20101012Compliance Filing.pdf

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Paifc Po I
Rocky Mountn Por IParp Ene
825 NE Multnmah. Suite 1900 LeT
Portland, Ore 97232201ß OCT i 2 AM to: 51
October 12, 2010
Jí OVERNGHT DELIVERY
Idaho Public Utilties Commssion
472 West Washigton
Boise, ID 83702.,5983
Attention:Ms. Jean D. Jewell
Commssion Secreta
Re: Idaho Docket No. P AC-E-ØS-08 Compliance Filng
To the Idao Public Utilties Commission:
PacifiCorp submits the atthments in compliance with the Commssion's Order in ths case
issued on Febru 13,2006 and amended on March 14,2006. The Order approved the
Stipulation supportg the acquisition of PacifiCorp by MidAerican Energy Holdings
Company.
Commtment 120 of the Stipulation provides that PacifiCorp will provide to the Commssion, on
an informational basis, credit rating agency news releases and final reports regarding PacifiCorp
when such report are known to PacifiCorp and are available to the public.
Therefore, in compliance with Commtment 120 of the Stipulation, please find the atthed
report related to PacifiCorp.
Very try yours,~LJ~
Bruce Wiliams
Vice President and Treasurer
Enclosure
Fitch Ratings I Press Release Page i of 4
FitchRatings
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Fitch Affrms MidAmerican Energy Holdings Co. & Subsidiaries; Outlook Stable
Ratings
01 Oct 2010 12:59 PM (EOn
Fitch Ratings-New York-01 October 2010: Fitch Ratings has affrmed the MidAmerican Energy Holdings Company's
(MEHC) long- and short-term Issuer Default Ratings (lOR) at 'BBB+' and 'F2', respetively. Fitch has also affrmed MEHC'sindividual secrity ratings and its subsidiary lOR and instrument ratings as listed below. The Rating Outloo is Stable.
Approximately $20 bilion of debt is affected by the rating action.
Key MEHC rating drivers include:
-The underlying financial strength and relative predictabilit of its core U.S.-based electric utilit and natural gas pipeline
companies and UK electric distribution utilities;
--The salutary financial affects of MEHC's afliation wih Berkshire Hathaway Inc. (BRK; lOR 'AA-' with a Stable Outlook);
-Regulatory outcomes in peing and futre rate case proedings;
-Execution of MEHC's capitl expenditure proram.
MEHC's ratings and Stable Outlook refec the company's diversifid cash flows frm six relatively low-risk utilites and
natural gas pipelines loted in the U.S. and U.K., soDd and improving crit metrcs, strng liquidity position and
manageable planned 2010-2014 capital expenditures. MEHC's ratings also consider the positive credit implications of its
status as a subsidiary of BRK, including BRK's strategic commitment to expand MEHC's investments in regulate assets.
BRK has opportunistilly provided capital and financing to MEHC to pursue suc acquisitns, incuding the Marc 2006
PaciCor (PPW) acuisition; aborted acquisiton of Constellation Energy Group (CEG) in 208; and, an invesen inaYD Company Umited (BYO) in 2009.
MEHC's affliation with BRK provid two unique. spefi financal adantags to the intermiate holing copany and its
subsidiaries. These two factors mitigate concm regarding MEHC's modrately high cosolidated financial leveragerelative to Fitch's 'BBB+' guidelines and large consolidated capital expenditure program.
Rrst, unlike most utilty holding companies, MEHC befits signifcantl from capital retained as the direc result of BRK's
financial strength, which obviates the need to upstream dividends. Second, MEHC and BRK recently extended the equit
commitment agreement (ECA) originally put in place in March 200. The ECA provides equity capital of up to $3.5 bilion at
the request of MEHC. ECA equity contributions may only be used for the purpse of paying MEHC debt obligations when
due and funding the general corporate purpose and capital requirements of MEHC's regulated subsidiaries. The ECA was
set to expire Feb. 28, 2011. Earlier this year, the ECA was extended through February 2014 and the commitment level
lowered from $3.5 billon to $2 billon effecte March 1, 2011. The reduction reflect reduced equit capital requirements at
PPW and lower anticipated MEHC parent level debt maturies.
