20120309Report of First Mortgage.pdf

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~ROCKY MOUNTAINPOR
A DIVISI OF PAFlRP RECEIVED
2012 MAR -9 AM 9: 51
20 I South Main, Suit 2300
Salt Lake City, Utah 84111
March 9,2012
VI OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Att: Ms. Jean Jewell
Commission Secretar
Re: Case No. PAC-E-I0-02 Order No. 31018 Report of First Mortgage Bond
Offering in Aggregate Principal Amount of $100,000,000
Dear Commissioners:
Pursuant to the referenced Order, PacifiCorp submits to the Commission an original and seven (7)
copies of the following documents relating to PacifiCorp's February 28,2012 offering of
$100,000,000 aggregate principal amount of First Mortgage Bonds, (the "Bonds"):
1. Prospectus Supplement dated Februar 28,2012.
2. Underwting Agreement between PacifiCorp and J.P. Morgan Securities LLC, dated
Februar 28, 2012.
3. Report of Securities Issued.
With regard to the use of the proceeds from the issuance of the Bonds, PacifiCorp intends to use the
proceeds to redeem $84 milion of ta exempt debt, repay short term debt and for general corporate
puroses.
Under penalty of perjur, I declare that I know the contents of the enclosed documents, and they
are tre, correct, and complete.
Please contact me if you have any questions about this letter or the enclosed documents.
Sincerely,
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Bruce N. Wiliams
Vice President and Treasurer
Enclosures
Cc: Terri Carlock (Idaho Commission)
Ted Weston (PacifiCorp)
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PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED DECEMBER 3, 2010
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$100,000,000 First Mortgage Bonds
2.95% Series Due 2022
The 2.95% Series First Mortgage Bonds due 2022 (the "bonds") wil bear interest at 2.95% per
year and wil mature on February 1, 2022. We wil pay interest on the bonds on February 1 and
August 1 of each year, beginning on August 1,2012. On January 6,2012, we issued $350,000,000
aggregate principal amount of 2.95% Series First Mortgage Bonds due 2022 (the "prior bonds"). The
bonds offered hereby are part of the same series as the prior bonds. Upon the issuance of the bonds
offered hereby, the aggregate principal amount of outstanding 2.95% Series First Mortgage Bonds due
2022 wil be $450,000,000.
We may redeem some or all of the bonds at any time at the redemption prices discussed under the
caption "Description of the Bonds-Optional Redemption."
The Underwiter proposes to offer the bonds from time to time for sale in negotiated transactions,
or otherwise, at varying prices to be determined at the time of each sale. The Underwiter has agreed
to purchase the bonds from us at 100.081% of their principal amount ($100,081,000 before deducting
estimated expenses from the sale of the bonds) plus accrued interest from January 6, 2012, subject to
the terms and conditions in the underwriting agreement between the Underwriter and us. Any investor
that purchases bonds from the Underwriter wil be required to pay accrued interest on the bonds from
January 6, 2012.
We wil not apply for listing of the bonds on any securities exchange or include them in any
automated dealer quotation system. Currently, there is no public market for the bonds.
Investing in the bonds involves risks. See "Risk Factors" on page S-7 for
information on certain matters you should consider before purchasing the bonds.
The underwriter expects to deliver the bonds to purchasers through The Depository Trust
Company on or about March 6, 2012.
Neither the Securities and Exchange Commission nor any state secnnties commission has
approved or disapproved of these securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation to the contrary is a cnminal
offense.
J.R Morgan
The date of this prospectus supplement is February 28, 2012.
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TABLE OF CONTENTS
Page
Prospectus Supplement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
About This Prospectus Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Prospectus Supplement Summary .............................................. S-4
About PacifiCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
The Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ".' . . . S-5
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S- 7
Summary Consolidated Financial Information ..................................... S-7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-7
Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-S
Consolidated Ratios of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-S
Description of the Bonds .................................................... S-S
Certain U.S. Federal Income Tax Considerations ................................... S-LL
Benefit Plan Investor Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... S- 15
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. S- 15
Legal Matters ............................................................. S-lS
Experts .......................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... S- is
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .
About This Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Forward-Looking Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 1
The Company ............................................................ 2
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Ratios of Earnings to Fixed Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Where You Can Find More Information .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Description of Additional Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Book-Entry Issuance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Legal Matters ............................................................ 14
Exerts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
S-2
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ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is the prospectus supplement, which describes the
specific terms of the bonds we are offering and certain other matters relating to us and our financial
condition. The second part, the accompanying prospectus, gives more general information about
securities we may offer from time to time, some of which does not apply to the bonds we are offering.
Generally, when we refer to the prospectus, we are referring to both parts of this document combined.
You should read both this prospectus supplement and the accompanying prospectus, together with the
documents incorporated by reference and the additional information described in the. accompanying
prospectus under the heading "Where You Can Find More Information." If the description of the
bonds in the prospectus supplement differs from the description in the accompanying prospectus, the
description in the prospectus supplement supersedes the description in the accompanying prospectus.
