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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-5152
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PACIFICORP
(Exact name of registrant as specified in its charter)
STATE OF OREGON 93-0246090
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 N.E. MULTNOMAH,
PORTLAND, OREGON
(Address of principal executive 97232-4116
offices) (Zip Code)
Registrant's telephone number, including area code: (503) 731-2000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS REGISTERED
------------------------------------------- ---------------------------------------
Common Stock New York Stock Exchange
Pacific Stock Exchange
$1.98 No Par Serial Preferred Stock, New York Stock Exchange
($25 Stated Value), Series 1992
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS
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5% Preferred Stock (Cumulative; $100 Stated Value)
Serial Preferred Stock (Cumulative; $100 Stated Value)
No Par Serial Preferred Stock (Cumulative; Various Stated Values)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES _X_ NO ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
On March 1, 1995, the aggregate market value of the shares of voting stock
of the Registrant held by nonaffiliates was approximately $5.8 billion.
As of March 1, 1995, there were 284,259,719 shares of the Registrant's
common stock outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders of the Registrant for the year
ended December 31, 1994 are incorporated by reference in Parts I and II.
Portions of the Annual Reports on Form 10-K of Pacific Telecom, Inc. and
PacifiCorp Financial Services, Inc. for the year ended December 31, 1994 are
incorporated by reference in Part I.
Portions of the proxy statement of the Registrant for the 1995 Annual
Meeting of Shareholders are incorporated by reference in Part III.
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TABLE OF CONTENTS
PAGE
NO.
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Definitions............................................................. ii
Part I
Item 1. Business.................................................. 1
The Organization........................................ 1
Electric Utility Operations............................. 1
Pacific Telecom......................................... 9
Other................................................... 9
Employees............................................... 10
Item 2. Properties................................................ 10
Item 3. Legal Proceedings......................................... 12
Item 4. Submission of Matters to a Vote of Security Holders....... 13
Item 4A. Executive Officers of the Registrant...................... 13
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters...................................... 15
Item 6. Selected Financial Data................................... 15
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 15
Item 8. Financial Statements and Supplementary Data............... 15
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...................... 15
Part III
Item 10. Directors and Executive Officers of the Registrant........ 15
Item 11. Executive Compensation.................................... 15
Item 12. Security Ownership of Certain Beneficial Owners and
Management............................................... 15
Item 13. Certain Relationships and Related Transactions............ 15
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K................................................. 16
Signatures.............................................................. 20
Appendices
Schedule II
Statements of Computation of Ratio of Earnings to Fixed Charges
Statements of Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
List of Subsidiaries
Portions of the Annual Reports on Form 10-K of Pacific Telecom, Inc.
and PacifiCorp Financial Services, Inc. for the year ended December
31, 1994
i
DEFINITIONS
When the following terms are used in the text they will have the meanings
indicated:
TERM MEANING
--------------------------------------------- -------------------------------------------------------------------
BPA.......................................... Bonneville Power Administration
Company...................................... PacifiCorp, an Oregon corporation
FERC......................................... Federal Energy Regulatory Commission
Holdings..................................... PacifiCorp Holdings, Inc., a wholly owned subsidiary of the Company
PGC.......................................... Pacific Generation Company, a wholly owned subsidiary of Holdings,
and its subsidiaries
PFS.......................................... PacifiCorp Financial Services, Inc., a wholly owned subsidiary of
Holdings, and its subsidiaries
Pacific Power................................ Pacific Power & Light Company, the assumed business name of the
Company under which it conducts a portion of its retail electric
operations
Pacific Telecom.............................. Pacific Telecom, Inc., an approximately 87% owned subsidiary of
Holdings, and its subsidiaries
Utah Power................................... Utah Power & Light Company, the assumed business name of the
Company under which it conducts a portion of its retail electric
operations
ii
PART I
ITEM 1. BUSINESS
THE ORGANIZATION
The Company is an electric utility that conducts a retail electric utility
business through Pacific Power and Utah Power, and engages in power production
and sales on a wholesale basis under the name PacifiCorp. The Company formed
Holdings in 1984 to hold the stock of the Company's principal subsidiaries and
to facilitate the conduct of businesses not regulated as electric utilities. The
Company's strategic business plan is to strengthen the scope and competitive
position of its electric utility and telecommunications operations, to develop
and expand its independent power production and cogeneration business, and to
reduce the size and narrow the scope of its other diversified activities.
Through Holdings, the Company indirectly owns approximately 87% of Pacific
Telecom, a telecommunications company that provides local telephone service and
access to the long distance network in Alaska, seven other western states and
three midwestern states, intrastate and interstate long distance communication
services in Alaska, and cellular mobile telephone services. Pacific Telecom is
also involved in the operation and maintenance of and sale of capacity in a
submarine fiber optic cable between the United States and Japan. Holdings has
entered into an agreement and plan of merger with Pacific Telecom under which
Holdings would acquire the 13% publicly held minority interest in Pacific
Telecom for $30 per share. The merger requires approval by the holders of a
majority of the outstanding shares of Pacific Telecom not owned by Holdings (5.3
million shares), and is subject to regulatory approvals and other conditions
customary to such transactions.
Holdings owns 100% of PGC, which is engaged in the independent power
production and cogeneration business. Holdings also owns 100% of PFS. Consistent
with PacifiCorp's strategic plan, PFS has sold substantial portions of its loan,
leasing, manufacturing and real estate investments and expects to continue its
disposition activities over the next several years. PFS presently expects to
retain only its tax-advantaged investments in leveraged lease assets (primarily
aircraft) and low-income housing projects.
Note 16 to the Company's Consolidated Financial Statements, incorporated
herein by reference under Item 8, contains information with respect to the
revenue and income from operations contributed by each of the Company's industry
segments for the past three years and the identifiable assets attributable to
each segment at the end of each of those years; this information is incorporated
herein by this reference. For the year ended December 31, 1994, 76% of
PacifiCorp's revenues from operations were derived from Electric Operations,
while Pacific Telecom contributed 20%.
The Company's common stock (symbol PPW) is traded on the New York Stock
Exchange and the common stock of Pacific Telecom, Inc. (symbol PTCM) is traded
on the national over-the-counter market. The Company's $1.98 No Par Serial
Preferred Stock, Series 1992, is traded on the New York Stock Exchange.
ELECTRIC UTILITY OPERATIONS
PacifiCorp conducts its retail electric utility operations as Pacific Power
and Utah Power, and engages in wholesale electric transactions under the name
PacifiCorp. Pacific Power and Utah Power provide electric service within their
respective service territories. Power production, wholesale sales, fuel supply
and administrative functions are managed on a coordinated basis.
SERVICE AREA
The Company serves 1.3 million retail customers in service territories
aggregating about 153,000 square miles in portions of seven Western states:
Utah, Oregon, Wyoming, Washington, Idaho, California and Montana. The service
area contains diversified industrial and agricultural economies.
1
Principal industries include oil and gas extraction, lumber and wood products,
paper and allied products, chemicals and primary metals and mining. Agricultural
products include potatoes, hay, grain and livestock.
The Company's distribution assets in northern Idaho were sold on December
31, 1994 following approval of the sale by the Idaho Public Utilities
Commission. The decision to sell these assets was based on a number of
competitive factors, including the likelihood of significant future price
increases. The sale affects 9,800 residential, commercial and industrial
customers.
The geographical distribution of retail electric operating revenues for the
year ended December 31, 1994 was Utah, 36%; Oregon, 31%; Wyoming, 15%;
Washington, 8%; Idaho, 5%; California, 3%; and Montana, 2%.
CUSTOMERS
Electric utility revenues and energy sales, by class of customer, for the
three years ended December 31, 1994 were as follows:
1994 1993 1992
-------------- -------------- --------------
Operating Revenues (Dollars in
millions):
Residential................. $ 724.9 28% $ 698.9 29% $ 649.8 28%
Commercial.................. 570.4 22 543.9 22 526.9 23
Industrial.................. 726.3 28 696.2 28 695.6 30
Government, Municipal and
Other...................... 30.7 1 29.8 1 29.9 1
-------- ---- -------- ---- -------- ----
Total Retail Sales........ 2,052.3 79 1,968.8 80 1,902.2 82
Wholesale Sales-Firm........ 456.2 18 422.5 17 356.5 15
Wholesale Sales-Nonfirm... 76.5 3 77.3 3 71.3 3
-------- ---- -------- ---- -------- ----
Total Energy Sales........ 2,585.0 100% 2,468.6 100% 2,330.0 100%
---- ---- ----
---- ---- ----
Other Revenues (1).......... 62.8 38.3 32.4
-------- -------- --------
Total Operating
Revenues................. $2,647.8 $2,506.9 $2,362.4
-------- -------- --------
-------- -------- --------
Kilowatt-hours Sold (kWh in
millions):
Residential................. 12,127 21% 12,055 21% 11,230 21%
Commercial.................. 10,645 18 10,085 18 9,733 18
Industrial.................. 20,306 34 19,671 34 19,942 36
Government, Municipal and
Other...................... 623 1 602 1 606 1
-------- ---- -------- ---- -------- ----
Total Retail Sales........ 43,701 74 42,413 74 41,511 76
Wholesale Sales-Firm........ 12,418 21 11,919 21 10,455 19
Wholesale Sales-Nonfirm..... 3,207 5 3,030 5 2,965 5
-------- ---- -------- ---- -------- ----
Total kWh Sold............ 59,326 100% 57,362 100% 54,931 100%
-------- ---- -------- ---- -------- ----
-------- ---- -------- ---- -------- ----
<FN>
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(1) Includes miscellaneous and steam heating revenues.