In addition, MEHC benefis frm its affliation wih BRK throgh opportunistic M&A actvity. whic is funded separate from
the ECA. For example, MEHC reived after-ta cash procs of $1.7 billion in 200 and 2009 folloing termination of its
pianned acquisitn of CEG. After repaying $1 bilion of preferred secriies iss to Its parent to fund the CEG
transaction, cash proceds to MEHC were approximately $725 million, of which $493 millon was used to reduce debt and
fund capital expenditures. MEHC invested the remaining $232 miHion in return for a 10% ownership interest in BYD, which
is acive in rechargeable battery, cel phon and other technology business lines and automobile manufcturing in China.
MEHC's investment in BYD was valued at $1.3 billon as of Aug. 31, 2010. Fitch does not expect further investment in
industries outside the core regulated utilty and pipeline sector.
MEHC's operations incude two domestic utilities, two domestic natural gas pipelines, and two elctric distribution
companies in the UK which together, accunted for 89% of 2009 MEHC revenue and 95% of consolidated operating
income (before corporate and other expense).
MEHC's oprating utlity and natural gas subsidiaries benefi from solid stand-alone credit profiles, relatively stable
earnings and cash flow characteristics and generally reasonable regulatory jurisdictions. The ratings assume that future
regulatory rulings will continue to support reasonable earned returns and credit metrics consistent with Fitch's projecions.
Timely recovery of PPWs large capitl expenditure progra is crcil to the fuure creitwrtiness of PPW and MEHC, in
Fitch's view. Fitch notes that regulatory decsions since MEHC has owned PPW have ben generalfy reasonabie and
balanced.
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Fitch Ratings I Press Release Page 2 of4
The raings consider the improving trend evident in MEHC's credit metri in recent years and assume the trend wil
continue through 2014. Fitch calculates earnings before interest, taxes, depreciation and amortzation (EBITDA)-to-interest
expense and funds-from-oerations (FFO).to-interest expense ratios of 3.1 times (x) and 3.5x, respectively, at June 30,
2010 and estimates that these credit ratios wil strengthen to approximately 4x In 2014. Fitch expects MEHC's projected
debt-to-FFO ratio to improve from 7x in 2010 to better than ax in 2014. In Fitch's view, thes credit metncs comb/ned wit
the salutary effct of its status as subsidiary of BRK supprts MEHC's current ratings and Stable Outlook.
MEHC's liquidity position was strong as of June 30,2010, wih $471 milion of cash ànd cash equivalents on its
consolidated balance sheet and $2.2 billon of available boowing capacity under its $3 bilion of consolidated revolvng
credit agreements. In additon, the company's ECA wih BRK, as descnbed above, provides up to $3.5 billio of equity
capital throgh Feb. 28, 2011 and $2 billon through February 2014. During 2010-2014, $4.3 bilion (22%) of MEHC's $19.7
bilion of outstanding long-term debt is schedule to mature.
Fitch's affirmtion of PPWs 'BBB' lOR considers the company's solid financial poition, copetitive resource base, and
relatively balanced, diversied regulatory environment. Th current ratings and Stable Outloo assume PPW continues to
benefit from parent company support and reasonable outcomes in pending and fuure rate procdings to recoer
anticipated, significant capial investment. Rating concerns for PPW investors include execuion and reovery of its large,
planned capital investment. Emergence of more stringent environmental rules and regulations are also a concern.
The affrmation of MidAmencan Energ Co. (MEC) 'A-' and MidAmerican Funding, LLC's (MF) 'BBB+' IDRs reflec MEC's
low business risk profile, strong credit metrics, low debt leverag and a relatively supportive regulatory environment in
Iowa, which is MEC's largest jurisdiction. MEC beefis from a solid competiive position, and stable operating
penormance. Commodity exposure at MEC is mitigated by the utilit's long capaci position.
MF is an intermdiate holding company that is a whlly owned subsidiary of MEHC and the indirect parent of MEC. MF's
ratings are based on the credit qualit of MEC, which is the primary source of cash flow to servce its debt obligations and
also benefis from the supprt of its ultimate corporate parent, BRK.