Any statement made in this prospectus supplement or in a document incorporated or deemed to
be incorporated by reference in this prospectus supplement wil be deemed to be modified or
superseded for purposes of this prospectus supplement to the extent that a statement contained in this
prospectus supplement or in any other subsequently fied document that is also incorporated or deemed
to be incorporated by reference in this prospectus supplement modifies or supersedes that statement.
Any statement so modified or superseded wil not be deemed, except as so modified or superseded, to
constitute a part of this prospectus supplement. The information we have included in this prospectus
supplement and the accompanying prospectus is accurate only as of the date of this prospectus
supplement or the accompanying prospectus, and any information we have incorporated by reference is
accrate only as of the date of the document incorporated by reference.
You should rely only on the information contained in or incorporated by reference in the
prospectus. We have not, and the underwiter has not, authorized anyone to provide you with different
information. If anyone provides you with different or inconsistent information, you should not rely on
it. This document may only be used where it is legal to sell the bonds. The information in this
prospectus and the documents incorporated by reference herein may only be accurate as of the dates of
those respective documents. Our business, financial condition, results of operations and prospects may
have changed since those dates.
S-3
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PROSPECTUS SUPPLEMENT SUMMAY
In this prospectus supplement, unless othelWise indicated or unless the context othelWise requires, the
words "Company," "we," "our," "us" and "PacifiCorp" refer to PacifiCorp, an Oregon corporation, and its
subsidiaries. References to the "Mortgage" are to the Mortgage and Deed of Trust, dated as of January 9,
1989, as amended and supplemented, with The Bank of New Thrk Mellon Trust Company, NA. as
successor trstee.
The following summary contains basic information about PacifiCorp and this offering. It may not
contain all of the information that is important to you. The "Description of the Bonds" section of this
prospectus supplement contains more detailed information regarding the terms and conditions of the bonds.
The following summary is qualified in its entirety by reference to the detailed information appearing
elsewhere in this prospectus supplement and by the documents incorporated by reference into this prospectus
supplement.
ABOUT PACIFICORP
We are a regulated electricity company serving 1.7 millon retail customers, including residential,
commercial, industrial and other customers in portions of the states of Utah, Oregon, Wyoming,
Washington, Idaho and California. We own, or have interests in, 75 thermal, hydroelectric,
wind-powered and geothermal generating facilities with a net owned capacity of 10,597 megawatts. We
also own, or have interests in, electric transmission and distribution assets, and transmit electricity
through approximately 16,200 miles of transmission lines. We also buy and sell electricity on the
wholesale market with other utilties, energy marketing companies, financial institutions and other
market participants as a result of excess electricity generation or other system balancing activities. We
are subject to comprehensive state and federal regulation. Our subsidiaries support our electric utilty
operations by providing coal mining and environmental remediation services.
We are an indirect subsidiary of MidAmerican Energy Holdings Company ("MEHe"), a holding
company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses.
MEHC is a consolidated subsidiar of Berkshire Hathaway Inc. ("Berkshire"), which owned 89.8% of
MEHC's voting common stock as of December 31, 2011.
Our principal executive offices are located at 825 N.E. Multnomah, Portland, Oregon 97232 and
our telephone number is [phone]. We were initially incorporated in 1910 under the laws of the
state of Maine under the name Pacific Power & Light Company. In 1984, Pacific Power & Light
Company changed its name to PacifiCorp. In 1989, we merged with Utah Power and Light Company, a
Utah corporation, in a transaction wherein both corporations merged into a newly formed Oregon
corporation. The resulting Oregon corporation was re-named PacifiCorp, which is the operating entity
today.
For additional information concerning our business and affairs, including our capital requirements,
external financing arrangements and pending legal and regulatory proceedings, including descriptions of
those laws and regulations to which we are subject, prospective purchasers should refer to the
documents in the section entitled "Where You Can Find More Information" in the accompanying
prospectus.
S-4
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THE OFFERING
Issuer .......................
Bonds Offered .... . . . . . . . . . . . . .
Matunty Date .................
Interest Payment Dates. . . . . . . . . . .
Optional Redemption . . . . . . . . . . . .
Sinking Fund. . . . . . . . . . . . . . . . . .
Ranking. . . . . . . . . . . . . . . . . . . . . .
PacifiCorp.
$100,000,000 aggregate principal amount of 2.95% First
Mortgage Bonds due 2022 (the "bonds").
The bonds are part of the thirty-ninth series of bonds issued
under the twenty-fifth supplement to the Mortgage.
February 1, 2022.
February 1 and August 1, beginning on August 1, 2012.
