-----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, UCqjM0DmZMrqBIXdvA26eVNGDNyUGRDGwxDR/XEpCN5FEzxET1AQIZvgHVLfND1D mtExmhqytV0BZarMMSqLnQ== 0000912057-94-003552.txt : 19941027 0000912057-94-003552.hdr.sgml : 19941027 ACCESSION NUMBER: 0000912057-94-003552 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19941026 SROS: NYSE SROS: PSE 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: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-55309 FILM NUMBER: 94555261 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 424B3 1 424B3 THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION OR AMENDMENT AND PROSPECTIVE PURCHASERS ARE REFERRED TO THE RELATED FINAL PROSPECTUS SUPPLEMENT FOR DEFINITIVE INFORMATION ON ANY MATTER CONTAINED HEREIN. NEITHER THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. Rule 424(b)(3) File Number 33-55309 SUBJECT TO COMPLETION, DATED OCTOBER 25, 1994 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 17, 1994 $75,000,000 [LOGO] % JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES, SERIES A, DUE 2024 -------------- Interest on the % Junior Subordinated Deferrable Interest Debentures, Series A, Due 2024 (the "Series A Junior Subordinated Debentures") is payable on June 30 and December 31 of each year, commencing December 31, 1994. The Series A Junior Subordinated Debentures will be redeemable at the option of PacifiCorp, an Oregon corporation ("PacifiCorp"), in whole or in part, on or after December 31, 2004 at the redemption prices set forth herein. The Series A Junior Subordinated Debentures will be issued in the form of one or more global certificates registered in the name of The Depository Trust Company ("DTC"), as securities depository, or its nominee. Except as described herein, purchasers of the Series A Junior Subordinated Debentures will not receive certificates representing their ownership interests therein, and such interests will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. The authorized denominations of the Series A Junior Subordinated Debentures are $1,000 and integral multiples thereof. See "Description of the Series A Junior Subordinated Debentures." The obligations of PacifiCorp under the Series A Junior Subordinated Debentures are subordinate and junior in right of payment to Senior Indebtedness (as defined in the accompanying Prospectus) of PacifiCorp. At June 30, 1994, Senior Indebtedness of PacifiCorp aggregated approximately $3.7 billion. Senior Indebtedness includes only indebtedness of PacifiCorp on an unconsolidated basis. ------------------- SEE "INVESTMENT CONSIDERATIONS" FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SERIES A JUNIOR SUBORDINATED DEBENTURES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF INTEREST ON THE SERIES A JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES. ------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE(1) COMMISSION(2) PACIFICORP(1)(3) ----------------- ----------------- ----------------- Per Series A Junior Subordinated Debenture.............. % % % Total................................................... $ $ $ - ------------------------ (1) Plus accrued interest, if any, from November , 1994. (2) PacifiCorp has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. (3) Before deducting estimated expenses of $ payable by PacifiCorp.
------------------- The Series A Junior Subordinated Debentures offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the Series A Junior Subordinated Debentures will be ready for delivery in book-entry form only through the facilities of DTC in New York, New York on or about November , 1994. ------------------- GOLDMAN, SACHS & CO. SMITH BARNEY INC. MORGAN STANLEY & CO. INCORPORATED -------------------------------- The date of this Prospectus Supplement is November , 1994. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. ------------------- S-2 PACIFICORP PacifiCorp is an electric utility that conducts a retail electric utility business through two divisions, Pacific Power & Light Company ("Pacific Power") and Utah Power & Light Company ("Utah Power"), and engages in power production and sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the indirect owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary), of 87% of Pacific Telecom, Inc. ("Pacific Telecom") and 100% of PacifiCorp Financial Services, Inc. ("PFS"). Pacific Power and Utah Power furnish electric service in portions of seven western states: California, Idaho, Montana, Oregon, Utah, Washington and Wyoming. Pacific Telecom, through its subsidiaries, provides local telephone service and access to the long distance network in Alaska, seven other western states and three midwestern states, provides intrastate and interstate long distance communication services in Alaska, provides cellular mobile telephone services, and is engaged in sales of capacity in and operation of a submarine fiber optic cable between the United States and Japan. PFS plans to sell substantial portions of its loan, leasing and real estate investments over the next several years. The principal executive offices of PacifiCorp are located at 700 NE Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503) 731-2000. INVESTMENT CONSIDERATIONS Prospective purchasers of Series A Junior Subordinated Debentures should carefully review the information contained elsewhere in this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters: SUBORDINATION OF SERIES A JUNIOR SUBORDINATED DEBENTURES. The obligations of PacifiCorp under the Series A Junior Subordinated Debentures are subordinate and junior in right of payment to Senior Indebtedness (as defined in the accompanying Prospectus) of PacifiCorp. At June 30, 1994, Senior Indebtedness of PacifiCorp aggregated approximately $3.7 billion. There are no terms in the Series A Junior Subordinated Debentures that limit PacifiCorp's ability to incur additional indebtedness, including indebtedness that ranks senior to the Series A Junior Subordinated Debentures. The Indenture (as defined herein) does not contain any cross-defaults to any other indebtedness of PacifiCorp and, therefore, a default with respect to, or the acceleration of, any such indebtedness will not constitute an "Event of Default" with respect to the Series A Junior Subordinated Debentures. See "Description of the Junior Subordinated Debentures -- Subordination" and "-- Events of Default" in the accompanying Prospectus. OPTION TO EXTEND INTEREST PAYMENT PERIOD. PacifiCorp has the right under the Indenture to extend the interest payment period from time to time on the Series A Junior Subordinated Debentures to a period not exceeding 60 consecutive months, and, as a consequence, interest payments on the Series A Junior Subordinated Debentures would be deferred (but would continue to accrue with interest thereon) during any such extended interest payment period. In the event that PacifiCorp exercises this right, PacifiCorp may not declare or pay dividends on, or redeem, purchase or acquire, any of its capital stock. Prior to the termination of any such extension period, PacifiCorp may further extend the interest payment period, provided that any such extension period together with all such previous and further extensions thereof may not exceed 60 consecutive months. Upon the termination of any extension period and the payment of all amounts then due, PacifiCorp may select a new extension period, subject to the above requirements. PacifiCorp believes that the extension of an interest payment period on the Series A Junior Subordinated Debentures is unlikely. See "Description of the Series A Junior Subordinated Debentures -- Option to Extend Interest Payment Period." Should an extended interest payment period occur, holders of the Series A Junior Subordinated Debentures will continue to accrue income for United States federal income tax purposes, even though interest is not being paid on a current basis. As a result, a holder will include such interest in gross income for United States federal income tax purposes in advance of the receipt of cash, and will not receive the cash from PacifiCorp related to such income if such holder disposes of his or her Series A Junior Subordinated Debentures prior to the record date for payment of interest. See "United States Taxation -- United States Holders." S-3 SELECTED FINANCIAL INFORMATION (DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) The following selected financial information for each of the three years in the period ended December 31, 1993 and the six months ended June 30, 1993 and 1994 has been derived from the consolidated financial statements of PacifiCorp for the respective periods. The consolidated financial statements for the three-year period ended December 31, 1993 have been audited by Deloitte & Touche LLP, independent auditors, and the reports of Deloitte & Touche LLP are incorporated in the accompanying Prospectus by reference. This selected financial information should be read in conjunction with the financial statements and related notes thereto included in the Incorporated Documents (as defined in the accompanying Prospectus).
TWELVE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, JUNE 30, ------------------------------- -------------------- 1991 1992 1993 1993 1994 --------- --------- --------- --------- --------- Income Statement Data: Revenues....................................................... $ 3,168 $ 3,242 $ 3,412 $ 1,668 $ 1,701 Income from Operations (1)..................................... 941 633 916 445 453 Income from Continuing Operations.............................. 447 150 423 204 210 Discontinued Operations (2).................................... 60 (491) 52 -- -- Cumulative Effect on Prior Years of a Change in Accounting for Income Taxes.................................................. -- -- 4 4 -- Net Income (Loss).............................................. 507 (341) 479 208 210 Preferred Stock Dividend Requirements.......................... 26 37 39 19 20 Earnings (Loss) on Common Stock................................ 481 (378) 440 189 190 Earnings (Loss) per Common Share: Continuing Operations........................................ 1.63 .42 1.40 .68 .67 Discontinued Operations...................................... .23 (1.84) .19 -- -- Cumulative Effect on Prior Years of a Change in Accounting for Income Taxes............................................ -- -- .01 .01 --
JUNE 30, 1994 ---------------------------------------------- ACTUAL AS ADJUSTED(3) ---------------------- ---------------------- AMOUNT % AMOUNT % --------- ----------- --------- ----------- Capital Structure: Long-Term Debt and Capital Lease Obligations............................... $ 3,814 49% $ 3,889 50% Preferred Stock............................................................ 367 5 367 5 Preferred Stock Subject to Mandatory Redemption............................ 219 3 219 3 Common Equity.............................................................. 3,345 43 3,345 42 --------- --- --------- --- Total.................................................................... $ 7,745 100% $ 7,820 100% --------- --- --------- --- --------- --- --------- --- Short-Term Debt.............................................................. $ 528 454 Long-Term Debt and Capital Lease Obligations Currently Maturing.................................................................... $ 164 $ 164 - ------------------------ (1) Income before income taxes, interest, other nonoperating items, discontinued operations and cumulative effect of a change in an accounting principle. (2) Discontinued operations represents PacifiCorp's interests in NERCO, Inc., the disposition of which was completed pursuant to a merger in June 1993, and an international communications subsidiary of Pacific Telecom, the disposition of which was completed in September 1993. (3) Adjusted to give effect to the issuance and sale of the Series A Junior Subordinated Debentures at an assumed issue price of 100% of the principal amount thereof and the application of the estimated net proceeds thereof to retire short-term debt. See "Use of Proceeds."
