-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VH3AFDXXQr7ay3MXkT8xLNZP6W6Wah0eEeRGQ8jL4mTgMTsmnynRgmlSlz5IkoLa usboOuV7P2gToSqL3Cl10A== 0000075594-99-000008.txt : 19990512 0000075594-99-000008.hdr.sgml : 19990512 ACCESSION NUMBER: 0000075594-99-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990509 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACIFICORP /OR/ CENTRAL INDEX KEY: 0000075594 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 930246090 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05152 FILM NUMBER: 99616415 BUSINESS ADDRESS: STREET 1: 825 NE MULTNOMAH STE 2000 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 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (date of earliest event reported): May 9, 1999 PACIFICORP (Exact name of registrant as specified in its charter) State of Oregon 1-5152 93-0246090 (State of Incorporation) (Commission (I.R.S. Employer File No.) Identification No.) 825 N.E. Multnomah, Suite 2000, Portland, Oregon 97232-4116 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (503) 813-5000 No Change (Former Name or Former Address, if changed since last report) 2 Item 5. OTHER EVENTS Information contained in the news release of PacifiCorp issued on May 9, 1999 is incorporated herein by reference. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibit. 99. PacifiCorp news release issued May 9, 1999. 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 (Registrant) By: ROBERT R. DALLEY ________________________________ Robert R. Dalley Controller (Chief Accounting Officer) Date: May 10, 1999 INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGE _______ ___________ ____ 99 PacifiCorp news release issued May 9, 1999.
EX-99 2 1 EXHIBIT 99 _____________________________________________________________________________ PACIFICORP NEWS RELEASE _____________________________________________________________________________ Scott Hibbs: (503) 813-7222 May 9, 1999 PACIFICORP REPORTS FIRST QUARTER 1999 FINANCIAL RESULTS PORTLAND, Ore. - PacifiCorp (NYSE: PPW) today reported first quarter 1999 earnings on common stock of $87 million, or $0.29 per share. That compared to a first quarter 1998 loss on common stock of $20 million, or $0.07 per share. The first quarter 1998 loss included a charge of $70 million, or $0.24 per share, associated with a work force reduction in the company's domestic electric operations, and a charge of $54 million, or $0.18 per share, associated with the company's terminated bid for The Energy Group PLC. "Our first quarter financial results are in line with expectations and we are off to a good start in 1999," said Keith McKennon, Chairman and Chief Executive Officer of PacifiCorp. "We remain squarely focused on our twin objectives of improving the performance of our core electric business and obtaining the necessary approvals for our proposed merger with ScottishPower. We are pleased with our progress to date on both accounts," McKennon said. On May 6, 1999 the Securities and Exchange Commission cleared the proxy solicitation materials for PacifiCorp's proposed merger with ScottishPower. These documents have been mailed to PacifiCorp shareholders, who can vote by mail or in person at a shareholder meeting to be held on June 17, 1999. "We are happy to begin the process of seeking our shareholders' approval for our merger with ScottishPower," McKennon said. "As part of ScottishPower, we have an exciting future with the opportunity to pursue more effectively our strategy of concentrating on our core electricity business and providing good value for our shareholders." DOMESTIC ELECTRIC OPERATIONS The first quarter 1999 earnings contribution from the company's domestic electric operations totaled $75 million, or $0.25 per share. In the first quarter of 1998, the earnings contribution from domestic electric operations was $76 million, or $0.26 per share, excluding the work force reduction charge. A recently ordered rated reduction in the state of Utah reduced domestic electric operations earnings in the first quarter of 1999 by $6 million, or $0.02 per share. 