At any time prior to November 1, 2021, we may redeem the
bonds, at our option, in whole or in part, at any time, at a
redemption price equal to the greater of:
(1) 100% of the principal amount of the bonds to be
redeemed; or
(2) the sum of the present values of the remaining
scheduled payments of principal and interest on the
bonds to be redeemed (not including any portion of such
payments of interest accrued as of the redemption date)
discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate plus 15
basis points,
plus, for (1) or (2) above, whichever is applicable, accrued and
unpaid interest, if any, on such bonds to the date of
redemption. See "Description of the Bonds-Optional
Redemption."
At any time on or after November 1,2021 (which is the date
that is three months prior to the maturity of the bonds), we
may redeem the bonds, in whole or in part, at a redemption
price equal to 100% of the principal amount of the bonds to
be redeemed, plus accrued and unpaid interest thereon, if any,
to the date of redemption.
The bonds wil not be subject to a mandatory sinking fund.
The bonds wil be secured by a first mortgage lien on certain
utilty property owned by us. The bonds wil be equally and
ratably secured with all other bonds issued under the
Mortgage. The lien of the Mortgage is subject to certain
exceptions. See "Description of the Bonds-Ranking and
Security."
S-5
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Covenants .................... The Mortgage contains a number of covenants by us for the
benefit of the holders of the bonds, including provisions
requiring us to maintain the mortgaged property as an
operating system or systems capable of engaging in all or any
of the generating, transmission, distribution or other utility
businesses described in the Mortgage. See "Description of
Additional Bonds-Certain Covenants" in the accompanying
prospectus.
Denominations . . . . . . . . . . . . . . . .. The bonds are available for purchase in minimum
denominations of $2,000 and any integral multiple of $1,000 in
excess thereof.
Use of Proceeds . . . . . . . . . . . . . . .. We intend to use the net proceeds from the sale of the bonds
for the redemption of certain tax-exempt bonds, repayment of
short-term debt and general corporate purposes. We intend to
redeem $84 milion of tax-exempt bonds that mature from
2021 to 2030 and have a weighted-average interest rate of
5.72%. See "Use of Proceeds" in this prospectus supplement.
Trustee ...................... The Bank of New York Mellon Trust Company, N.A. wil be
the trustee for the holders of the bonds. See "Description of
Additional Bonds-The Mortgage Trustee" in the
accompanying prospectus.
S-6
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RISK FACTORS
Investing in the bonds involves risk. Before purchasing the bonds, you should carefully consider the
risk factors included in the accompanying prospectus, our Annual Report on Form lO-K for the year
ended December 31, 2011 (the "Form 10-K"), incorporated by reference herein. You should also read
and consider the other information contained in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference herein and therein in order to evaluate an
investment in the bonds. See "Where You Can Find More Information" in the accompanying
prospectus. Additional risks and uncertainties that are not presently known or that are currently
deemed immaterial may also materially harm our business, operating results and financial condition
and could result in a loss on your investment.
SUMMAY CONSOLIDATED FINANCIA INFORMTION
We have derived the summary consolidated financial information presented below from our
audited historical Consolidated Financial Statements as of and for the years ended December 31, 2011,
2010 and 2009. This summary consolidated financial information should be read together with, and is
qualified in its entirety by reference to, our consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations contained in the Form 10-K.
Consolidated Statements of Operations Information:
Operating revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to PacifiCorp. . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Consolidated Financial Information:
Net cash from operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash from financing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheet Information:
Total assets ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long-term debt(l). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total PacifiCorp shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2011 2010 2009
(in milions)
$ 4,586 $ 4,432 $ 4,457
1,084 1,036 1,060
555 566 542
$ 1,636 $ 1,410 $ 1,500
(1,529)(1,613)(2,308)
(91)117 866
As of December 31,
2011 2010 2009
(in milions)
$21,106 $20,146 $18,966
6,194 5,813 6,400
7,312 7,311 6,648
(1) Includes capital lease obligations, but excludes current maturities and short-term debt.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the bonds for the redemption of certain
tax-exempt bonds, repayment of short-term debt and general corporate purposes. We intend to redeem
$84 millon of tax-exempt bonds that mature from 2021 to 2030 and have a weighted-average interest
rate of 5.72%. See "Capitalization" below.
S-7
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CAPITALIZATION
The table below shows our capitalization on a consolidated basis as of December 31, 2011. The
'~s Adjusted" column reflects our capitalization as of that date after giving effect to: (i) the issuance of
$650 milion of our first mortgage bonds on Januar 6, 2012 and a corresponding reduction of
short-term debt; and (ii) this offering of bonds and the use of the net proceeds from this offering to
redeem $84 milion of tax-exempt bonds and to reduce short-term debt. You should read this table
along with the Consolidated Financial Statements contained in the Form lO-K (in milions).
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, currently maturing(l) .....................
Long-term debt, net of current maturities(l) . . . . . . . . . . . . . . . . .
Total short- and long-term debt. . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock ......................................
