SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
/X/ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) |
For the fiscal year ended December 31, 1999
OR
/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
For the Transition period from _________ to _________
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
PACIFICORP K PLUS EMPLOYEE SAVINGS PLAN
825 N.E. Multnomah, Portland, Oregon 97232
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
SCOTTISH POWER plc
1 Atlantic Quay, Glasgow G2 8SP, Scotland
PacifiCorp K Plus Employee
Savings Plan
Financial Statements and Supplemental Schedule
For the Years Ended December 31, 1999 and 1998
PacifiCorp K Plus Employee Savings Plan
Table of Contents
Page | |
|
|
Report of Independent Accountants
To the Trustees of
PacifiCorp K Plus Employee Savings Plan
In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the PacifiCorp K Plus Employee Savings Plan (the Plan) at December 31, 1999 and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. The financial statements of the Plan as of December 31, 1998 and for the year then ended were audited by other independent accountants whose report dated June 18, 1999 expressed an unqualified opinion on those statements.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes at end of year is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Portland, Oregon
June 23, 2000
1
INDEPENDENT AUDITORS' REPORT
To the Trustees of
PacifiCorp K Plus Employee Savings Plan:
We have audited the accompanying statement of net assets available for benefits of the PacifiCorp K Plus Employee Savings Plan (the "Plan") as of December 31, 1998, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1998, and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.
June 18, 1999
2
PacifiCorp K Plus Employee Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
1999 | 1998 | |
|
|
|
The accompanying notes are an integral part of the financial statements.
3
PacifiCorp K Plus Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1999 and 1998
1999 | 1998 | |
|
|
|
The accompanying notes are an integral part of the financial statements.
4
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
1. Plan Description
The following brief description of the PacifiCorp K Plus Employee Savings Plan (the Plan) is
provided for general information purposes only. Participants should refer to the Plan
document for more complete information.
General
Effective January 1, 1988, PacifiCorp (the Company) and most of its subsidiaries
(Employers) adopted the Plan. The Plan is a tax-qualified Employee Savings Plan covering
employees of the Employers, except employees identified as "casual employees" within the
Employer's payroll system, employees covered by a collective bargaining agreement that
does not provide for participation in the Plan, leased employees and temporary employees.
Qualified employees of the Employers become eligible to participate after completing one
month of service as defined in the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Effective January 1, 1999, the Plan adopted the American Institute of Certified Public
Accountants Statement of Position 99-3, Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Disclosure Matters, which among other things, eliminates
the previous requirement to present fund information for participant directed investments.
The adoption of this statement had no effect on reported net assets or changes in net assets
available for benefits in the current or prior year.
Participant contributions
Participants may elect to contribute a percentage of their pre-tax annual compensation as
defined in the Plan (Pre-Tax Contributions). Different percentages can apply to separate
Employers, but in no event will the percentage be more than 16% of eligible compensation.
Each Employer makes a matching contribution each year for each participant (Matching
Contribution). The Matching Contribution is a percentage of the participant's Pre-Tax
Contribution for the year, up to 6% of the participant's compensation for the year. The
Matching Contribution percentage is 50% or a percentage fixed in the Employer's adoption
statement, by resolution of the Board of Directors of the Employer and announced to
participants, or pursuant to a collective bargaining agreement. Other than for employees
covered by certain collective bargaining agreements, the Matching Contribution is made to
the PacifiCorp K Plus Employee Stock Ownership Plan, another employee benefit plan
administered by the Company.
5
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
1. Plan Description (Continued)
Vesting
Pre-Tax Contributions are fully vested at all times. Matching Contributions are vested based
on years of service as follows:
Years of | Percent | |
|
|
Participant accounts
Each participant's account is credited with Pre-Tax Contributions, Matching Contributions,
where applicable, and an allocation of the Plan's net earnings or losses. Pre-Tax
Contributions are credited based on the participant's election, Matching Contributions are
credited according to the formula defined in the Plan document, and Plan earnings are
allocated based on participant account balances.
Participant withdrawals
Vested benefits are payable in a lump sum upon retirement, termination, death or disability.