The ratings affrmtion for Northern Natural Gas Company (NNG) reflcts the pipeine'S strong standalone credit profile,
solid crdit proecon measures. favorable opeting charaeritic and low reulatory rik. NNG's competie posit is
strong with acss to five major supply basins and a customer base primanly comprised of local diribution companies.
Competitive pressures are mitigated by the pipeline's stable customer base and geographic location, In Fitch's opinion.
The ratis affrmation for Kern River Funding Corpratio (KRFC) refl th pipelines' relatively preable earnings
and cash fl metrcs, resonable regulatory oversigt and manageable capil expenditure plans. KRFC is a financing
vehicle for the long-term debt obligations of Kern River Gas Transmission Co. (KRGT). KRFC's debt is unconditionally
guaranteed by KRGT, which owns and operates a 1,680 mile interstate pipeline delivering primarily Rocy Mountain Gas
from Wyoming to markets in Californa, Utah, and Nevada. KRFC's 'A-' rating reflecs KRFCIKRGT's standalone credit
quality as the result of specic legal and structural separations from its parent, MEHC. KRFC/KRGT's credit quality
benefits from a portlio of binding lon-term transportation contracs, a competive maret position, accss to relatively
low cost natural gas supply and a solid operaing track recod.
Fitch has afrmed the following ratings:
MidAmern Enegy Holdings Company (MEHC)
-Issuer Default Rating (lOR) at 'BBB+';
-Senior Unsecred Debt at '8BB+';
-Trust Preferred Stock at 'BB8-';
-Short.term lOR at 'F2'.
PaciCorp (PPW)
--lOR at 'BBB';
--Senior Secured Debt at 'A-';
.-Senior Unsecured Debt at 'BBB+';
-Preferre Stoc at 'BB8-';
-Short-ter lOR at 'F2';
-Commercial Paper at 'F2'.
MidAmerican Funding, LLC (MF)
-lOR at 'BB8+'.
-Senior Secur~ Debt at 'AJ.
htt://ww.fitchratings.comlcreditdesklpressJeleases/detal.cfm?print= 1 &pr _id=630651 10/412010
Fitch Ratings I Press Releas Page 3 of4
MidAmericn Energy Company (MEC)
-lOR at 'A-';
-Senior Unseured Debt at 'A';
-Preferred Stoc at 'BBB+';
-Shor-term lOR at 'F1';
-Commercial Paper at 'F1'.
Northern Natural Gas Company (NNG)
-lOR at 'A';
-Senior Unsecred Debt at 'A'.
Kern River Funding Corporation (KRFC)
--lOR at 'A.';
--Senior Unseured Debt at 'A.'.
Contact:
Primary Analyst
Philp W. Smyth, CFA
Senior Direcor
[phone]
Fitch,lnc.
One State Street Plaza
New York, NY 1004
Secondary Analyst
Karen Anderson
Senior Director
+1.312-368-3165
Comrnttee Chairman
Robert Hornick
Senior Direor
[phone]
Media Relations: Cindy Stoller, New York, Tel: [phone], Email: cindy.stolle~fichratings.com.
Additional Information is available at .w.fichratings.com..
Applicble Crieria and Related Researc:
-'Utilities Sector Notching and Recvery Ratings' (March 16, 2010);
-'Corporate Ratig Methodology' (Aug. 16,2010);
-'U.S. Power and Gas Comparative Operating Risk (COR) Evaluation and Financial Guidelines'(Aug. 22, 2007);
-'Recvery Ratings and Notching Critera for Nonfinancil Corprate Issuers' (Nov. 24,2009);
-'Issuer Defult Ratings and Recover Ratngs in the Power and Gas Secor' (Nov. 7, 2005);
-'Credit Rating Guidelines for Regulated Utilit Companie' (July 31, 2007); and,
-'Equity Credit for Hybrids & Other Capital Secties' (Dec. 29, 200).
