THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE INFORMATION CONTAINED HEREIN ARE
SUBJECT TO COMPLETION OR AMENDMENT AND PROSPECTIVE PURCHASERS ARE REFERRED TO
THE RELATED FINAL PROSPECTUS SUPPLEMENT FOR DEFINITIVE INFORMATION ON ANY MATTER
CONTAINED HEREIN. NEITHER THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
SUBJECT TO COMPLETION, DATED FEBRUARY 15, 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER 1, 1993
8,000,000 SHARES
[PACIFICORP LOGO]
COMMON STOCK
------------
The last reported sale price of the Common Stock, which is quoted under the
symbol "PPW", on the New York Stock Exchange on February 14, 1996 was $21 1/4.
The Common Stock is also listed on the Pacific Stock Exchange. The Additional
Common Stock will be listed, subject to notice of issuance, on those exchanges.
See "Common Stock Price Range, Book Value and Dividends" herein.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT(1) COMPANY(2)
------------------ ------------------ ------------------
Per Share.......................................... $ $ $
Total(3)........................................... $ $ $
- ------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $330,000 payable by the Company.
(3) The Company has granted the Underwriters an option for 30 days to purchase
up to an additional 1,200,000 shares at the initial public offering price
per share, less the underwriting discount, solely to cover over-allotments.
If such option is exercised in full, the total initial public offering
price, underwriting discount and proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting".
----------------
Shares offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the
certificates for the shares will be ready for delivery in New York, New York on
or about March , 1996.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC. PIPER JAFFRAY INC. SMITH BARNEY INC.
------------
The date of this Prospectus Supplement is March , 1996.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SUMMARY INFORMATION
Company........................... PacifiCorp
Securities Offered................ 8,000,000 shares of Additional Common Stock (assuming
that the Underwriters' over-allotment option is not
exercised)
New York and Pacific Stock
Exchanges Symbol................. PPW
Price Range (52 weeks ended
February 14, 1996)............... $17 1/2 - $21 1/4
Indicated Annual Dividend Rate.... $1.08
Common Shares Outstanding at
January 31, 1996................. 284,276,709
SELECTED FINANCIAL INFORMATION
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The selected financial data of the Company for the years ended December 31,
1993 and 1994 set forth below were derived from and should be read in
conjunction with the audited consolidated financial statements of the Company
and subsidiaries incorporated by reference in the accompanying Prospectus. The
selected financial data of the Company as of and for the year ended December 31,
1995 set forth below were derived from the unaudited consolidated financial
statements of the Company and subsidiaries. See "Recent Developments -- Summary
Unaudited Results of 1995 Operations."
TWELVE MONTHS ENDED DECEMBER 31,
---------------------------------
1993 1994 1995
--------- --------- -----------
(UNAUDITED)
Income Statement Data:
Revenues
Electric............................................... $ 2,507 $ 2,648 $ 2,616
Telecommunications..................................... 702 705 649
Other (1).............................................. 196 154 136
--------- --------- -----------
Total................................................ 3,405 3,507 3,401
Income from Operations (2)
Electric............................................... 784 819 801
Telecommunications..................................... 141 165 165
Other (1).............................................. 44 38 82
--------- --------- -----------
Total................................................ 969 1,022 1,048
Income from Continuing Operations........................ 423 468 505
Discontinued Operations (3).............................. 52 -- --
Cumulative Effect on Prior Years of a Change in
Accounting for Income Taxes............................. 4 -- --
Net Income............................................... 479 468 505
Preferred Stock Dividend Requirements.................... 39 40 39
Earnings Contribution on Common Stock
Electric............................................... 323 340 276(4)
Telecommunications..................................... 51 70 103
Other (1).............................................. 10 18 87(4)
Discontinued Operations................................ 52 -- --
Cumulative Effect on Prior Years of a Change in
Accounting for Income Taxes........................... 4 -- --
--------- --------- -----------
Total................................................ $ 440 $ 428 $ 466
S-2
TWELVE MONTHS ENDED DECEMBER 31,
---------------------------------
1993 1994 1995
--------- --------- -----------
(UNAUDITED)
Average Common Shares Outstanding (Thousands)............. 274,551 282,912 284,272
Earnings per Common Share
Continuing Operations.................................. $ 1.40 $ 1.51 $ 1.64
Discontinued Operations (3)............................ .19 -- --
Cumulative Effect on Prior Years of a Change in
Accounting for Income Taxes........................... .01 -- --
--------- --------- -----------
Total................................................ $ 1.60 $ 1.51 $ 1.64
Dividends Declared per Common Share...................... $ 1.08 $ 1.08 $ 1.08
DECEMBER 31, 1995
------------------------------------------
ACTUAL AS ADJUSTED(5)
-------------------- --------------------
AMOUNT % AMOUNT %
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
Capital Structure:
Long-Term Debt and Capital
Lease Obligations..................................................... $ 4,968 54% $ 5,168 55%
Preferred Stock......................................................... 312 4 312 3
Preferred Stock Subject to Mandatory Redemption......................... 219 2 219 2
Common Equity........................................................... 3,633 40 3,797 40
--------- --- --------- ---
Total............................................................... $ 9,132 100% $ 9,496 100%
Short-Term Debt........................................................... $ 1,021 $ 659
Long-term Debt and Capital Lease Obligations Currently Maturing........... $ 206 $ 206
- ------------
(1) Includes the operations of Pacific Generation Company and PacifiCorp
Financial Services, Inc., as well as corporate activities.
(2) Income before income taxes, interest, other nonoperating items, discontinued
operations and cumulative effect of a change in an accounting principle.
Certain amounts from prior years have been reclassified to conform with the
1995 method of presentation. These reclassifications had no effect on
previously reported consolidated net income.
(3) Discontinued operations represents the Company's interests in an
international communications subsidiary of Pacific Telecom, Inc., the
disposition of which was completed in September 1993.
(4) The Company reached a tax settlement with the U.S. Internal Revenue Service
for the tax years 1983-1988, including the issues relating to the 1983
abandonment of the Company's interest in Washington Public Power Supply
System Unit 3. The settlement had no effect on consolidated net income,
although it had the effect of reducing Electric earnings contribution by $32
million and increasing Other earnings contribution by $32 million.
(5) Adjusted to give effect to (a) the issuance and sale of 8,000,000 shares of
Common Stock (assuming that the Underwriters' over-allotment option is not
exercised) at an assumed net price of $20.57 per share and the application
of the estimated net proceeds thereof to retire short-term debt and (b) the
issuance and sale of $200 million in principal amount of secured medium-term
notes subsequent to December 31, 1995 and the application of the net
proceeds thereof to retire short-term debt. See "Use of Proceeds".
S-3
THE COMPANY
OVERVIEW
PacifiCorp (the "Company") is an electric utility headquartered in Portland,
Oregon that conducts a retail electric utility business through Pacific Power &
Light Company and Utah Power & Light Company and engages in power production and
sales on a wholesale basis under the name PacifiCorp. The Company is the
indirect owner, through PacifiCorp Holdings, Inc. (a wholly owned subsidiary)
("Holdings"), of 100% of each of Powercor Australia Limited ("Powercor"), an
Australian electric distribution company, and Pacific Telecom, Inc. ("Pacific
Telecom"), a leading provider of local telephone exchange service to rural and
suburban markets.