Total common equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2011
Actual As Adjusted
Amounts %Amounts %
$688 4.8 $22 0.1%
19 0.1 19 0.1
6,194 43.6 6,860 48.3--
6,901 48.5 6,901 48.5
41 0.3 41 0.3
7,271 51.2 7,271 51.2--
$14,213 100.0 $14,213 100.0%
(1) Includes capital lease obligations.
CONSOLIDATED RATIOS OF EARINGS TO FIXED CHAGES
2011
Years Ended December 31,2010 2009 2008
3.0x 2.9x 3.Ox
2007
2.9x 3.Ox
DESCRIPTION OF THE BONDS
The bonds wil be issued pursuant to the twenty-fifth supplemental indenture to the Mortgage,
dated as of January 1, 2012 (the "Supplemental Indenture"). The terms of the bonds include those
stated in the Mortgage, the Supplemental Indenture and those made part of the Mortgage by reference
to the Trust Indenture Act of 1939, as amended.
Set forth below is a description of the specific terms of the bonds. The following description is not
complete in every detail and is subject to, and is qualified in its entirety by reference to, the Mortgage
and the Supplemental Indenture. Capitalized terms used in this "Description of the Bonds" section that
are not defined in this prospectus supplement have the meanings given to them in the Mortgage or the
Supplemental Indenture.
General
The bonds constitute a further issuance of, are consolidated and form a single series with, have
identical terms (other than the date of issuance) and have the same CUSIP number as our
$350,000,000 aggregate principal amount of outstanding 2.95% Series First Mortgage Bonds due 2022
issued on January 6, 2012 (the "prior bonds"). The bonds offered hereby wil be issued in the aggregate
principal amount of $100,000,000. Upon completion of this offering, the aggregate principal amount of
outstanding 2.95% Series First Mortgage Bonds due 2022 wil be $450,000,000. The entire principal
amount of the bonds wil mature and become due and payable, together with any accrued and unpaid
interest thereon, on February 1, 2022. The bonds are not subject to any sinkg fund provision. The
bonds are available for purchase in minimum denominations of $2,000 and any integral multiple of
$1,000 in excess thereof.
S-8
Interest
Each bond wil bear interest at the rate of 2.95% per annum from January 6, 2012. Interest on the
bonds wil be payable semi-annually in arrears on February 1 and August 1 of each year (each, an
"Interest Payment Date"). The initial Interest Payment Date is August 1, 2012. The amount of interest
payable wil be computed on the basis of a 360-day year consisting of twelve 30-day months. If any date
on which interest is payable on the bonds is not a business day, then payment of the interest payable
on that date wil be made on the next succeeding day which is a business day (and without any
additional interest or other payment in respect of any delay), with the same force and effect as if made
on such date.
So long as the bonds remain in book-entry only form, the record date for each Interest Payment
Date wil be the close of business on the business day before the applicable Interest Payment Date. If
the bonds are not all in book-entry form, the record date for each Interest Payment Date wil be the
close of business on the 15th calendar day of the month immediately preceding the month in which the
applicable Interest Payment Date occurs (whether or not a business day).
Ranking and Security
The bonds wil be issued under the Mortgage and secured by a first mortgage lien on certain utilty
property owned from time to time by the Company. The lien of the Mortgage is subject to Excepted
Encumbrances, including tax and construction liens, purchase money liens and certain other exceptions.
The bonds wil be equally and ratably secured with all other bonds issued under the Mortgage.
Further Issuances
We may, from time to time, without notice to or the consent of the holders of the bonds, create
and issue further bonds equal in rank and having the same maturity, payment terms, redemption
features, CUSIP numbers and other terms as the bonds offered by this prospectus supplement, except
for the issue price, payment of interest accruing prior to the issue date of the further bonds and, under
some circumstances, for the first payment of interest following the issue date of the further bonds.
These further bonds may be consolidated and form a single series with the prior bonds and the bonds
offered by this prospectus supplement.
Optional Redemption
At any time prior to November 1, 2021, we may redeem the bonds, at our option, in whole or in
part, at any time, at a redemption price equal to the greater of:
· 100% of the principal amount of bonds then outstanding to be redeemed; or
· the sum of the present values of the remaining scheduled payments of principal and interest on
the bonds to be redeemed (not including any portion of such payments of interest accrued as of
the redemption date) discounted to the redemption date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 15 basis
points, as calculated by an Independent Investment Banker;
plus, in either of the above cases, whichever is applicable, accrued and unpaid interest, if any, on such
bonds to the date of redemption.
At any time on or after November 1, 2021 (which is the date that is three months prior to the
maturity of the bonds), we may redeem the bonds, at our option, in whole or in part, at any time, at a
redemption price equal to 100% of the principal amount of the bonds to be redeemed, plus accrued
and unpaid interest thereon to the date of redemption.
We wil mail a notice of redemption at least 30 days before the redemption date to each holder of
bonds to be redeemed. If we elect to partially redeem the bonds, the Trustee wil select in a fair and
appropriate manner the bonds to be redeemed.