Applicable Criteria and Relate Research:
Utilties Secor Notching and Recvery Ratings
Corporate Rating Methodology
U.S. Power and Gas Comparative Operating Risk (COR) Evaluation and Financial Guidelines
Recovery Ratings and Notching Criteria for Nonfinancial Corporate Issuers
Issuer Default Ratings and Recovery Ratings in the Power and Gas Sector
Credit Rating Guidelines for Regulated Utilit Companies
Equity Credit for Hybrids & Other Capitl Securiies - Amended
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ
THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
Hrrp:/IFITCHRATINGS.COMIUNDERSTANDINGCREDITRATINGS.IN ADDITION, RATING DEFINITIONS AND THE
TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE
'VV.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM
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Fitch Ratings I Press Release Page 4of4
THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE
FIREWAll, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCr SECTION OF THIS SITE.
Copyright e 2010 by Fitch, Inc, Fitch Ratings ltd. and its subsidiaries.
http://ww.fitchratings.comlcreditdesklpres Jeleases/detal.cfm ?print= 1 &pr Jd=630651 10/4/2010
Primary Credit Analyst:
Anne Selting, San Francisco (1) 415-371-5009; anne_selting(tstandardandpoors.com
Secondary Contact:
Todd A Shipman, CFA, New York (1) 212-438-7676; todd_shipman(tstandardandpoors.com
Table Of Contents
Major Rating Factors
Rationale
Outlook
ww.sndardaodpoors.comJratingsdirect 1
8249721300030966
PacifiCorp
Major Rating Factors
Strengt:
. Market and regulatory diversity is afforded by PacifiCorp's electic utility
business, which serves portions of six western U.S. states;
. Retail electic rates compare favorably with thos of other electric suppliers
operating in the states PacifiCorp serves, suggesting that the company may
be able to maintain its competitive advantage despite its ongoing need for
rate relief to support a large capital program;
. The company has made progress in putting into place fuel and purchased
power adjusters in the six states it serves (an adjuster was put into effect in
Idaho in 2009, and one is pending in PacifiCorp's largest market, Uta);
. The completion of new natural gas plants, along with wind farm
investment, is reducing the company's reliance on purchased power; and
. A settlement reached in February 2010 regarding the contentious Klamath
hydro relicensing case has the potential to adequately address the company's
financial exposure if the project is decommissioned, which wil not occur
before 2020.
Corporate Credit Rating
A-/S/A-2
Weakesses:
· Despite the company's policy of filing near annual rate cases in the states PacifiCorp serves, regulatory lag
contiues to allow only modest improvement in the company's fiancial profie: Its return on equity remains
under authorized levels and although leverage has improved since MidAerica Energ Holdings Co. acquired
the utilty in 2006, cash flow metrics remain just adequate to support the rating;
. Regulators wil need to consistently support retail rate increases to recover PacifiCorp's planed capital
investments, although the recessionary environment has caused some scaling-back of capital plans; and
. Growth in the percentage of generation provided by natual gas costs mitigates some of the company's potential
exposure to carbon regulation, but introduces greater potential for cost volatilty.
Rationale
The 'A-' corporate credit rating on PacifiCorp (PPW) reflects its "excellent" business risk profile, evidenced by a
diverse and growing service territory, and "significant" financial risk profile. PPW has made modest strides in
improving regulatory outcomes which should put the company on a path to achieving cash flow coverage metrics
that comfortbly support the rating. The company has made progress in increasing core earnings amid a recession
and a period of heavy capital spending for the company. The company has achieved this by focusing on
strengtening the regulatory mechanisms that are in place in the six states it serves and working to minimize
regulatory lag by filing for nearly annual rate relief in almost all states it serves.
In 2010 PPW has contiued to receive revenue increases though rate case outcomes, fuel adjustments and other
recovery mechanisms. Highlights of key regulatory rulings that have provided increased revenues to the company in
Standard & Poor's I RatingsDire on ti Global Credit Porl I October 7. 2010 2
824972 I 300030966
PacifiCorp
2010 include a Utah general rate increase beginning in February 2010 for $32 milion (or a 2% increase), and a $31
milion increase for the recovery of two major project approved in June. Also in Utah, the company's largest
market, the company has received approval to establish an energy cost adjusttent mechanism, with the mechanism
design under consideration before the Utah Public Servce Commission. In Januar 2010, the Oregon Public Utility
Commission (OPUC) approved a stipulation in the company's 2009 general rate case increasing base rates by $42
milion, effecve Feb. 2,2010. In January 2010, PPW received a rate increase of $14 milion, or 5%, in Washingon.
