-----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, ApIVWLC2dzd5h3rnRyo6J4TRXbWlu4cqGxMg3qi1GJtg6pSUhuK1KbkqHCo05Som AEnxr3ijMqyhG0VW2yDaLw== 0000075594-99-000012.txt : 19990630 0000075594-99-000012.hdr.sgml : 19990630 ACCESSION NUMBER: 0000075594-99-000012 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 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: 10-K/A SEC ACT: SEC FILE NUMBER: 001-05152 FILM NUMBER: 99654879 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 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 2 (Mark One) /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 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 Identification No.) of incorporation or organization) 825 N.E. Multnomah, Portland, Oregon 97232 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (503) 813-5000 Securities registered pursuant to section 12(b) of the Act: Name of each exchange Title of each Class on which registered ___________________ _____________________ Common Stock New York Stock Exchange Pacific Stock Exchange 8 3/8% Quarterly Income Debt Securities New York Stock Exchange (Junior Subordinated Deferrable Interest Debentures, Series A) 8.55% Quarterly Income Debt Securities New York Stock Exchange (Junior Subordinated Deferrable Interest Debentures, Series B) 8 1/4% Cumulative Quarterly Income New York Stock Exchange Preferred Securities, Series A, of PacifiCorp Capital I 7.70% Cumulative Quarterly Income New York Stock Exchange Preferred Securities, Series B, of PacifiCorp Capital II Securities registered pursuant to Section 12(g) of the Act: Title of each Class ___________________ 5% Preferred Stock (Cumulative; $100 Stated Value) Serial Preferred Stock (Cumulative; $100 Stated Value) No Par Serial Preferred Stock (Cumulative; Various Stated Values) 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] On February 1, 1999, the aggregate market value of the shares of voting and nonvoting common equity of the Registrant held by nonaffiliates was approximately $6.5 billion. As of March 1, 1999, there were 297,331,433 shares of the Registrant's common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE None PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. The list of all financial statements filed as a part of this report is included in ITEM 8. 2. Schedules:* - ---------- * All schedules have been omitted because of the absence of the conditions under which they are required or because the required information is included elsewhere in the financial statements included under ITEM 8. 3. Exhibits: *(2)a -- Agreement and Plan of Merger, dated as of December 6, 1998, by and among Scottish Power plc, NA General Partnership, Scottish Power NA 1 Limited and Scottish Power NA 2 Limited. (Incorporated by reference to Exhibit 1 to the Form 6-K, dated December 11, 1998, filed by Scottish Power plc, File No. 1- 14676). (2)b -- Amended and Restated Agreement and Plan of Merger, dated as of December 6, 1998, as amended as of January 29, 1999 and February 9, 1999, and amended and restated as of February 23, 1999, by and among New Scottish Power PLC, Scottish Power plc, NA General Partnership and PacifiCorp. *(2)c -- Stock Purchase Agreement, dated as of June 11, 1997, by and among PacifiCorp Holdings, Inc., Pacific Telecom, Inc., Century Telephone Enterprises, Inc. and Century Cellunet, Inc. (Incorporated by reference to Exhibit 2.1 of Century Telephone Enterprises, Inc.'s Current Report on Form 8-K dated June 11, 1997, File No. 1-7784). *(3)a -- Third Restated Articles of Incorporation of the Company (Exhibit (3)b, Form 10-K for the fiscal year ended December 31, 1996, File No. 1-5152). (3)b -- Bylaws of the Company as amended November 18, 1998. *(4)a -- Mortgage and Deed of Trust dated as of January 9, 1989, between the Company and Morgan Guaranty Trust Company of New York (The Chase Manhattan Bank, successor), Trustee, as supplemented and modified by twelve Supplemental Indentures (Exhibit 4-E, Form 8-B, File No. 1-5152; Exhibit (4)(b), File No. 33-31861; Exhibit (4)(a), Form 8-K dated January 9, 1990, File No. 1-5152; Exhibit 32 4(a), Form 8-K dated September 11, 1991, File No. 1-5152; Exhibit 4(a), Form 8-K dated January 7, 1992, File No. 1-5152; Exhibit 4(a), Form 10-Q for the quarter ended March 31, 1992, File No. 1-5152; and Exhibit 4(a), Form 10-Q for the quarter ended September 30, 1992, File