S-9
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Unless we default in payment of the redemption price, on and after the redemption date, interest
wil cease to accrue on the bonds or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date:
· the yield, under the heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three months before or
after the Remaining Life, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue wil be determined and the Adjusted Treasury Rate wil be
interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest
month); or
· if such release (or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
The Adjusted Treasury Rate wil be calculated on the third business day preceding the redemption
date.
"Comparable Treasury Issue" means the United States Treasury security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of the bonds to be
redeemed that would be used, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining
term of such bonds ("Remaining Life").
"Comparable Treasury Price" means, with respect to any redemption date, (1) the average of four
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest
Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers appointed by us, or
if that firm is unwiling or unable to serve as such, an independent investment and bankng institution
of national standing appointed by us.
"Reference Treasury Dealer" means:
· each of J.P. Morgan Securities LLC, RBS Securities Inc., a Primar Treasury Dealer (as defined
herein) selected by Mitsubishi UFJ Securities (USA), Inc. and a Primary Treasury Dealer
selected by Wells Fargo Securities, LLC, and their respective successors; provided that, if one of
these parties ceases to be a primary U.S. Government securities dealer in New York City
("Prmary Treasury Deaier'), we wil substitute another Primary Treasury Dealer; and
· any other Primary Treasury Dealers selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and
any redemption date, the average, as determined by the Independent Investment Banker, of the bid
and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00 p.m., New York City
time, on the third business day preceding such redemption date.
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CERTAIN U.S. FEDERA INCOME TAX CONSIDERATIONS
The following discussion is a summary of the material US. federal income tax considerations that
may be relevant to the ownership and disposition of the bonds issued pursuant to this offering, and
does not purport to be a complete analysis of all potential tax effects.
This discussion is limited to persons purchasing the bonds for cash pursuant to this prospectus
supplement and who hold the bonds as capital assets for tax purposes. This discussion assumes that at
least a substantial amount of the bonds sold pursuant to this offering wil be sold to the public (not
including sales to bond houses, brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers) at the time of the issuance of the bonds (or
immediately thereafter). This discussion does not address all the U.S. federal income tax consequences
that may be relevant to you in light of your particular circumstances or to investors subject to special
rules, such as financial institutions, banks, U.S. expatriates, controlled foreign corporations, passive
foreign investment companies, insurance companies, dealers in securities or currencies, traders in
securities, persons whose functional currency is not the U.S. dollar, tax-exempt organizations and
persons holding the bonds as part of a "straddle," "hedge," "conversion transaction" or other
integrated transaction. This discussion does not address any U.S. gift or estate tax considerations or tax
considerations arising under the laws of any state, local or non-US. jurisdiction.
If a partnership (including any entity or arrangement classified as a partnership for U.S. federal
income tax purposes) is an owner of the bonds, the treatment of a partner in the partnership generally
wil depend upon the status of the partner and the activities of the partnership. If you are a partner of
a partnership holding the bonds, you should consult your tax advisor regarding the U.S. federal income
tax consequences relating to the ownership and disposition of the bonds.
The discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), U.S. Treasury regulations issued thereunder ("Treasury Regulations"), court decisions and
administrative interpretations, all as in effect as of the date of this prospectus supplement and all of
which are subject to change at any time, possibly with retroactive effect. Changes in these authorities
may cause the tax consequences to vary substantially from the consequences described below.
We have not sought and wil not seek any rulings from the Internal Revenue Service ("IRS") with
respect to the matters discussed below. There can be no assurance that the IRS wil not take a
different position concerning the tax consequences of the purchase, ownership or disposition of the
bonds or that any such position taken by the IRS would not be sustained by a court.
You are urged to consult your own tax advisor regarding the U.S. federal, state, local, foreign or
other tax consequences of the ownership and disposition of the bonds.
Qualified Reopening
For U.S. federal income tax purposes, we intend to treat the bonds as being issued in a "qualified
reopening" of the prior bonds. As such, the bonds wil be deemed to be part of the same issue as the
prior bonds and wil have the same issue date, issue price and adjusted issue price as the prior bonds.
In addition, because the prior bonds were not issued with original issue discount for US. federal
income tax purposes, the bonds also do not have original issue discount. The remainder of this
discussion assumes the correctness of the treatment described in this paragraph.
U.S. Holders
This section applies to you if you are a "US. Holder." A "U.S. Holder" means a beneficial owner
of the bonds that is a U.S. citizen or US. resident alien, a corporation (or other entity taxble as a
corporation for U.S. federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, an estate whose income is subject to U.S.
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federal income tax regardless of its source or a trust that either is subject to the supervision of a court
within the United States and has one or more U.S. persons with authority to control all of its
substantial decisions or has a valid election in effect under applicable Treasury Regulations to be
treated as a U.S. person.
Interest
You generally must include the stated interest on a bond as ordinary income at the time such
interest is received or accrued, in accordance with your method of accounting for U.S. federal income
tax purposes.