The Company furnishes electric service to approximately 1,300,000 customers
in portions of seven western states: California, Idaho, Montana, Oregon, Utah,
Washington and Wyoming. Powercor serves approximately 540,000 customers in
suburban Melbourne and the western and central regions of the State of Victoria
in southeast Australia. See "Recent Developments -- Powercor Acquisition".
Pacific Telecom, through its subsidiaries, provides local telephone service and
access to the long distance network in Alaska, seven other western states and
three midwestern states, provides cellular mobile telephone services in nine
states, and is engaged in sales of capacity in and the operation of a submarine
fiber optic cable between the United States and Japan. Holdings also has
interests in the independent power production and cogeneration business through
its wholly-owned subsidiary, Pacific Generation Company. Holdings' wholly-owned
subsidiary, PacifiCorp Financial Services, Inc. ("PFS"), continues to liquidate
portions of its loan, leasing and real estate investment portfolio. PFS expects
to retain only its tax advantaged investments in leveraged lease assets
(primarily aircraft) and affordable housing and continues to pursue new
investment opportunities in affordable housing.
The principal executive offices of the Company are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
INVESTMENT HIGHLIGHTS
In the increasingly deregulated and competitive utility industry, the
Company is seeking to capitalize on its core competencies as a relatively
low-cost provider of electric power and an active participant in the wholesale
power markets. By expanding into new domestic and international markets, the
Company expects to increase its customer base and enhance shareholder value.
These activities and certain other investment highlights of the Company are
summarized below. The Company is unable to predict the ultimate outcome or
impact of competitive forces and increasing deregulation on the Company's
operations or the electric industry generally.
ATTRACTIVE GROWTH PROFILE. The Company is taking advantage of developments
in the marketplace to expand beyond its traditional geographic boundaries and
increase the breadth of the products and services it provides to customers. The
Company has established a significant international presence with the
acquisition of Powercor, an Australian distribution company serving customers in
Victoria, Australia, where the customer growth rate has been greater than in
other parts of Victoria or in domestic markets. See "Recent Developments --
Powercor Acquisition". The Company is also expanding its non-regulated
businesses that are engaged in wholesale marketing and aggregating of
electricity. The Company believes that the recently proposed transaction with
Big Rivers Electric Corporation will provide a base in the eastern United States
from which the Company can access additional power markets. See "Recent
Developments -- Big Rivers Transaction". In addition, customer growth within the
Company's traditional service territory has exceeded the national average in
recent years. The Company believes that this growth is due in part to the
attractiveness of the areas served by the Company.
STRONG COMPETITIVE POSITION. The Company is one of the lowest cost
providers of electric power in the western United States with significant
expertise in plant operation and fuels management. The Company's combined
production and transmission cost is significantly below the average of investor-
owned utilities in the western United States. In addition, the Company's
extensive transmission system has numerous points of interconnection in its
seven state territory and provides direct access to over 50
S-4
other utilities. These advantages, combined with the geographic diversity of its
generation resources, have enabled the Company to grow its wholesale power
business significantly over the past 10 years. To address competitive changes in
the marketplace, the Company has also been pursuing performance-based forms of
rate regulation in certain of its jurisdictions and has filed proposals with the
Oregon Public Utility Commission and the Wyoming Public Service Commission on
that basis. It is uncertain whether or not the Company's proposals or any other
alternative form of regulation will be adopted in these jurisdictions.
TELECOMMUNICATIONS. The Company's ownership of Pacific Telecom enables the
Company to participate in the expanding local exchange telecommunications
market. Pacific Telecom's internal access line growth has exceeded the national
average in recent years. Pacific Telecom has also significantly expanded its
local exchange business through acquisitions of over 90,000 access lines during
1995. Pacific Telecom is continuing to pursue other possible acquisitions and
has a pending acquisition of 26,600 access lines.
DIVERSIFIED CUSTOMER BASE. The Company's electric operations benefit from a
geographically and economically diverse service territory. Retail power sales
come from a nearly equal mix of residential, commercial and industrial
customers. No single industrial customer represents more than 1.6% of the
Company's retail revenue, which reduces the potential adverse effects from a
downturn in any particular industry. Additionally, with customers in seven
states, the Company operates in a diversified regulatory environment.
RECENT DEVELOPMENTS
SUMMARY UNAUDITED RESULTS OF 1995 OPERATIONS
Earnings for 1995 increased to $466 million ($1.64 per share) from $428
million ($1.51 per share) in 1994 primarily due to a $37 million ($0.13 per
share) after-tax gain relating to the sale of Pacific Telecom's long distance
operations in Alaska. Results from the Company's electric operations were
adversely affected by cool, wet weather that reduced demand from irrigation
customers, a decline in sales to oil and gas customers associated with permanent
well closures and unfavorable conditions in the wholesale power market. The
Company's earnings for the quarter ended December 31, 1995 were $119 million
($0.42 per share) compared to $116 million ($0.41 per share) for the same
quarter in 1994. Reference is made to the Incorporated Documents referred to in
the accompanying Prospectus for additional information concerning the Company's
unaudited results for 1995.
POWERCOR ACQUISITION
On December 12, 1995, the Company completed the acquisition of Powercor from
the State of Victoria, Australia for approximately U.S. $1.6 billion in cash.
The acquisition, which was structured through a series of wholly owned United
States and Australian subsidiaries of Holdings, was financed with borrowings of
A$1.2 billion in Australia (approximately U.S. $900 million based on the
applicable exchange rate as of December 12, 1995) and with an equity
contribution from Holdings that was initially financed with short-term debt in
the United States.
Powercor is one of five electric distribution businesses formed by the State
of Victoria, each comprising a geographically based, regulated distribution
network and a retail function that supplies a combination of franchise customers
on a geographic basis and non-franchise or contestable customers on a
competitive basis. Powercor serves approximately 540,000 customers in suburban
Melbourne and the western and central regions of Victoria. Powercor's
distribution area covers approximately 57,915 square miles. This region is the
largest franchise area in Victoria, representing approximately 64% of the total
area of Victoria. The Powercor distribution area accounts for over 1,450,000
people (approximately 32% of Victoria's population).
The Powercor acquisition will enable the Company to gain experience in an
incentive-based regulatory environment, which should prepare the Company for the
increasingly deregulated and competitive markets in the United States. In
addition, the Company plans to employ its wholesale marketing
S-5
expertise in the developing power markets in Australia. The acquisition also
positions the Company to take advantage of future opportunities in international
markets, including those that are expected to arise in connection with the
privatization of Victoria's generating stations during 1996.
BIG RIVERS TRANSACTION
On January 30, 1996, Holdings and Big Rivers Electric Corporation ("Big
Rivers"), a generation and transmission cooperative based in Henderson,
Kentucky, signed a letter of intent providing for PacifiCorp-Kentucky Energy
Company ("PKE"), a wholly owned subsidiary of Holdings, to operate and manage
Big Rivers' power plants under a 25-year operating agreement.