No. 1-5152; Exhibit 4(a), Form 8-K dated April 1, 1993, File No. 1-5152; Exhibit 4(a), Form 10-Q for the quarter ended September 30, 1993, File No. 1-5152; Exhibit 4(a), Form 10-Q for the quarter ended June 30, 1994, File No. 1-5152; Exhibit (4)b, Form 10-K for the fiscal year ended December 31, 1994, File No. 1-5152; and Exhibit (4)b, Form 10-K for the fiscal year ended December 31, 1995, File No. 1-5152; Exhibit (4)b, Form 10-K for the fiscal year ended December 31, 1996, File No. 1-5152). (4)b -- Thirteenth Supplemental Indenture, dated as of November 1, 1998. *(4)c -- Third Restated Articles of Incorporation and Bylaws. See (3)a and (3)b above. In reliance upon item 601(4)(iii) of Regulation S-K, various instruments defining the rights of holders of long-term debt of the Registrant and its subsidiaries are not being filed because the total amount authorized under each such instrument does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish a copy of any such instrument to the Commission upon request. *+(10)a -- PacifiCorp Deferred Compensation Payment Plan, as amended (Exhibit 10-F, Form 10-K for fiscal year ended December 31, 1992, File No. 1-8749) (Exhibit (10)b, Form 10-K for fiscal year ended December 31, 1994, File No. 1-5152). +(10)b -- PacifiCorp Compensation Reduction Plan dated December 1, 1994, as amended. *+(10)c -- PacifiCorp Executive Incentive Program (Exhibit (10)d, Form 10-K for the fiscal year ended December 31, 1996, File No. 1-5152). *+(10)d -- PacifiCorp Non-Employee Directors' Stock Compensation Plan dated August 1, 1985, as amended (Exhibit (10)f, Form 10-K for fiscal year ended December 31, 1994, File No. 1-5152). +(10)e -- PacifiCorp Long Term Incentive Plan, 1993 Restatement, as amended. *+(10)f -- Form of Restricted Stock Agreement under PacifiCorp Long-Term Incentive Plan, 1993 Restatement, as amended (Exhibit 10H, Form 10-K for the year ended December 31, 1993, File No. 0-873). +(10)g -- PacifiCorp Supplemental Executive Retirement Plan, as amended. *+(10)h -- Incentive Compensation Agreement dated as of February 1, 1994 between PacifiCorp and Frederick W. Buckman (Exhibit (10)k, Form 33 10-K for the fiscal year ended December 31, 1993, File No. 1-5152). *+(10)i -- Compensation Agreement dated as of February 9, 1994 between PacifiCorp and Keith R. McKennon, as amended (Exhibit (10)m, Form 10-K for the fiscal year ended December 31, 1993, File No. 1-5152). *+(10)j -- Amendment No. 1 to Compensation Agreement between PacifiCorp and Keith R. McKennon dated as of February 9, 1995 (Exhibit (10)r, Form 10-K for the fiscal year ended December 31, 1994, File No. 1-5152). +(10)k -- PacifiCorp Stock Incentive Plan dated August 14, 1996, as amended. +(10)l -- Form of Restricted Stock Agreement under PacifiCorp Stock Incentive Plan, as amended. +(10)m -- PacifiCorp 1998 Restricted Stock Program. +(10)n -- Form of Nonstatutory Stock Option Agreement under PacifiCorp Stock Incentive Plan. +(10)o -- PacifiCorp Executive Severance Plan, as amended. +(10)p -- Severance Agreement between PacifiCorp and Frederick W. Buckman dated as of September 18, 1998. +(10)q -- Employment Agreement between PacifiCorp and Keith R. McKennon dated as of December 4, 1998. *(10)r -- Short-Term Surplus Firm Capacity Sale Agreement executed July 9, 1992 by the United States of America Department of Energy acting by and through the Bonneville Power Administration and Pacific Power & Light Company (Exhibit (10)n, Form 10-K for the fiscal year ended December 31, 1992, File No. 1-5152). *(10)s -- Restated Surplus Firm Capacity Sale Agreement executed September 27, 1994 by the United States of America Department of Energy acting by and through the Bonneville Power Administration and Pacific Power & Light Company (Exhibit (10)t, Form 10-K for the fiscal year ended December 31, 1994, File No. 1-5152). (12)a -- Statements of Computation of Ratio of Earnings to Fixed Charges (See page S-1). (12)b -- Statements of Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (See page S-2). (21) -- Subsidiaries (See page S-3). (23)a -- Consent of Deloitte & Touche LLP with respect to Annual Report on Form 10-K. #(23)b -- Consent of Deloitte & Touche LLP with respect to Annual Report on Form 11-K. 34 (24) -- Powers of Attorney. (27) -- Financial Data Schedule (filed electronically only). #(99) -- Annual Report on Form 11-K of the PacifiCorp K Plus