S-4 USE OF PROCEEDS The proceeds from the sale of the Series A Junior Subordinated Debentures will be used by PacifiCorp to repay short-term borrowings and for other corporate purposes. DESCRIPTION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES The following description of the Series A Junior Subordinated Debentures supplements and should be read in conjunction with the description of the general terms and provisions of the Junior Subordinated Debentures set forth in the accompanying Prospectus under the caption "Description of the Junior Subordinated Debentures." The following description does not purport to be complete and is qualified in its entirety by reference to the description in the accompanying Prospectus and the Indenture, dated as of November 1, 1994, between PacifiCorp and The Bank of New York, as Trustee, as supplemented by a First Supplemental Indenture, dated as of November 1, 1994 (such Indenture, as so supplemented, is hereinafter referred to as the "Indenture"). GENERAL The Series A Junior Subordinated Debentures will be issued as a series of unsecured Junior Subordinated Debentures under the Indenture. The Series A Junior Subordinated Debentures will be limited in aggregate principal amount to $75 million. The entire principal amount of the Series A Junior Subordinated Debentures will become due and payable, together with any accrued and unpaid interest thereon, on December 31, 2024. The Series A Junior Subordinated Debentures will initially be issued as a Global Security (as defined below). As described herein, under certain limited circumstances Series A Junior Subordinated Debentures may be issued in certificated form in exchange for a Global Security (as defined below). See "-- Book-Entry and Settlement." In the event that Series A Junior Subordinated Debentures are issued in certificated form, such Series A Junior Subordinated Debentures will be in denominations of $1,000 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Series A Junior Subordinated Debentures issued as a Global Security will be made to The Depository Trust Company (the "Depository" or "DTC"), as the depository for the Series A Junior Subordinated Debentures. In the event Series A Junior Subordinated Debentures are issued in certificated form, principal of and premium, if any, and interest on the Series A Junior Subordinated Debentures will be payable, the transfer of Series A Junior Subordinated Debentures will be registrable and Series A Junior Subordinated Debentures will be exchangeable for Series A Junior Subordinated Debentures of other denominations of a like aggregate principal amount at the corporate trust office of the Trustee in The City of New York; provided, that payment of interest may be made at the option of PacifiCorp by check mailed to the address of the persons entitled thereto. OPTIONAL REDEMPTION PacifiCorp shall have the right to redeem the Series A Junior Subordinated Debentures, in whole or in part, from time to time, on or after December 31, 2004, upon not less than 30 nor more than 60 days' notice, at the respective redemption prices (expressed as percentages of principal amount) set forth in the following table, together in each case with accrued interest to the redemption date, if redeemed during the twelve month periods commencing on December 31 of the years indicated:
REDEMPTION REDEMPTION YEAR PRICE YEAR PRICE - ------------------------------- --------------- ------------------------------- --------------- 2004........................... % 2010........................... % 2005........................... 2011........................... 2006........................... 2012........................... 2007........................... 2013........................... 2008........................... 2014 and thereafter............ 100 2009...........................
S-5 INTEREST Each Series A Junior Subordinated Debenture will bear interest at the rate of % per annum from November , 1994, payable on June 30 and December 31 of each year (each, an "Interest Payment Date"), commencing December 31, 1994, to the person in whose name such Series A Junior Subordinated Debenture is registered, subject to certain exceptions, at the close of business on the Business Day (as defined below) next preceding such Interest Payment Date. In the event the Series A Junior Subordinated Debentures shall not continue to remain in book-entry-only form, PacifiCorp shall have the right to select record dates which shall be more than one Business Day prior to an Interest Payment Date. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series A Junior Subordinated Debentures is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. A "Business Day" shall mean any day other than a day on which banking institutions in The City of New York are authorized or required by law to close. OPTION TO EXTEND INTEREST PAYMENT PERIOD PacifiCorp shall have the right at any time during the term of the Series A Junior Subordinated Debentures to extend the interest payment period from time to time to a period not exceeding 60 consecutive months (an "Extension Period"), at the end of which Extension Period PacifiCorp shall pay all interest then accrued and unpaid (together with interest thereon at the rate specified for the Series A Junior Subordinated Debentures to the extent permitted by applicable law); provided, that, during any such Extension Period, PacifiCorp shall not declare or pay any dividends on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock. Prior to the termination of any such Extension Period, PacifiCorp may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof may not exceed 60 consecutive months. Upon the termination of any Extension Period and the payment of all amounts then due, PacifiCorp may select a new Extension Period, subject to the above requirements. No interest during an Extension Period, except at the end thereof, shall be due and payable. PacifiCorp shall give the holders of the Series A Junior Subordinated Debentures notice of its selection of such Extension Period ten Business Days prior to the next Interest Payment Date. BOOK-ENTRY AND SETTLEMENT The Series A Junior Subordinated Debentures will be issued in the form of one or more global certificates (each, a "Global Security") registered in the name of the nominee of DTC. Except under the limited circumstances described below, Series A Junior Subordinated Debentures represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Series A Junior Subordinated Debentures in definitive form. The Global Securities described above may not be transferred except by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or to a successor depository or its nominee. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a Global Security. Except as provided below, owners of beneficial interests in such a Global Security will not be entitled to receive physical delivery of Series A Junior Subordinated Debentures in definitive form and will not be considered the Holders (as defined in the Indenture) thereof for any purpose under the Indenture, and no Global Security representing Series A Junior Subordinated Debentures shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of DTC or its nominee or to a successor depository or its nominee. Accordingly, each beneficial owner must rely on the procedures of DTC and, if such person is not a Participant (as defined below), on the procedures of the Participant through which such person owns its interest to exercise any rights of a Holder under the Indenture. S-6 THE DEPOSITORY. DTC will act as securities depository for the Series A Junior Subordinated Debentures. The Series A Junior Subordinated Debentures will be issued only as fully-registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully-registered global certificates will be issued, representing in the aggregate the total number of Series A Junior Subordinated Debentures and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Series A Junior Subordinated Debentures within the DTC system must be made by or through Direct Participants, which will receive a credit for the Series A Subordinated Debentures on DTC's records. The ownership interest of each actual purchaser of each Series A Junior Subordinated Debentures ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Series A Junior Subordinated Debentures. Transfers of ownership interests in the Series A Junior Subordinated Debentures are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series A Junior Subordinated Debentures, except in the event that use of the book-entry system for the Series A Junior Subordinated Debentures is discontinued. DTC has no knowledge of the actual Beneficial Owners of the Series A Junior Subordinated Debentures; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series A Junior Subordinated Debentures are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Series A Junior Subordinated Debentures are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such series to be redeemed. Interest payments on the Series A Junior Subordinated Debentures will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participant and not of DTC or PacifiCorp, subject to any statutory or regulatory requirements as may be in effect from time to time. S-7 Payment of interest to DTC is the responsibility of PacifiCorp, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series A Junior Subordinated Debentures at any time by giving reasonable notice to PacifiCorp. Under such circumstances, in the event that a successor securities depository is not obtained, Series A Junior Preferred Security certificates are required to be printed and delivered. Additionally, PacifiCorp may decide to discontinue use of the system of book-entry transfers through DTC (or a successor depository). In that event, certificates for the Series A Junior Subordinated Debentures will be printed and delivered. In each of the above circumstances, PacifiCorp will appoint a paying agent with respect to the Series A Junior Subordinated Debentures. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that PacifiCorp believes to be reliable, but PacifiCorp takes no responsibility for the accuracy thereof. Neither PacifiCorp, the Trustee, any paying agent nor any other agent of PacifiCorp or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for such Series A Junior Subordinated Debentures or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. DISCONTINUANCE OF THE DEPOSITORY'S SERVICES. A Global Security shall be exchangeable for Series A Junior Subordinated Debentures registered in the names of persons other than DTC or its nominee only if (i) DTC notifies PacifiCorp that it is unwilling or unable to continue as a depository for such Global Security and no successor depository shall have been appointed, or if any time DTC ceases to be a clearing agency registered under the Exchange Act at a time when DTC is required to be so registered to act as such depository, (ii) PacifiCorp in its sole discretion determines that such Global Security shall be so exchangeable or (iii) there shall have occurred an Event of Default (as defined in the Indenture) with respect to such Series A Junior Subordinated Debentures. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series A Junior Subordinated Debentures registered in such names as the Depository shall direct. It is expected that such instructions will be based upon directions received by the Depository from its Participants with respect to ownership of beneficial interests in such Global Security. REGISTRAR AND TRANSFER AGENT So long as the Series A Junior Subordinated Debentures remain in book-entry-only form, PacifiCorp will act as registrar and transfer agent for the Series A Junior Subordinated Debentures. See "-- General" above. S-8 UNITED STATES TAXATION GENERAL This section is a summary of certain United States federal income tax considerations that may be relevant to prospective purchasers of Series A Junior Subordinated Debentures and represents the opinion of Stoel Rives Boley Jones & Grey, counsel to PacifiCorp, insofar as it relates to matters of law and legal conclusions. This section is based upon current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations thereunder and current administrative rulings and court decisions, all of which are subject to change. Subsequent changes may cause tax consequences to vary substantially from the consequences described below. No attempt has been made in the following discussion to comment on all United States federal income tax matters affecting purchasers of Series A Junior Subordinated Debentures. Moreover, the discussion focuses on holders of Series A Junior Subordinated Debentures who are individual citizens or residents of the United States that hold the Series A Junior Subordinated Debentures as a capital asset and has only limited application to corporations, estates, trusts and non-resident aliens. Accordingly, each prospective purchaser of Series A Junior Subordinated Debentures should consult, and should depend on, his or her own tax advisor in analyzing the federal, state, local and foreign tax consequences of the purchase, ownership and disposition of Series A Junior Subordinated Debentures. UNITED STATES HOLDERS For purposes of this discussion, a United States Holder is a Beneficial Owner that is (i) a citizen or resident of the United States, (ii) a domestic corporation or (iii) otherwise subject to United States federal income taxation on a net income basis in respect of the Series A Junior Subordinated Debentures. Because the interest payment period is extendable by PacifiCorp, the interest on the Series A Junior Subordinated Debentures will be treated as "original issue discount" pursuant to Code Sections 1271 ET SEQ. and the Treasury Regulations promulgated thereunder. Therefore, interest on Series A Junior Subordinated Debentures will be included in the income of a United States Holder as it accrues, rather than when it is paid, regardless of the United States Holder's regular method of accounting for tax purposes. United States Holders may therefore include interest in income for taxable years prior to the year in which the interest is actually received. For calendar year taxpayers, however, this should occur only during an Extension Period or any other nonpayment period. A United States Holder will generally recognize gain or loss on the sale or retirement of a Series A Junior Subordinated Debenture equal to the difference between the amount realized from the sale or retirement and the United States Holder's tax basis in the Series A Junior Subordinated Debenture. Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the Series A Junior Subordinated Debenture has been held for more than one year. A United States Holder's tax basis in a Series A Junior Subordinated Debenture will generally equal the amount paid for it, increased by the amount of any accrued but unpaid interest. UNITED STATES ALIEN HOLDERS For purposes of the following discussion, a "United States Alien Holder" is any holder that is (i) a nonresident alien individual, (ii) a foreign corporation or partnership or (iii) an estate or trust that has a foreign fiduciary, in each case not subject to United States federal income tax on a net income basis in respect of a Series A Junior Subordinated Debenture. Under current United States federal income tax law, subject to the discussion below with respect to backup withholding: (i) payments by PacifiCorp or any of its paying agents in respect of a Series A Junior Subordinated Debenture to a United States Alien Holder will not be subject to United States federal withholding tax provided that (a) the Beneficial Owner of the Series A Junior Subordinated Debenture does not actually or constructively own 10% or more of the total combined voting power of all classes of capital stock of PacifiCorp entitled to vote, (b) the Beneficial Owner of the Series A Junior S-9 Subordinated Debenture is not a controlled foreign corporation that is related to PacifiCorp through stock ownership and (c) the Beneficial Owner provides the correct certification of United States Alien Holder status (which may generally be satisfied by providing an IRS Form W-8 certifying that the Beneficial Owner is a United States Alien Holder and providing the name and address of the Beneficial Owner); and (ii) a United States Alien Holder will not be subject to United States federal withholding tax, and generally will not be subject to United States federal income tax, on gain realized from the sale or exchange of a Series A Junior Subordinated Debenture. Under certain conditions, a United States Alien Holder may be subject to United States federal income tax on gain or income received with respect to the sale or exchange of a Series A Junior Subordinated Debenture. Such income taxation may occur, for example, if the United States Alien Holder (a) is engaged in a trade or business in the United States and gain or income is effectively connected with the conduct of that trade or business or (b) is an individual present in the United States for 183 days or more during the taxable year, and certain other conditions are met. Such taxation is beyond the scope of this summary and should be discussed with a tax advisor. If income is effectively connected with the conduct of a trade or business in the United States by a United States Alien Holder, withholding of United States federal income tax may be required unless the United States Alien Holder files with PacifiCorp or its paying agent an IRS form to the effect that the income is so effectively connected. BACKUP WITHHOLDING AND INFORMATION REPORTING In general, information reporting requirements will apply to payments of principal of and premium, if any, and interest on a Series A Junior Subordinated Debenture and to the proceeds from the sale of a Series A Junior Subordinated Debenture prior to maturity within the United States, with respect to non-corporate United States Holders, and "backup withholding" at a rate of 31% will apply to such payments if the United States Holder fails to provide an accurate taxpayer identification number or to report all interest required to be shown on its federal income tax returns. Information reporting and backup withholding will not apply to payments of principal, premium and interest made by PacifiCorp or a paying agent to a United States Alien Holder on a Series A Junior Subordinated Debenture if the certification described in clause (i)(c) under "United States Alien Holders" above is received, provided that the payor does not have actual knowledge that the holder is a United States Holder. Payments of the proceeds from the sale by a United States Alien Holder of a Series A Junior Subordinated Debenture made to or through a foreign office of a broker generally will not be subject to information reporting or backup withholding, except that, if the broker is a United States person, a controlled foreign corporation for United States tax purposes, or a foreign person 50% or more of whose gross income is effectively connected with a United States trade or business for a specified three-year period, information reporting may apply to such payments. Payments of the proceeds from the sale of a Series A Junior Subordinated Debenture to or through the United States office of a broker is subject to information reporting and backup withholding unless the holder or beneficial owner certifies as to its non-United States status or otherwise establishes an exemption from information reporting and backup withholding. S-10 UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement, PacifiCorp has agreed to sell to each of the Underwriters named below (the "Underwriters"), and each of the Underwriters has severally agreed to purchase from PacifiCorp, the principal amount of Series A Junior Subordinated Debentures set forth opposite its name below:
PRINCIPAL AMOUNT OF SERIES A JUNIOR UNDERWRITER SUBORDINATED DEBENTURES - ----------------------------------------------------------------- ----------------------- Goldman, Sachs & Co.............................................. $ Smith Barney Inc................................................. Morgan Stanley & Co. Incorporated................................ ------------ Total.......................................................... $ 75,000,000 ------------ ------------
The Underwriters have advised PacifiCorp that they propose to offer the Series A Junior Subordinated Debentures in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of % of the principal amount of the Series A Junior Subordinated Debentures. The Underwriters may allow, and such dealers may reallow, a concession not in excess of % of the principal amount of the Series A Junior Subordinated Debentures to certain brokers and dealers. After the Series A Junior Subordinated Debentures are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Underwriters. PacifiCorp has agreed, during the period beginning from the date of the Underwriting Agreement and continuing to and including 30 days after the closing date, not to offer, sell, contract to sell or otherwise dispose of any Series A Junior Subordinated Debentures or any other securities of PacifiCorp that are substantially similar to the Series A Junior Subordinated Debentures, without the prior written consent of the Underwriters. The Series A Junior Subordinated Debentures will not have an established trading market when issued. The Series A Junior Subordinated Debentures will not be listed on any securities exchange. PacifiCorp has been advised by the Underwriters that they intend to make a market in the Series A Junior Subordinated Debentures but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Series A Junior Subordinated Debentures. PacifiCorp has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments the Underwriters may be required to make on respect thereof. Certain of the Underwriters engage in transactions with, and from time to time have performed services for, PacifiCorp and its subsidiaries in the ordinary course of business. LEGAL MATTERS The validity of the Indenture and the Series A Junior Subordinated Debentures will be passed upon on behalf of PacifiCorp by Stoel Rives Boley Jones & Grey, Portland, Oregon and on behalf of the Underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York. Statements as to United States taxation in this Prospectus Supplement under the caption "United States Taxation" have been