Under the terms of the proposed transaction, Big Rivers would retain
ownership of its assets and continue to operate its transmission system in
western Kentucky. PKE would be required to make payments of $30.1 million per
year during the term of the operating agreement, which obligation would be
guaranteed by Holdings. PKE would sell power to Big Rivers under a long-term
contract for resale to the four member cooperatives of Big Rivers and would
market the surplus output from the 1,740 megawatts of generation assets owned by
Big Rivers.
Consummation of the proposed transaction is subject to certain conditions,
including negotiation of definitive agreements, approval by Big Rivers'
creditors of a restructuring of its debt, termination or renegotiation of all
fuel contracts to bring prices in line with current market conditions, and
certain state and federal regulatory approvals. Definitive agreements are
subject to approval by the boards of directors of Holdings and Big Rivers, as
well as the boards of the member cooperatives of Big Rivers. The parties
currently expect to receive the required approvals by December 31, 1996.
The Company believes that the Big Rivers transaction will provide a base in
the eastern power markets from which the Company can implement a national power
marketing strategy and will allow it to capitalize on its capabilities in
low-cost plant operation and fuel management. The Company expects to consider
additional opportunities for the acquisition or construction of strategic
generating assets in the eastern United States.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby ("Additional Common Stock") are estimated to be approximately
$164 million (or approximately $189 million if the Underwriters' over-allotment
option is exercised in full) assuming a public offering price of $21 1/4 per
share (the last reported sale price of the Common Stock on the New York Stock
Exchange on February 14, 1996). The net proceeds will be used to repay a portion
of the Company's short-term debt.
S-6
COMMON STOCK PRICE RANGE, BOOK VALUE AND DIVIDENDS
The outstanding Common Stock is listed on the New York and Pacific Stock
Exchanges, and the Additional Common Stock will be so listed upon notice of
issuance. The following table indicates the high and low sales prices of the
Common Stock during the respective periods indicated, as reported in THE WALL
STREET JOURNAL, and the dividends declared per share:
PRICE RANGE
--------------------
HIGH LOW DIVIDENDS
--------- --------- ---------------
1994:
First Quarter................................................... 191/2 171/4 .27
Second Quarter.................................................. 183/8 16 .27
Third Quarter................................................... 183/8 157/8 .27
Fourth Quarter.................................................. 191/8 161/2 .27
1995:
First Quarter................................................... 193/4 18 .27
Second Quarter.................................................. 197/8 181/2 .27
Third Quarter................................................... 191/2 171/2 .27
Fourth Quarter.................................................. 215/8 183/4 .27
1996:
First Quarter (through February 14)............................. 22 203/4 .27
The last reported sale price of the Common Stock on the New York Stock
Exchange Composite Tape on February 14, 1996 was $21 1/4. At December 31, 1995,
the book value per share of the Common Stock was $12.78.
The Company has paid dividends on its Common Stock since 1947. Future
dividends will depend on the Company's earnings, its financial condition and
other factors. See "Description of Capital Stock -- Dividends" in the
accompanying Prospectus.
S-7
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each of
such Underwriters, for whom Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Dean Witter Reynolds Inc., Piper Jaffray Inc. and Smith
Barney Inc. are acting as representatives, has severally agreed to purchase from
the Company, the respective number of shares of Additional Common Stock set
forth opposite its name below:
NUMBER OF
SHARES OF
ADDITIONAL
UNDERWRITER COMMON STOCK
- --------------------------------------------------------------------------------------- ---------------
Goldman, Sachs & Co....................................................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated.....................................
Dean Witter Reynolds Inc...............................................................
Piper Jaffray Inc......................................................................
Smith Barney Inc.......................................................................
---------------
Total.............................................................................. 8,000,000
---------------
---------------
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.
The Underwriters propose to offer the shares of Additional Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus Supplement and in part to certain securities
dealers at such price less a concession of $ per share. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of $
per share to certain brokers and dealers. After the shares of Additional Common
Stock are released for sale to the public, the offering price and other selling
terms may from time to time be varied by the representatives.
The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus Supplement to purchase up to an aggregate of
1,200,000 additional shares of Common Stock solely to cover over-allotments, if
any. If the Underwriters exercise their over-allotment option, the Underwriters
have severally agreed, subject to certain conditions, to purchase approximately
the same percentage thereof that the number of shares to be purchased by each of
them, as shown in the foregoing table, bears to the 8,000,000 shares of
Additional Common Stock.
The Company has agreed that, during the period beginning from the date of
this Prospectus Supplement and continuing to and including the date 90 days
after the date of this Prospectus Supplement, it will not offer, sell, contract
to sell or otherwise dispose of any securities of the Company (other than
pursuant to existing employee or shareholder plans) which are substantially
similar to the shares of Common Stock or which are convertible or exchangeable
into securities which are substantially similar to the shares of Common Stock,
without the prior written consent of the representatives, except for the shares
of Additional Common Stock.
The Underwriters and certain affiliates thereof engage in transactions with
and perform services for the Company and its affiliates in the ordinary course
of business.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
S-8
[PACIFICORP LOGO]
FIRST MORTGAGE AND COLLATERAL TRUST BONDS
COMMON STOCK
PacifiCorp (Company) may offer from time to time (i) First Mortgage and
Collateral Trust Bonds (New Bonds) and (ii) shares of its Common Stock
(Additional Common Stock) at prices and on terms to be determined at the time of
sale. The New Bonds and the Additional Common Stock may be issued in one or more
series or issuances and the aggregate initial offering price thereof will not
exceed $850,000,000. The New Bonds and Additional Common Stock are collectively
referred to herein as the "Securities."
This Prospectus will be supplemented by a prospectus supplement or
supplements (Prospectus Supplement) that will set forth, in the case of any New
Bonds, the form in which such New Bonds are to be issued, their aggregate
principal amount, rate or rates and times of payment of interest, maturity or
maturities, the initial public offering price or prices, redemption or
repurchase provisions, if any, and other specific terms of such New Bonds in
respect of which this Prospectus is being delivered and, in the case of any
Additional Common Stock, the number of shares of such Additional Common Stock,
their purchase price and the initial public offering price or prices and other
specific terms of such Additional Common Stock in respect of which this
Prospectus is being delivered. See "Description of New Bonds" and "Description
of Capital Stock" herein.
The Common Stock of the Company is listed on the New York Stock Exchange and
the Pacific Stock Exchange (Symbol: PPW). The Additional Common Stock will be
listed, subject to notice of issuance, on those exchanges. See "Common Stock
Dividends, Price Range and Book Value" herein.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECU-
RITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
The Company may sell the Securities through underwriters, dealers or agents,
or directly to one or more purchasers. The Prospectus Supplement will set forth
the names of underwriters or agents, if any, any applicable commissions or
discounts and the net proceeds to the Company from any such sale. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers and agents.
The date of this Prospectus is December 1, 1993
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE CLASS OR SERIES
OF SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE APPLICABLE
EXCHANGES, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (Exchange Act), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (SEC). Such reports, proxy statements and other information
can be inspected and copied at the offices of the SEC at 450 Fifth Street, N.W.,
Washington, D.C.; Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Ill.; and 7 World Trade Center, 13th Floor, New York, N.Y. Copies
of this material can also be obtained at prescribed rates from the Public
Reference Section of the SEC at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Common Stock of the Company is listed on the New
York and Pacific Stock Exchanges. Reports, proxy statements and other
information concerning the Company can be inspected and copied at the respective
offices of these exchanges at 20 Broad Street, New York, New York and 301 Pine
Street, San Francisco, California.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC pursuant to the
Exchange Act are incorporated in this Prospectus by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1992;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1993;
(3) The Company's Current Reports on Form 8-K dated February 18, March
22, April 1, June 2, September 23, October 29 and November 19, 1993; and
(4) The description of the Common Stock contained in the Company's
registration under Section 12 of the Exchange Act, including any amendment
or report updating such description.