Employee Savings Plan for the fiscal year ended December 31, 1998. - ----------- *Incorporated herein by reference. +This exhibit constitutes a management contract or compensatory plan or arrangement. #Filed with Amendment No. 2. (b) Reports on Form 8-K. On Form 8-K and Form 8-K/A Amendment No. 1 dated December 7, 1998, under "Item 5. Other Events," the Company filed a news release concerning a merger agreement between the Company, Scottish Power plc, NA General Partnership, Scottish Power NA 1 Limited and Scottish Power NA 2 Limited. On Form 8-K, dated February 16, 1999, under "Item 5. Other Events," the Company filed a news release announcing an agreement to sell TPC Corporation. (c) See (a) 3. above. (d) See (a) 2. above. 35 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 /s/ROBERT R. DALLEY By_______________________________________ Robert R. Dalley (Controller and Chief Accounting Officer) Date: June 29, 1999 36 EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE _______ ___________ ____ (23)b Consent of Independent Public Accountants for the K Plus Form 11-K (filed electronically) (99) Annual Report on Form 11-K of the PacifiCorp K Plus Employee Savings Plan for the fiscal year ended December 31, 1998 (filed electronically)
EX-23 2 Deloitte & Touche LLP ___________ _____________________________________________________ Suite 3900 Telephone:(503)222-1341 111 S.W. Fifth Avenue Facsimile:(503)224-2172 Portland, Oregon 97204-3698 EXHIBIT (23)b INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 33-58461 of PacifiCorp on Form S-8 of our report dated June 18, 1999, appearing in this Annual Report on Form 11-K of the PacifiCorp K Plus Employee Savings Plan for the year ended December 31, 1998. DELOITTE & TOUCHE LLP June 25, 1999 EX-99 3 EXHIBIT (99) SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ____________________ FORM 11-K ____________________ /X/ Annual report pursuant to Section 15(d) of the Securities Exchange Act of _ 1934 For the Fiscal Year Ended December 31, 1998 OR /_/ Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to ________ Commission file number 1-5152 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: PACIFICORP 825 N.E. Multnomah Suite 2000 Portland, Oregon 97232 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN TABLE OF CONTENTS ______________________________________________________________________________
PAGE INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-10 SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1998: Item 27a - Schedule of Assets Held for Investment Purposes 11-12 Item 27d - Schedule of Reportable Transactions - Series 13 Item 27d - Schedule of Reportable Transactions - Single 14 Schedules not filed herewith are omitted because of the absence of conditions under which they are required.
1 INDEPENDENT AUDITORS' REPORT To the Trustees of PacifiCorp K Plus Employee Savings Plan: We have audited the accompanying statements of net assets available for benefits of the PacifiCorp K Plus Employee Savings Plan (the "Plan") as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules, listed in the Table of Contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The schedules have been subjected to the auditing procedures applied in our audit of the basic 1998 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic 1998 financial statements taken as a whole. June 18, 1999 2 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998 AND 1997 ______________________________________________________________________________
1998 1997 ASSETS: Investments at fair value (Notes 3 and 6): PacifiCorp common stock (Note 5) $137,706,819 $223,167,149 Mutual Funds 377,098,651 332,279,712 Guaranteed investment contracts 71,796,831 75,018,303 Temporary cash investments 10,527,899 9,016,012 Participant loans 31,779,309 32,076,981 ___________ ___________ Total investments 628,909,509 671,558,157 ___________ ___________ Receivables: Due from brokers for securities sold 247,866 53,793,960 Dividends and interest 651,717 1,605,639 ___________ ___________ Total receivables 899,583 55,399,599 ___________ ___________ Total assets 629,809,092 726,957,756 ___________ ___________ LIABILITIES - Due to brokers for securities purchased 1,767,237 4,521,879 ___________ ___________ NET ASSETS AVAILABLE FOR BENEFITS $628,041,855 $722,435,877 =========== =========== See notes to financial statements.