If the participant's account balance exceeds $5,000, the participant may defer payment, or
upon retirement, elect installment payments over a specified period of time not exceeding 15
years from the date of commencement of benefits. The Plan also provides for withdrawals
due to financial hardship.
Participant loans
Participants may borrow from their account balance a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50% of their account balance under the Plan. Loan terms
range from 1 to 5 years or up to 15 years for the purchase of a primary residence, except for
some loans, which are transferred in from other plans which keep the existing terms. The
loans bear interest at a rate commensurate with local prevailing rates and are secured by the
balance in the participant's account and an assignment of current pay of the participant
sufficient to service the loan.
Plan termination
Although it has not expressed any intention to do so, the Company may wholly or partially
terminate the Plan or direct the discontinuance of contributions at any time, subject to the
provisions of ERISA.
6
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
2. Summary of Significant Accounting Policies
Basis of accounting
The financial statements of the Plan are prepared under the accrual method of accounting.
Investment valuation
On November 29, 1999, the Company and Scottish Power plc (ScottishPower) completed
their merger under which the Company became an indirect subsidiary of ScottishPower.
Each share of the Company's stock in the Plan was converted to 0.58 ScottishPower
American Depository Shares (ScottishPower ADS). Each ScottishPower ADS represents
four ordinary shares of ScottishPower common stock.
The investments in ScottishPower ADS and PacifiCorp common stock are stated at fair value
based on published market quotations at year-end. The per share market values of the
ScottishPower ADS and PacifiCorp common stock at December 31, 1999 and 1998 were
$28.00 and $21.06, respectively.
The Plan's investments in guaranteed investment contracts are stated at contract value, which
represents contributions made under the contract, plus earnings, less withdrawals. Plan
management believes that the contract value approximates fair value for the guaranteed
investment contracts. The average yield to maturity of the guaranteed investment contracts
was 6.24% and 6.43% at December 31, 1999 and 1998, respectively. There were no
valuation reserves at December 31, 1999 and 1998.
Investments in mutual funds and the common and commingled trust fund are stated at fair
value based on quoted market prices. Temporary cash investments and participant loans are
stated at cost, which approximates fair value.
Investment transactions and investment income
Investment transactions are accounted for on the date the investments are purchased or sold
(trade date). Interest income is recorded as earned. Dividend income is recorded on the ex
dividend date.
The Plan presents in the statement of changes in net assets available for benefits the net
appreciation (depreciation) in the fair value of its investments which consists of the realized
gains or losses and the unrealized appreciation (depreciation) on these investments.
Tax status
The Internal Revenue Service has determined and informed the Company by letter dated
June 25, 1996, that the Plan and related trust are designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the
determination letter. However, the Plan administrator and the Plan's tax counsel believe that
the Plan is designed and is currently being operated in compliance with the applicable
provisions of the IRC.
7
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
2. Summary of Significant Accounting Policies (Continued)
Payment of Benefits
Benefits are recorded when paid. As of December 31, 1999 and 1998, net assets available
for benefits included benefits of $1,410,781 and $724,149, respectively, due to participants
who have withdrawn from participation in the Plan.
On November 30, 1997, Pacific Telecom, Inc. (PTI) active employees ceased participation in
the Plan as a result of the sale of PTI, an indirect subsidiary of PacifiCorp, to Century
Telephone Enterprises, Inc. (Century). These participants' balances totaling $73,567,850
were transferred to a similar plan sponsored by Century in 1998.
Administrative expenses
The Plan provides that each participating Employer may pay administrative costs and
expenses of the Plan; those costs not paid by each Employer are paid from Plan assets.
Participant loans
Loan transactions are treated as a transfer between the investment funds and the Participant
Loan Fund.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that
affect reported amounts of assets, liabilities and changes therein, and the disclosure of
contingent assets and liabilities. Actual results could differ from those estimates.
Reclassifications
We have made reclassifications to certain prior year amounts to make them comparable to
the 1999 presentation. These changes had no effect on previously reported net assets
available for benefits.