All documents filed by the Company pursuant to Section 13, 14 or 15(d) of
the Exchange Act after the date of this Prospectus and prior to the termination
of this offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents
(such documents, and the documents enumerated above, being hereinafter referred
to as "Incorporated Documents"; provided, however, that all documents filed by
the Company pursuant to Section 13 or 14 of the Exchange Act in each year during
which the offering made by this Prospectus is in effect prior to the filing with
the SEC of the Company's Annual Report on Form 10-K covering such year shall not
be Incorporated Documents or be incorporated by reference in this Prospectus or
be a part hereof from and after such filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE INCORPORATED DOCUMENTS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO INVESTOR
RELATIONS DEPARTMENT,
2
PACIFICORP, 700 NE MULTNOMAH, SUITE 1600, PORTLAND, OREGON 97232, TELEPHONE
NUMBER (503) 731-2000. THE INFORMATION RELATING TO THE COMPANY CONTAINED IN THIS
PROSPECTUS DOES NOT PURPORT TO BE COMPREHENSIVE AND SHOULD BE READ TOGETHER WITH
THE INFORMATION CONTAINED IN THE INCORPORATED DOCUMENTS.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR IN ANY PROSPECTUS SUPPLEMENT,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY OR THEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ITS
SUBSIDIARIES SINCE THE DATE OF THIS PROSPECTUS OR THE DATE OF THE LATEST
PROSPECTUS SUPPLEMENT, AS THE CASE MAY BE.
3
THE COMPANY
The Company is an electric utility that conducts a retail electric utility
business through two divisions, Pacific Power & Light Company (Pacific Power)
and Utah Power & Light Company (Utah Power), and engages in power production and
sales on a wholesale basis under the name PacifiCorp. The Company is the
indirect owner, through PacifiCorp Holdings, Inc. (a wholly-owned subsidiary),
of 87% of Pacific Telecom, Inc. (Pacific Telecom) and 100% of PacifiCorp
Financial Services, Inc. (PacifiCorp Financial Services).
Pacific Power furnishes electric service in portions of six western states:
Oregon, Wyoming, Washington, Idaho, California and Montana. Utah Power furnishes
electric service in portions of three western states: Utah, Wyoming and Idaho.
Pacific Telecom, through its subsidiaries, provides local telephone service and
access to the long distance network in Alaska, seven other western states and
three midwestern states, provides intrastate and interstate long distance
communication services in Alaska, provides cellular mobile telephone services,
and is engaged in sales of capacity in and operation of a submarine fiber optic
cable between the United States and Japan. PacifiCorp Financial Services offers
certain specialized financial services and manages certain loan, leasing and
real estate investments.
The principal executive offices of the Company are located at 700 NE
Multnomah, Suite 1600, Portland, Oregon 97232; the telephone number is (503)
731-2000.
USE OF PROCEEDS
Except as may otherwise be set forth in any Prospectus Supplement, the net
proceeds to be received by the Company from the issuance and sale of the
Securities will initially become part of the general funds of the Company and
will be used to repay all or a portion of the Company's short-term borrowings
outstanding at the time of issuance of the Securities or may be applied to
utility asset purchases, new construction or other corporate purposes, including
the refunding of long-term debt. Reference is made to the Incorporated Documents
with respect to the Company's capital requirements and its general financing
plans.
DESCRIPTION OF NEW BONDS
GENERAL. The New Bonds are to be issued under the Company's Mortgage and
Deed of Trust, dated as of January 9, 1989, with Morgan Guaranty Trust Company
of New York (Morgan Guaranty), as Trustee (Trustee), as amended and
supplemented, referred to herein as the "Mortgage."
As herein summarized, bonds now or hereafter issued under the Mortgage
(Bonds) will be secured by first mortgage bonds issued under the Mortgages and
Deeds of Trust, as supplemented, of Pacific Power & Light Company (Pacific
Mortgage) and Utah Power & Light Company (Utah Mortgage) (collectively, the
Class "A" Mortgages) and deposited with the Trustee, and/or by a first mortgage
Lien of the Mortgage on certain property not subject to the Class "A" Mortgages.
First lien property not subject to the Class "A" Mortgages could include
electric utility property acquired by the Company of the type described below
that is not a renewal, replacement or extension of or an addition to the
existing Pacific Power or Utah Power system. Bonds issued under the Mortgage
will be equally secured and pari passu.
The Company assumed the Pacific and Utah Mortgages as the surviving
corporation in its 1989 merger with PacifiCorp, a Maine corporation, and Utah
Power & Light Company, a Utah corporation. The first mortgage bonds issued under
these Class "A" Mortgages (Class "A" Bonds) are secured by a first mortgage lien
on certain properties owned by the particular company prior to the merger and on
improvements, extensions and additions to, and renewals and replacements of,
such properties.
The Mortgage provides that in the event of the merger or consolidation of
another electric utility company with or into the Company or the conveyance or
transfer to the Company by another such
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company of all or substantially all of such company's property that is of the
same character as Property Additions under the Mortgage, an existing mortgage
constituting a first lien on operating properties of such other company may be
designated by the Company as an additional Class "A" Mortgage. (Mortgage, Sec.
11.06.) Bonds thereafter issued pursuant to such additional mortgage would be
Class "A" Bonds and could provide the basis for the issuance of Bonds under the
Mortgage.
The Mortgage and the Class "A" Mortgages are exhibits to the Registration
Statement of which this Prospectus is a part. The statements herein concerning
Bonds, the New Bonds and such mortgages are merely an outline and do not purport
to be complete. Such statements include terms defined in such mortgages and are
qualified in their entirety by reference to such mortgages.
The Company expects to issue New Bonds upon the basis, dollar for dollar, of
the deposit with the Trustee of Class "A" Bonds. Such New Bonds will be issuable
in the form of fully registered bonds and, except as may be set forth in any
Prospectus Supplement relating to such New Bonds, will be issuable in
denominations of $2,000 and any multiple thereof. They may be transferred
without charge, other than for applicable taxes or other governmental charges,
at Morgan Guaranty, New York, New York.
MATURITY AND INTEREST PAYMENTS. Reference is made to the Prospectus
Supplement relating to any New Bonds for the date or dates on which such New
Bonds will mature; the rate or rates per annum at which such New Bonds will bear
interest; and the times at which such interest will be payable. These terms and
conditions, as well as the terms and conditions relating to redemption and
purchase referred to under "Redemption or Purchase of New Bonds" below, will be
as established in or pursuant to Resolutions of the Board of Directors of the
Company at the time of issuance of the New Bonds.
REDEMPTION OR PURCHASE OF NEW BONDS. The New Bonds may be redeemable, in
whole or in part, on not less than 30 days' notice either at the option of the
Company or as required by the Mortgage. The New Bonds may be subject to
repurchase at the option of the holder.