3 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998 AND 1997 ______________________________________________________________________________
1998 1997 INCREASES (DECREASES) TO NET ASSETS ATTRIBUTED TO: Investment income (Note 3): Net appreciation (depreciation) in fair value of investments (Note 4) $(16,073,242) $102,850,752 Dividends 28,270,948 33,301,828 Interest 7,087,821 7,039,019 ___________ ___________ Total investment income 19,285,527 143,191,599 Participant contributions 49,890,267 41,568,843 Merged from Utah Power & Light Savings and Stock Purchase Plan of PacifiCorp (Note 7) - 156,965,997 Transfers and other receipts 3,820,772 - ___________ ___________ Total increases 72,996,566 341,726,439 ___________ ___________ DECREASES TO NET ASSETS ATTRIBUTED TO: Participant withdrawals 93,525,244 38,230,432 Administrative expenses 297,494 405,327 Transfers to Century Plan (Note 2) 73,567,850 8,273,341 ___________ ___________ Total decreases 167,390,588 46,909,100 ___________ ___________ NET INCREASE (DECREASE) (94,394,022) 294,817,339 NET ASSETS AVAILABLE FOR BENEFITS BEGINNING OF YEAR 722,435,877 427,618,538 ___________ ___________ NET ASSETS AVAILABLE FOR BENEFITS END OF YEAR $628,041,855 $722,435,877 =========== =========== See notes to financial statements.
4 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 ______________________________________________________________________________ 1. PLAN DESCRIPTION The following brief description of the PacifiCorp K Plus Employee Savings Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. GENERAL - Effective January 1, 1988, PacifiCorp (the "Company") and most of its subsidiaries ("Employers") adopted the Plan. The Plan is a tax-qualified employee savings plan covering all employees of the Employers, except employees identified as "casual employees" within the Employers' payroll systems, employees covered by a collective bargaining agreement that does not provide for participation in the Plan, leased employees, and temporary employees. Qualified employees of the Employers become eligible to participate after completing one month of service as defined in the Plan document. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). PARTICIPANT CONTRIBUTIONS - Participants may elect to contribute a percentage of their pre-tax annual compensation as defined in the Plan ("Pre-Tax Contributions"). Different percentages can apply to separate Employers, but in no event will the percentage be more than 16% of eligible compensation, or 14% for certain participants eligible to participate in the PacifiCorp K Plus Employee Stock Ownership Plan due to Internal Revenue Service regulations. Each Employer makes a matching contribution each year for each participant ("Matching Contribution"). The Matching Contribution is a percentage of the participant's Pre-Tax Contribution for the year, up to 6% of the participant's compensation for the year. The Matching Contribution percentage is 50% or a percentage fixed in the Employer's adoption statement or by resolution of the Board of Directors of the Employer and announced to participants, or pursuant to a collective bargaining agreement. Other than for employees covered by certain collective bargaining agreements, the Matching Contribution is made to the PacifiCorp K Plus Employee Stock Ownership Plan. VESTING - Pre-Tax Contributions are fully vested at all times. Matching Contributions are vested based on years of service as follows:
YEARS OF SERVICE PERCENT VESTED ________________ ______________ Less than 1 0% 1 20% 2 40% 3 60% 4 80% 5 or more 100%
PARTICIPANT ACCOUNTS - Each participant's account is credited with Pre-Tax Contributions, Matching Contributions, where applicable, and an allocation of the Plan's net earnings or losses. Pre-Tax Contributions are credited based on the participant's election, Matching Contributions are credited 5 according to the formula defined in the Plan document, and Plan earnings are allocated based on participant account balances. PARTICIPANT WITHDRAWALS - Vested benefits are payable in a lump sum upon retirement, termination, death or disability. If the participant's account balance exceeds $5,000, the participant may defer payment, or upon retirement, elect installment payments over a specified period of time not exceeding 15 years from the date of commencement of benefits. The Plan also provides for withdrawals due to