The Company's seven-state service territory has complementary seasonal load
patterns. In the western sector, customer demand peaks in the winter months due
to space heating requirements. In the eastern sector, customer demand peaks in
the summer when irrigation and cooling systems are heavily used. Many factors
affect per customer consumption of electricity. For residential customers,
within a given year, weather conditions are the dominant cause of usage
variations from normal seasonal patterns. However, the price of electricity is
also considered a significant factor.
During 1994, no single retail customer accounted for more than 1.5% of the
Company's retail utility revenues and the 20 largest retail customers accounted
for 12% of total retail electric revenues.
2
COMPETITION
Although the Company operates as a regulated monopoly within its service
territories, the Company encounters significant competition from both
traditional and nontraditional energy suppliers. Competition varies in form and
intensity and includes competition from both utility and nonutility energy
suppliers for industrial customers, as well as for wholesale power sales to
other utilities; self generation and cogeneration by industrial customers; and
substitute energy forms for residential and commercial space heating, cooling
and water heating.
The Energy Policy Act of 1992 eased restrictions on independent power
production and gave the FERC authority to mandate wholesale wheeling. The FERC
is moving quickly to set the stage for competition. In a series of recently
released orders and notices of proposed rulemaking, the FERC has heightened the
level of industry discussion regarding topics such as transmission access and
pricing, stranded investment, unbundling of services and comparability of
service standards. In addition, several states have taken actions that may
increase competition at the retail level. For example, the California Public
Utilities Commission is conducting a rulemaking that would allow competition for
all retail electric customers in California. The Michigan Public Service
Commission has also ordered an experimental five-year program to evaluate
competition for large retail customers in that state.
The Company is formulating strategies to meet these new challenges and
maintain its competitive position. The Company has restructured its electric
operations into three internal business units -- generation, wholesale
transactions and transmission, and retail sales. The Company is also seeking
alternate forms of regulation that will include performance indices to give
shareholders an appropriate opportunity to share in the rewards and risks of
competition. The Company plans to focus on the development of new products and
services, as well as the use of existing technologies in new ways. The Company
has begun to offer power supply services to other utilities, including dispatch
assistance, daily system load monitoring, backup power, power storage and power
marketing, and services to retail customers that encourage efficient use of
energy. In addition, the Company has recently opened a wholesale power marketing
office in Nevada. Depending upon the success of these strategies, the Company
will continue to adjust its competitive direction.
For a discussion of accounting for the effects of regulation, see Note 1 to
the Company's Consolidated Financial Statements incorporated herein by reference
under Item 8.
CURRENT POWER AND FUEL SUPPLY
The Company's generating facilities are interconnected through its own
transmission lines or by contract through the lines of others. Substantially all
generating facilities and reservoirs located within the Pacific Northwest are
managed on a coordinated basis to obtain maximum load carrying capability and
efficiency.
The Company's transmission system connects with other utilities in the
Northwest having low-cost hydroelectric generation and with utilities in
California and the Southwest having higher-cost, fossil-fuel generation. In
periods of favorable hydro conditions, the Company utilizes lower-cost
hydroelectric power to supply a greater portion of its load and attempts to sell
its displaced higher-cost thermal generation to other utilities. In periods of
less favorable hydro conditions, the Company seeks to sell excess thermal
generation to utilities which are more dependent on hydroelectric generation
than the Company. During the winter, the Company is able to purchase power from
Southwest utilities, either for its own peak requirements or for resale to other
Northwest utilities. During the summer, the Company is able to sell excess power
to Southwest utilities to assist them in meeting their peak requirements. See
"Wholesale Sales and Purchased Power."
The Company owns or has interests in generating plants with an aggregate
nameplate rating of 8,413.5 megawatts ("MW") and plant net capability of 7,983.1
MW. See "Item 2. Properties." With its present generating facilities, under
average water conditions, the Company expects that approximately 7% of its
energy requirements for 1995 will be supplied by its hydroelectric plants and
79% by
3
its thermal plants. The balance of 14% will be obtained under long-term purchase
contracts, interchange and other purchase arrangements. Note 9 to the Company's
Consolidated Financial Statements, incorporated by reference under Item 8,
contains additional details relating to the Company's purchase of power under
long-term arrangements.
The Company is purchasing 1,100 MW of firm capacity from the BPA pursuant to
a recently executed long-term agreement that extends through August 1, 2011. The
Company's current annual payment under this agreement is $77.2 million. The
agreement provides for this amount to escalate at the rate of increase of BPA's
average system cost. See "Regulation" for information concerning an increase in
the BPA's rates.
In January 1993, the Operating Committee for the Trojan Plant formally
approved the permanent cessation of nuclear operations at the plant, which had
been shut down since November 9, 1992 when a leak was detected in a steam
generator tube. Portland General Electric Company is the operator of the Trojan
Plant and owns a 67.5% share. The Eugene Water and Electric Board has assigned
its 30% interest in the plant to the BPA, and the Company owns a 2.5% interest.
Recovery of the Company's remaining investment in the Trojan Plant ($13.4
million at December 31, 1994) and estimated share of plant closure and
decommissioning costs ($15.4 million at December 31, 1994) is subject to
regulatory approval.
Under the requirements of the Public Utility Regulatory Policies Act of 1978
("PURPA"), the Company purchases the output of qualifying facilities constructed
and operated by entities that are not public utilities. During 1994, the Company
purchased an average of 102 MW from qualifying facilities, compared to an
average of 94 MW in 1993.
The Company plans and manages its capacity and energy resources based on
critical water conditions. Under critical or better water conditions in the
Northwest, the Company believes that it has adequate reserve generation capacity
for its requirements. The Company's historical total firm peak load (including
both retail and firm wholesale sales) of 8,903 MW occurred on December 5, 1994,
and historical on-system firm peak load of 7,623 MW occurred on December 21,
1990.
WHOLESALE SALES AND PURCHASED POWER
Wholesale sales continue to contribute significantly to total revenues. The
Company's wholesale sales complement its retail business and enhance the
efficient use of its generating capacity. In 1994, wholesale sales accounted for
26% of total energy sales and 21% of total energy revenues.
In addition to its base of thermal and hydroelectric resources, the Company
utilizes a mix of long-term and short-term firm power purchases and nonfirm
purchases to meet its load obligations and to make sales to other utilities when
prices are favorable. Firm power purchases supplied 9% of the Company's total
energy requirements in 1994. Nonfirm purchases were 5% of total energy
requirements in 1994 and slightly less than the total amount of energy sold by
the Company on the nonfirm wholesale market during the year.
PROPOSED ASSET ADDITIONS
In accordance with the Company's long range integrated resource planning
process, also referred to as "least-cost planning," the Company considers
various future demand and supply options for providing customers with reliable,
low-cost energy services. See "Projected Demand." In this connection, the
Company also seeks opportunities to acquire existing assets from other
utilities.
In 1993, the Company signed a contract to purchase the entire output from
the Hermiston Generating Project located near Hermiston, Oregon. This 474
megawatt natural gas cogeneration project is being developed by U.S. Generating
Company ("U.S. Generating"). In November 1994, U.S. Generating commenced
construction of the plant. The Company has entered into an agreement to
purchase, subject to certain conditions, a 50% ownership interest in this
project for approximately $156 million. The payment is also contingent upon
commercial operation of the project, which is expected to occur in July 1996.
4
The Company has signed a contract to build a 50 MW cogeneration project at
the James River paper mill in Camas, Washington. The steam royalty agreement
extends for 20 years. The facility will use steam produced for the paper making
process to drive an electric turbine generator and is expected to begin
operating in late 1995.
The Company plans to participate in two wind generation projects, a 70 MW
project in Wyoming and a 31 MW project in Washington, both of which are to be
built by Kenetech Windpower and scheduled to begin producing power in 1996. The
Company plans to own 53.2%, or about 38 MW of the Wyoming project, and 60%, or
about 19 MW, of the Washington project.
The terms of the Company's 1991 transaction with Arizona Public Service
Company ("APS") call for the construction by APS of 150 MW of combustion
turbines to be owned by the Company. The Company will pay a $20 million fee in
January 1997 for rights and services provided by APS. Commercial operation dates
for the turbines have not been established.