3. Investment Programs
Upon enrollment in the Plan, a participant may direct contributions to any of the following
funds:
The Equity Fund - invests primarily in equity investments.
The Balanced Fund - invests primarily in equity investments and bonds.
The Bond Fund - invests primarily in mortgage-backed securities, U.S. Treasury Bonds, and
corporate bonds.
The Stable Asset Fund - invests primarily in guaranteed investment contracts.
The PacifiCorp Stock Fund invests in PacifiCorp common stock.
The ScottishPower ADS Fund - invests in ScottishPower ADS.
8
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
3. Investment Programs (Continued)
The Money Market Fund - invests solely in U.S. treasury securities.
The Aggressive Equity Fund - invests in equity instruments of small and medium size
companies.
The International Equity Fund - invests in equity investments of non-U.S. companies.
The Life Path Funds - various proportions of equity instruments and fixed income and debt
instruments. There are five Life Path Funds from which the participant may choose.
The S&P 500 Index Fund - invests in a portfolio of common stocks designed to match the
overall return of the S&P 500 Index.
Participant Loan Fund - loans to participants.
The following presents current value of investments that represent 5% or more of the Plan's
net assets:
1999 | 1998 | |
|
|
|
4. Net Appreciation in Fair Value of Investments
For the years ended December 31, 1999 and 1998, the Plan's investments appreciated
(depreciated) in fair value as follows:
1999 | 1998 | |
|
|
|
9
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
5. Reconciliation of Financial Statements to Internal Revenue Service Form 5500
The following is a reconciliation of net assets available for benefits per the financial
statements at December 31, 1999 and 1998 to the Internal Revenue Service Form 5500
(Form 5500):
1999 | 1998 | |
|
|
|
The following is a reconciliation of benefits paid to participants per the financial statements
for the year ended December 31, 1999 to Form 5500:
Benefits paid to participants per the financial statements | $ 52,314,848 |
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit
claims that have been processed and approved for payment prior to December 31, 1999, but
not yet paid as of that date.
6. Related-Party Transactions
Certain Plan investments are shares of ScottishPower ADS, PacifiCorp common stock, the
Bankers Trust Pyramid Directed Account Cash Fund and Pyramid Equity Index Fund.
PacifiCorp, and, indirectly, ScottishPower, are the Plan Sponsors and Bankers Trust is the
Trustee, as defined by the Plan. Therefore, these transactions qualify as party-in-interest.
10
PacifiCorp K Plus Employee Savings Plan
Notes to Financial Statements
6. Related-Party Transactions (Continued)
Purchases of employer-related stock during the years ended December 31, 1999 and 1998
were as follows:
Number |
| |
|
|
|
7. Concentration of Risk
At December 31, 1999, the Plan's assets consist primarily of investments in financial
instruments, including temporary cash investments, investment contracts, ScottishPower
ADS, mutual funds, common and commingled trust fund and participant loans. These
investments may subject the Plan to concentrations of risk, as from time-to-time, cash
balances exceed amounts insured by the Federal Deposit Insurance Corporation, market
value of securities are dependent on the ability of the issuers to honor contractual
commitments, and the value of ScottishPower ADS, mutual funds and the common and
commungled trust fund are subject to changes in market values.
8. Subsequent Event
On May 4, 2000, the utility partners who own the Centralia Power Plant sold the plant and
adjacent coal mine owned and operated by the Company to TransAlta, subject to certain
post-closing adjustments. Employees of the plant and adjacent coal mine became fully
vested in their matching contributions on May 4, 2000.
11
PacifiCorp K Plus Employee Savings Plan |
|
| (b) (c) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
12
PacifiCorp K Plus Employee Savings Plan |
|
| (b) (c) |
|
|
|
|
| |
|
|
| |
|
| ||
|
| ||
|
|
13
SIGNATURES
THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE K PLUS EMPLOYEE SAVINGS ADMINISTRATIVE COMMITTEE, WHICH ADMINISTERS THE PLAN, HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED.
PacifiCorp |
Date: June 28, 2000
14