A portion of the price paid for the bonds wil be attributable to stated interest that "accrued"
prior to the date the bonds are purchased (the "pre-issuance accrued stated interest"). On the first
interest payment date, a corresponding portion of the stated interest received wil be treated as a
return of the pre-issuance accrued stated interest and not as a payment of stated interest on the bonds
and wil not be taxable when received, but wil reduce your adjusted tax basis in the bonds. You are
urged to consult your own tax advisor regarding the tax treatment of the pre-issuance accrued stated
interest.
If we call the bonds for redemption (see "Description of the Bonds-Optional Redemption"), we
may be obligated to make "make-whole" payments on the bonds in excess of stated interest and
principaL. We believe, and the following discussion assumes, that the likelihood that we wil be
obligated to make these additional payments is remote. Remote contingencies are not taken into
account unless and until they occur. Our determination that this contingency is remote is binding on
you unless you disclose a contrary position in the manner required by applicable Treasury Regulations.
Our determination is not, however, binding on the IRS. Assuming our determination is upheld, if we
are required to make these additional payments, you likely would recognize additional interest income
in accordance with your method of accounting for U.S. federal income tax purposes.
Certain U.S. Holders who are individuals, estates or trusts wil be subject to a 3.8% tax on, among
other things, interest for taxable years beginning after December 31, 2012. You should consult your tax
advisor regarding the effect, if any, of this tax on your ownership of our bonds.
Market Discount
To the extent your purchase price for a bond (excluding any amounts attributable to pre-issuance
accrued stated interest) is less than the bond's stated principal amount, the excess of the stated
principal amount over the purchase price wil be treated as market discount. However, the market
discount wil be considered to be zero if it is less than Y4 of 1 percent of the principal amount of the
bond multiplied by the number of complete years to maturity from the date the bond is purchased.
If a bond is purchased with market discount, you generally wil be required to include any gain
realized on the sale, exchange, retirement, redemption or other disposition of the bond as ordinar
income (generally treated as interest income) to the extent of the market discount which accrued but
was not previously included in your gross income. In addition, you may be required to defer, until the
maturity of the bond or its earlier disposition in a taxable transaction, the deduction of all or a portion
of the interest expense on any indebtedness incurred or continued to purchase or carr the bond. In
general, market discount wil be considered to accrue ratably during the period from the date of the
purchase of the bond to the maturity date of the bond, unless you make an irrevocable election (on an
instrument-by-instrument basis) to accrue market discount under a constant yield method. However,
you may elect to include market discount in income currently as it accrues (under either a ratable or
constant yield method), in which case the rules described above regarding the treatment as ordinary
income of gain upon the disposition of the bond and the deferral of interest deductions wil not apply.
Your election to include market discount in income currently, once made, applies to all market
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discount obligations acquired by you on or after the first day of the first taxable year to which the
election applies, and may not be revoked without the consent of the IRS. You are urged to consult
your own tax advisor regarding the rules relating to market discount and their application to your
particular circumstances.
Bond Premium
To the extent your purchase price for a bond (excluding any amounts attributable to pre-issuance
accrued stated interest) is greater than the bond's stated principal amount, the bond wil have
amortizable bond premium. You generally may elect to amortize bond premium using the constant
yield method over the remaining term of the bond and may offset stated interest income otherwise
required to be included in respect of the bond during any taxable year by the amortized amount of
bond premium for the taxable year. The election to amortize bond premium on a constant yield
method, once made, wil also apply to all other debt obligations with bond premium that you hold at
the beginning of or acquire in or after the first taxable year to which the election applies and may not
be revoked without the consent of the IRS. If you do not elect to amortize the bond premium, the
bond premium wil decrease the gain or increase the loss such holder would otherwise recognize on the
disposition of the bond. You are urged to consult your own tax advisor regarding the rules relating to
amortizable bond premium and their application to your particular circumstances.
Sale or Other Taxble Disposition of the Bonds
You generally wil recognize gain or loss on the sale, exchange, redemption, retirement or other
taxable disposition of a bond equal to the difference between (i) the amount of cash and the fair
market value of any property received upon the disposition (less any amount attributable to accrued
but unpaid interest, which wil be taxable as ordinary interest income unless previously taken into
income) and (ii) your adjusted tax basis in the bond. Your adjusted tax basis in a bond generally wil be
your purchase price of the bond on the date of purchase, increased by the amount of market discount
previously included in income, if any, and reduced by the amount of amortized bond premium, if any,
and the pre-issuance accrued stated interest you previously received. Gain or loss recognized generally
wil be a capital gain or loss, and wil be long-term capital gain or loss if you held the bond for more
than one year. Long-term capital gains of some non-corporate taxpayers (including individuals) are
taxed at preferential capital gains tax rates. Your abilty to deduct capital losses may be limited.