PROJECTED DEMAND
Annual increases in retail kilowatt-hour sales for the Company have averaged
2% since 1989. The Company has benefited from improved economic conditions in
portions of its service territory and the Company's commitment to price
stability. Substantial price reductions in many of the Company's service
territories have helped sustain sales volume growth.
In connection with its long-range integrated resource planning process,
which includes load growth projections for its service areas, the Company
considered a range of average annual growth in energy requirements from 0.3% to
3.8% over a 20-year horizon. For the period 1995 to 1999, the average annual
growth is expected to be about 2%. Actual growth in the future will be
determined by economic and demographic growth, competition and the effectiveness
of energy efficiency programs.
The Company's base of existing resources, in combination with actions
outlined in its integrated resource plan, are expected to be sufficient to meet
the above range of possible load growth conditions throughout the 1990s. Actions
outlined in the integrated resource plan include energy efficiency by customers
(demand-side management), efficiency improvements to existing generation,
transmission and distribution systems, and investments in cogeneration, single
cycle and combined cycle combustion turbines and in renewable resources. See
"Proposed Asset Additions." The Company intends to use the results of its
integrated resource planning process as a framework to evaluate opportunities to
acquire surplus generating facilities from other utilities.
Demand-side management is an element of the Company's diversified portfolio
of resources identified in its integrated plan. The use of an energy service
charge concept in the Company's demand-side resource programs is intended to
allow these resources to be acquired at competitive costs. Under the energy
service charge program, the customers receiving the benefits of energy
efficiency measures are expected to pay most of the related costs. The Company
expended an aggregate of $44 million for demand-side resources in 1994, while
acquiring 18.7 average MW of energy efficiency.
ENVIRONMENT
In addition to land use restrictions and other controls by local
governments, the Company is subject to regulation by federal, state and local
authorities pursuant to legislation designed to protect and enhance the quality
of the environment, including air and water quality, remediation of
contamination, waste disposal and protection of endangered species.
Environmental regulation has not only increased the cost of providing electric
service, it has adversely affected various industrial groups, thereby negatively
impacting kWh sales by the Company to certain customers in those industries.
However, the Company has been able to manage these additional costs to date
without having to pass the costs directly to its customers in the form of higher
rates. The Company's ability to avoid such price increases in the future is
uncertain.
5
AIR QUALITY. The Company's operations are subject to regulation under the
Federal Clean Air Act, as enforced by the Environmental Protection Agency
("EPA") and various state agencies. The Company believes that all of the
coal-fired generating plants operated by it comply in all material respects with
current emission standards. Some of the plants have recently modified their fuel
supply systems or processes in order to meet those standards. The Company
believes that it can continue to operate its plants at or below currently
mandated emission rates without incurring costs that would have a material
adverse effect on its consolidated results of operations.
In August 1993, the Sierra Club filed an action against the owners of the
Hayden Generating Station alleging violations of state and federal air quality
regulations at the station since 1988. In April 1992, the Company acquired
interests in two units of the station, which is operated by Public Service
Company of Colorado. Among other things, the complaint alleges violations of
opacity emission standards and seeks civil monetary penalties and an injunction.
Various federal and state agencies have raised concerns with respect to
perceived visibility degradation in areas where the Company owns coal-fired
generating plants. Two visibility studies have been completed within the
Company's service territory, one in Washington and the other in the Canyonlands
area of Utah. To date, no additional emission control requirements have resulted
from these studies. The Company is participating in additional visibility
studies in western Wyoming, Colorado and the Grand Canyon area. The findings of
these studies may have a significant impact on operations at a number of
generating plants owned by the Company or in which the Company has an ownership
interest.
The 1990 Clean Air Act Amendments require an overall reduction in the
emission of sulfur dioxide ("SO(2)") and nitrogen oxides ("NO(x)") from utility
generating plants, and establish a system of marketable SO(2) emission
allowances. The Company's generating plants burn low-sulfur coal and the
majority of the Company's plants representing a majority of its installed
capacity have been equipped with SO(2) emission controls. However, the new law
will result in additional operating costs because the Company will be required
to maintain and manage SO(2) emission levels, install approximately $12 million
of emission monitoring equipment, and reduce NO(x) emissions at some of its
generating plants. The SO(2) emission allowances awarded to the Company are
sufficient to enable the Company to meet its current needs and expansion plans
and to enable the Company to take advantage of opportunities to sell surplus
allowances to other utilities. In 1994, the Company recorded the sales of a
portion of its surplus allowances for $9 million. The Company may have
approximately 20,000 to 25,000 tons of surplus SO(2) emission allowances
available for sale each year until 2024.
In February 1995, the Southwest Air Pollution Control Authority ("SWAPCA")
published a preliminary determination of the SO(2) emission limitations to be
imposed on the Centralia steam electric generating plant through the application
of Reasonably Available Control Technology ("RACT") as mandated by the state of
Washington's Clean Air Act. The RACT determination considers technical
feasibility, economic impact and other issues in setting an emissions level for
the plant. Such limitations could be achieved through the use of low-sulfur coal
from sources other than the Centralia mine, or by flue gas desulfurization
systems on a portion of the flue gasses, or a combination of those or other
means, certain of which could require capital expenditures. The Company and
SWAPCA are discussing the appropriate emission level to be imposed at the plant.
Emissions from coal-fired generating plants include carbon dioxide (CO(2)).
Carbon dioxide emissions are not currently subject to regulation, but have been
the subject of increasing public concern. In 1994, the Company joined with 37
other investor-owned utilities to sign a voluntary agreement with the U.S.
Department of Energy addressing CO(2) emissions. The Company's specific
agreement includes a commitment to reduce its 1990 CO(2) emissions rate by 10%
and to spend $1 million on offset projects by the year 2000. The Company is
testing various techniques of offsetting CO(2) emissions to determine their
feasibility and cost effectiveness.
6
ENDANGERED SPECIES. Enforcement of the Endangered Species Act ("ESA") and
other laws by the National Marine Fisheries Service ("NMFS") and the U.S. Fish
and Wildlife Service ("FWS") is affecting the Company's operations in a number
of areas.
Environmental regulation under the ESA has resulted in reduced availability
of timber for use by the Company's customers in the wood products industry, and
long-range timber management plans for timberlands managed by federal and state
agencies are expected to further reduce the volume of timber available for
processing. In addition, the listing of the Northern Spotted Owl and other
species under the ESA is expected to result in further restrictions on timber
harvesting from both public and private timber lands. These actions have
adversely affected energy sales to the Company's customers in the wood products
industry.
Protection of habitat of endangered and threatened species will make it more
difficult to site and construct new transmission and distribution facilities and
generating plants, and is also a consideration in connection with the
relicensing of existing hydroelectric generating projects.
NMFS is responsible for ESA actions regarding marine fish and certain marine
mammals. As a result of recent decisions with respect to the listing of species
of Columbia River salmon as endangered or threatened, NMFS is involved in
recovery measure planning that could result in changes in federal hydrosystem
operations and flows. These changes could affect the availability and cost of
power from the BPA. Pending and threatened lawsuits under the ESA and the
Northwest Power Act could result in further restrictions on the federal
hydropower system and affect regional power supplies and costs.
The FWS has identified the Lost River sucker, the shortnose sucker, and the
bald eagle as species listed under the ESA that may be affected by operations of
the Klamath Project, a hydroelectric project in southern Oregon and Northern
California. Waterflows through the Klamath Project are directed by the U.S.
Bureau of Reclamation during periods of critically low flows. Because of recent
drought conditions, flows past the Link River Dam have been substantially
reduced, which has contributed to a reduction in hydroelectric generation at
certain of the Company's downstream hydroelectric plants.
The Company anticipates that other fish species will be nominated for ESA
listings, and such actions could further impact the Company's hydroelectric
resources. The Company is continuing to monitor and participate in regional ESA
activities to minimize the generation and economic impacts resulting from such
actions. It is unknown at this time what impact, if any, these actions will have
on the Company's operations.
ELECTROMAGNETIC FIELDS. A number of studies have examined the possibility
of adverse health effects from electromagnetic fields ("EMF"), without
conclusive results. Certain states and cities have enacted regulations to limit
the strength of magnetic fields at the edge of transmission line rights-of-way;
however, other than California, none of the jurisdictions in which the Company
operates has adopted formal rules or programs with respect to EMF or EMF
considerations in the siting of electric facilities. In California, the Public
Utilities Commission has issued an interim order requiring utilities to
implement no cost or low-cost mitigation measures in the certification process
for their facilities. The Company expects that public concerns about EMF will
make it more difficult to site and construct new power lines and substations in
the future. It is uncertain whether the Company's operations may be adversely
affected in other ways as a result of EMF concerns.