passed upon by Stoel Rives Boley Jones & Grey, and are stated herein on their authority. S-11 $150,000,000 [LOGO] JUNIOR SUBORDINATED DEBENTURES PACIFICORP DELAWARE PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY [LOGO] --------------------- PacifiCorp, an Oregon corporation ("PacifiCorp"), may from time to time offer its junior subordinated deferrable interest debentures (the "Junior Subordinated Debentures") in one or more series and in amounts, at prices and on terms to be determined at the time of the offering. The Junior Subordinated Debentures when issued will be unsecured and subordinate and junior in right of payment to Senior Indebtedness (as defined herein) of PacifiCorp. See "Description of the Junior Subordinated Debentures." PacifiCorp Delaware, L.P. ("PacifiCorp Delaware"), a Delaware special purpose limited partnership in which PacifiCorp is the general partner, may offer, from time to time, its preferred securities, representing limited partner interests (the "Preferred Securities"), in one or more series. The payment of periodic cash distributions ("dividends") with respect to Preferred Securities of any series, out of moneys held by PacifiCorp Delaware, and payments on liquidation or redemption with respect to the Preferred Securities are guaranteed by PacifiCorp to the extent described herein (the "Guarantee"). PacifiCorp's obligations under the Guarantee are subordinate and junior in right of payment to all other liabilities of PacifiCorp and PARI PASSU with the most senior preferred stock issued by PacifiCorp. Junior Subordinated Debentures also may be issued and sold from time to time in one or more series by PacifiCorp to PacifiCorp Delaware in connection with the investment of the proceeds from the offering of Preferred Securities. The Junior Subordinated Debentures subsequently may be distributed pro rata to holders of Preferred Securities in connection with the dissolution of PacifiCorp Delaware upon the occurrence of certain events as may be described in an accompanying Prospectus Supplement (the "Prospectus Supplement"). Specific terms of the particular Junior Subordinated Debentures and Preferred Securities of any series in respect of which this Prospectus is being delivered (the "Offered Securities") will be set forth in an accompanying Prospectus Supplement with respect to such series, which will describe, without limitation and where applicable, the following: (i) in the case of Junior Subordinated Debentures, the specific designation, aggregate principal amount, denomination, maturity, premium, if any, interest rate or rates (or the method of determining such rate or rates), if any, dates on which premium, if any, and interest will be payable, any redemption provisions, any sinking fund provisions, the initial public offering price, any listing on a securities exchange and any other terms and (ii) in the case of Preferred Securities, the specific designation, number of Preferred Securities, dividend rate or rates (or the method of determining such rate or rates), dates on which dividends will be payable, liquidation preference, voting rights, any redemption provisions, terms for any conversion or exchange into other securities, the initial public offering price, any listing on a securities exchange, and any other rights, preferences, privileges, limitations and restrictions. The Offered Securities may be offered in amounts, at prices and on terms to be determined at the time of offering; provided, however, that the aggregate initial public offering price of all Offered Securities shall not exceed $150,000,000. The Prospectus Supplement relating to any series of Offered Securities will contain information concerning certain United States federal income tax considerations, if applicable to the Offered Securities. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The Offered Securities will be sold directly, through agents, underwriters or dealers as designated from time to time, or through a combination of such methods. If any agents, dealers or underwriters are involved in the sale of the Offered Securities in respect of which this Prospectus is being delivered, the names of such agents, dealers or underwriters and any applicable commissions or discounts will be set forth in or may be calculated from the Prospectus Supplement with respect to such Offered Securities. See "Plan of Distribution." ------------------------ THE DATE OF THIS PROSPECTUS IS OCTOBER 17, 1994. AVAILABLE INFORMATION PacifiCorp is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information (including proxy and information statements) filed by PacifiCorp can be inspected and copied at public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the following Regional Offices of the Commission: New York Regional Office, 7 World Trade Center, 13th Floor, New York, New York 10046, and Chicago Regional Office, 500 W. Madison Street, 14th Floor, Chicago, Illinois 60661. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the prescribed rates. The Common Stock of PacifiCorp is listed on the New York and Pacific Stock Exchanges. Reports, proxy statements and other information concerning PacifiCorp can be inspected at their respective offices: New York Stock Exchange, 20 Broad Street, New York, New York 10005, and Pacific Stock Exchange, 301 Pine Street, San Francisco, California. PacifiCorp Delaware and PacifiCorp have filed with the Commission a joint Registration Statement under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the securities offered hereby. This Prospectus does not contain all of the information set forth in such Registration Statement and the exhibits thereto. For further information with respect to PacifiCorp, PacifiCorp Delaware and the Offered Securities, reference is hereby made to such Registration Statement, including the exhibits thereto, which may be examined at the Commission's principal office, 450 Fifth Street, N.W., Washington, D.C. 20549, or copies of which may be obtained from the Commission at such office upon payment of the fees prescribed by the Commission. No separate financial statements of PacifiCorp Delaware have been included herein. PacifiCorp and PacifiCorp Delaware do not consider that such financial statements would be material to holders of Preferred Securities offered hereby because PacifiCorp Delaware is a newly formed special purpose entity, has no operating history, has no independent operations and is not engaged in, and does not propose to engage in, any activity other than as set forth below. PacifiCorp Delaware is a limited partnership formed under the laws of the State of Delaware. PacifiCorp is the sole general partner of PacifiCorp Delaware and, as of the date hereof, directly or indirectly beneficially owns all of PacifiCorp Delaware's partnership interests. See "PacifiCorp Delaware, L.P." INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by PacifiCorp with the Commission pursuant to the Exchange Act are incorporated in this Prospectus by reference: (1) PacifiCorp's Annual Report on Form 10-K for the year ended December 31, 1993 (as amended by Form 10-K/A dated June 7, 1994); (2) PacifiCorp's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994 and June 30, 1994; and (3) PacifiCorp's Current Reports on Form 8-K dated January 18 and May 24, 1994. All documents filed by PacifiCorp pursuant to Section 13, 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of this offering shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents (such documents, and the documents enumerated above, being hereinafter referred to as "Incorporated Documents"; provided, however, that all documents filed by PacifiCorp pursuant to Section 13 or 14 of the Exchange Act in each year during which the offering made by this Prospectus is in effect prior to the filing with the Commission of PacifiCorp's Annual Report on Form 10-K covering such year shall not be Incorporated Documents or be incorporated by reference in this Prospectus or be a part hereof from and after such filing of such Annual Report on Form 10-K). 2 Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. PACIFICORP HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO RICHARD T. O'BRIEN, VICE PRESIDENT, PACIFICORP, 700 NE MULTNOMAH, SUITE 1600, PORTLAND, OREGON 97232, TELEPHONE NUMBER (503) 731-2000. THE INFORMATION RELATING TO PACIFICORP CONTAINED IN THIS PROSPECTUS DOES NOT PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE INCORPORATED DOCUMENTS. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PACIFICORP DELAWARE OR PACIFICORP. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PACIFICORP OR ITS SUBSIDIARIES SINCE THE DATE OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT, AS THE CASE MAY BE. PACIFICORP PacifiCorp is an electric utility that conducts a retail electric utility business through two divisions, Pacific Power & Light Company ("Pacific Power") and Utah Power & Light Company ("Utah Power"), and engages in power production and sales on a wholesale basis under the name PacifiCorp. PacifiCorp is the indirect owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary), of 87% of Pacific Telecom, Inc. ("Pacific Telecom") and 100% of PacifiCorp Financial Services, Inc. ("PFS"). Pacific Power and Utah Power furnish electric service in portions of seven western states: California, Idaho, Montana, Oregon, Utah, Washington, and Wyoming. Pacific Telecom, through its subsidiaries, provides local telephone service and access to the long distance network in Alaska, seven other western states and three midwestern states, provides intrastate and interstate long distance communication services in Alaska, provides cellular mobile telephone services, and is engaged in sales of capacity in and operation of a submarine fiber optic cable between the United States and Japan. PFS plans to sell substantial portions of its loan, leasing and real estate investments over the next several years. The principal executive offices of PacifiCorp are located at 700 NE Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503) 731-2000. PACIFICORP DELAWARE, L.P. PacifiCorp Delaware is a limited partnership formed under the laws of the State of Delaware. PacifiCorp Delaware exists for the sole purpose of issuing its limited partnership interests and investing the net proceeds thereof in Junior Subordinated Debentures. Such Junior Subordinated Debentures will be the only assets of PacifiCorp Delaware and the only revenues of PacifiCorp Delaware will be the interest in such Junior Subordinated Debentures. PacifiCorp is the sole general partner in PacifiCorp Delaware (the "General Partner"). PacifiCorp Preferred Capital, Inc., a Delaware corporation and a wholly owned subsidiary of PacifiCorp, is, as of the date hereof, the sole limited partner in PacifiCorp Delaware. Upon the issuance of Preferred Securities, which securities represent limited partner interests in PacifiCorp Delaware, PacifiCorp Preferred Capital, Inc. will remain as a limited partner, but will have no interest in the profits and dividends or in the assets of PacifiCorp Delaware. PacifiCorp Delaware has a term of approximately 45 years, subject to extension by the General Partner for an additional 40 years, unless earlier dissolved. PacifiCorp