2 Non-fuel operations and maintenance and administrative and general costs declined $3 million, or 2 percent, in the quarter, consistent with the company's recent actions to reduce these costs. AUSTRALIAN ELECTRIC OPERATIONS The first quarter 1999 earnings contribution from the company's Australian electric operations totaled $10 million, or $0.04 per share. The first quarter 1998 earnings contribution from Australian electric operations was $14 million, or $0.05 per share. The decreased earnings contribution from Australian operations was primarily attributable to increased purchased power costs. SCOTTISHPOWER MERGER In December 1998, PacifiCorp announced a proposed merger with ScottishPower PLC, a leading United Kingdom multi-utility. Under the terms of the agreement, each PacifiCorp share will be converted tax-free into a right to receive 0.58 American Depositary Shares (each ADS represents four ordinary shares) or 2.32 ordinary shares of ScottishPower. The proposed merger is subject to approval by the shareholders of both companies and federal and state regulators. Both companies have already received clearance under the Hart-Scott- Rodino Antitrust Improvements Act and from U.K. and Australian regulatory authorities for the proposed merger. Proceedings are currently underway before state regulators in PacifiCorp's western U.S. service territory. Both companies expect completion of the regulatory approval process to occur later this year. DISCONTINUED OPERATIONS In September 1998, the company decided to dispose of TPC Corporation and exit the eastern U.S. electricity trading business of PacifiCorp Power Marketing. As a result, the energy trading segment has been reported as discontinued operations in 1998. The eastern electricity trading business was shut down in the fourth quarter of 1998 and the company sold TPC to NIPSCO Industries, Inc. in the first quarter of 1999 for $150 million. UTAH RATE ORDER On March 4, 1999, the Utah Public Service Commission ordered PacifiCorp to reduce customer prices by 12 percent, or $85 million annually. The ordered rate reduction is the culmination of a general rate case in Utah that began in 1997. The company has decided not to appeal the ordered rate reduction to the Utah Supreme Court. 3 FIRST QUARTER 1999 EARNINGS ANALYSIS DOMESTIC ELECTRIC OPERATIONS EARNINGS CONTRIBUTION Domestic electric operations earnings contribution was $75 million, or $0.25 per share, in the first quarter of 1999 compared to $6 million, or $0.02 per share, in 1998. The first quarter of 1998 included a charge of $70 million, or $0.24 per share, associated the work force reduction. Excluding this charge, earnings contribution in 1998 would have been $76 million, or $0.26 per share. The Utah Rate Order reduced 1999 earnings $6 million, or $0.02 per share. This decrease was partially offset by lower interest expense and increased interest income totaling $11 million, or $0.04 per share, due to funds received by domestic electric operations as intercompany dividends from PacifiCorp Group Holdings Company (Holdings) of $500 million and $660 million in October 1998 and January 1999, respectively. REVENUES Total Domestic electric operations revenues decreased $270 million, or 25 percent, from the first quarter of 1998 to $807 million. This decrease was primarily attributable to a $259 million decrease in wholesale revenues. The sale of the company's Montana service area in November 1998 decreased revenues $12 million while the Utah rate order reduced revenues by $10 million. Residential revenues were down $1 million to $231 million. Excluding the impact of the sale of Montana, residential revenues were up $5 million, energy volumes were up 4 percent and customer growth was 2 percent. Growth in the average number of residential customers added $5 million to revenues. Volume increases added $3 million to revenues primarily due to colder weather. The Utah rate order reduced residential revenues by $4 million. Commercial revenues were down $2 million, or 1 percent, to $159 million. Excluding the impact of the sale of Montana, commercial revenues were up $1 million. Increased commercial customers added $5 million to revenues. The Utah rate order reduced commercial revenues by $4 million. Industrial revenues decreased $11 million, or 7 percent, to $152 million. Excluding the impact of the sale of Montana, industrial revenues were down $8 million, energy volumes were down 4 percent and average customers were down 4 percent. Decreased energy volumes due to the cyclical nature of industrial customer usage drove a $6 million decrease in revenues. The company does not expect this trend to be long-term. The Utah rate order reduced industrial revenues by $2 million. Wholesale sales decreased $259 million. The decrease in revenues was driven by a 57 percent decline in energy volumes. Lower short-term and spot market wholesale energy volumes decreased