ENVIRONMENTAL CLEANUPS. Under the Comprehensive Environmental Response,
Compensation and Liability Act and comparable state statutes, entities that
disposed of or arranged for the disposal of hazardous substances, and the owners
and operators of the affected property, may be liable for the remediation of
contaminated sites. The Company has been identified as a potentially responsible
party in connection with a number of cleanup sites to which it may have sent
transformers containing polychlorinated biphenyls ("PCBs"), used oil and other
hazardous wastes. In addition, certain of the Company's own properties have been
identified as requiring remediation. The Company is conducting
7
or participating in investigations and remedial actions with respect to those
sites; however, the costs associated with those actions are not expected to be
material to the Company's consolidated financial position or results of
operations.
WATER QUALITY. The Clean Water Act requires permits for the discharge of
certain pollutants into the waters of the United States, including storm water
runoff. Under this Act, the EPA has issued effluent limitation guidelines,
pretreatment standards and new source performance standards for the control of
certain pollutants; and individual states may impose still more stringent
limitations. The Company currently has the required discharge permits for its
facilities, except for a dredging permit with respect to Bear Lake in Idaho
which is expected to involve a contested hearing. Failure to obtain that permit
could adversely affect certain of the Company's hydroelectric facilities on the
Bear River. Additional regulations may be promulgated in the future, but the
Company is unable to predict the extent to which such additional regulations
will affect its operations and capital expenditure requirements.
HAZARDOUS WASTES. The federal Resource Conservation and Recovery Act
("RCRA") has established a national program for the handling, treatment,
recycling, storage and disposal of hazardous wastes. To date, RCRA has not had a
material impact on the Company's operations or expenditures; however, the EPA
and the Congress are studying the impacts of high volume, low toxicity utility
wastes, such as fly ash, which are now exempt from RCRA regulations. If this
exception were to be withdrawn, the Company may be faced with considerable
expense to change its disposal practices and modify its existing disposal
facilities.
MISCELLANEOUS. In cooperation with Bureau of Land Management ("BLM") and
the FWS, the Company has installed a system to prevent birds from landing in the
flue gas desulfurization waste pond at the Naughton Plant pond. The Company is
studying possible methods of preventing bird landings on a similar pond at the
Jim Bridger plant.
REGULATION
The Company is subject to the jurisdiction of public utility regulatory
authorities of each of the states in which it conducts retail electric
operations as to prices, services, accounting, issuance of securities and other
matters. The Company is a "licensee" and a "public utility" as those terms are
used in the Federal Power Act and is, therefore, subject to regulation by the
FERC as to accounting policies and practices, certain prices and other matters.
Most of the Company's hydroelectric plants are licensed as major projects under
the Federal Power Act and certain of these projects are licensed under the
Oregon Hydroelectric Act.
The Company is currently in the process of relicensing certain of its
hydroelectric projects under the Federal Power Act and will be seeking licenses
for other projects in the future. The licenses of 11 of the Company's
hydroelectric projects expire within the next 10 years. These projects represent
458 MW, or 43%, of the Company's hydroelectric generating capacity. In the new
licenses, the FERC is expected to impose conditions designed to address the
impact of the projects on fish and other environmental concerns. See
"Environment; Endangered Species." The Company is unable to predict the impact
of imposition of such conditions, but capital expenditures and operating costs
are expected to increase in future periods. In addition, the Company may refuse
relicenses for certain projects if the terms of renewal make the projects
uneconomical to operate.
Prices charged to retail customers are subject to regulation in each of the
states the Company serves. Interstate sales of electricity at wholesale prices
and interstate wheeling rates are regulated by the FERC. Except in Montana,
where the commission is elected, commissioners are appointed by the individual
state's governor for varying terms. While regulation varies from state to state,
industry analysts consider the overall quality of the regulatory commissions
having jurisdiction over the Company to be about average in their treatment of
the rate applications of utilities.
BPA plans to increase its power and wheeling rates effective in late 1995 or
early 1996. The Company's firm capacity purchase and wheeling expenses will be
affected by this increase. In addition,
8
any increase in the BPA's rates will reduce the exchange benefits directly
received by the Company's residential and small farm customers. The Company
intends to request price increases that will allow it to recover the loss of
exchange benefits.
CONSTRUCTION PROGRAM
The following table shows actual construction costs for 1994 and the
Company's estimated construction costs for 1995 through 1997, including costs of
acquiring demand-side resources. The estimates of construction costs for 1995
through 1997 are subject to continuing review and the Company makes appropriate
revisions. These estimates do not include expected expenditures for purchases of
generating assets. See "Proposed Asset Additions" for information concerning
recent and proposed additions to the Company's generating assets.
ESTIMATED
ACTUAL ----------------
TYPE OF FACILITY 1994 1995 1996 1997
------------------------------ ------ ---- ---- ----
(DOLLARS IN MILLIONS)
Production.................... $143 $105 $181 $181
Transmission.................. 81 55 66 60
Distribution.................. 246 221 204 206
Mining........................ 77 20 29 42
Other......................... 91 133 82 80
------ ---- ---- ----
Total....................... $638 $534 $562 $569
------ ---- ---- ----
------ ---- ---- ----
PACIFIC TELECOM
Pacific Telecom provides local telephone service and access to the long
distance network in Alaska, seven other western states and three midwestern
states. Alascom, Inc., Pacific Telecom's long distance telephone subsidiary,
provides Alaska with both intrastate and interstate long distance communication
services. Pacific Telecom's sale of Alascom, Inc. to AT&T Corp. is pending.
Pacific Telecom has acquired and is developing, operating and managing cellular
mobile telephone services in seven states. Pacific Telecom is also involved in
the operation and maintenance of and sale of capacity in a submarine fiber optic
cable between the United States and Japan. For further information with respect
to the business of Pacific Telecom and the pending merger under which Holdings
would acquire the minority interest in Pacific Telecom, see "Item 1. Business"
of the Annual Report on Form 10-K of Pacific Telecom, Inc. for the year ended
December 31, 1994; such information is incorporated herein by this reference.
See "Item 3. Legal Proceedings" for a discussion of certain litigation
affecting Pacific Telecom.
OTHER
Consistent with PacifiCorp's strategic plan, PFS plans to continue to sell
portions of its loan, leasing and real estate investments over the next several
years. PFS expects to retain only its tax-advantaged investments in leveraged
lease assets (primarily aircraft) and low-income housing projects. For further
information with respect to the business of PFS, see "Item 1. Business" of the
Annual Report on Form 10-K of PacifiCorp Financial Services, Inc. for the year
ended December 31, 1994; such information is incorporated herein by this
reference.
During 1994, the Company's wholly owned independent power production and
cogeneration business, PGC, through its subsidiaries, began construction of a
240 MW cogeneration facility in California. When completed, the facility will be
operated by PGC and PGC will own approximately 46% of the completed project. PGC
plans to continue to pursue opportunities in the U.S. market and has begun a
preliminary investigation of opportunities in the international markets.
9
EMPLOYEES
PacifiCorp and its subsidiaries had 12,845 employees on December 31, 1994.
Of these employees, 9,281 were employed by PacifiCorp and its mining affiliates,
2,762 were employed by Pacific Telecom and 802 were employed by PFS, PGC and
other subsidiaries.
Approximately 64% of the employees of PacifiCorp and its mining affiliates
are covered by union contracts, principally with the International Brotherhood
of Electrical Workers, the Utility Workers Union of America and the United Mine
Workers of America.
For information with respect to the employees of Pacific Telecom and PFS,
see "Item 1. Business" of the Annual Reports on Form 10-K of Pacific Telecom,
Inc. and PacifiCorp Financial Services, Inc., for the year ended December 31,
1994; such information is incorporated herein by this reference.
In the Company's judgment, employee relations are satisfactory.