financial hardship. PARTICIPANT LOANS - Participants may borrow from their account balance a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance under the Plan. Loan terms range from 1 to 5 years or up to 15 years for the purchase of a primary residence, except for some loans which are transferred in from other plans which keep the existing terms. The loans bear interest at a rate commensurate with local prevailing rates and are secured by the balance in the participant's account and an assignment of current pay of the participant sufficient to service the loan. PLAN TERMINATION - Although it has not expressed any intentions to do so, the Company may wholly or partially terminate the Plan or direct the discontinuance of contributions at any time, subject to the provisions of ERISA. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The financial statements of the Plan are prepared under the accrual method of accounting. INVESTMENT VALUATION - The investment in PacifiCorp common stock is stated at fair value based on published market quotations at year end. The per share market values of the PacifiCorp common stock at December 31, 1998 and 1997 were $21.0625 and $27.313, respectively. The Plan's investments in guaranteed investment contracts are stated at contract value which represents contributions made under the contract, plus earnings, less withdrawals. Plan management believes that the contract value approximates fair value for the guaranteed investment contracts. The average yield to maturity of the guaranteed investment contracts was 6.6% at December 31, 1998 and 6.39% at December 31, 1997. There were no valuation reserves at December 31, 1998 and 1997. Investments in mutual funds are stated at fair value based on quoted market prices. Temporary cash investments and participant loans are stated at cost which approximates fair value. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME - Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Interest income is recorded as earned. Dividend income is recorded on the ex-dividend date. TAX STATUS - The Plan is a tax-qualified retirement plan in accordance with Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and related provisions. The Plan includes elective contribution provisions designed to qualify under Code Section 401(k) and related provisions. The Company has received a determination letter dated June 23, 1993 in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Code. The Plan has been amended since receiving the determination letter. However, Plan management believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 6 BENEFITS PAYABLE - As of December 31, 1998 and 1997, net assets available for benefits included benefits of zero and $73,567,850, respectively, due to participants who have withdrawn from participation in the Plan. On November 30, 1997, Pacific Telecom, Inc. ("PTI") active employees ceased participation in the Plan as a result of the sale of PTI, an indirect subsidiary of PacifiCorp, to Century Telephone Enterprises, Inc. ("Century"). These participants' balances totaling $73,567,850 were transferred to a similar plan sponsored by Century. ADMINISTRATIVE EXPENSES - The Plan provides that each employer may pay administrative costs and expenses of the Plan; those costs not paid by each employer are paid from Plan assets. PARTICIPANT LOANS - Loan transactions are treated as a transfer between the investment funds and the Participant Loan Fund. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases to net assets during the reporting period. Actual results could differ from those estimates. 3. INVESTMENT PROGRAMS AND BY FUND INFORMATION Upon enrollment in the Plan, a participant may direct participant contributions in any of the following funds: A. The Equity Fund, which consists primarily of equity investments. B. The Balanced Fund, which consists primarily of equity investments and bonds. C. The Bond Fund, which consists primarily of mortgage-backed securities, U.S. treasury bonds, and corporate bonds. D. The Stable Asset Fund, which consists primarily of guaranteed investment contracts. E. The PacifiCorp Stock Fund, which consists of PacifiCorp common stock. F. The Money Market Fund, which consists solely of U.S. treasury securities. G. The Aggressive Equity Fund, which consists of equity instruments of smaller and medium sized companies. H. The International Equity Fund, which consists of equity instruments of non-U.S. companies. I. The Life Path Funds, which consist of various proportions of equity instruments and fixed income and debt instruments. There are five Life Path Funds from which the participant may choose. J. The S&P 500 Index Fund, which consists primarily of a fund investing in a portfolio of common stocks designed to match the overall return of the S&P 500 index. The participant loan fund is used to account for loans to participants. 