revenues by $264 million. Related energy prices averaged $20 per mWh in the quarter, a 3 percent increase over the prior year. The higher prices for these sales added $7 4 million to revenues in the quarter. This decline in energy volumes is consistent with the company's decision to scale back short-term wholesale sales. OPERATING EXPENSES Total operating expenses decreased $370 million, or 38 percent, to $612 million in the quarter. This decrease was primarily attributable to decreased purchased power expense due to the decline in wholesale sales and the special charge for the work force reduction that occurred in 1998. Purchased power expense decreased $249 million, to $210 million. The lower expense was primarily due to a 12.5 million mWh decrease in short-term firm and spot market energy purchases which decreased purchased power expense $243 million. Short-term firm and spot market purchase prices averaged $19 per mWh in the quarter versus $20 per mWh in 1998, a 5 percent decrease. The decrease in purchase prices reduced costs $9 million. Short-Term and Spot Market Sales and Purchases
1999 1998 ______ ______ Total sales volume (thousands of mWh) 5,719 18,900 Average sales price ($/mWh) $20.32 $19.77 ______ ______ Revenues ($, millions) $ 116 $ 374 Total purchase volume (thousands of mWh) 5,111 17,635 Average purchase price ($/mWh) $18.61 $19.70 ______ ______ Expenses ($,millions) $ 95 $ 347 ______ ______ Net ($, millions) $ 21 $ 27 ====== ======
Fuel expense was down $3 million, or 3 percent, to $120 million in 1999. Thermal generation was down 4 percent to 12.8 million mWh. The average cost per mWh increased to $9.31 from $9.17 in the prior year due to increased generation at plants with higher fuel costs. The shift in generation resulted from unscheduled plant outages. Hydroelectric generation increased 13 percent compared to the first quarter of 1998 due to favorable water conditions. Other operations and maintenance expense increased $2 million, or 2 percent, to $113 million. Increased tree trimming added $3 million to expenses, which was partially offset by a reduction in labor costs of $1 million. Administrative and general expenses decreased $5 million, or 7 percent, to $73 million primarily due to a reduction in labor and employee related costs of $12 million. This decrease was partially offset by a $6 million increase in costs relating to the ongoing implementation of the company's new SAP software operating environment and increased outside services of $2 million. OTHER INCOME/EXPENSE 5 Domestic electric operations interest expense was down $12 million to $68 million as a result of lower debt balances. The lower debt balances were due to dividends received from Holdings in October and January that were used to pay down intercompany debt owed to Holdings and some external debt. Interest income increased $5 million as a result of the dividends received from Holdings, some of which was invested in interest bearing accounts. AUSTRALIAN ELECTRIC OPERATIONS Australian Electric Operations First Quarter Results (In millions): ____________________________________________________
Change Change Due to Due to 1999 1998 Currency Operations ____ ____ ________ __________ Australian Electric Operations: ______________________________ Revenues $147 $163 $(8) $(8) Purchased power 59 58 (3) 4 Depreciation and amortization 15 15 (1) 1 Other operating expenses 38 49 (2) (9) ___ ___ __ __ Income from operations 35 41 (2) (4) Equity in losses of Hazelwood 4 3 - 1 Interest expense 14 16 (1) (1) ___ ___ __ __ Income before income taxes 17 22 (1) (4) Income taxes 7 8 - 1 ___ ___ __ __ Earnings contribution $ 10 $ 14 $(1) $(3) === === == ==
EARNINGS CONTRIBUTION The company's Australian electric operations contributed earnings of $10 million, or $0.04 per share, in the first quarter of 1999, compared to $14 million, or $0.05 per share in 1998. The currency exchange rate for converting Australian dollars to U. S. dollars was 0.63 in the first quarter of 1999 as compared to 0.67 in 1998, a 6 percent decrease. The effect of this change in exchange rates lowered revenues by $8 million and costs by $7 million in the first quarter of 1999. The following discussion excludes the effects of the lower currency exchange rate in 1999. REVENUE Australia's revenues decreased $8 million, or 5 percent, to $147 million. This decrease is attributable to a decline in energy volumes sold of 120 million kWh, or 4 percent. Energy volumes sold to contestable customers outside Powercor's franchise area were up 11 million kWh and added $1 million to revenues due to customer gains in Queensland and Australian Capital Territory. Inside Powercor's franchise area, revenues decreased $8 million due to a 131 million kWh decrease in energy sold. Volumes are down due to the loss of a few large contestable customers. 