ITEM 2. PROPERTIES
The Company owns 52 hydroelectric generating plants and has an interest in
one additional plant, with an aggregate nameplate rating of 1,079.2 MW and plant
net capability of 1,124.5 MW. It also owns or has interests in 15
thermal-electric generating plants with an aggregate nameplate rating of 7,334.3
MW and plant capability of 6,858.6 MW. The following table summarizes the
Company's existing generating facilities:
INSTALLATION NAMEPLATE PLANT NET
LOCATION ENERGY SOURCE DATES RATING(MW) CAPABILITY(MW)
--------------------- --------------- ------------ ---------- --------------
HYDROELECTRIC PLANTS
Swift....................... Cougar, Washington Lewis River 1958 240.0 267.9
Merwin...................... Ariel, Washington Lewis River 1931-1958 136.0 144.0
Yale........................ Amboy, Washington Lewis River 1953 134.0 132.0
Five North Umpqua Plants.... Toketee Falls, Oregon N. Umpqua River 1950-1956 133.5 135.5
John C. Boyle............... Keno, Oregon Klamath River 1958 80.0 82.0
Copco Nos. 1 and 2 Plants... Hornbrook, California Klamath River 1918-1925 47.0 54.5
Clearwater Nos. 1 and 2
Plants..................... Toketee Falls, Oregon Clearwater
River 1953 41.0 41.0
Grace....................... Grace, Idaho Bear River 1914-1923 33.0 33.0
Prospect No. 2.............. Prospect, Oregon Rogue River 1928 32.0 36.0
Cutler...................... Collinston, Utah Bear River 1927 30.0 29.1
Oneida...................... Preston, Idaho Bear River 1915-1920 30.0 28.0
Iron Gate................... Hornbrook, California Klamath River 1962 18.0 20.0
Soda........................ Soda Springs, Idaho Bear River 1924 14.0 14.0
Fish Creek.................. Toketee Falls, Oregon Fish Creek 1952 11.0 12.0
33 Minor Hydroelectric
Plants..................... Various Various 1896-1990 99.7 95.5*
---------- -------
Subtotal (53 Hydroelectric Plants) 1,079.2 1,124.5
10
INSTALLATION NAMEPLATE PLANT NET
LOCATION ENERGY SOURCE DATES RATING(MW) CAPABILITY(MW)
--------------------- --------------- ------------ ---------- --------------
THERMAL ELECTRIC PLANTS
Jim Bridger................. Rock Springs, Wyoming Coal-Fired 1974-1979 1,495.0* 1,386.7*
Huntington.................. Huntington, Utah Coal-Fired 1974-1977 892.8 845.0
Dave Johnston............... Glenrock, Wyoming Coal-Fired 1959-1972 816.7 772.0
Naughton.................... Kemmerer, Wyoming Coal-Fired 1963-1971 707.2 700.0
Centralia................... Centralia, Washington Coal-Fired 1972 693.5* 636.5*
Hunter 1 and 2.............. Castle Dale, Utah Coal-Fired 1978-1980 687.7* 639.4*
Hunter 3.................... Castle Dale, Utah Coal-Fired 1983 446.4 395.0
Cholla Unit 4............... Joseph City, Arizona Coal-Fired 1981 414.0 380.0
Wyodak...................... Gillette, Wyoming Coal-Fired 1978 289.7* 268.0*
Gadsby...................... Salt Lake City, Utah Gas-Fired 1951-1955 251.6 237.0
Carbon...................... Castle Gate, Utah Coal-Fired 1954-1957 188.6 175.0
Craig 1 and 2............... Craig, Colorado Coal-Fired 1979-1980 172.1* 165.0*
Colstrip 3 and 4............ Colstrip, Montana Coal-Fired 1984-1986 155.6* 144.0*
Hayden 1 and 2.............. Hayden, Colorado Coal-Fired 1965-1976 81.3* 78.0*
Blundell.................... Milford, Utah Geothermal 1984 26.1 23.0
Little Mountain............. Ogden, Utah Gas Turbine 1971 16.0 14.0
---------- -------
Subtotal (15 Thermal Electric Plants) 7,334.3 6,858.6
---------- -------
Total Hydro and Thermal Generating Facilities (68) 8,413.5 7,983.1
---------- -------
---------- -------
<FN>
------------------------------
* Jointly owned plants; amount shown represents the Company's share only.
NOTE: Hydroelectric project locations are stated by locality and river
watershed.
The Company's generating facilities are interconnected through its own
transmission lines or by contract through the lines of others. Substantially all
generating facilities and reservoirs located within the Pacific Northwest region
are managed on a coordinated basis to obtain maximum load carrying capability
and efficiency. Portions of the Company's transmission and distribution systems
are located, by franchise or permit, upon public lands, roads and streets and,
by easement or license, upon the lands of others.
Substantially all of the Company's electric utility plants are subject to
the liens of the Company's Mortgages and Deeds of Trust.
The following table describes the Company's recoverable coal reserves as of
December 31, 1994. All coal reserves are dedicated to nearby Company operated
generating plants. Recoverability by surface mining methods typically ranges
between 90% and 95%. Recoverability by underground mining techniques ranges from
50% to 70%. The Company considers that the respective reserves assigned to the
Centralia, Craig, Dave Johnston, Huntington, Hunter and Jim Bridger plants,
together with coal available under both long-term and short-term contracts with
external suppliers, will be sufficient to provide these plants with fuel that
meets the Clean Air Act standards effective in 1995, for their current
economically useful lives. The sulfur content of the reserves ranges from 0.43%
to 0.84% and the BTU value per pound of the reserves ranges from 7,600 to
11,400. Reserve estimates are subject to adjustment as a result of the
development of additional data, new mining technology and changes in regulation
and economic factors affecting the utilization of such reserves.
RECOVERABLE TONS
LOCATION PLANT SERVED (IN MILLIONS)
------------------------------ --------------------- ----------------
Centralia, Washington......... Centralia 44(1)
Craig, Colorado............... Craig 72(2)
Glenrock, Wyoming............. Dave Johnston 64(1)
Emery County, Utah............ Huntington and Hunter 141(1)(3)
Rock Springs, Wyoming......... Jim Bridger 138(4)
<FN>
------------------------
(1) These reserves are mined by subsidiaries of the Company.
11
(2) These reserves are leased and mined by Trapper Mining Company, a wholly
owned subsidiary of Williams Fork Company, in which the Company owns
approximately 20% of the outstanding stock.
(3) These reserves are in underground mines.
(4) These reserves are leased and mined by Bridger Coal Company, a joint
venture between Pacific Minerals, Inc., a subsidiary of the Company, and a
subsidiary of Idaho Power Company. Pacific Minerals, Inc. has a two-thirds
interest in the joint venture.
Most of the Company's coal reserves are held pursuant to leases from the
federal government through the BLM and from certain states and private parties.
The leases generally have multi-year terms that may be renewed or extended and
require payment of rentals and royalties. In addition, federal and state
regulations require that comprehensive environmental protection and reclamation
standards be met during the course of mining operations and upon completion of
mining activities. In 1994, the Company expended $3.6 million of reclamation
costs and accrued $5.7 million of estimated final mining reclamation costs.
Final mine reclamation funds have been established with respect to certain of
the Company's mining properties. At December 31, 1994, the Company's pro rata
portion of these reclamation funds totaled $26 million and the Company had an
accrued reclamation liability of $104 million at December 31, 1994.
For a description of the properties of Pacific Telecom and PFS, see "Item 1.
Business" and "Item 2. Properties" of the Annual Reports on Form 10-K of Pacific
Telecom, Inc. and PacifiCorp Financial Services, Inc. for the year ended
December 31, 1994; such information is incorporated herein by this reference.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are parties to various legal claims,
actions and complaints, certain of which are described below. Although it is
impossible to predict with certainty whether or not the Company and its
subsidiaries will ultimately be successful in its legal proceedings or, if not,
what the impact might be, management believes that disposition of these matters
will not have a material adverse effect on the Company's consolidated results of
operations.
In November 1991, former shareholders of American Network, Inc. ("AmNet")
filed a third amended complaint against Pacific Telecom and others, suing
individually and also derivatively on behalf of AmNet for damages allegedly
arising out of the acquisition of AmNet by United States Transmission Systems,
Inc. ("USTS"), a subsidiary of ITT Corporation, in 1988 and various alleged
actions in connection with certain transactions that occurred in 1984 and 1986
between AmNet or its subsidiaries and Pacific Telecom or between AmNet and other
parties. (LOEWEN, ET AL. V. GALLIGAN, ET AL., Circuit Court for the State of
Oregon, County of Multnomah; United States District Court, District of Oregon.)
At the time of the acquisition by USTS, Pacific Telecom owned 36.4% of the
common shares of AmNet. On September 14, 1994, the Oregon Court of Appeals
affirmed the trial court's grant of summary judgment to defendants. Plaintiffs'
petition for review of that decision by the Oregon Supreme Court was denied on
December 27, 1994.
A class action complaint was filed against Equitec Financial Group, Inc.
("Equitec"), certain of its subsidiaries and former directors and officers, as
well as the Company, PacifiCorp Holdings and PacifiCorp Financial Services.
(DUVAL, ET AL. V. GLEASON, ET AL., Alameda County Superior Court, filed August
16, 1989). PacifiCorp Holdings acquired an interest in Equitec in December 1987
and owns approximately 49% of Equitec's stock. The complaint, as amended, was
filed on behalf of the limited partners in twelve real estate limited
partnerships sponsored by Equitec during the 1980-1988 period, and alleges fraud
and breach of fiduciary duty by the defendants in connection with the public
offering
12
and management of the real estate partnerships. Plaintiffs seek an unspecified
amount of compensatory and punitive damages, an accounting of transactions
entered into by the partnerships and rescission of the purchase of their
partnership interests. The PacifiCorp defendants filed a demurrer to the amended
complaint, which was allowed with prejudice and without further leave to amend.
The plaintiffs in the DUVAL case have also filed two actions in the federal
district court for the Northern District of California alleging fraud under the
federal securities laws in connection with the sale of interests in the same
partnerships. (SPENCER, ET AL. V. GLEASON, ET AL. and DUVAL, ET AL. V. GLEASON,
ET AL., United States District Court for the Northern District of California.)