Certain U.S. Holders who are individuals, estates or trusts wil be subject to a 3.8% tax on, among
other things, capital gains from the sale or other disposition of the bonds for taxable years beginning
after December 31, 2012. You should consult your tax advisors regarding the effect, if any, of this tax
on your disposition of the bonds.
Non-U.S. Holders
This section applies to you if you are a "Non-U.S. Holder." A Non-U.S. Holder means a beneficial
owner of the bonds that is neither a u.s. Holder nor a partnership for U.S. federal income tax
purposes.
Interest
Payments to you of interest generally wil not be subject to U.S. federal withholding tax, provided
that:
· you do not actually or constructively own 10% or more of the total combined voting power of all
classes of our stock entitled to vote;
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· you are not a controlled foreign corporation that is related to us actually or constructively
through stock ownership;
· you are not a bank receiving certain tyes of interest; and
· we, or our paying agent, receive appropriate documentation, generally a completed IRS
Form W-8BEN, establishing that you are not a U.S. person within the meaning of the Code.
Interest that meets these requirements is referred to as "portfolio interest" and, in addition to
generally not being subject to U.S. federal withholding tax, is also generally not subject to regular U.S.
federal income tax unless the conditions of the following paragraph apply to you.
The interest on the bonds wil be taxed at regular U.S. federal net income tax rates and not be
subject to U.S. withholding tax if: (i) the interest constitutes income that is effectively connected with
the conduct by you of a U.S. trade or business, and (ii) if an income tax treaty applies, the interest is
attributable to a U.S. permanent establishment or fixed base under the terms of such treaty ("U.S.
trade or business income"), provided, in each case, that a proper certification is provided. In addition,
if you are a foreign corporation, such income may also be subject to the "branch profits tax" at a rate
of 30% (or lower applicable treaty rate). Interest that neither qualifies as portfolio interest nor
constitutes U.S. trade or business income wil be subject to U.S. withholding tax at the rate of 30%,
unless such rate is reduced or eliminated by an applicable tax treaty and you provide the appropriate
certification.
Sale or Other Taxble Disposition of the Bonds
Gain realized by a you on the sale, redemption or other taxable disposition of a bond generally
wil not be subject to U.S. federal income or withholding tax, unless (i) such gain is effectively
connected with the conduct by you of a trade or business within the United States (and, if an income
tax treaty applies, is attributable to a permanent establishment or fixed base in the United States) or
(ii) you are an individual who is present in the United States for 183 days or more in the taxable year
of disposition and certain other conditions are satisfied.
Gain recognized by a you upon a sale, redemption or other taxable disposition of a bond that is
effectively connected with the conduct by you of a U.S. trade or business and, if an income tax treaty
applies, is attributable to a U.S. permanent establishment or fixed base, generally wil be subject to U.S.
federal income tax in the same manner as if the bond were held by a U.S. Holder. In addition, if you
are a corporation, such gain may also be subject to the branch profits tax at a rate of 30% (or lower
applicable treaty rate).
Information Reporting and Backup Withholding
Payments of interest made by us on, or the proceeds of the sale or other disposition of, the bonds
may be subject to information reporting and U.S. federal backup withholding tax, unless, in certain
cases, the recipient of the payment supplies an accurate taxayer identification number or otherwise
complies with applicable U.S. information reporting or certification requirements. Backup withholding
is not an additional tax, and any amount withheld under the backup withholding rules is allowable as a
credit against your U.S. federal income tax liability, and you may qualify for a refund of any excess
withheld amounts, provided that the required information is timely furnished to the IRS.
PERSONS CONSIDERING THE PURCHASE OF THE BONDS SHOULD CONSULT THEIR OWN
TAX ADVISORS WITH RESPECT TO THE U.S. FEDERA INCOME TAX CONSEQUENCES OF
THE PURCHASE, OWNERSHIP AND DISPOSITION OF BONDS IN LIGHT OF THEIR
PARTICULA CIRCUMSTANCES, AS WELL AS THE EFFECT OF AN STATE, WeAL OR
FOREIGN TAX LAWS OR AN APPLICABLE TAX TREATY
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BENEFIT PLAN INVSTOR CONSIDERATIONS
The bonds may be purchased and held by or with the assets of an employee benefit plan subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), an individual
retirement account or other plan subject to Section 4975 of the Code or an employee benefit plan
sponsored by a state or local government or otherwse subject to laws that include restrictions
substantially similar to ERISA and Section 4975 of the Code (any such law, a "Similar Law"). A
fiduciary of an employee benefit plan subject to ERISA, Section 4975 of the Code or any Similar Law
must determine that the purchase and holding of the bonds are consistent with its fiduciary duties
under ERISA, Section 4975 of the Code or any Similar Law. Such fiduciary, as well as any other
prospective investor subject to ERISA, Section 4975 of the Code or any Similar Law, must also
determine that its purchase and holding of the bonds does not result in a non-exempt prohibited
transaction as defined in Section 406 of ERISA, Section 4975 of the Code or any Similar Law. Among
other things, these sections prohibit the lending of money and other extensions of credit between an
employee benefit plan or individual retirement account or annuity ("IRX') and a party in interest (as
defined in ERISA) or disqualified person (as defined in the Code) with respect to such plan or IRA,
unless such transaction is covered by an exemption. The bonds constitute an extension of credit by the
purchaser to us. Accordingly, each purchaser and transferee of the bonds who is subject to ERISA,
Section 4975 of the Code or a Similar Law wil be deemed to have represented by its acquisition and
holding of the bonds that its acquisition and holding of the bonds does not constitute or give rise to a
non-exempt prohibited transaction under ERISA, Section 4975 of the Code or any Similar Law. Such
purchaser or transferee should consult legal counsel before purchasing the bonds. Nothing herein shall
be construed as a representation that an investment in the bonds would meet any or all of the relevant
legal requirements with respect to investments by, or is appropriate for, an employee benefit plan or
IRA subject to ERISA, Section 4975 of the Code or a Similar Law.
