SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 2, 2001
Date of Report (Date of earliest event reported)
[LOGO OF NORTHWEST]
NORTHWEST NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
Commission File No. 0-994
OREGON 93-0256722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 N.W. SECOND AVENUE, PORTLAND, OREGON 97209
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (503) 226-4211
Part II. OTHER INFORMATION
Item 5. Other Events
As previously reported, on October 5, 2001, Northwest Natural Gas
Company ("NW Natural") and Enron Corp., an Oregon corporation ("Enron"), entered
into a Stock Purchase Agreement (the "Stock Purchase Agreement") providing for
the acquisition, by a wholly owned subsidiary of NW Natural (now named Northwest
Energy Corporation) formed to serve as a holding company, of all of the issued
and outstanding common stock of Portland General Electric Company, an Oregon
corporation and wholly-owned subsidiary of Enron ("PGE").
On December 2, 2001, Enron filed for reorganization under Chapter 11 of
the United States Bankruptcy Code in U.S. Bankruptcy Court for the Southern
District of New York. PGE did not file for reorganization under Chapter 11.
NW Natural affirms that, notwithstanding Enron's Chapter 11 bankruptcy
filing, NW Natural intends to continue its acquisition of PGE.
NW Natural understands that Enron's bankruptcy will add complexity to
the transaction, but NW Natural believes that the acquisition of PGE will
produce significant benefits for its customers, its shareholders and for Enron.
NW Natural believes it is in the best interest of all parties involved to
complete this transaction as soon as practicable.
PGE is an affiliated, but separate, corporation from Enron. The Stock
Purchase Agreement requires that PGE continue to be operated in the ordinary
course of business, consistent with past practice, to preserve existing
relationships and to maintain assets in their current condition. The Stock
Purchase Agreement also restricts various actions such as the payment of
dividends and dispositions of assets. In addition, PGE remains subject to
regulation as a utility and, as such, is subject to legal and regulatory
constraints in its dealings with Enron.
At this time, it is difficult to completely assess the impact of
Enron's bankruptcy filing on PGE. While it is possible that Enron's situation
could adversely affect PGE and give rise to circumstances that would permit NW
Natural to terminate the Stock Purchase Agreement should it choose to do so, NW
Natural remains committed to completing the acquisition of PGE.
Notwithstanding Enron's bankruptcy, the Stock Purchase Agreement
remains a valid contractual obligation of Enron to sell, and for NW Natural to
acquire, through a newly formed holding company, the common stock of PGE.
However, in the Enron bankruptcy case, Enron can elect to reject the Stock
Purchase Agreement and either retain ownership of PGE or attempt to sell PGE to
another party. NW Natural expects that Enron will determine that the sale of PGE
to NW Natural is in the best interests of Enron and will elect to complete the
proposed transaction. NW Natural cannot, however, predict when such a
determination will be made or whether Enron will solicit new offers to acquire
PGE.
2
The purchase price to be paid for the common stock of PGE includes an
estimated $50 million of common stock and class B common stock and $200 million
of FELINE PRIDES(SM) to be issued by Northwest Energy Corporation. Since those
securities will be issued to Enron and could be sold by Enron in certain
circumstances for the benefit of Enron's bankruptcy estate and creditors, NW
Natural believes that the seller financing contemplated by the Stock Purchase
Agreement can proceed.
NW Natural will continue to evaluate the impact of Enron's Chapter 11
bankruptcy filing on PGE and on the proposed acquisition of PGE. The ultimate
impact of Enron's bankruptcy filing on PGE and on the acquisition cannot be
determined at this time and may be materially different from the preliminary
assessment contained herein. At this time, however, NW Natural is proceeding on
the assumption that the acquisition of PGE will be completed on the terms set
forth in the Stock Purchase Agreement.
Forward-Looking Statements
- --------------------------
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements to encourage such disclosures without the
threat of litigation, provided those statements are identified as
forward-looking and are accompanied by meaningful, cautionary statements
identifying important factors that could cause the actual results to differ
materially from those projected in the statement. Forward-looking statements
have been made in this current report. The matters discussed in this current
report that are not historical facts are forward-looking. Such statements are
based on management's beliefs as well as assumptions made by, and information
currently available to, management. When used herein, the words "will,"
"anticipate," "estimate," "expect," "believe" and similar expressions are
intended to identify forward-looking statements that involve estimates,
projections, goals, forecasts, assumptions and uncertainties that could cause
actual results or outcomes to differ materially from those expressed in the
forward-looking statements.
Examples of factors that should be considered with respect to any
forward-looking statements made include the following:
o developments affecting prevailing federal and state
governmental policies and regulatory actions, including those
of the Oregon Public Utility Commission, the Washington
Utilities and Transportation Commission and the Federal Energy
Regulatory Commission, with respect to allowed rates of
return, industry and rate structure, purchased electricity and
gas, investment recovery, acquisitions and dispositions of
assets and facilities, operation and construction of plant
facilities, and present or prospective wholesale and retail
competition;
o the impact of Enron's bankruptcy filing on PGE and on the
proposed acquisition of PGE;
o risks relating to the failure to realize the synergies and
other benefits expected from the acquisition of PGE;
3
o risks relating to the interest rate environment as it may
affect the financing commitment and the interest rates borne
by the debt financing for the acquisition of PGE;
o risks and uncertainties relating to delays in obtaining, or
adverse conditions contained in, regulatory approvals
necessary for the plan of reorganization and acquisition of
PGE;
o changes in tax laws and policies, and changes in and
compliance with environmental and safety laws and policies;
o the pace of electric industry deregulation in Oregon and in
the United States;
o weather conditions and other natural phenomena;
o unanticipated population growth or decline, and changes in
market demand and demographic patterns;
o competition for retail and wholesale customers;
o pricing of natural gas and electricity relative to other
energy sources;
o changes in customer consumption patterns due to electric and
gas commodity price changes;
o unanticipated changes in interest or foreign currency exchange
rates or in rates of inflation;
o economic factors which could cause a severe downturn in
certain key industries, thus affecting the demand for natural
gas and electricity;
o unanticipated changes in operating expenses and capital
expenditures;
o capital market conditions;
o competition for new energy development opportunities; and
o legal and administrative proceedings and settlements.
All subsequent forward-looking statements, whether written or oral also
are expressly qualified by these cautionary statements. Any forward-looking
statement speaks only as of the date on which such statement is made, and there
is no obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time and it
is not possible to predict all such factors, nor can we assess the impact of
each such factor or the extent to which any factor, or combination of factors,
may cause results to differ materially from those contained in any
forward-looking statement.
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NORTHWEST NATURAL GAS COMPANY
(Registrant)
Dated: December 4, 2001 /s/ Bruce R. DeBolt
-----------------------------------
Senior Vice President and
Chief Financial Officer
5