The PacifiCorp defendants filed a motion to dismiss the federal actions, which
has been held in abeyance pending settlement discussions. The parties have
reached a tentative settlement of the federal and state actions subject to court
approval.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No information is required to be reported pursuant to this item.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list of all executive officers of the Company. There are
no family relationships among the executive officers. Officers are normally
elected annually.
Frederick W. Buckman, born March 9, 1946, President and Chief Executive
Officer of the Company
Mr. Buckman was elected President and Chief Executive Officer of the Company
effective February 1, 1994 and became a director of the Company and PacifiCorp
Holdings, Inc. in February 1994. He formerly served as President and Chief
Executive Officer of Consumers Power Company, Jackson, Michigan, from 1992 to
1994 and as President and Chief Operating Officer of Consumers Power Company
from 1988 to 1991.
Charles E. Robinson, born December 3, 1933, Chairman, President and Chief
Executive Officer of Pacific Telecom, Inc. and Chairman, President and Director
of Alascom, Inc.
Mr. Robinson was elected Chairman of Pacific Telecom, Inc. in February 1989.
He has been serving as Chief Executive Officer since April 1985 and served as
President from April 1985 to October 1990. He resumed the role of President on
December 31, 1992.
John A. Bohling, born June 23, 1943, Senior Vice President of the Company
Mr. Bohling was elected Senior Vice President of the Company in February
1993. He served as Executive Vice President of Pacific Power from September 1991
to February 1993 and as Senior Vice President of Utah Power from February 1990
to September 1991.
Shelley R. Faigle, born June 8, 1951, Senior Vice President of the Company
Ms. Faigle was elected Senior Vice President of the Company in November
1993. She served as Vice President from February 1992 to November 1993 and as
Vice President of Pacific Power from 1989 to February 1992.
Paul G. Lorenzini, born April 16, 1942, Senior Vice President of the Company
Mr. Lorenzini was elected Senior Vice President of the Company in May 1994.
He served as President of Pacific Power from January 1992 to May 1994 and as
Executive Vice President from January 1989 to January 1992.
John E. Mooney, born March 9, 1937, Senior Vice President of the Company
Mr. Mooney was elected Senior Vice President of the Company in November
1994. He served as Executive Vice President of Utah Power from September 1991 to
November 1994 and as Vice President of Pacific Power from August 1990 to
September 1991.
13
Daniel L. Spalding, born December 23, 1953, Senior Vice President of the
Company and Senior Vice President of PacifiCorp Holdings, Inc.
Mr. Spalding was elected Senior Vice President of the Company in February
1992. He served as Vice President from October 1987 to February 1992.
Dennis P. Steinberg, born December 5, 1946, Senior Vice President of the
Company
Mr. Steinberg was elected Senior Vice President of the Company in August
1994. He served as Vice President of the Company from February 1992 to August
1994 and as Vice President of Electric Operations from August 1990 to February
1992.
Verl R. Topham, born August 25, 1934, Senior Vice President and General
Counsel of the Company
Mr. Topham was elected Senior Vice President and General Counsel and a
director of the Company in May 1994. He had served as President of Utah Power
from February 1990 to May 1994.
Sally A. Nofziger, born July 5, 1936, Vice President and Corporate Secretary
of the Company, Secretary of PacifiCorp Holdings, Inc. and PacifiCorp Financial
Services, Inc.
Mrs. Nofziger was elected Vice President of the Company in 1989 and has been
Corporate Secretary since 1983.
Thomas J. Imeson, born March 20, 1950, Vice President of the Company
Mr. Imeson was elected Vice President of the Company in February 1992. He
had served as Vice President of Electric Operations from 1990 to February 1992.
Robert F. Lanz, born October 30, 1942, Vice President of the Company
Mr. Lanz was elected Vice President of the Company in 1980. He served as
Treasurer of the Company from June 1984 to December 1993.
Richard T. O'Brien, born March 20, 1954, Vice President of the Company and
Senior Vice President of PacifiCorp Holdings, Inc.
Mr. O'Brien was elected Vice President of the Company in August 1993. He
served as Senior Vice President, Treasurer and Chief Financial Officer of NERCO,
Inc., a former subsidiary of the Company, during 1992 and 1993 and Vice
President and Treasurer of NERCO from 1989 to 1992.
Jacqueline S. Bell, born November 17, 1941, Controller of the Company and
PacifiCorp Holdings, Inc.
Ms. Bell became Controller of the Company and of PacifiCorp Holdings, Inc.
in June 1989 and served as Controller of PacifiCorp Financial Services, Inc.
from October 1993 to December 1994.
William E. Peressini, born May 23, 1956, Treasurer of the Company
Mr. Peressini was elected Treasurer of the Company in January 1994. He
served as Executive Vice President of PacifiCorp Financial Services, Inc. from
January 1992 to January 1994 and as Senior Vice President and Chief Financial
Officer of that company from 1989 to January 1992.
14
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is included under "Summary
Information" and "Quarterly Financial Data" on pages 20 and 53 of the Company's
Annual Report to Shareholders and is incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is included under "Summary
Information" and "Capitalization" on pages 20 and 26 of the Company's Annual
Report to Shareholders and is incorporated herein by this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is included under "Summary
Information," "Liquidity and Capital Resources," "Electric Operations,"
"Telecommunications," "Other" and "Discontinued Operations" on pages 20 through
35 of the Company's Annual Report to Shareholders and is incorporated herein by
this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by this reference from
the Company's Annual Report to Shareholders or filed with this Report as listed
in Item 14 hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
No information is required to be reported pursuant to this item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to the Company's
directors is incorporated herein by this reference to "Election of Directors" in
the Proxy Statement for the 1995 Annual Meeting of Shareholders. The information
required by this item with respect to the Company's executive officers is set
forth in Part I of this report under Item 4A. The information required by this
item with respect to compliance with Section 16(a) of the Securities Exchange
Act of 1934 is incorporated herein by this reference to "Compliance within
Section 16(a) of the Securities Exchange Act of 1934" in the Proxy Statement for
the 1995 Annual Meeting of Shareholders.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by this
reference to "Executive Compensation" in the Proxy Statement for the 1995 Annual
Meeting of Shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated herein by this
reference to "Security Ownership of Certain Beneficial Owners and Management" in
the Proxy Statement for the 1995 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by this
reference to "Director Compensation and Certain Transactions" in the Proxy
Statement for the 1995 Annual Meeting of Shareholders.
15
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
PAGE
REFERENCES
----------
(a) 1. Index to Consolidated Financial
Statements:*
Independent Auditors' Report.......... 36
Statements of consolidated income and
retained earnings for each of the
three years ended December 31,
1994................................. 37
Consolidated balance sheets at
December 31, 1994 and 1993........... 38
Statements of consolidated cash flows
for each of the three years ended
December 31, 1994.................... 40
Notes to consolidated financial
statements........................... 41
2. Schedules:**
Independent Auditors' Report.......... 22
II -- Valuation and qualifying
accounts for the three years ended
December 31, 1994.................... 23
------------------------
* Page references are to the incorporated portion of the Annual Report to
Shareholders of the Registrant for the year ended December 31, 1994.
** All other schedules have been omitted because of the absence of the
conditions under which they are required or because the required information
is included elsewhere in the financial statements incorporated by reference
herein.
3. Exhibits:
*(2)a -- Agreement and Plan of Merger dated as of March 9, 1995 by
and among Pacific Telecom, Inc., PacifiCorp Holdings, Inc.
and PXYZ Corporation. (Exhibit 2A, Form 8-K dated March 9,
1995, File No. 0-873.)
*(2)b -- Agreement dated as of March 9, 1995 between PacifiCorp and
Pacific Telecom, Inc. (Exhibit 2B, Form 8-K dated March 9,
1995, File No. 0-873.)
*(3)a -- Second Restated Articles of Incorporation of the Company, as
amended. (Exhibit (3)a, Form 10-K for fiscal year ended
December 31, 1992, File No. 1-5152).
*(3)b -- Bylaws of the Company (as restated and amended November 17,
1993). (Exhibit (3)b, Form 10-K for fiscal year ended
December 31, 1993, File No. 1-5152).
*(4)a -- Mortgage and Deed of Trust dated as of January 9, 1989,
between the Company and Morgan Guaranty Trust Company of New
York (Chemical Bank, successor), Trustee, as supplemented
and modified by nine Supplemental Indentures (Exhibit 4-E,
Form 8-B, File No. 1-5152; Exhibit (4)(b), File No.
33-31861; Exhibit (4)(a), Form 8-K dated January 9, 1990,
File No. 1-5152; Exhibit 4(a), Form 8-K dated September 11,
1991, File No. 1-5152; Exhibit 4(a), Form 8-K dated January
7, 1992, File No. 1-5152; Exhibit 4(a), Form 10-Q for the
quarter ended March 31, 1992, File No. 1-5152; and Exhibit
4(a), Form 10-Q for the quarter ended September 30, 1992,
File No. 1-5152; Exhibit 4(a), Form 8-K dated April 1, 1993,
File No. 1-5152; Exhibit 4(a), Form 10-Q for the quarter
ended September 30, 1993, File No. 1-5152); and Exhibit
4(a), Form 10-Q for the quarter ended June 30, 1994, File
No. 1-5152).