In March 2010, PPW fied a new general rate case in Oregon requesting an increase in the rates by $131 milion, or
13% increase, and in July reached a multipart stipulation for an increase of $85 million, or 8%. If approved by the
OPUC, the rates wil be effective Jan. 1,2011.
As with may electric utilties, the company's 2008 and 2009 credit metrics have been buoyed by deferred tax
increases, which boosted funds from operations metrics. But these effec notwithstanding, the company's fuds
from operations (FFO) to total debt has been consistently in the high teens, slightly below our expeed credit
metrics for the rating, since it was acquired by MidAerican Energy Holdings Co. (MEHC; BBB+/Stablel--).
Leverage has also been somewhat high for the rating at 53% at year-end 2009. However, we expect that credit
metrics wil improve in the coming years, producing FFO to total debt in the area of 20%, FFO interest coverage of
20% or better and in the range of 4.0x-4.5x, and leverage of about 50%. (We would note that PPW has, over the
last three years, produced FFO to total debt of more than 20%, but this is due to benefits of deferred taxes.)
PPW serves 1.7 milion customers in portions of six western states: Utah, Oregon, Wyoming, Washington, Idaho,
and California. The company operates as Pacific Power in Oregon, Washington, and California, and as Rocky
Mountain Power in Utah, Wyomig, and Idaho, The company's two largest makets, Utah and Oregon, accounted
for about 67% of the company's retail elecic sales in 2009, with Wyoming and Washington at 25%, and the
balance being sold to customers in Idaho and Californa. As of Dec. 31,2009, the utility's long-term debt was $6.4
bilion.
PPW completed $2.3 bilion in capital expnditues in 2009, up from $1.8 bilion in 2008. The company project
that it will spend $4.6 bilion in 2010-2012, excluding non-cash allowance for funds used during construction. The
largest component of PPW's capital program is the construction of the Gateway transmission project, an estimated
$4.6 bilion, 2,OOO-mile transmission line connecing portons of Wyoming, Uta, Idaho, Oregon, and the
southwestern U.S. The projec is being completed in phases, with initial portions of new lines being placed in service
as early as 2010 and a tentative completon date of 2018. About 34% of the company's total capital budget over the
next three years (2010-2012) is devoted to transmission investment, of which Gateway is a component. In 2008, the
Federal Energy Regulatory Commission awarded the company incentive rate treattent of 200 basis points for seven
of the eight project segments.
PPW is owned by MEHC. In turn, MEHC is privately held and majority owned by Berkshire Hathaway
(AA+/Stable/A-1+). MEHC has demonstrated a wilingness to deploy equity to support the utility's large capital
program, providing the utility with $865 million in equity contributions since it purchased the company in March
2006. Although PPW is investing heavily in its system, we expct PPW distributions to MEHC to be minimaL.
MEHC's credit profile is supported by Berkshire Hathaway, which has in place through Februar 2011 a $3.5
billon equity commttent agreement between itself and MEHC in which MEHC can unilaterally call upon
Berkshire Hathaway to support either its debt repayment or the capital needs of its regulated subsidiaries, including
PP\v In March 2010, the agreement was extended though February 2014 at a lower level of $2 bilion. We view
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824972 i 3ú0030966
PacifiCorp
this agreement between PPW's parent and a 'AA+' rated entity as reducing the likelihood of a PPW default.