7 Net assets, investment income, participant contributions, and participant withdrawals/loan disbursements by fund are as follows for the years ended December 31, 1998 and 1997:
1998 1997 Net assets: Equity Fund $162,427,800 $172,375,714 Balanced Fund 82,713,662 100,996,070 Bond Fund 16,675,702 12,524,889 Stable Asset Fund 81,424,097 85,742,096 PacifiCorp Stock Fund 139,095,633 223,664,651 Money Market Fund 8,609,855 9,409,296 Aggressive Equity Fund 54,343,416 51,066,856 International Equity Fund 7,828,574 8,608,728 Life Path 2000 1,591,290 1,444,602 Life Path 2010 6,160,978 5,452,597 Life Path 2020 6,695,223 5,508,703 Life Path 2030 5,754,979 3,954,200 Life Path 2040 10,272,015 7,040,971 S&P 500 Index Fund 9,593,719 - Pending distribution account 724,149 164,116 Pending investment account 2,344,591 2,401,665 Participant Loans Fund 31,786,172 32,080,723 ___________ ___________ Total $628,041,855 $722,435,877 =========== =========== Investment income: Equity Fund $ 28,579,511 $ 29,156,573 Balanced Fund 5,336,895 15,469,098 Bond Fund 1,215,421 1,004,152 Stable Asset Fund 5,094,362 5,596,940 PacifiCorp Stock Fund (40,191,520) 78,855,177 Money Market Fund 391,965 385,281 Aggressive Equity Fund 9,922,752 8,521,807 International Equity Fund 1,142,891 89,264 Life Path 2000 148,975 72,643 Life Path 2010 819,052 457,833 Life Path 2020 1,027,759 577,578 Life Path 2030 912,364 354,946 Life Path 2040 1,706,073 537,837 S&P 500 Index Fund 984,372 - Pending distribution account 69,015 40,173 Pending investment account 99,977 60,456 Participant Loans Fund 2,025,663 2,011,841 ___________ ___________ Total $ 19,285,527 $143,191,599 =========== ===========
8
1998 1997 Participant contributions: Equity Fund $14,107,975 $10,703,407 Balanced Fund 8,946,671 6,630,115 Bond Fund 1,596,601 840,904 Stable Asset Fund 6,299,826 4,335,619 PacifiCorp Stock Fund 7,367,260 10,198,629 Money Market Fund 1,092,508 570,108 Aggressive Equity Fund 5,783,405 5,558,156 International Equity Fund 1,027,049 1,143,822 Life Path 2000 308,773 85,033 Life Path 2010 794,925 390,043 Life Path 2020 725,090 425,079 Life Path 2030 611,194 279,841 Life Path 2040 1,131,385 408,087 S&P 500 Index Fund 97,605 - __________ __________ Total $49,890,267 $41,568,843 ========== ========== Participant withdrawals: Equity Fund $23,356,336 $ 7,447,532 Balanced Fund 14,602,271 4,601,860 Bond Fund 2,634,958 717,351 Stable Asset Fund 18,104,904 10,757,919 PacifiCorp Stock Fund 17,494,135 11,073,305 Money Market Fund 7,576,660 2,153,372 Aggressive Equity Fund 5,026,563 2,737,408 International Equity Fund 930,464 250,003 Life Path 2000 562,698 7,631 Life Path 2010 915,746 195,655 Life Path 2020 328,706 109,943 Life Path 2030 295,868 138,654 Life Path 2040 779,153 86,881 S&P 500 Index Fund 133,285 - Pending distribution account (491,056) 106,749 Participant Loans Fund 1,274,553 (2,153,831) __________ __________ Total $93,525,244 $38,230,432 ========== ===========
The pending accounts consist of cash held at year end awaiting investment or distribution. 9 4. NET APPRECIATION IN FAIR VALUE OF INVESTMENTS For the years ended December 31, 1998 and 1997, the Plan's investments appreciated (depreciated) in fair value as follows:
1998 1997 PacifiCorp common stock $(47,380,758) $ 72,355,508 Mutual funds 31,307,516 30,495,244 ___________ ___________ Net appreciation (depreciation) in fair value of investments $(16,073,242) $102,850,752 =========== ===========
5. RELATED-PARTY TRANSACTIONS Certain Plan investments are shares of PacifiCorp common stock and the Bankers Trust Pyramid Direct Account Cash Fund and Pyramid Equity Index Fund. PacifiCorp is the Plan Sponsor and Bankers Trust is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Purchases of employer-related stock during the years ended December 31, 1998 and 1997 were as follows:
PacifiCorp Common Stock _______________________ Number of Shares Cost Balance, December 31, 1996 3,319,635 $ 62,744,661 Purchases and transfers in 7,354,153 139,594,094 Sales (2,400,583) (44,572,489) Distributed to participants (102,475) (1,642,417) __________ ___________ Balance, December 31, 1997 8,170,730 $156,123,849 Purchases and transfers in 1,121,284 23,208,724 Sales (2,516,185) (48,803,676) Distributed to participants (237,975) (4,541,255) __________ ___________ Balance, December 31, 1998 6,537,854 $125,987,642 ========== ===========
6. INVESTMENTS EXCEEDING 5% OF NET ASSETS AVAILABLE FOR BENEFITS Investments which exceeded 5% of net assets available for benefits as of December 31, 1998 and 1997 are as follows:
1998 1997 PacifiCorp Common Stock $137,706,819 $223,167,149 Dodge & Cox Balanced Fund 82,720,847 87,673,966 Columbia Management Equity Fund - 151,552,744 MFS-MIT Class 1 Equity Fund 162,373,717 - Putnam New Opportunities Fund 54,368,533 44,679,604 Participant Loan Account 31,779,309 -
10 7. MERGER FROM OTHER PLAN Effective July 1, 1997, the Utah Power & Light Company Savings and Stock Purchase Plan of PacifiCorp ("UP&L Plan") was merged into the Plan. As a result of the merger, the net assets available for benefits of the UP&L Plan were transferred into the Plan on that date. The assets transferred consisted of $29,564 in cash, 5,951,200 shares of PacifiCorp common stock valued at $131,298,350 at July 1, 1997, participant loan investment balances totaling $6,662,667, equity funds totaling $12,072,786, balanced funds totaling $1,189,797, and stable asset funds totaling $5,712,833. Participants of the UP&L Plan became participants of the Plan as of July 1, 1997. 8. CONCENTRATION OF RISK The Plan's assets consist primarily of financial instruments including temporary cash investments, investment contracts, PacifiCorp common stock, mutual funds, and participant loans. These financial instruments may subject the Plan to concentrations of risk, as from time to time, cash balances exceed amounts insured by the Federal Deposit Insurance Corporation, market value of securities are dependent on the ability of the issuers to honor contractual commitments, and investments in common stock are subject to changes in market values of the stock. * * * * * * 11 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1998 ______________________________________________________________________________
SHARES (b) IDENTITY OF ISSUE, BORROWER, OR (e) OR SIMILAR PARTY/ FACE (d) CURRENT (a) (c) DESCRIPTION OF INVESTMENT VALUE COST VALUE COMMON STOCK: * PacifiCorp common stock 6,537,854 $125,987,642 $137,706,819 ___________ ___________ MUTUAL FUNDS: Dodge & Cox Balanced Fund 1,268,336 76,207,997 82,720,847 PIMCO Total Return Fund 1,579,884 17,017,337 16,651,975 MFS-MIT Class 1 Equity Fund 8,014,497 153,628,111 162,373,717 USTPN Capital Preservation Fund 144,577 3,933,680 4,520,048 Putnam New Opportunities Fund 930,490 42,097,859 54,368,533 T. Rowe Price International Stock Fund 519,238 7,390,134 7,783,370 Vanguard Admiral Funds Inc. 8,566,203 8,566,203 8,566,203 Life Path 2000 Fund 136,866 1,580,744 1,593,125 Life Path 2010 Fund 428,794 5,743,704 6,174,631 Life Path 2020 Fund 406,743 6,041,947 6,703,122 Life Path 2030 Fund 306,688 5,143,243 5,744,266 Life Path 2040 Fund 505,256 9,387,624 10,271,859 * Bankers Trust Pyramid Equity Index Fund (S&P 500 Index Fund) 3,296 8,686,733 9,626,955 ___________ ___________ Total Mutual Funds 345,425,316 377,098,651 ___________ ___________ GUARANTEED INVESTMENT CONTRACTS: Commonwealth Life Insurance, 6.46%, 10/24/02 3,750,463 3,750,463 First Allmerica Financial Life Ins., 6.95%, due 5/12/99 1,025,924 1,025,924 First Allmerica Financial Life Ins., 6.95%, due 3/12/99 1,025,924 1,025,924 Safeco Life Ins., 6.88%, due 11/10/99 1,580,818 1,580,818 Safeco Life Ins., 6.88%, due 9/11/00 1,580,818 1,580,818 Transamerican Occidental, 5.60%, due 7/22/00 4,358,306 4,358,306 Hartford Life, 7.51%, due 7/27/99 1,369,240 1,369,240 Principal Mutual, 7.40%, due 4/23/99 2,071,727 2,071,727 ___________ ___________ Forward 16,763,220 16,763,220 (Continued)
12 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1998 ______________________________________________________________________________