6 OPERATING EXPENSES Purchased power expense increased $4 million, or 7 percent, to $59 million. Higher average prices increased power costs by $6 million. Prices for purchased power averaged $22 per mWh in the first quarter of 1999 compared to $19 per mWh in the first quarter of 1998. This price increase was the result of a contract dispute Powercor is having with a power supplier in Australia. The power supplier did not deliver power to Powercor at the agreed upon rate which forced Powercor to purchase power on the open market at a higher rate than last year. Other operating expenses decreased $9 million, or 18 percent, to $38 million. Decreased network rates resulted in lower network fees of $2 million and an increase in customers inside Powercor's franchise area serviced by other energy suppliers resulted in higher network revenues of $6 million. OTHER BUSINESSES EARNINGS CONTRIBUTION Other operations reported income of $1 million in the quarter compared to losses of $39 million in the same period a year ago. The increase was primarily due to an $86 million pretax ($54 million after-tax) charge in the first quarter of 1998 for costs associated with the company's terminated bid for TEG. Results from other operations for the quarter were reduced by approximately $11 million, or $0.04 per share, in decreased interest income as the result of cash dividends of $500 million paid in November and $660 million paid in January by Holdings to domestic electric operations. This cash had been invested by Holdings in interest bearing accounts prior to the dividends. PacifiCorp and its Consolidated Subsidiaries Summary Financial Information (In Thousands, Except Per Share Amounts) (Unaudited)
3 Months Ended March 31 $ % 1999 1998 Change Change - ----------------------------------------------------------------------------------- REVENUES Domestic Electric Operations (See next page) $ 807,200 $1,077,000 $(269,800) (25) Australian Electric Operations (See next page) 147,000 162,500 (15,500) (10) Other Operations (1) 5,600 20,700 (15,100) (73) - ----------------------------------------------------------------------------------- TOTAL 959,800 1,260,200 (300,400) (24) - ----------------------------------------------------------------------------------- EXPENSES Domestic Electric Operations (See next page) 611,600 981,200 (369,600) (38) Australian Electric Operations 112,200 121,700 (9,500) (8) Other Operations (1) 8,500 17,100 (8,600) (50) - ----------------------------------------------------------------------------------- TOTAL 732,300 1,120,000 (387,700) (35) - ----------------------------------------------------------------------------------- INCOME (LOSS) FROM OPERATIONS Domestic Electric Operations 195,600 95,800 99,800 104 Australian Electric Operations 34,800 40,800 (6,000) (15) Other Operations (1) (2,900) 3,600 (6,500) * - ----------------------------------------------------------------------------------- TOTAL 227,500 140,200 87,300 62 Interest expense 88,000 94,300 (6,300) (7) Other (income) expense (9,700) 76,000 (85,700) (113) - ----------------------------------------------------------------------------------- Income from continuing operations before income taxes 149,200 (30,100) 179,300 * Income taxes 57,900 (15,500) 73,400 * - ----------------------------------------------------------------------------------- Income from continuing operations 91,300 (14,600) 105,900 * Discontinued operations (2) - (500) 500 100 - ----------------------------------------------------------------------------------- NET INCOME 91,300 (15,100) 106,400 * Preferred dividend requirement 4,800 4,800 - - - ----------------------------------------------------------------------------------- EARNINGS CONTRIBUTION (LOSS) ON COMMON STOCK (3) Domestic Electric Operations 75,400 5,600 69,800 * Australian Electric Operations 10,400 14,100 (3,700) (26) Other Operations (1) 700 (39,100) 39,800 102 - ----------------------------------------------------------------------------------- Continuing operations 86,500 (19,400) 105,900 * Discontinued operations (2) - (500) 500 100 - ----------------------------------------------------------------------------------- TOTAL $ 86,500 $ (19,900) $ 106,400 * ========================================== Average common shares outstanding 297,334 297,059 275 - EARNINGS PER COMMON SHARE - BASIC AND DILUTIVE Domestic Electric Operations $ 0.25 $ 0.02 $ 0.23 * Australian Electric Operations 0.04 0.05 (0.01) (20) Other Operations (1) - (0.14) 0.14 100 - ----------------------------------------------------------------------------------- Continuing operations 0.29 (0.07) 0.36 * Discontinued operations (2) - - - - - ----------------------------------------------------------------------------------- TOTAL $ 0.29 $ (0.07) $ 0.36 * =========================================== Dividends paid per common share $ 0.27 $ 0.27 $ - - =========================================== * Not a meaningful number. (See accompanying notes)
PacifiCorp and its Consolidated Subsidiaries Summary Financial Information (In Thousands, Except Per Share Amounts) (Unaudited)
3 Months Ended March 31 $ % 1999 1998 Change Change - ----------------------------------------------------------------------------------- DOMESTIC ELECTRIC REVENUES (In thousands) Residential $ 231,200 $ 231,800 $ (600) - Commercial 159,000 161,400 (2,400) (1) Industrial 151,800 162,700 (10,900) (7) Other 7,200 7,600 (400) (5) - ----------------------------------------------------------------------------------- Retail sales 549,200 563,500 (14,300) (3) Wholesale sales 240,000 499,100 (259,100) (52) Other 18,000 14,400 3,600 25 - ----------------------------------------------------------------------------------- TOTAL $ 807,200 $1,077,000 $ (269,800) (25) =========================================== DOMESTIC ELECTRIC ENERGY SALES (Millions of kWh) Residential 3,773 3,751 22 1 Commercial 2,993 2,992 1 - Industrial 4,628 4,891 (263) (5) Other 153 159 (6) (4) - ----------------------------------------------------------------------------------- Retail sales 11,547 11,793 (246) (2) Wholesale sales 9,636 22,443 (12,807) (57) - ----------------------------------------------------------------------------------- TOTAL 21,183 34,236 (13,053) (38) =========================================== DOMESTIC ELECTRIC EXPENSES (In thousands) Fuel $ 119,500 $ 122,700 $ (3,200) (3) Purchased power 209,700 458,700 (249,000) (54) Other operations and maintenance 112,600 110,600 2,000 2 Depreciation and amortization 97,000 98,100 (1,100) (1) Administrative and general 72,800 78,000 (5,200) (7) Special charges - 113,100 (113,100) (100) - ----------------------------------------------------------------------------------- TOTAL $ 611,600 $ 981,200 $ (369,600) (38) =========================================== AUSTRALIAN ELECTRIC REVENUES (In thousands) Residential $ 48,900 $ 48,600 $ 300 1 Commercial 50,200 53,300 (3,100) (6) Industrial 42,500 55,700 (13,200) (24) - ----------------------------------------------------------------------------------- Energy sales 141,600 157,600 (16,000) (10) Other 5,400 4,900 500 10 - ----------------------------------------------------------------------------------- TOTAL $ 147,000 $ 162,500 $ (15,500) (10) =========================================== AUSTRALIAN ELECTRIC ENERGY SALES (Millions of kWh) Residential 622 576 46 8 Commercial 1,080 1,040 40 4 Industrial 1,150 1,356 (206) (15) - ----------------------------------------------------------------------------------- TOTAL 2,852 2,972 (120) (4) =========================================== March December $ % 1999 1998 Change Change CONSOLIDATED CAPITALIZATION (In thousands) Common equity $3,968,000 $3,957,000 $ 11,000 - Preferred stock 241,000 241,000 - - Preferred securities of trusts holding solely PacifiCorp debentures 341,000 341,000 - - Long-term debt 4,519,000 4,559,000 (40,000) (1) Short-term debt 317,000 560,000 (243,000) (43) - ----------------------------------------------------------------------------------- TOTAL $9,386,000 $9,658,000 $ (272,000) (3) =========================================== * Not a meaningful number. (1) Other Operations includes the operations of PacifiCorp Financial Services, Inc. and several start-up phase ventures, as well as activities of PacifiCorp Group Holdings Company. (2) Represents the discontinued operations of the natural gas and wholesale electricity trading activities of TPC Corporation and PacifiCorp Power Marketing, respectively. (3) 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 Operations, (c) Amounts are net of preferred dividend requirements and minority interest.
-----END PRIVACY-ENHANCED MESSAGE-----