Nevertheless, we expe PPW to grow into a stand-alone credit profie consistent with the 'A-' rating on the
company. We take this view because the utility has no right to cause MEHC to mae an equity contrbution, either
from MEHC or via Berkshire Hathaway through an MEHC board request. Although MEHC would typically have
strong incentives to support the utility by tapping the Berkshire Hathaway contingent equity, we would note that in
a catastrophic utilty event, MEHC would be expected to do so only if doing so were in the parent's best economic
interests. Such a scenario is remote and would require an unprecedented event such as what ocurred during the
westrn energy crisis, when regulators refused to allow utilties to recover power procurement costs.
Short-ter credt factors
On a stand-alone basis (i.e., unenhanced by the existing contingent equity agreement available to MEHC to support
any of its regulated subsidiaries, includig PPW) we view PPW's liquidity as "strong" under our corporate liquidity
methodology. This methodolog categori liquidity in five standard desriptors (exceptional, strong, adequate, less
than adequate, and weak). Projected sources of liquidity, which consist of operating cash flow and available bank
lines, exceed projected uses, the company's commtted capital expenditures, debt maturities, and common dividends
by about 1.5x. Under our criteria, we exclude as sources of liquidity any facilities expiring within one year of the
liquidity assessment date. Presuming that MEHC draws on its contingent equity to support PPW's projected capital
requirements and debt maturities over the next two years, liquidity would be bolstered to more than 2x, or
" exceptionaL. "
As of June 30, 2010, PPW's cash and cash equivalents totaled $110 millon. The utility maintain unsecured credit
facilities totaling nearly $1.4 bilion that mature 2012-2013. As of June 30, 2010, PPW had additional borrowing
capacity of $1.1 bilion, because $304 millon of liquidity is reserved to support variable-rate tax-exempt bond
obligations and letters of credit. There are no rating triggers on the credit lines. PPW's next substantial long-term
debt matuties are $600 milion due in 2011 and $284 milion in 2013.
Outlook
The stable outlook on the PPW ratigs incorporates our expection that MEHC wil continue to support the utility
by contributing equity suffcient to ensure that fully adjusted debt to total capitalization is managed over the next
few years to a level of closer to 50% and that FFO to total debt and FFO interest coverage wil be in the area of
20% and the 4.0x-4.5x range, respectively. Given that PPW's financial risk profie is weak for the ratings, we do not
expect near-term upward ratings momentu for the utility. PPW's regulatory and strctural insulation shields the
utility from MEHC credit deterioration, to an extent. Specifically, our criteria provide that the PPW corporate credit
rating can be no more than three notches above the MEHC consolidated credit rating. The company is comfortably
within this range, so we do not see significant risks that the utilty rating wil fall as a result of advers rating
changes on MEHC, which also has a stable ratig outlook.
Table 1.
PacifiCorp -- Peer Comparison*
Rating as of sept. 22, 2010
PacifiCo" Portlind General Electc Co. Pacific Gis & Electrc Co.
A-/Stable/A-2 BBBlStable/A-2 BBB+/Wate Neg/A-2
Stadard & Poor's I RatingsDire on th Global Credit Porl I October 7. 2010 4
824972 I 300030966
Table 1.
PacifiCorp -- Peer Comparison* (cont.
--Average of past three fiscl years-
(MiL. $)
Revenues
Net ince from cont. oper.
Funds from operations (FFO)
Capital expnditures
Cash and short.term investnts
Debt
Preferred stock
Equity
Debt and equity
Adjustd ratios
EBIT interest corage (xl
FFO int. cov. (xl
FFO/debt (%)
Discretionary cash flow/deb (%)
Net cash flow/capex (%1
Total debt/debt plus equit (%)
Return on common equity (%)
Common dividend paout ratio (unadj.1 (%)
"Fully adjusted (including postretirement obligations),
4.40.3
479.7
1.342.3
1.850.2
134.7
6.641.
34.2
5.926.2
12.567.9
1.64.0
109.0
326.5
511.4
38.0
1.875.2
0.0
1,404.3
3.279.5
13.218.9
1.157.7
3.03.0
3.437.
17.7
12.662.8
258.0
10.032.3
22.695.2
2.8
4.3
20.2
(10.5)
72.5
52.8
7.2
2.7
2.2
3.5
17.4
(14.41
51.5
57.2
6.3
59.6
2.9
4.1
23.9
(14.1)
71.2
55.8
11.1
49.6
Table 2.