SHARES (b) IDENTITY OF ISSUE, BORROWER, OR (e) OR SIMILAR PARTY/ FACE (d) CURRENT (a) (c) DESCRIPTION OF ASSET VALUE COST VALUE GUARANTEED INVESTMENT CONTRACTS (Continued): Forward $ 16,763,220 $ 16,763,220 Life of Virginia, 7.40%, due 6/28/99 2,745,848 2,745,848 New York Life, 7.45%, due 7/23/99 1,021,192 1,021,192 New York Life, 7.45%, due 9/23/99 1,021,192 1,021,192 New York Life, 5.70%, due 10/29/99 886,011 886,011 Business Mens Co., 5.63%, due 1/15/99 1,400,210 1,400,210 Safeco Life, 6.88%, due 11/9/00 1,580,818 1,580,818 Bayerische Landesbank Girozentrale, 6.89%, due 3/15/01 4,240,867 4,240,867 Security Life of Denver, 6.70%, due 3/1/02 4,724,492 4,724,492 TransAmerica Occidental Life, 7.22%, due 5/15/02 3,364,261 3,364,261 Principal Mutual Life, 7.20%, due 9/3/02 2,231,501 2,231,501 Principal Mutual Life, 6.34%, due 2/15/02 3,710,634 3,710,634 Canada Life Assurance Co., 6.00%, due 8/15/01 3,639,604 3,639,604 Metropolitan Life Ins. Co., 6.18%, due 3/27/03 2,590,735 2,590,735 Life Ins. Co. of Virginia, 5.94%, due 2/18/03 3,661,301 3,661,301 State St. Bank & Trust, 4.12%, due 6/30/03 5,519,135 5,519,135 Commonwealth Life Ins. Co., 6.38%, due 10/24/01 3,228,385 3,228,385 Metropolitan Life Ins. Co., 6.55%, due 12/16/02 4,364,710 4,364,710 Bayerische Landesbank Girozentrale, 6.24%, due 11/15/01 2,025,986 2,025,986 Security Life of Denver, 6.96%, due 7/17/01 3,076,729 3,076,729 ___________ ___________ Total Guaranteed Investment Contracts 71,796,831 71,796,831 ___________ ___________ PARTICIPANT LOANS: Interest rates ranging from 6.5% to 12.5% 31,779,309 31,779,309 ___________ ___________ TEMPORARY CASH INVESTMENTS: * Bankers Trust Pyramid Directed Account Cash Fund 10,527,899 10,527,899 ___________ ___________ TOTAL INVESTMENTS $585,516,997 $628,909,509 =========== =========== * Denotes parties-in-interest (Concluded)
13 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS - SERIES YEAR ENDED DECEMBER 31, 1998 ______________________________________________________________________________________________________________________ __ Transactions reportable as defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, are as follows:
(h) (f) Current Expense Value of (a) (b) (c) (d) (e) Incurred (g) Asset on (i) Identity of Description Purchase Selling Lease with Cost of Transaction Net Gain/ Party Involved of Asset Price Price Rental Transaction Asset Date (Loss) *Bankers Trust Pyramid Directed Account Cash Fund $281,671,848 $ - $ - $ - $281,671,848 $281,671,848$ - *Bankers Trust Pyramid Directed Account Cash Fund - 280,049,470 - - 280,049,470 280,049,470- Bankers Trust Dodge & Cox Balanced Fund 21,969,757 - - - 21,969,757 21,969,757- Bankers Trust Dodge & Cox Balanced Fund - 24,689,319 - - 21,922,339 24,689,3192,766,980 Bankers Trust Columbia Common Stock Fund Inc. 22,865,010 - - - 22,865,010 22,865,010- Bankers Trust Columbia Common Stock Fund Inc. - 186,194,367 - - 158,181,218 186,194,36728,013,149 Bankers Trust Putnam New Oppor- tunities Fund 21,664,694 - - - 21,664,694 21,664,694- Bankers Trust Putnam New Oppor- tunities Fund - 20,154,219 - - 17,190,899 20,154,2192,963,320 *Bankers Trust PacifiCorp Common Stock 23,187,601 - - - 23,187,601 23,187,601- *Bankers Trust PacifiCorp Common Stock - 41,498,967 - - 34,591,483 41,498,9676,907,484 Bankers Trust MFS-MIT Class 1 Equity Fund 161,102,757 - - - 161,102,757 161,102,757- Bankers Trust MFS-MIT Class 1 Equity Fund - 7,745,006 - - 7,474,645 7,745,006270,361 *Denotes party-in-interest.
14 PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS - SINGLE YEAR ENDED DECEMBER 31, 1998 ______________________________________________________________________________________________________________________ __ Transactions reportable as defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, are as follows:
(h) (f) Current Expense Value of (a) (b) (c) (d) (e) Incurred (g) Asset on (i) Identity of Description Purchase Selling Lease with Cost of Transaction Net Gain/ Party Involved of Asset Price Price Rental Transaction Asset Date (Loss) Bankers Trust Columbia Common Stock Fund Inc. $ - $151,802,204 $ - $ - $128,852,392 $151,802,204 $22,949,812 Bankers Trust Massachusetts Investors Trust-1 151,802,204 - - - 151,802,204 151,802,204-
15 SIGNATURE The Plan. Pursuant to the requirements of the Securities Exchange Act of ________ 1934, the K Plus Employee Savings Administrative Committee, which administers the Plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunder duly authorized. PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN /s/WILLIAM E. PERESSINI William E. Peressini, Committee Member June 29, 1999 -----END PRIVACY-ENHANCED MESSAGE-----