Delaware's 3 registered office in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, telephone: (302) 658-7581. All of PacifiCorp Delaware's business and affairs will be conducted by PacifiCorp, as the sole general partner. The principal place of business of PacifiCorp Delaware is c/o PacifiCorp, 700 NE Multnomah, Suite 1600, Portland, Oregon 97232, telephone number (503) 731-2000. CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES The ratios of earnings to fixed charges of PacifiCorp for the years ended December 31, 1989 through 1993 and for the six months ended June 30, 1994 calculated as required by the Commission, are 2.3x, 2.3x, 2.4x, 1.6x, 2.5x and 2.8x, respectively. Excluding the effect of special charges, the ratio was 1.9x for the year 1992. For the purpose of computing such ratios, "earnings" represents 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 losses (income) of less than 50% owned affiliates without loan guarantees. "Fixed charges" represents consolidated interest charges, an estimated amount representing the interest factor in rents and preferred stock dividend requirements of majority-owned subsidiaries, and excludes discontinued operations. CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The ratios of earnings to combined fixed charges and preferred stock dividends of PacifiCorp for the years ended December 31, 1989 through 1993 and for the six months ended June 30, 1994, calculated as required by the Commission, are 2.1x, 2.2x, 2.2x, 1.4x, 2.2x and 2.4x, respectively. Excluding the effect of special charges, the ratio was 1.8x for the year 1992. For the purpose of computing such ratios, "earnings" represents 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 losses (income) of less than 50% owned affiliates without loan guarantees. "Fixed charges" represents consolidated interest charges, an estimated amount representing the interest factor in rents and preferred stock dividend requirements of majority-owned subsidiaries, and excludes discontinued operations. "Preferred stock dividends" represents preferred dividend requirements multiplied by the ratio which pre-tax income from continuing operations bears to income from continuing operations. USE OF PROCEEDS Unless otherwise specified in the Prospectus Supplement, the net proceeds to be received by PacifiCorp from the sale of Junior Subordinated Debentures will become part of the general funds of PacifiCorp and will be used to repay its short-term borrowings and for other corporate purposes. Reference is made to the Incorporated Documents with respect to PacifiCorp's capital requirements and its general financing plans. PacifiCorp Delaware will invest all proceeds received from the sale of Preferred Securities in Junior Subordinated Debentures. DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES Junior Subordinated Debentures may be issued from time to time in one or more series under an Indenture, dated as of November 1, 1994 (the "Indenture"), between PacifiCorp and The Bank of New York, as Trustee (the "Trustee"). PacifiCorp may issue the Junior Subordinated Debentures to the public or to institutional investors as described under "Plan of Distribution" or to PacifiCorp Delaware in connection with the issuance of Preferred Securities. The following summary does not purport to be complete and is subject in all respects to the provisions of and is qualified in its entirety by reference to the Indenture, which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. Whenever particular provisions or defined terms in the Indenture are referred to herein, such provisions or defined terms are incorporated by reference herein. Section and Article references used herein are references to provisions of the Indenture unless otherwise noted. 4 GENERAL The Junior Subordinated Debentures will be unsecured, subordinated obligations of PacifiCorp. The Indenture does not limit the aggregate principal amount of Junior Subordinated Debentures which may be issued thereunder and provides that the Junior Subordinated Debentures may be issued thereunder from time to time in one or more series. PacifiCorp's Second Restated Articles of Incorporation, as amended (the "Articles"), limit the amount of unsecured debt that PacifiCorp may issue to the equivalent of 30% of the total of all secured indebtedness and total equity. Under this provision, approximately $1.16 billion of additional unsecured debt could have been issued as of June 30, 1994. The Junior Subordinated Debentures are issuable in one or more series pursuant to an indenture supplemental to the Indenture or a resolution of PacifiCorp's Board of Directors (each, a "Supplemental Indenture") (Section 2.01). The aggregate principal amount of Junior Subordinated Debentures relating to Preferred Securities of any series will be set forth in the Prospectus Supplement for such series. With respect to any issuance of Junior Subordinated Debentures to PacifiCorp Delaware in connection with the issuance of Preferred Securities, the aggregate principal amount of the Junior Subordinated Debentures will be equal to the sum of the aggregate liquidation preference of the Preferred Securities for such series and the General Partner's capital contribution with respect to the Preferred Securities for such series. Junior Subordinated Debentures relating to Preferred Securities of any series subsequently may be distributed pro rata to holders of Preferred Securities of such series in connection with the dissolution of PacifiCorp Delaware upon the occurrence of certain events described in the Prospectus Supplement relating to the Preferred Securities of such series. Reference is made to the Prospectus Supplement which will accompany this Prospectus for the following terms of the series of Junior Subordinated Debentures being offered thereby: (i) the specific title of such Junior Subordinated Debentures; (ii) any limit on the aggregate principal amount of such Junior Subordinated Debentures; (iii) the date or dates on which the principal of such Junior Subordinated Debentures is payable; (iv) the rate or rates at which such Junior Subordinated Debentures will bear interest or the manner of calculation of such rate or rates; (v) the date or dates from which such interest shall accrue, the interest payment dates on which such interest will be payable or the manner of determination of such interest payment dates and the record dates for the determination of holders to whom interest is payable on any such interest payment dates; (vi) the right, if any, to extend the interest payment periods and the duration of such extension; (vii) the period or periods within which, the price or prices at which and the terms and conditions upon which such Junior Subordinated Debentures may be redeemed, in whole or in part, at the option of PacifiCorp; (viii) the obligation, if any, of PacifiCorp to redeem or purchase such Junior Subordinated Debentures pursuant to any sinking fund or analogous provisions or at the option of the holder thereof and the period or periods, the price or prices at which, and the terms and conditions upon which such Junior Subordinated Debentures shall be redeemed or purchased, in whole or part, pursuant to such obligation; (ix) the form of such Junior Subordinated Debentures; (x) if other than denominations of $25 or any integral multiple thereof, the denominations in which such Junior Subordinated Debentures shall be issuable; (xi) any and all other terms with respect to such series; and (xii) whether such Junior Subordinated Debentures are issuable as a global security, and in such case, the identity of the depository. (Section 2.01.) The Indenture does not contain any provisions that afford holders of Junior Subordinated Debentures protection in the event of a highly leveraged transaction involving PacifiCorp. SUBORDINATION The Indenture provides that the Junior Subordinated Debentures are subordinate and junior in right of payment to all Senior Indebtedness (as defined below) of PacifiCorp as provided in the Indenture. No payment of principal of (including redemption and sinking fund payments), or premium, if any, or interest on, the Junior Subordinated Debentures may be made if any Senior Indebtedness is not paid when due, any applicable grace period with respect to such default has ended and such default has not been cured or waived, or if the maturity of any Senior Indebtedness has been accelerated because of a default. Upon any distribution of assets of PacifiCorp to creditors upon any dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all 5 principal of and premium, if any, and interest due or to become due on all Senior Indebtedness must be paid in full before the holders of the Junior Subordinated Debentures are entitled to receive or retain any payment. The rights of the holders of the Junior Subordinated Debentures will be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions applicable to Senior Indebtedness until all amounts owing on the Junior Subordinated Debentures are paid in full. (Sections 14.01 to 14.03.) The term "Senior Indebtedness" shall mean the principal of and premium, if any, and interest on and any other payment due pursuant to any of the following, whether outstanding at the date of execution of the Indenture or thereafter incurred, created or assumed: (a) all indebtedness of PacifiCorp evidenced by notes, debentures, bonds or other securities sold by PacifiCorp for money; (b) all indebtedness of others of the kinds described in the preceding clause (a) assumed by or guaranteed in any manner by PacifiCorp or in effect guaranteed by PacifiCorp; and (c) all renewals, extensions or refundings of indebtedness of the kinds described in either of the preceding clauses (a) and (b); unless, in the case of any particular indebtedness, renewal, extension or refunding, the instrument creating or evidencing the same or the assumption or guarantee of the same expressly provides that such indebtedness, renewal, extension or refunding is not superior in right of payment to or is PARI PASSU with the Junior Subordinated Debentures. Such Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness. (Section 1.01.) The Indenture does not limit the aggregate amount of Senior Indebtedness which may be issued. As of June 30, 1994, Senior Indebtedness of PacifiCorp aggregated approximately $3.7 billion. As the Junior Subordinated Debentures will be issued by PacifiCorp, the Junior Subordinated Debentures effectively will be subordinate to all obligations of PacifiCorp's subsidiaries, and the rights of PacifiCorp's creditors, including holders of the Junior Subordinated Debentures, to participate in the assets of such subsidiaries upon liquidation or reorganization will be junior to the rights of the holders of all preferred stock, indebtedness and other liabilities of such subsidiaries, which may include trade payables, obligations to banks under credit facilities, guarantees, pledges, support arrangements, bonds, capital leases, notes and other obligations. With respect to Pacific Telecom, the rights of PacifiCorp's creditors, including holders of the Junior Subordinated Debentures, will also be limited to PacifiCorp's 87% ownership interest in Pacific Telecom. CERTAIN COVENANTS