PacifiCorp -- Financial Summary*
-fiscel year ended Dec. 31-
2l 20 20 2O 2O
Rating history A-/Stable/ A.2 A-/Wath Neg/A-l A-/Stable/ A.l A-/Stable/ A.l A-/Stable/ A-l
(MiL. $)
Revenues 4,457.0 4,498.0 4.258.0 4,154.1 3.896.7
Net income from continuing operations 542.0 45.0 439.0 307.9 360.7
Funds from operations (FFOI 1.60.1 1.272.1 99.8 927.6 864.5
Capital expnditures 2,297.1 1.57.0 1,496.4 1.375.0 1,030.5
Cash and shor-term investments 11.0 59.0 228.0 59.0 119.6
Debt 7,415.8 6.635.9 5.873.5 5,473.6 5.185.3
Preferred stock 20.5 41.0 41.0 41.3 41.3
Equity 6,711.5 5.987.0 5,080.0 4,426.8 3,750.7
Debt and equity 14.127.3 12.622.9 10,953.5 9.90.4 8.936.0
Adjusd ras
EBIT intere covrage (x)2.7 2.8 2.8 2.5 3.0
FFO int. cov. (x)4.9 4.2 3.5 3.8 3.8
FFO/debt (%)23.7 19.2 16.9 16.9 16.7
Discretionary cash flow/debt (%)(10.21 (10.7)(10.5)(10.7)(5.6)
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PacìfiCorp
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PacifiCorp
Table 2.
PacifiCorp -- Financial Summary* (cont.)
Net cash flow/capex (%)
Debtdebt and equit (%)
Return on common equity (%)
Common dividend payout ratio (unadj.) (%)
*Fully adjusted (including postretirement obligations).
76.6
52.5
7.0
7.0
723
52.6
6.8
0.0
66.3
53.6
7.8
0.0
66.1
55.3
6.2
5.2
66.7
58.0
8.9
49.1
Table 3.
Reconciliation Of PacifiCorp Reported Amounts With Standard & Poor's Adjusted Amounts (MiL. $)*
-rlScal yeir ended Dec. 31. 20.
PacifiCorp report amount
Opering Opending Opeatng
incom income incom Ceshflow C8hflow
Shareholders'(bere (before (aftr Intre frm fr Divdends Capitl
Debt equity O&I O&I D&AI expense operions operons paid expenditres
Reported 6.16.0 6.732.0 1,609.0 1,609.0 1,060.0 359.0 1,500.0 1.500.0 2.0 2,328.0
Standard & Poo's adjustent
Operating 36.5 5.0 2.3 2.3 2.3 2.7 2.4.1
leases
Intermediate 20.5 (20.51 1.0 (1.0)(1.0)(1.0)
hyrids
reportd as
equity
Posteti rement 369.9 20.0 20.0 20.0 5.0 33.8 33.8
benefit
obligations
Accrued 111.0
interest not
included in
reported debt
Capitalized 35.0 (35.0)(35.0)(35.0)
interest
Power purchase 395.7 63.3 63.3 25.8 25.8 37.5 37.5
agreements
Asse 66.3 9.0 9.0 9.0 9.0 5.2 5.2
retirement
obligations
Reclassification 83.0
of nonoperating
income
(expnses)
Reclassification 217.0
of
working-capital
cash flow
changes
Total 999.8 (20.5)97.3 94.6 140.2 78.2 43.1 260.1 (1.0)(30.9)
adjustments
Standard & Poor's I Rangsirec on the Global Crdit Porl I October 7, 2010 6
8249721300030966
PacifiCorp
Table 3.
Reconciliation Of PacifiCorp Reported Amounts With Standard & Poor's Adjusted Amounts (MiL. S)* (cont.)