(4)b -- Tenth Supplemental Indenture dated as of August 1, 1994 to
the Mortgage and Deed of Trust dated as of January 9, 1989
between the Company and Morgan Guaranty Trust Company of New
York (Chemical Bank, successor), Trustee.
*(4)c -- Mortgage and Deed of Trust dated as of July 1, 1947, between
Pacific Power & Light Company and Guaranty Trust Company of
New York (Chemical Bank, successor) and Oliver R. Brooks et
al. (resigned) Trustees, as supplemented and modified by
16
fifty-two Supplemental Indentures (Exhibit 7(d), File No.
2-7118; Exhibit 7(b), File No. 2-8354; Exhibit 4(b)-3, File
No. 2-9446; Exhibit 4(b)-4, File No. 2-9809; Exhibit 4(b)-5,
File No. 2-10731; Exhibit 4(b)-6, File No. 2-11022; Exhibit
4(b)-7, File No. 2-12576; Exhibit 4(b)-8, File No. 2-13403;
Exhibit 4(b)-2, File No. 2-13793; Exhibit 4(b)-2, File No.
2-14125; Exhibit 4(b)-2, File No. 2-14706; Exhibit 4(b)-2,
File No. 2-16843; Exhibit 4(b)-2, File No. 2-19841; Exhibit
4(b)-2, File No. 2-20797; Exhibit 4(b)-3, File No. 2-20797;
Exhibit 4(b)-2, File No. 2-15327; Exhibit 4(b)-2, File No.
2-21488; Exhibit 4(b)-2, File No. 2-15327; Exhibit 4(b)-2,
File No. 2-23922; Exhibit 4(b)-5, File No. 2-15327; Exhibit
4(b)-2, File No. 2-32390; Exhibit 4(b)-2, File No. 2-34731;
Exhibit 2(b)-1, File No. 2-37436; Exhibit 2(b)-4, Thirteenth
Amendment, File No. 2-15327; Exhibit 5(gg), File No.
2-43377; Exhibit 2(b)-1, File No. 2-45648; Exhibit 2(b)-1,
File No. 2-49808; Exhibit 2(b)-1, File No. 2-52039; Exhibit
2, Form 8-K for the month of June 1975, File No. 1-5152;
Exhibit 2, Form 8-K for the month of January 1976, File No.
1-5152; Exhibit 3(c), Form 8-K for the month of July 1976,
File No. 1-5152; Exhibit 2, Form 8-K for the month of
December 1976, File No. 1-5152; Exhibit 3(c), Form 8-K for
the month of January 1977, File No. 1-5152; Exhibit 5(yy),
File No. 2-60582; Exhibit 5(m)-2, File No. 2-66153; Exhibit
4(a)-2, File No. 2-70905; Exhibit (4)a, Form 10-K for the
fiscal year ended December 31, 1980, File No. 1-5152;
Exhibit 4(b), Form 10-K for the fiscal year ended December
31, 1981, File No. 1-5152; Exhibit (4)b, Form 10-K for the
fiscal year ended December 31, 1982, File No. 1-5152;
Exhibit (4)b, File No. 2-82676; Exhibit (4)b, Form 10-K for
the fiscal year ended December 31, 1985, File No. 1-5152;
Exhibit 4, Form 8-K dated July 25, 1986, File No. 1-5152;
Exhibit 4, Form 8-K dated May 18, 1988, File No. 1-5152;
Exhibit 4(a), Form 8-K dated January 9, 1989, File No.
1-5152; Exhibit (4)(d), File No. 33-31861; Exhibit (4)(b),
Form 8-K dated January 9, 1990, File No. 1-5152; Exhibit
4(b), Form 8-K dated September 11, 1991, File No. 1-5152;
Exhibit 4(b), Form 8-K dated January 7, 1992, File No.
1-5152; Exhibit 4(b), Form 10-Q for the quarter ended March
31, 1992, File No. 1-5152; Exhibit 4(b), Form 10-Q for the
quarter ended September 30, 1992, File No. 1-5152; Exhibit
4(b), Form 8-K dated April 1, 1993, File No. 1-5152; Exhibit
4(b), Form 10-Q for the quarter ended September 30, 1993,
File No. 1-5152; and Exhibit 4(b), Form 10-Q for the quarter
ended June 30, 1994, File No. 1-5152).
(4)d -- Fifty-third Supplemental Indenture dated as of August 1,
1994 to the Mortgage and Deed of Trust dated as of July 1,
1947 between Pacific Power & Light Company and Guaranty
Trust Company of New York (Chemical Bank, successor) and
Oliver R. Brooks et al. (resigned), Trustees.
*(4)e -- Mortgage and Deed of Trust dated as of December 1, 1943,
between Utah Power & Light Company and Guaranty Trust
Company of New York (Morgan Guaranty, successor) and Arthur
E. Burke et al. (resigned) Trustees, as supplemented and
modified by fifty-four Supplemental Indentures (Exhibits
7(a), 7(b) and 7(e), File No. 2-6245; Exhibit 7(a), File No.
2-7420; Exhibit 7(a), File No. 2-7880; Exhibit 7(a), File
No. 2-8057; Exhibit 7(g), File No. 2-8564; Exhibit 7(h),
File No. 2-9121; Exhibit 4(d), File No. 2-9796; Exhibit
4(d), File No. 2-10707; Exhibit 4(d), File No. 2-11822;
Exhibit 4(d), File No. 2-13560; Exhibit 4(d), File No.
2-16861; Exhibit 4(d), File No. 2-20176; Exhibit 2(c), File
No. 2-21141; Exhibit 2(c), File No. 2-59660; Exhibit 2(e),
File No. 2-28131; Exhibit 2(e), File No. 2-59660; Exhibit
2(e), File No. 2-36342; Exhibit 2(e), File No. 2-39394;
Exhibits 2(h) and 2(i), File No. 2-59660; Exhibit 2(d), File
No. 2-51736; Exhibit 2(c), File No. 2-54812; Exhibit 2(c),
File No. 2-55331; Exhibit 2(c), File No. 2-55762; Exhibit
2(d), File No. 2-56990; Exhibit 2(e), File No. 2-56990;
Exhibits 2(c) and 2(d), File No. 2-58227; Exhibit 2(r), File
No. 2-59660; Exhibits 2(c) and 2(d), File No. 2-61221;
Exhibit 2(c), File No. 2-63813; Exhibit 2(c), File No.
2-65221; Exhibit 2(c)-1, File No. 2-66680;
17
Exhibits 4(b) and 4(c)-1, File No. 2-74773; Exhibit 4(d),
File No. 2-80100; Exhibits 4(d)-2 and 4(d)-3, File No.
2-76293; Exhibit 4(b), File No. 33-9932; Exhibit 4(b), File
No. 33-13207; Exhibits 4(a) and 4(b), File No. 33-01890;
Exhibit 4(b), Form 8-K dated January 9, 1989, File No.
1-5152; Exhibit (4)(f), File No. 33-31861; Exhibit (4)(c),
Form 8-K dated January 9, 1990, File No. 1-5152; Exhibit
4(c), Form 8-K dated September 11, 1991, File No. 1-5152;
Exhibit 4(c), Form 8-K dated January 7, 1992, File No.
1-5152; Exhibit 4(c), Form 10-Q for the quarter ended March
31, 1992, File No. 1-5152; Exhibit 4(c), Form 10-Q for the
quarter ended September 30, 1992, File No. 1-5152; Exhibit
4(c), Form 8-K dated April 1, 1993, File No. 1-5152; Exhibit
4(c), Form 10-Q for the quarter ended September 30, 1993,
File No. 1-5152; and Exhibit 4(c), Form 10-Q for the quarter
ended June 30, 1994, File No. 1-5152).
(4)f -- Fifty-fifth Supplemental Indenture dated as of August 1,
1994 to the Mortgage and Deed of Trust dated as of December
1, 1943 between Utah Power & Light Company and Guaranty
Trust Company of New York (Chemical Bank, successor) and
Arthur E. Burke et al. (resigned), Trustees.
*(4)g -- Second Restated Articles of Incorporation, as amended, and
Bylaws. See (3)a and (3)b above.
In reliance upon item 601(4)(iii) of Regulation S-K, various
instruments defining the rights of holders of long-term debt
of the Registrant and its subsidiaries are not being filed
because the total amount authorized under each such
instrument does not exceed 10 percent of the total assets of
the Registrant and its subsidiaries on a consolidated basis.
The Registrant hereby agrees to furnish a copy of any such
instrument to the Commission upon request.
*+(10)a -- PacifiCorp Deferred Compensation Payment Plan (Exhibit 10-F,
Form 10-K for fiscal year ended December 31, 1992, File No.
1-8749).