OF PACIFICORP PacifiCorp will covenant that it will not declare or pay any dividend on, or redeem, purchase, acquire or make a distribution or liquidation payment with respect to, any of its capital stock, if at such time (a) there shall have occurred any event that would constitute an Event of Default under the Indenture or (b) PacifiCorp shall have given notice of its selection of an extended interest payment period as provided in the Indenture and such period, or any extension thereof, shall be continuing. (Section 4.06.) With respect to any issuance of Junior Subordinated Debentures to PacifiCorp Delaware in connection with the issuance of Preferred Securities, PacifiCorp will also covenant (i) not to declare or pay any dividend on or redeem, purchase, acquire or make a distribution or liquidation payment with respect to any of its capital stock, if at such time PacifiCorp shall be in default with respect to its payment of any obligations under the Guarantee, (ii) to remain the sole general partner of PacifiCorp Delaware and maintain 100% ownership of the general partner interests thereof; provided that any permitted successor of PacifiCorp under the Indenture may succeed to PacifiCorp's duties as General Partner, (iii) to contribute capital to the extent required to maintain its capital at an amount equal to at least 3% of the total capital contributions to PacifiCorp Delaware, (iv) not to voluntarily dissolve, wind-up or terminate PacifiCorp Delaware, except in connection with the distribution of Junior Subordinated Debentures to the holders of Preferred Securities in liquidation of PacifiCorp Delaware and in connection with certain mergers, consolidations or amalgamations permitted 6 by the Limited Partnership Agreement (as defined herein), (v) to timely perform all of its duties as the general partner in PacifiCorp Delaware (including the duty to pay dividends on the Preferred Securities) and (vi) to use its reasonable efforts to cause PacifiCorp Delaware to remain a limited partnership and otherwise continue to be treated as a partnership for United States federal income tax purposes. FORM, EXCHANGE, REGISTRATION AND TRANSFER Junior Subordinated Debentures of each series will be issued in registered form and in certificated form or will be represented by one or more global securities. If not represented by one or more global securities, Junior Subordinated Debentures may be presented for registration of transfer (with the form of transfer endorsed thereon duly executed) or exchange, at the office of the Debenture Registrar or at the office of any transfer agent designated by PacifiCorp for such purpose with respect to any series of Junior Subordinated Debentures and referred to in an applicable Prospectus Supplement, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. Such transfer or exchange will be effected upon the Debenture Registrar or such transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. PacifiCorp has appointed the Trustee as Debenture Registrar with respect to the Junior Subordinated Debentures. (Section 2.05.) If a Prospectus Supplement refers to any transfer agent (in addition to the Debenture Registrar) initially designated by PacifiCorp with respect to any series of Junior Subordinated Debentures, PacifiCorp may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, except that PacifiCorp will be required to maintain a transfer agent in each Place of Payment for such series. (Section 4.02.) PacifiCorp may at any time designate additional transfer agents with respect to any series of Junior Subordinated Debentures. In the event of any redemption in part, PacifiCorp shall not be required to (i) issue, register the transfer of or exchange any Junior Subordinated Debenture during a period beginning at the opening of business 15 days before any selection for redemption of Junior Subordinated Debentures of like tenor and of the series of which such Junior Subordinated Debenture is a part, and ending at the close of business on the earliest date in which the relevant notice of redemption is deemed to have been given to all holders of Junior Subordinated Debentures of like tenor and of such series to be redeemed and (ii) register the transfer of or exchange any Junior Subordinated Debentures so selected for redemption, in whole or in part, except the unredeemed portion of any Junior Subordinated Debenture being redeemed in part. (Section 2.05.) PAYMENT AND PAYING AGENTS Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of and premium (if any) on any Junior Subordinated Debenture will be made only against surrender to the Paying Agent of such Junior Subordinated Debenture. Unless otherwise indicated in an applicable Prospectus Supplement, principal of and any premium and interest, if any, on Junior Subordinated Debentures will be payable, subject to any applicable laws and regulations, at the office of such Paying Agent or Paying Agents as PacifiCorp may designate from time to time, except that at the option of PacifiCorp payment of any interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Debenture Register with respect to such Junior Subordinated Debentures. (Section 4.03.) Unless otherwise indicated in an applicable Prospectus Supplement, payment of interest on a Junior Subordinated Debenture on any Interest Payment Date will be made to the person in whose name such Junior Subordinated Debenture (or Predecessor Security) is registered at the close of business on the Regular Record Date for such interest payment. (Section 2.03.) PacifiCorp will act as Paying Agent with respect to the Junior Subordinated Debentures. PacifiCorp may at any time designate additional Paying Agents or rescind the designation of any Paying Agents or approve a change in the office through which any Paying Agent acts, except that PacifiCorp will be required to maintain a Paying Agent in each Place of Payment for each series of the respective Junior Subordinated Debentures. (Sections 4.02 and 4.03.) All moneys paid by PacifiCorp to a Paying Agent for the payment of the principal of or premium, if any, or interest on any Junior Subordinated Debenture of any series which remain unclaimed at the end of two 7 years after such principal, premium, if any, or interest shall have become due and payable will be repaid to PacifiCorp and the holder of such Junior Subordinated Debenture will thereafter look only to PacifiCorp for payment thereof. (Section 11.05.) GLOBAL DEBENTURES If any Junior Subordinated Debentures of a series are represented by one or more global securities, the applicable Prospectus Supplement will describe the circumstances, if any, under which beneficial owners of interests in any such Global Debenture may exchange such interests for Junior Subordinated Debentures of such series and of like tenor and principal amount in any authorized form and denomination. Principal of and any premium and interest on a Global Debenture will be payable in the manner described in the applicable Prospectus Supplement. (Section 2.11.) The specific terms of the depository arrangement with respect to any portion of a series of Junior Subordinated Debentures to be represented by a Global Debenture will be described in the applicable Prospectus Supplement. MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting PacifiCorp and the Trustee, with the consent of the holders of not less than a majority in principal amount of the Junior Subordinated Debentures of each series which are affected by the modification, to modify the Indenture or any supplemental indenture affecting that series or the rights of the holders of that series of Junior Subordinated Debentures; provided, that no such modification may, without the consent of the holder of each outstanding Junior Subordinated Debenture affected thereby, (i) extend the fixed maturity of any Junior Subordinated Debentures of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the holder of each Junior Subordinated Debenture so affected or (ii) reduce the percentage of Junior Subordinated Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Junior Subordinated Debenture then outstanding and affected thereby. (Section 9.02.) In addition, PacifiCorp and the Trustee may execute, without the consent of any holder of Junior Subordinated Debentures, any supplemental indenture for certain other usual purposes including the creation of any new series of Junior Subordinated Debentures. (Sections 2.01, 9.01 and 10.01.) EVENTS OF DEFAULT The Indenture provides that any one or more of the following described events, which has occurred and is continuing, constitutes an "Event of Default" with respect to each series of Junior Subordinated Debentures: (a) failure for 10 days to pay interest on the Junior Subordinated Debentures of that series, including any Additional Interest in respect thereof, when due; or (b) failure to pay principal of or premium, if any, on the Junior Subordinated Debentures of that series when due whether at maturity, upon redemption, by declaration or otherwise, or to make any sinking fund payment with respect to that series; or (c) failure to observe or perform any other covenant (other than those specifically relating to one or more other series) contained in the Indenture for 90 days after notice; or (d) certain events of bankruptcy, insolvency or reorganization of PacifiCorp. (Section 6.01.) With respect to any issuance of Junior Subordinated Debentures to PacifiCorp Delaware in connection with the issuance of Preferred Securities, the Indenture will also provide that the dissolution, winding-up or termination of PacifiCorp Delaware, except in connection with the distribution of Junior Subordinated Debentures to the holders of Preferred Securities in liquidation of PacifiCorp Delaware and in connection with certain mergers, consolidations or amalgamations permitted by the Limited Partnership Agreement, shall constitute an "Event of Default" with respect to each series of Junior Subordinated Debentures. 