Stndard & Poor's adjusted amounts
Operating
incom Cash flow Funds(bere Intere from frm Divends Capitl
Debt Equit D&)EBITA EBIT expense operaions opeons paid exlJitres
Adjust 7,415.8 6,711.5 1,06.3 1,703.6 1,200.2 437.2 1.54.1 1,760.1 1.0 2.297.1
.PacifiCorp reprted amounts shown are taken from the company's financial stments but might include adjustments made by data provider or relassifictions mae by
Standard & Poor's analysts. Please note that tw reported amounts (operating inc bere OM and cash flow frm operations) are used to derve more than one Standard
& Por's-adjust amount (operating income before DM and EBITDA. and cash flow from operations and funds from operations, respecively). Consequently. the first seion
in some tables may feature duplicate descriptions and amounts.
Ratings Detail iAs Of October 7, 20' Or
PacifCorp
Corporate Credit Rating
Commercial Paper
Local Currncy
Preferred Stock (1 Issue)
Senior Secured (69 Issues)
Senior Unsecured (1 Issue)
Senior Unsecured (2 Issues)
Corp Creit Rang Histry
27-Mar-2oo9
18-Sep- 2008
22-Mar-2oo6
06-Mar-2oo6
Busine Risk Profile
Financial Risk Prile
Relat Enites
CE CaS8cna.n Wat and Ener Co. Inc.
Senior Secured (1 Issue)
CEElecic U.K. Fundin Co.
Issuer Credit Rating
Senior Unseured (1 Issue)
CE Generaton LL
Senior Secured (1 Issue)
CordO' Enargy Co. LLC
Senior Secured (1 Issue)
Iow-Ilinois Gas & Eleic Co.
Senior Unsecured (5 Issues)
Kern River Gas Traision Co.
Senior Secured (2 Issues)
MidArican Enrgy Co.
Issuer Credit Rating
A-lSæble/A-2
A-2
BBB
A
A-
AlOeveloping
A-/Stble/A-2
A-/Watch NegA-1
A-/Sæble/A-1
A-/Stable/ A-2
Excellent
Significant
Bß+/Stable
BBß+/Sæble/ A-2
BBß+/Sæble
BB+/Stle
BB/Sæble
A-/A-
A-/Sæble
A-lStable/A-2
ww.stndardandpoors.comJrangirect 7
824972 I 300030966
PacifiCorp
Ratings Detail il's Of October 7, 20',0) (cont.)
Commercial Paper
Local Currency
Preferred Stock (1 Issue)
Senior Unsecured (9 Issues)
Senior Unsec.ured (2 Issues)
MidArican Energy Holding Co.
Issuer Credit Rating
Preferred Stock (2 Issues)
Senior Unsecured (8 Issues)
MidAricn Flnding. LLC
Senior Secured (2 Issues)
Midw Power Sy Inc.
Senior Unsecured (1 I$sue)
NortemEl_ctc Disbuon Lt.
Issuer Credit Rating
SeniorUnsecured (1 Issue)
Northern Elec Finence PLC
Senior Unsecured (1 Issue)
Norn Electrc PLC
Issuer Credit Rating
Senior Unseured (1 Issue)
Nortrn Natural Gas Co,
Issuer Credit Rating
Senior Unsecured (5 Issues)
SaltnSe Faing Cor.
Senior Secured (2 Issues)
Yorkire Eleit Distbuon PlC
Issuer Credit Rating
Senior Unsecured (1 Issue)
Senior Unsecured (1 Issue)
Yorhire Eleccit Grop PLC
Issuer Credit Rating
Yorshire Poer Group Lt.
Issuer Credit Rating
Senior Unsecured (1 Issue)
A-2
BBß+
A.
A./M
BBß+/Stable/"
BBB.
BBß+
BBß+
A./A-2
A./Stable/..
A.
A./Stable
BBß+/Stale/ A.2
A.
A/Stable/..
A
BBB-/Stable
A./Stable/ A.2
A.
A./Stable
BBß+/Stable/..
BBß+/Stable/ A-2
BBß+
.Unless otherwise noted. all ratings in this report are global scale ratings. Standard & Por's creit ratings on the global scle are comparable across countries. Standard
& Poor's credit ratings on a national scale are relative to obligors or obligations within that speific count.
Standard & Poor's I RatingsDireet on the Global Credit Porl I October 7. 2010 8
824972 I 300030955
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