+(10)b -- PacifiCorp Compensation Reduction Plan dated December 1,
1994, as amended.
*+(10)c -- Pacific Telecom Executive Bonus Plan, dated October 26, 1990
(Exhibit 10B, Form 10-K for the fiscal year ended December
31, 1990, File No. 0-873).
+(10)d -- PacifiCorp 1995 PerformanceShare Incentive Plan.
+(10)e -- PacifiCorp 1995 Individual Incentive Plan.
+(10)f -- PacifiCorp Non-Employee Directors' Stock Compensation Plan
dated August 1, 1985, as amended.
*+(10)g -- PacifiCorp Long Term Incentive Plan, 1993 Restatement
(Exhibit 10G, Form 10-K for the year ended December 31,
1993, File No. 0-873).
*+(10)h -- Form of Restricted Stock Agreement under PacifiCorp Long
Term Incentive Plan, 1993 Restatement (Exhibit 10H, Form
10-K for the year ended December 31, 1993, File No. 0-873).
+(10)i -- PacifiCorp Supplemental Executive Retirement Plan 1988
Restatement, as amended.
*+(10)j -- PacifiCorp Executive Severance Plan (Exhibit (10)m, Form
10-K for fiscal year ended December 31, 1988, File No.
1-5152).
*+(10)k -- Pacific Telecom Executive Deferred Compensation Plan dated
as of January 1, 1994, as amended (Exhibit 10L, Form 10-K
for the year ended December 31, 1994, File No. 0-873).
*+(10)l -- Pacific Telecom Long Term Incentive Plan 1994 Restatement
dated as of January 1, 1994 (Exhibit 10F, Form 10-K for the
fiscal year ended December 31, 1993, File No. 0-873).
18
*+(10)m -- Pacific Telecom Executive Officer Severance Plan (Exhibit
10N, Form 10-K for the year ended December 31, 1994, File
No. 0-873).
*+(10)n -- Form of Restricted Stock Agreement under Pacific Telecom
Long-Term Incentive Plan 1994 Restatement (Exhibit (10)o,
Form 10-K for the year ended December 31, 1993, File No.
1-5152).
*+(10)o -- Incentive Compensation Agreement dated as of February 1,
1994 between PacifiCorp and Frederick W. Buckman (Exhibit
(10)k, Form 10-K for the fiscal year ended December 31,
1993, File No. 1-5152).
*+(10)p -- Restricted Stock Agreement dated as of December 3, 1992
between PacifiCorp and A. M. Gleason (Exhibit (10)k, Form
10-K for the fiscal year ended December 31, 1992, File No.
1-5152).
*+(10)q -- Compensation Agreement dated as of February 9, 1994 between
PacifiCorp and Keith R. McKennon. (Exhibit (10)m, Form 10-K
for the fiscal year ended December 31, 1993, File No.
1-5152).
+(10)r -- Amendment No. 1 to Compensation Agreement between PacifiCorp
and Keith R. McKennon dated as of February 9, 1995.
*(10)s -- Short-Term Surplus Firm Capacity Sale Agreement executed
July 9, 1992 by the United States of America Department of
Energy acting by and through the Bonneville Power
Administration and Pacific Power & Light Company (Exhibit
(10)n, Form 10-K for the fiscal year ended December 31,
1992, File No. 1-5152).
(10)t -- Restated Surplus Firm Capacity Sale Agreement executed
September 27, 1994 by the United States of America
Department of Energy acting by and through the Bonneville
Power Administration and Pacific Power & Light Company.
(12)a -- Statements of Computation of Ratio of Earnings to Fixed
Charges. (See page S-1.)
(12)b -- Statements of Computation of Ratio of Earnings to combined
Fixed Charges and Preferred Stock Dividends. (See page S-2.)
(13) -- Portions of Annual Report to Shareholders of the Registrant
for the year ended December 31, 1994 incorporated by
reference herein.
(21) -- Subsidiaries. (See pages S-3 and S-4.)
(23) -- Consent of Deloitte & Touche LLP with respect to Annual
Report on Form 10-K.
(24) -- Powers of Attorney.
(27) -- Financial Data Schedule (filed electronically only).
(99) -- "Item 1. Business" and "Item 2. Properties" from the Annual
Reports on Form 10-K of Pacific Telecom, Inc. and PacifiCorp
Financial Services, Inc. for the year ended December 31,
1994.
<FN>
------------------------
* Incorporated herein by reference.
+ This exhibit constitutes a management contract or compensatory plan or
arrangement.
(b) Reports on Form 8-K.
On Form 8-K dated March 9, 1995, under "Item 5. Other Events," the Company
filed a press release reporting a proposed merger under which the minority
interest in Pacific Telecom, Inc. would be acquired by PacifiCorp Holdings.
In addition, the Company reported certain summary financial information.
(c) See (a) 3. above.
(d) See (a) 2. above.
19
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
PACIFICORP
By /s/ FREDERICK W. BUCKMAN
-----------------------------------
Frederick W. Buckman
(PRESIDENT)
Date: March 30, 1995
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
------------------------------------------------------
/s/ FREDERICK W. BUCKMAN
------------------------------------------- President, Chief Executive
Frederick W. Buckman Officer and Director March 30, 1995
(President)
/s/ DANIEL L. SPALDING
------------------------------------------- Senior Vice President (Chief
Daniel L. Spalding Accounting Officer) March 30, 1995
(Senior Vice President)
*KATHRYN A. BRAUN
-------------------------------------------
Kathryn A. Braun
*C. TODD CONOVER
-------------------------------------------
C. Todd Conover
Director March 30, 1995
*RICHARD C. EDGLEY
-------------------------------------------
Richard C. Edgley
*A. M. GLEASON
-------------------------------------------
A. M. Gleason
(Vice Chairman)
20
SIGNATURE TITLE DATE
------------------------------------------------------
*JOHN C. HAMPTON
-------------------------------------------
John C. Hampton
*NOLAN E. KARRAS
-------------------------------------------
Nolan E. Karras
*KEITH R. MCKENNON
-------------------------------------------
Keith R. McKennon
(Chairman)
Director March 30, 1995
*ROBERT G. MILLER
-------------------------------------------
Robert G. Miller
*VERL R. TOPHAM
-------------------------------------------
Verl R. Topham
*DON M. WHEELER
-------------------------------------------
Don M. Wheeler
*NANCY WILGENBUSCH
-------------------------------------------
Nancy Wilgenbusch
*By /s/ NANCY WILGENBUSCH
--------------------------------------
Nancy Wilgenbusch
(Attorney-in-Fact)
21
INDEPENDENT AUDITORS' REPORT
PacifiCorp:
We have audited the consolidated financial statements of PacifiCorp and
subsidiaries as of December 31, 1994 and 1993, and for each of the three years
in the period ended December 31, 1994, and have issued our report thereon dated
February 17, 1995, March 9, 1995 as to the agreement to acquire the minority
interest in Pacific Telecom, Inc. described in Note 1, (which expresses an
unqualified opinion and includes an explanatory paragraph relating to the change
in the Company's method of accounting for income taxes and other postretirement
benefits); such consolidated financial statements and report are included in
your 1994 Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the consolidated financial statement
schedules of PacifiCorp and subsidiaries, listed in Item 14. These consolidated
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, such financial statement schedules, when considered in relation to
the basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
DELOITTE & TOUCHE LLP
Portland, Oregon
February 17, 1995
(March 9, 1995 as to the agreement
to acquire the minority interest
in Pacific Telecom, Inc. described
in Note 1)
22
PACIFICORP
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 1994
(MILLIONS OF DOLLARS)
BALANCE CHARGED TO BALANCE
AT CHARGED TO OTHER AT END
BEGINNING COSTS AND ACCOUNTS OF
DESCRIPTION OF PERIOD EXPENSES (1) DESCRIBE DEDUCTIONS (2) PERIOD
---------------------------------------- --------- ---------- ---------- ---------- -------
Year Ended December 31, 1994:
Accumulated amortization of estimated
recoverable nuclear project costs.... $61.8 $ 1.0 $-- $-- $62.8
Allowance for credit losses........... 53.4 1.5 -- 10.3 44.6
Other reserves........................ 36.6 10.7 (.6) 14.5 32.2
Year Ended December 31, 1993:
Accumulated amortization of estimated
recoverable nuclear project costs.... 60.0 1.8 -- -- 61.8
Allowance for credit losses........... 56.5 2.6 24.6 30.3 53.4
Other reserves........................ 79.0 14.0 (24.6) 31.8 36.6
Year Ended December 31, 1992:
Accumulated amortization of estimated
recoverable nuclear project costs.... 59.0 1.0 -- -- 60.0
Allowance for credit losses........... 15.0 77.1 -- 35.6 56.5
Other reserves........................ 33.4 83.5 -- 37.9 79.0
<FN>
------------------------
(1) Charged principally to depreciation and amortization, provision for
uncollectible accounts, provision for credit losses and other expense.
(2) Uncollectible amounts written off net of recoveries.
23