8 The holders of a majority in aggregate outstanding principal amount of any series of the Junior Subordinated Debentures have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee for that series. (Section 6.06.) The Trustee or the holders of not less than 25% in aggregate outstanding principal amount of any particular series of the Junior Subordinated Debentures may declare the principal due and payable immediately upon an Event of Default with respect to such series, but the holders of a majority in aggregate outstanding principal amount of such series may annul such declaration and waive such Event of Default if it has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee. (Sections 6.01 and 6.06.) The holders of a majority in aggregate outstanding principal amount of all series of the Junior Subordinated Debentures affected thereby may, on behalf of the holders of all the Junior Subordinated Debentures of such series, waive any past default, except a default in the payment of principal, premium, if any, or interest. (Section 6.06.) PacifiCorp is required to file annually with the Trustee a certificate as to whether or not PacifiCorp is in compliance with all the conditions and covenants under the Indenture. (Section 5.03(d).) CONSOLIDATION, MERGER AND SALE The Indenture does not contain any covenant which restricts PacifiCorp's ability to merge or consolidate with or into any other corporation, sell or convey all or substantially all of its assets to any person, firm or corporation or otherwise engage in restructuring transactions. (Section 10.01.) DEFEASANCE AND DISCHARGE Under the terms of the Indenture, PacifiCorp will be discharged from any and all obligations in respect of the Junior Subordinated Debentures of any series (except in each case for certain obligations to register the transfer or exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated Junior Subordinated Debentures, maintain paying agencies and hold moneys for payment in trust) if PacifiCorp deposits with the Trustee, in trust, moneys or Government Obligations, in an amount sufficient to pay all the principal of, and interest on, the Junior Subordinated Debentures of such series on the dates such payments are due in accordance with the terms of such Junior Subordinated Debentures and, in certain circumstances, delivers to the Trustee an Opinion of Counsel to the effect that the holders of Junior Subordinated Debentures of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and discharge had not occurred. In addition to discharging certain obligations under the Indenture as stated above, if the Company delivers to the Trustee an Opinion of Counsel (in lieu of the Opinion of Counsel referred to above) to the effect that (a) the Company has received from, or there has been published by the Internal Revenue Service a ruling or (b) since the date of the Indenture there has been a change in applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the holders of Junior Subordinated Debentures of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred, and (c) the trust resulting from the defeasance is a valid trust and will not constitute a regulated investment company under the Investment Company Act of 1940, as amended, then, in such event, the Company will be deemed to have paid and discharged the entire indebtedness on the Junior Subordinated Debentures. In the event of any such defeasance and discharge of Junior Subordinated Debentures of such series, holders of Junior Subordinated Debentures of such series would be able to look only to such trust fund for payment of principal of (and premium, if any) and interest, if any, on the Junior Subordinated Debentures of such series. (Sections 11.01, 11.02 and 11.03.) GOVERNING LAW The Indenture and the Junior Subordinated Debentures will be governed by, and construed in accordance with, the laws of the State of New York. (Section 13.04.) 9 INFORMATION CONCERNING THE TRUSTEE The Trustee, prior to default, undertakes to perform only such duties as are specifically set forth in the Indenture and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. (Section 7.01.) Subject to such provision, the Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Junior Subordinated Debentures, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. (Section 7.02.) The Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. (Section 7.01.) PacifiCorp maintains a banking relationship with The Bank of New York. The Bank of New York serves as trustee under other indentures pursuant to which unsecured debt securities issued on behalf of PacifiCorp are outstanding. MISCELLANEOUS PacifiCorp will have the right at all times to assign any of its rights or obligations under the Indenture to a direct or indirect wholly-owned subsidiary of PacifiCorp; provided that, in the event of any such assignment, PacifiCorp will remain liable for all such obligations. PacifiCorp Delaware may not assign any of its rights under the Indenture without the prior written consent of PacifiCorp. Subject to the foregoing, the Indenture will be binding upon and inure to the benefit of the parties thereto and their respective successors and assigns. The Indenture provides that it may not otherwise be assigned by the parties thereto. (Section 13.11.) DESCRIPTION OF THE PREFERRED SECURITIES PacifiCorp Delaware may issue, from time to time, Preferred Securities, in one or more series, having terms described in the Prospectus Supplement relating thereto. The limited partnership agreement of PacifiCorp Delaware will be amended and restated (as so amended and restated, the "Limited Partnership Agreement") to authorize the establishment of one or more series of Preferred Securities, having such terms, including dividends, redemption, voting, liquidation rights and such other preferred or other special rights or such restrictions, as shall be set forth therein or otherwise established by the General Partner pursuant thereto. Reference is made to the Prospectus Supplement relating to the Preferred Securities of a particular series for specific terms, including (i) the distinctive designation of such series which shall distinguish it from other series; (ii) the number of Preferred Securities included in such series, which number may be increased or decreased from time to time unless otherwise provided by the General Partner in creating the series; (iii) the annual dividend rate or rates (or method of determining such rate or rates) for Preferred Securities of such series and the date or dates upon which such dividends shall be payable; provided, however, dividends on any series of Preferred Securities shall be payable on a monthly basis to holders of such series of Preferred Securities as of a record date in each month during which such series of Preferred Securities are outstanding; (iv) the right, if any, to extend the dividend payment periods and the duration of any such extension; (v) whether dividends on Preferred Securities of such series shall be cumulative, and, in the case of Preferred Securities of any series having cumulative dividend rights, the date or dates or method of determining the date or dates from which dividends on Preferred Securities of such series shall be cumulative; (vi) the amount or amounts which shall be paid out of the assets of PacifiCorp Delaware to the holders of Preferred Securities of such series upon voluntary or involuntary dissolution, winding-up or termination of PacifiCorp Delaware; (vii) the price or prices at which, the period or periods within which and the terms and conditions upon which Preferred Securities of such series may be redeemed or purchased, in whole or in part, at the option of PacifiCorp Delaware or the General Partner; (viii) the obligation, if any, of PacifiCorp Delaware to purchase or redeem Preferred Securities of such series and the price or prices at which, the period or periods within which and the terms and conditions upon which Preferred Securities of such series shall be purchased or redeemed, in whole or in part, pursuant to such obligation; (ix) the voting rights, if any, of Preferred Securities of such series in addition to those required by law, including the number of votes per Preferred Security and any requirement for the approval by the holders of Preferred Securities, or of Preferred Securities of one of more series, or of both, as a condition to 10 specified action or amendments to the Limited Partnership Agreement; and (x) any other relative rights, preferences, privileges, limitations or restrictions of Preferred Securities of the series not inconsistent with the Limited Partnership Agreement or with applicable law. All Preferred Securities offered hereby will be guaranteed by PacifiCorp to the extent set forth below under "Description of the Guarantee." Any applicable federal income tax considerations applicable to any offering of Preferred Securities will be described in the Prospectus Supplement relating thereto. DESCRIPTION OF THE GUARANTEE Set forth below is a summary of information concerning the Guarantee which will be executed and delivered by PacifiCorp for the benefit of the holders from time to time of Preferred Securities. The summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Guarantee, which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part. GENERAL PacifiCorp will irrevocably and unconditionally agree, to the extent set forth in the Guarantee, to pay in full, to the holders of the Preferred Securities of each series, the Guarantee Payments (as defined below) (except to the extent paid by PacifiCorp Delaware), as and when due, regardless of any defense, right of set-off or counterclaim which PacifiCorp Delaware may have or assert. The following payments with respect to any series of Preferred Securities to the extent not paid by PacifiCorp Delaware (the "Guarantee Payments") will be subject to the Guarantee (without duplication): (i) any accrued and unpaid dividends which are required to be paid on the Preferred Securities of such series, to the extent PacifiCorp Delaware shall have funds legally available therefor, (ii) the redemption price, including all accrued and unpaid dividends (the "Redemption Price"), payable out of funds legally available therefor with respect to any Preferred Securities called for redemption by PacifiCorp Delaware and (iii) upon a liquidation of PacifiCorp Delaware, the lesser of (a) the aggregate of the liquidation preference and all accrued and unpaid dividends on the Preferred Securities of such series to the date of payment and (b) the amount of assets of PacifiCorp Delaware remaining available for distribution to holders of Preferred Securities of such series in liquidation of PacifiCorp Delaware. PacifiCorp's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by PacifiCorp to the holders of Preferred Securities or by causing PacifiCorp Delaware to pay such amounts to such holders. CERTAIN COVENANTS OF PACIFICORP In the Guarantee, PacifiCorp will covenant that, so long as any Preferred Securities remain outstanding, PacifiCorp will not declare or pay any dividend on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock or make any guarantee payment with respect to the foregoing if at such time PacifiCorp shall be in default with respect to its payment or other obligations under the Guarantee or there shall have occurred any event that would constitute an Event of Default under the Indenture described above. See "Description of the Junior Subordinated Debentures." AMENDMENTS AND ASSIGNMENT Except with respect to any changes which do not adversely affect the rights of holders of Preferred Securities (in which case no vote will be required), the Guarantee may be changed only with the prior approval of the holders of not less than 66 2/3% in liquidation preference of the outstanding Preferred Securities. The manner of obtaining any such approval of holders of the Preferred Securities of each series will be as set forth in an accompanying Prospectus Supplement. All guarantees and agreements contained in the Guarantee shall bind the successors, assigns, receivers, trustees and representatives of PacifiCorp and shall inure to the benefit of the holders of the Preferred Securities then outstanding. TERMINATION OF THE GUARANTEE The Guarantee will terminate and be of no further force and effect as to the Preferred Securities of any series upon full payment of the Redemption Price of all Preferred Securities of such series, and will terminate completely upon full payment of the amounts payable upon liquidation of PacifiCorp Delaware. 