Reference is made to the Prospectus Supplement relating to any New Bonds for
the redemption or repurchase terms and other specific terms of such New Bonds.
If, at the time notice of redemption is given, the redemption moneys are not
held by the Trustee, the redemption may be made subject to their receipt on or
before the date fixed for redemption and such notice shall be of no effect
unless such moneys are so received.
While the Mortgage contains provisions for the maintenance of the Mortgaged
and Pledged Property, the Mortgage does not permit redemption of Bonds pursuant
to these provisions. There is no sinking or analogous fund in the Mortgage.
Cash deposited under any provisions of the Mortgage may be applied (with
certain exceptions) to the redemption or repurchase of Bonds of any series.
(Mortgage, Arts. XII and XIII.)
SECURITY AND PRIORITY. The Bonds issued under the Mortgage will be secured
by Class "A" Bonds held by the Trustee and/or by a first mortgage Lien of the
Mortgage on certain property of the Company. Presently, most of the Company's
property, while subject to the Lien of the Mortgage, is subject to the
respective first Liens of the Class "A" Mortgages. The Bonds will have the
benefit of first mortgage Liens of the Class "A" Mortgages on such property to
the extent of the aggregate principal amount thereof issued on the basis of
Class "A" Bonds held by the Trustee.
The Lien of the Mortgage and Liens of the Class "A" Mortgages are subject to
Excepted Encumbrances, including tax and construction liens, purchase money
liens and certain other exceptions.
There are excepted from the Lien of the Mortgage all cash and securities
(except those specifically deposited); equipment, materials or supplies held for
sale or other disposition; any fuel and similar consumable materials and
supplies; automobiles, other vehicles, aircraft and vessels; timber, minerals,
mineral rights and royalties; receivables, contracts, leases and operating
agreements; electric
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energy, gas, water, steam, ice and other products for sale, distribution or
other use; natural gas wells; gas transportation lines or other property used in
the sale of natural gas to customers or to a natural gas distribution or
pipeline company, up to the point of connection with any distribution system;
the Company's interest in the Wyodak Facility; and all properties that have been
released from the Pacific Mortgage or the Utah Mortgage and that PacifiCorp, a
Maine corporation, or Utah Power & Light Company, a Utah corporation, contracted
to dispose of, but title to which had not passed at the date of the Mortgage.
The Class "A" Mortgages have similar, but not identical, exceptions. The Company
has reserved the right, without any consent or other action by holders of Bonds
of the Eighth Series or any subsequently created series of Bonds (including the
New Bonds), to amend the Mortgage in order to except from the Lien of the
Mortgage allowances allocated to steam-electric generating plants owned by the
Company, or in which the Company has interests, pursuant to Title IV of the
Clean Air Act Amendments of 1990, as now in effect or as hereafter supplemented
or amended.
The Mortgage contains provisions subjecting after-acquired property to the
Lien thereof. These provisions may be limited, at the option of the Company, in
the case of consolidation or merger (whether or not the Company is the surviving
corporation), conveyance or transfer of all or substantially all of the utility
property of another electric utility company to the Company or sale of
substantially all of the Company's assets. In addition, after-acquired property
may be subject to a Class "A" Mortgage, purchase money mortgages and other liens
or defects in title. (Mortgage, Sec. 18.03.)
The Mortgage provides that the Trustee shall have a lien upon the mortgaged
property, prior to the holders of Bonds, for the payment of its reasonable
compensation and expenses and for indemnity against certain liabilities.
(Mortgage, Sec. 19.09.)
ISSUANCE OF ADDITIONAL BONDS. The maximum principal amount of Bonds which
may be issued under the Mortgage is not limited. Bonds of any series may be
issued from time to time on the basis of: (1) Class "A" Bonds (which need not
bear interest) delivered to the Trustee; (2) 70% of qualified Property Additions
after adjustments to offset retirements; (3) retirement of Bonds or certain
prior lien bonds; and/or (4) deposits of cash. With certain exceptions in the
case of (1) and (3) above, the issuance of Bonds is subject to Adjusted Net
Earnings of the Company for 12 consecutive months out of the preceding 15
months, before income taxes, being at least twice the Annual Interest
Requirements on all Bonds at the time outstanding, including the additional
issue of New Bonds, all outstanding Class "A" Bonds held other than by the
Trustee or by the Company, and all other indebtedness secured by a lien prior to
the Lien of the Mortgage. In general, interest on variable interest bonds, if
any, is calculated using the rate then in effect. (Mortgage, Arts. IV through
VII.)
Property Additions generally include electric, gas, steam and/or hot water
utility property but not fuel, securities, automobiles, other vehicles or
aircraft, or property used principally for the production or gathering of
natural gas. (Mortgage, Sec. 1.04.)
Additional Class "A" Bonds may only be issued as the basis of the issuance
of additional Bonds. Class "A" Bonds may be issued under the Pacific Mortgage or
the Utah Mortgage on the basis of (1) 60% of qualified Property Additions after
adjustments to offset retirements; (2) retirement of Class "A" Bonds or certain
prior lien bonds; and/or (3) deposits of cash with the particular Class "A"
Mortgage trustee. The issuance of Class "A" Bonds is subject to earnings tests
which in application are less restrictive than the Adjusted Net Earnings test
under the Mortgage.
Property Additions under the Class "A" Mortgages are similar, but not
identical, to Property Additions under the Mortgage.
The Class "A" Mortgages currently have maintenance funds and sinking and
improvement funds applicable to certain series of bonds outstanding thereunder,
none of which would permit the redemption of any of the Bonds. As these funds
cease to be in effect, any Property Additions previously used to satisfy their
requirements would become available to issue Class "A" Bonds.
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The issuance of Bonds and Class "A" Bonds on the basis of Property Additions
subject to prior liens is restricted. Bonds may, however, be issued against the
deposit of Class "A" Bonds. (Mortgage, Secs. 1.04 to 1.07 and 4.01 to 7.01.)
RELEASE AND SUBSTITUTION OF PROPERTY. Property subject to the Lien of the
Mortgage may be released upon the basis of: (1) the release of such property
from the Lien of a Class "A" Mortgage; (2) the deposit of cash or, to a limited
extent, purchase money mortgages; (3) Property Additions, after making
adjustments for certain prior lien bonds outstanding against Property Additions;
and/or (4) waiver of the right to issue Bonds. Cash may be withdrawn upon the
bases stated in (1), (3) and (4) above. Property that does not constitute Funded
Property may be released without funding other property. Similar provisions are
in effect as to cash proceeds of such property. The Mortgage contains special
provisions with respect to certain prior lien bonds deposited and disposition of
moneys received on deposited prior lien bonds. (Mortgage, Secs. 1.05, 7.02,
7.03, 9.05, 10.01 to 10.04 and 13.03 to 13.09.) Property may be released from
the Class "A" Mortgages on similar but not identical bases.
DIVIDEND RESTRICTIONS. The Mortgage provides that the Company may not
declare or pay dividends (other than dividends payable solely in shares of its
common stock) on any shares of its common stock if, after giving effect to such
declaration or payment, the Company would not be able to pay its debts as they
become due in the usual course of business. (Mortgage, Sec. 9.07.) The Pacific
and Utah Mortgages contain provisions restricting payment of cash dividends and
other distributions on common stock. The amount restricted is subject to being
increased or decreased on the basis of various factors. At September 30, 1993,
approximately $240,000,000 was available for these purposes. Reference is made
to the Notes to Consolidated Financial Statements included in the Company's
Annual Report on Form 10-K incorporated herein by reference for information
relating to other restrictions.
