decrease) ____ ____ __________ (Millions of Dollars) 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
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% - 12 - 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 - 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 - 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 - 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 - 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 - EXHIBIT INDEX EXHIBIT DESCRIPTION PAGE _______ ___________ ____ 12 Statements of Computation of Ratio of Earnings to Fixed Charges 15 Deloitte & Touche Audit Opinion EX-12 2 EXHIBIT 12 PACIFICORP STATEMENTS OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (IN MILLIONS OF DOLLARS)
Three Months YEAR ENDED DECEMBER 31, Ended ____________________________________________ 1990 1991 1992 1993 March 31, 1994 ____ ____ ____ ____ ______________ 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 ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ _______________ *"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.
EX-15 3 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 -----END PRIVACY-ENHANCED MESSAGE-----