11 The Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Securities of any series must restore payment of any sums paid under such series of Preferred Securities or the Guarantee. STATUS OF THE GUARANTEE The Guarantee will constitute an unsecured obligation of PacifiCorp and will rank (i) subordinate and junior in right of payment to all liabilities of PacifiCorp, (ii) PARI PASSU with the most senior preferred or preference stock now or hereafter issued by PacifiCorp and with any guarantee now or hereafter entered into by PacifiCorp in respect of any preferred or preference stock of any affiliate of PacifiCorp and (iii) senior to PacifiCorp's common stock. The Limited Partnership Agreement provides that each holder of Preferred Securities by acceptance thereof agrees to the subordination provisions and other terms of the Guarantee. The Guarantee will constitute a guarantee of payment and not of collection. The Guarantee will be deposited with the General Partner to be held for the benefit of the holders of each series of the Preferred Securities. In the event of the appointment of a special representative of PacifiCorp Delaware and the limited partners (a "Special Representative") to, among other things, enforce the Guarantee, the Special Representative may take possession of the Guarantee for such purpose. If no Special Representative has been appointed to enforce the Guarantee, the General Partner has the right to enforce the Guarantee on behalf of the holders of each series of the Preferred Securities. The holders of not less than 10% in aggregate liquidation preference of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available in respect of the Guarantee, including the giving of directions to the General Partner or the Special Representative, as the case may be. If the General Partner or the Special Representative fails to enforce the Guarantee as above provided, any holder of Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce its rights under the Guarantee, without first instituting a legal proceeding against PacifiCorp Delaware or any other person or entity. The Guarantee will not be discharged except by payment of the Guarantee Payments in full to the extent not paid by PacifiCorp Delaware and by complete performance of all obligations under the Guarantee. EFFECT OF OBLIGATIONS UNDER THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE As set forth in the Limited Partnership Agreement, the sole purpose of PacifiCorp Delaware is to issue limited partnership interests in PacifiCorp Delaware and to invest the proceeds thereof in Junior Subordinated Debentures of PacifiCorp. As long as payments of interest and other payments are made when due on the Junior Subordinated Debentures issued in connection with Preferred Securities, such payments will be sufficient to cover dividends and payments due on the Preferred Securities primarily because (i) the aggregate principal amount of such Junior Subordinated Debentures will be equal to the sum of the aggregate stated liquidation preference of the Preferred Securities and the General Partner's capital contribution with respect to the Preferred Securities; (ii) the interest rate and interest and other payment dates on such Junior Subordinated Debentures of each series will match the dividend rate and dividend and other payment dates for the Preferred Securities of such series; (iii) the Limited Partnership Agreement provides that PacifiCorp, as General Partner, shall pay for all, and PacifiCorp Delaware shall not be obligated to pay, directly or indirectly, for any, costs and expenses of PacifiCorp Delaware; and (iv) the Limited Partnership Agreement further provides that the General Partner shall not cause or permit PacifiCorp Delaware to, among other things, engage in any activity that is not consistent with the purposes of PacifiCorp Delaware. If PacifiCorp fails to make interest or other payments on the Junior Subordinated Debentures issued in connection with Preferred Securities when due, the Limited Partnership Agreement provides a mechanism whereby the holders of the Preferred Securities may appoint a Special Representative to enforce the rights of PacifiCorp Delaware under such Junior Subordinated Debentures. Payments of dividends and other payments due on the Preferred Securities out of moneys held by PacifiCorp Delaware are guaranteed by PacifiCorp to the extent set forth under "-- General" above. The Limited Partnership Agreement also provides, and PacifiCorp, under the Guarantee, acknowledges, that a Special Representative may be appointed to enforce the Guarantee if PacifiCorp is in default on any of its payment obligations under the 12 Guarantee. In addition, if the General Partner or the Special Representative fails to enforce the Guarantee, a holder of a Preferred Security may institute a legal proceeding directly against PacifiCorp to enforce its rights under the Guarantee without first instituting a legal proceeding against PacifiCorp Delaware or any other person or entity. PacifiCorp and PacifiCorp Delaware believe that the Guarantee, taken together with related covenants contained in the Limited Partnership Agreement and PacifiCorp's obligations under the Junior Subordinated Debentures described above, are equivalent to a full and unconditional guarantee by PacifiCorp of payments due on the Preferred Securities. GOVERNING LAW The Guarantee will be governed by and construed in accordance with the laws of the State of New York. PLAN OF DISTRIBUTION PacifiCorp may sell any series of Junior Subordinated Debentures, and PacifiCorp Delaware may sell any series of Preferred Securities, in one or more of the following ways at any time or from time to time: (i) to underwriters for resale to the public or to institutional investors; (ii) directly to institutional investors; or (iii) through agents to the public or to institutional investors. The Prospectus Supplement with respect to each series of Offered Securities will set forth the terms of the offering of such Offered Securities, including the name or names of any underwriters or agents, the purchase price of such Offered Securities and the proceeds to PacifiCorp or PacifiCorp Delaware, as the case may be, from such sale, any underwriting discounts or agency fees and other items constituting underwriters' or agents' compensation, any initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such Offered Securities may be listed. If underwriters are used in the sale, such Offered Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase any series of Offered Securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all of such series of Offered Securities, if any are purchased. Underwriters and agents may be entitled under agreements entered into with PacifiCorp and/or PacifiCorp Delaware to indemnification by PacifiCorp and/or PacifiCorp Delaware against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the underwriters or agents may be required to make in respect thereof. Underwriters and agents may be customers of, engage in transactions with, or perform services for PacifiCorp and its subsidiaries in the ordinary course of business. Each series of Offered Securities will be a new issue of securities and will have no established trading market. Any underwriters to whom Offered Securities are sold by PacifiCorp or PacifiCorp Delaware for public offering and sale may make a market in such Offered Securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. The Offered Securities may or may not be listed on a national securities exchange. EXPERTS The audited consolidated financial statements of PacifiCorp and subsidiaries and supplemental schedules incorporated by reference in this Prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports included in or incorporated by reference in PacifiCorp's Annual Report on Form 10-K incorporated by reference herein, and have been so incorporated herein in reliance upon such reports given upon the authority of that firm as experts in accounting and auditing. With respect to any unaudited interim financial information that is incorporated herein by reference, Deloitte & Touche LLP have applied limited procedures in accordance with professional standards for a 13 review of such information. However, as stated in their reports included in any Quarterly Reports on Form 10-Q incorporated by reference herein, they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities Act for their reports on the unaudited interim financial information because those reports are not "reports" or a "part" of the Registration Statement to which this Prospectus is a part prepared or certified by an accountant within the meaning of Sections 7 and 11 of said Securities Act. LEGAL OPINIONS Certain legal matters in connection with the Offered Securities, including the validity of the Indenture, the Guarantee and the Junior Subordinated Debentures, will be passed upon for PacifiCorp and PacifiCorp Delaware by Stoel Rives Boley Jones & Grey, Portland, Oregon, and for the underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New York. Certain matters of Delaware law relating to the validity of the Preferred Securities, the validity of the Limited Partnership Agreement and the formation of PacifiCorp Delaware will be passed upon by Richards, Layton & Finger, P.A., as special Delaware counsel to PacifiCorp and PacifiCorp Delaware. Certain tax matters in connection with the Preferred Securities will be passed upon for PacifiCorp and PacifiCorp Delaware by Stoel Rives Boley Jones & Grey. John M. Schweitzer and John Detjens III, who are assistant secretaries of PacifiCorp, are partners in the firm of Stoel Rives Boley Jones & Grey. 14 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. -------------- TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT PacifiCorp........................... S-3 Investment Considerations............ S-3 Selected Financial Information....... S-4 Use of Proceeds...................... S-5 Description of the Series A Junior Subordinated Debentures............. S-5 United States Taxation............... S-9 Underwriting......................... S-11 Legal Matters........................ S-11 PROSPECTUS Available Information................ 2 Incorporation of Certain Documents by Reference........................... 2 PacifiCorp........................... 3 PacifiCorp Delaware, L.P............. 3 Consolidated Ratios of Earnings to Fixed Charges....................... 4 Consolidated Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends..................... 4 Use of Proceeds...................... 4 Description of the Junior Subordinated Debentures............. 4 Description of the Preferred Securities.......................... 10 Description of the Guarantee......... 11 Plan of Distribution................. 13 Experts.............................. 13 Legal Opinions....................... 14
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $75,000,000 [LOGO] % JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES, SERIES A, DUE 2024 ------------------ PROSPECTUS SUPPLEMENT ------------------ GOLDMAN, SACHS & CO. SMITH BARNEY INC. MORGAN STANLEY & CO. INCORPORATED -----END PRIVACY-ENHANCED MESSAGE-----