FOREIGN CURRENCY DENOMINATED BONDS. The Mortgage authorizes the issuance of
Bonds denominated in foreign currencies, provided that the Company deposits with
the Trustee a currency exchange agreement with an entity having, at the time of
such deposit, a financial rating at least as high as that of the Company that in
the opinion of an independent expert gives the Company at least as much
protection against currency exchange fluctuation as is usually obtained by
similarly situated borrowers. The Company believes that such a currency exchange
agreement will provide effective protection against currency exchange
fluctuations. However, if the other party to the exchange agreement defaults and
the foreign currency is valued higher at the date of maturity than at the date
of issuance of the relevant Bonds, holders of such Bonds would have a claim on
the assets of the Company which is greater than that to which holders of
dollar-denominated Bonds issued at the same time would be entitled.
THE TRUSTEE. Morgan Guaranty acts as lender and agent under loan agreements
with the Company and affiliates of the Company, and serves as trustee under
indentures and other agreements involving the Company and its affiliates. Morgan
Guaranty is also the trustee under the Pacific and Utah Mortgages.
MODIFICATION. The rights of bondholders may be modified with the consent of
holders of 60% of the Bonds, or, if less than all series of Bonds are adversely
affected, the consent of the holders of 60% of the Bonds adversely affected. In
general, no modification of the terms of payment of principal, premium, if any,
or interest and no modification affecting the Lien or reducing the percentage
required for modification is effective against any bondholder without the
consent of such holder. (Mortgage, Art. XXI.)
The rights of the holders of present Class "A" Bonds may be modified with
the consent of the holders of 70% of the Class "A" Bonds under the applicable
Class "A" Mortgage and, if less than all series of Class "A" Bonds are adversely
affected, the consent also of the holders of 70% of the Class "A" Bonds of each
series so affected. The foregoing percentages may be reduced to 66 2/3% (in the
case of the Pacific Mortgage) or 60% (in the case of the Utah Mortgage) in the
future without the consent of the Trustee as holder of Class "A" Bonds. In
general, no modification of the terms of
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payment of principal, premium, if any, or interest, no modification affecting
the Lien or reducing the percentage required for modification and no
modification of certain other covenants is effective against any holder of Class
"A" Bonds without the consent of such holder.
The Trustee is, unless there is a Default under the Mortgage, generally
required to vote Class "A" Bonds held by it with respect to any amendment of the
applicable Class "A" Mortgage proportionately with the vote of the holders of
all Class "A" Bonds then actually voting, except that the Trustee must vote in
favor of certain amendments to the Pacific Mortgage and the Utah Mortgage as
specified in Exhibits X and Y to the Mortgage. (Mortgage, Sec. 11.03.)
DEFAULTS AND NOTICE THEREOF. Defaults are defined in the Mortgage as:
default in payment of principal; default for 60 days in payment of interest or
an installment of any fund required to be applied to the purchase or redemption
of any Bonds; default in payment of principal or interest with respect to
certain prior lien bonds; certain events in bankruptcy, insolvency or
reorganization; default in other covenants for 90 days after notice; and the
existence of any "Default" as defined under the Pacific Mortgage or the Utah
Mortgage or any default under another Class "A" Mortgage which permits the
declaration of the principal of all of the bonds secured by such Class "A"
Mortgage and the interest accrued thereupon due and payable. (Mortgage, Sec.
15.01.) An effective default under any Class "A" Mortgage or under the Mortgage
will result in an effective default under all such mortgages. The Trustee may
withhold notice of default (except in payment of principal, interest or funds
for retirement of Bonds) if it determines that it is not detrimental to the
interests of the bondholders. (Mortgage, Sec. 15.02.)
"Defaults" under the Pacific Mortgage and Utah Mortgage are similar, but not
identical, to Defaults under the Mortgage. The trustee under a Class "A"
Mortgage may withhold notice of default (except in payment of principal,
interest or funds for retirement of Class "A" Bonds) if it determines that it is
in the interest of the holders of Class "A" Bonds issued under such Class "A"
Mortgage.
The Trustee or the holders of 25% of the Bonds may declare the principal and
interest due and payable on Default, but a majority may annul such declaration
if such Default has been cured. (Mortgage, Sec. 15.03.) No holder of Bonds may
enforce the Lien of the Mortgage without giving the Trustee written notice of a
Default and unless the holders of 25% of the Bonds have requested the Trustee to
act and offered it reasonable opportunity to act and indemnity satisfactory to
it against the costs, expenses and liabilities to be incurred thereby and the
Trustee shall have failed to act. (Mortgage, Sec. 15.16.) The holders of a
majority of the Bonds may direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Mortgage, Sec. 15.07.) The Trustee is not
required to risk its funds or incur personal liability if there is reasonable
ground for believing that repayment is not reasonably assured. (Mortgage, Sec.
19.08.)
EVIDENCE TO BE FURNISHED TO THE TRUSTEE. Compliance with Mortgage
provisions is evidenced by written statements of Company officers or persons
selected or paid by the Company. In certain cases, opinions of counsel and
certification of an engineer, accountant, appraiser or other expert (who in some
cases must be independent) must be furnished. The Company must give the Trustee
an annual statement as to whether or not the Company has fulfilled its
obligations under the Mortgage throughout the preceding calendar year.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of three classes of
preferred stock (Preferred Stock): 126,533 shares of 5% Preferred Stock of the
stated value of $100 per share (5% Preferred Stock), 3,500,000 shares of Serial
Preferred Stock of the stated value of $100 per share (Serial Preferred Stock),
16,000,000 shares of No Par Serial Preferred Stock (No Par Serial Preferred
Stock); and 750,000,000 shares of Common Stock (Common Stock).
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Following is a brief summary of the relative rights and preferences of the
various classes of the Company's capital stock, which does not purport to be
complete. For a complete description of the relative rights and preferences of
the various classes of the Company's capital stock, reference is made to Article
III of the Company's Second Restated Articles of Incorporation, as amended
(Articles), a copy of which is an exhibit to the Registration Statement of which
this Prospectus is a part.
GENERAL. The Company's Articles provide that the Serial Preferred Stock and
the No Par Serial Preferred Stock each may be issued in one or more series and
that all such series of each such class shall constitute one and the same class
of stock, shall be of equal rank and shall be identical in all respects except
as to the designation thereof and except that each series may vary, as fixed and
determined by the Board of Directors at the time of its creation and expressed
in a resolution, as to (a) the dividend rate or rates, which may be subject to
adjustment, (b) the date or dates from which dividends shall be cumulative, (c)
the dividend payment dates, (d) the amount to be paid upon redemption, if
redeemable, or in the event of voluntary liquidation, dissolution or winding up
of the Company, (e) the rights of conversion, if any, into shares of Common
Stock and the terms and conditions of any such conversion, (f) provisions, if
any, for the redemption or purchase of shares, which may be at the option of the
Company or upon the happening of a specified event or events, including the
times, prices or rates, which may be subject to adjustment, and (g) with respect
to the No Par Serial Preferred Stock, voting rights.
DIVIDENDS. The No Par Serial Preferred Stock, the 5% Preferred Stock and
the Serial Preferred Stock are entitled, pari passu with each other and in
preference to the Common Stock, to accumulate dividends at the rate or rates,
which may be subject to adjustment, determined in accordance with the Articles
at the time of creation of each series. Subject to the prior rights of the
several Preferred Stocks (and to the rights of any other classes of stock
hereafter authorized), the Common Stock alone is entitled to all dividends other
than those payable in respect of the several Preferred Stocks.
For certain restrictions on the payment of dividends, reference is made to
the Notes to Consolidated Financial Statements included in the Company's Annual
Report on Form 10-K incorporated herein by reference and to "Description of New
Bonds -- Dividend Restrictions" herein.
LIQUIDATION RIGHTS. Upon involuntary liquidation of the Company, each class
of Preferred Stock is entitled, pari passu with each other class and in
preference to the Common Stock, to the stated value thereof or, in the case of
the No Par Serial Preferred Stock, the amount fixed as the consideration
therefor in the resolution creating the series of No Par Serial Preferred Stock,
in each case plus accrued dividends to the date of distribution.
Upon voluntary liquidation of the Company, each outstanding series of No Par
Serial Preferred Stock (other than the $7.70 Series and the $7.48 Series which
are entitled to $100 per share and the $1.98 Series 1992 which is entitled to
$25 per share) and Serial Preferred Stock (other than the 7.00%, 6.00%, 5.00%
and 5.40% Series which are entitled to $100 per share) is entitled to an amount
equal to the then current redemption price for such series and the 5% Preferred
Stock is entitled to $110 per share, in each case plus accrued dividends to the
date of distribution, pari passu with each other and in preference to the Common
Stock.
Subject to the rights of the several Preferred Stocks (and to the rights of
any other class of stock hereafter authorized), the Common Stock alone is
entitled to all amounts available for distribution upon liquidation of the
Company other than those to be paid on the Preferred Stock.
VOTING RIGHTS. The holders of the 5% Preferred Stock, Serial Preferred
Stock and Common Stock are entitled to one vote for each share held on matters
presented to shareholders generally. The holders of the No Par Serial Preferred
Stock are entitled to such voting rights as are set forth in the Articles upon
creation of each series. Certain series of No Par Serial Preferred Stock may not
be entitled to vote on matters presented to shareholders generally, including
the election of directors. During any periods when dividends on the 5% Preferred
Stock or any series of Serial Preferred Stock or No Par Serial Preferred Stock
are in default in an amount equal to four full quarterly payments or
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more per share, the holders of the Preferred Stock, voting as one class
separately from the holders of the Common Stock, have the right to elect a
majority of the full Board of Directors. No Preferred Stock dividends are in
arrears at the date of this Prospectus.
Holders of the outstanding shares of any class of Preferred Stock are
entitled to vote as a class on certain matters, such as changes in the aggregate
number of authorized shares of the class and certain changes in the
designations, preferences, limitations or relative rights of the class. The vote
of holders of at least two-thirds of each class of Preferred Stock is required
prior to creating any new stock ranking prior thereto or altering its express
terms to its prejudice. The vote of holders of a majority of all classes of
Preferred Stock, voting as one class separately from the holders of the Common
Stock, is required prior to merger or consolidation and prior to making certain
unsecured borrowings and certain issuances of 5% Preferred Stock, Serial
Preferred Stock and No Par Serial Preferred Stock.
The shares of the Company do not have cumulative voting rights, which means
that the holders of more than 50% of all outstanding shares entitled to vote for
the election of directors can elect 100% of the directors if they choose to do
so, and, in such event, the holders of the remaining less than 50% of the shares
will not be able to elect any person or persons to the Board of Directors.
The holders of the Company's shares have no preemptive rights.
VOTING ON CERTAIN TRANSACTIONS. Under the Articles, certain business
transactions with a Related Person, including a merger, consolidation or plan of
exchange of the Company or its subsidiaries, or certain recapitalizations, or
the sale or exchange of a substantial part of the assets of the Company or its
subsidiaries, or any issuance of voting securities of the Company, will require
in addition to existing voting requirements, approval by at least 80% of the
outstanding Voting Stock (for purposes of this provision, Voting Stock is
defined as all of the outstanding shares of capital stock of the Company
entitled to vote generally in the election of directors, considered as one
class). A Related Person includes any shareholder that is, directly or
indirectly, the beneficial owner of 20% or more of the Voting Stock. The 80%
voting requirement will not apply in the following instances:
(a) The Related Person has no direct or indirect interest in the proposed
transaction except as a shareholder;
(b) The shareholders, other than the Related Person, will receive
consideration for their Voting Stock having, in the opinion of a majority of the
Continuing Directors (as defined in the Articles), a fair market value per share
at least equal to, or at least equivalent to, the highest per-share price paid
by the Related Person for any Voting Stock acquired by it;
(c) At least two-thirds of the Continuing Directors expressly approved in
advance the acquisition of the Voting Stock that caused such Related Person to
become a Related Person; or
(d) The proposed transaction is approved by at least two-thirds of the
Continuing Directors.
This provision of the Articles may be amended or replaced only upon the
approval of the holders of at least 80% of the Voting Stock.
Classification of Board; Removal. The Board of Directors of the Company is
divided into three classes, designated Class I, Class II and Class III, each
class as nearly equal in number as possible. The directors in each class serve
staggered three-year terms, such that one-third (or as close thereto as
possible) of the Board of Directors is elected each year. A vote of at least 80%
of the votes entitled to be cast at an election of directors is required to
remove a director without cause, and at least two-thirds of such votes are
required to remove a director for cause. Any amendment or revision of this
provision requires the approval of at least 80% of the votes entitled to be cast
at an election of directors.
RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for the years ended December 31,
1988 through 1992 and for the nine months ended September 30, 1993, calculated
as required by the SEC, are 2.3x, 2.3x, 2.3x,
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2.4x, 1.6x and 2.5x, respectively. Excluding the effect of special charges in
1992, the ratio was 1.9x. For the purpose of computing such ratios, "earnings"
represents the aggregate of (a) income from continuing operations, (b) taxes
based on income from continuing operations, (c) minority interest in the income
of majority-owned subsidiaries that have fixed charges, (d) fixed charges and
(e) undistributed losses (income) of less than 50% owned affiliates without loan
guarantees. "Fixed charges" represents consolidated interest charges, an
estimated amount representing the interest factor in rents and preferred stock
dividend requirements of majority-owned subsidiaries, and excludes discontinued
operations.
COMMON STOCK PRICE RANGE, BOOK VALUE AND DIVIDENDS
The Company has paid cash dividends on its Common Stock since 1947. Future
dividends will depend upon the Company's earnings, its financial condition and
other factors. (See "Description of New Bonds -- Dividend Restrictions" and
"Description of Capital Stock -- Dividends.")
The outstanding Common Stock is listed on the New York and Pacific Stock
Exchanges and the Additional Common Stock will be so listed upon notice of
issuance. The following table indicates the high and low sales prices of the
Common Stock during the respective periods indicated, as reported in THE WALL
STREET JOURNAL, and the dividends declared per share:
PRICE RANGE DIVIDENDS
------------------ ------------------
HIGH LOW QUARTERLY ANNUAL
------- ------- ------- -------
1991:
First Quarter........................... 23 20 3/8 .36
Second Quarter.......................... 23 20 1/2 .375
Third Quarter........................... 23 1/4 20 7/8 .375
Fourth Quarter.......................... 25 1/4 22 1/4 .375 $ 1.485
1992:
First Quarter........................... 25 1/4 21 1/8 .375
Second Quarter.......................... 23 3/8 21 1/4 .385
Third Quarter........................... 23 5/8 22 1/8 .385
Fourth Quarter.......................... 23 1/8 18 1/8 .385 $ 1.53
1993:
First Quarter........................... 20 5/8 16 7/8 .27
Second Quarter.......................... 19 1/8 17 1/2 .27
Third Quarter........................... 20 3/4 18 3/8 .27
Fourth Quarter (through November 19,
1993).................................. 20 1/8 18 1/4 .27 $ 1.08
The reported last sale price of the Common Stock on the New York Stock
Exchange Composite Tape on November 19, 1993 was $19.25. At September 30, 1993,
the book value per share of the Common Stock was $11.49.
LEGALITY
The legality of the securities to which this Prospectus relates will be
passed upon for the Company by Stoel Rives Boley Jones & Grey, counsel to the
Company, 700 NE Multnomah, Suite 950, Portland, Oregon 97232, and for any
underwriters, dealers or agents by Winthrop, Stimson, Putnam & Roberts, One
Battery Park Plaza, New York, New York 10004. John M. Schweitzer and John
Detjens, III, who are assistant secretaries of the Company, are partners in the
firm of Stoel Rives Boley Jones & Grey.
EXPERTS
The audited consolidated financial statements of the Company and
subsidiaries and supplemental schedules incorporated by reference in this
Prospectus have been audited by Deloitte & Touche, independent auditors, as
stated in their reports included in or incorporated by reference in the
11
Company's Annual Report on Form 10-K incorporated by reference herein, and have
been so incorporated herein in reliance upon such reports given upon the
authority of that firm as experts in accounting and auditing.
With respect to any unaudited interim financial information that is
incorporated herein by reference, Deloitte & Touche have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in any Quarterly
Reports on Form 10-Q incorporated by reference herein, they did not audit and
they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche are not subject to the liability provisions of Section 11 of
the Securities Act of 1933, as amended (Securities Act), for their reports on
the unaudited interim financial information because those reports are not
"reports" or a "part" of the Registration Statement to which this Prospectus is
a part prepared or certified by an accountant within the meaning of Sections 7
and 11 of the Securities Act.
PLAN OF DISTRIBUTION
The Company may sell the Securities through underwriters, dealers or agents,
or directly to one or more purchasers. A Prospectus Supplement with respect to
the Securities offered thereby will set forth the terms of the offering of such
Securities, including the name or names of any underwriters, dealers or agents,
the purchase price of such Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time. Only underwriters named in a Prospectus Supplement
are deemed to be underwriters in connection with the Securities offered thereby.
If underwriters are involved in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
underwriter or underwriters with respect to a particular underwritten offering
of Securities will be named in the Prospectus Supplement relating to such
offering and, if an underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover page of such Prospectus Supplement.
Unless otherwise set forth in such Prospectus Supplement, the obligations of the
underwriters to purchase the Securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all such
Securities if any is purchased.
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any such agent, who may be deemed
to be an underwriter as that term is defined in the Securities Act, involved in
the offer or sale of any of the Securities will be named, and any commissions
payable by the Company to such agent will be set forth, in the Prospectus
Supplement relating to such offer or sale. Unless otherwise indicated in such
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If sold through agents, the Additional Common Stock may be sold from time to
time through such agents, by means of (i) ordinary brokers' transactions, (ii)
block transactions (which may involve crosses) in accordance with the rules of
the New York Stock Exchange, the Pacific Stock Exchange or other stock exchanges
on which the Common Stock is admitted to trading privileges (Exchanges), in
which such agent may attempt to sell the Additional Common Stock as agent but
may position and resell all or a portion of the blocks as principal, (iii)
"fixed price offerings" off the floor of the Exchanges or "exchange
distributions" and "special offerings" in accordance with the rules of the
Exchanges or (iv) a combination of any such methods of sale, in each case at
market prices prevailing at the time of sale in the case of transactions on the
Exchanges and at negotiated prices related to prevailing market prices in the
case of transactions off the floor of the Exchanges. In connection
12
therewith, distributors' or sellers' commissions may be paid or allowed that
will not exceed those customary in the types of transactions involved. If an
agent purchases Additional Common Stock as principal, such stock may be resold
by any of the methods of sale described above.
From time to time an agent may conduct a "fixed price offering" of
Additional Common Stock covered by this Prospectus off the floor of the
Exchanges. In such case, such agent would purchase a block of shares from the
Company and would form a group of selected dealers to participate in the resale
of the shares. Any such offering would be described in a Prospectus Supplement
setting forth the terms of the offering and the number of shares being offered.
It is also possible that an agent may conduct from time to time "special
offerings" or "exchange distributions" in accordance with the rules of the
Exchange. Any such offering or distribution would be described in a Prospectus
Supplement at the time thereof.
If a dealer is used in the sale of the Securities, the Company would sell
such Securities to the dealer, as principal. The dealer could then resell such
Securities to the public at varying prices to be determined by such dealer at
the time of resale. The name of any dealer involved in a particular offering of
Securities and any discounts or concessions allowed or reallowed or paid to the
dealer will be set forth in the Prospectus Supplement relating to such offering.
If so indicated in any applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Bonds from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the future.
Such contracts will be subject to those conditions set forth in such Prospectus
Supplement and such Prospectus Supplement will set forth the commission payable
for solicitation of such contracts.
Subject to certain conditions, the Company may agree to indemnify the
several underwriters, agents or dealers and their controlling persons against
certain civil liabilities, including certain liabilities under the Securities
Act, or to contribute to payments any such person may be required to make in
respect thereof. Agents, underwriters and dealers may engage in transactions
with or perform services for the Company and its subsidiaries in the ordinary
course of business.
13
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
---------
Summary Information...................... S-2
Selected Financial Information........... S-2
The Company.............................. S-4
Recent Developments...................... S-5
Use of Proceeds.......................... S-6
Common Stock Price Range, Book Value and
Dividends............................... S-7
Underwriting............................. S-8
PROSPECTUS
Available Information.................... 2
Incorporation of Certain Documents by
Reference............................... 2
The Company.............................. 4
Use of Proceeds.......................... 4
Description of New Bonds................. 4
Description of Capital Stock............. 8
Ratios of Earnings to Fixed Charges...... 10
Common Stock Price Range, Book Value and
Dividends............................... 11
Legality................................. 11
Experts.................................. 11
Plan of Distribution..................... 12
8,000,000 SHARES
[PACIFICORP LOGO]
COMMON STOCK
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
DEAN WITTER REYNOLDS INC.
PIPER JAFFRAY INC.
SMITH BARNEY INC.
REPRESENTATIVES OF THE UNDERWRITERS
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