UNDERWRING
We are sellng the entire principal amount of the bonds to J.P. Morgan Securities LLC (the
"Underwiter") pursuant to the terms of an underwiting agreement dated February 28, 2012.
The underwriting agreement provides that the obligations of the underwriter to purchase the bonds
included in this offering are subject to approval of legal matters by counsel and to other conditions.
The underwriter is obligated to purchase all the bonds if it purchases any of the bonds.
The Underwriter proposes to offer the bonds from time to time for sale in negotiated transactions,
or otherwise, at varying prices to be determined at the time of each sale. In connection with the sale of
the bonds, the Underwriter may be deemed to have received compensation from us in the form of
underwriting discounts.
The bonds are a new issue of securities with no established trading market. We have been advised
by the underwriter that the underwriter intends to make a market in the bonds but is not obligated to
do so and may discontinue market makng at any time without notice. No assurance can be given as to
the liquidity of any trading market for the bonds.
In connection with the offering of the bonds, the Underwriter may engage in transactions that
maintain or otherwise affect the price of the bonds. Specifically, the Underwriter may overallot in
connection with the offering of the bonds, creating a short position in the bonds for its own account. In
addition, the Underwiter may bid for, and purchase, bonds in the open market to cover short
positions. Finally, the Underwiter may reclaim selling concessions allowed for distributing the bonds in
the offering, if the Underwriter repurchases previously distributed bonds in transactions to cover short
positions. These activities may maintain or otherwise affect the market price of the bonds above
independent market levels. The Underwriter is not required to engage in any of these activities and
may end any of these activities at any time.
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We expect that delivery of the bonds wil be made against payment therefor on or about the
delivery date specified on the cover page of this prospectus supplement, which wil be the fifh business
day following the date of pricing of the bonds (this settlement cycle being referred to as T+5). Under
Rule 15c6- 1 under the Exchange Act, trades in the secondary market generally are required to settle in
three business days, unless the parties to that trade expressly agree otherwise. Accordingly, purchasers
who wish to trade bonds on the date of pricing or the next succeeding business day wil be required, by
virtue of the fact that the bonds initially wil settle in T+5, to specify an alternate settlement cycle at
the time of any such trade to prevent a failed settlement and should consult their own advisors.
These activities by the underwriter, as well as other purchases by the underwriter for its own
account, may stabilize, maintain or otherwise affect the market price of the bonds. As a result, the
price of the bonds may be higher than the price that otherwise would exist in the open market. If these
activities are commenced, they may be discontinued by the underwiter at any time. These transactions
may be effected in the over-the-counter market or otherwise.
We estimate that our total offering expenses wil be approximately $300,000.
Conflcts of Interest
The underwriter, together with its affiliates, is a full service financial institution engaged in various
activities, which may include securities trading, commercial and investment banking, financial advisory
investment management, investment research, principal investment, hedging, financing and brokerage
activities.
In the ordinary course of its various business activities, the underwriter and its affilates may make
or hold a broad array of investments and actively trade debt and equity securities (or related derivative
securities) and financial instruments (including bank loans) for their own account and for the accounts
of their customers, and such investment and securities activities may involve securities and instruments
of us or our affiliates. The underwriter and its affiliates that have a lending relationship with us
routinely hedge their credit exposure to us consistent with their customary risk management policies.
Typically, the underwriter and its affiliates would hedge such exposure by entering into transactions
which consist of either the purchase of credit default swaps or the creation of short positions in our
securities, including potentially the bonds offered hereby. Any such short positions could adversely
affect future trading prices of the bonds offered hereby. The underwriter and its affilates may also
make investment recommendations or publish or express independent research views in respect of such
securities or instruments and may at any time hold, or recommend to clients that they acquire, long or
short positions in such securities and instruments.
The underwriter and its affilates have performed commercial banking, investment bankg and
advisory services for us or our affilates from time to time for which they have received customary fees
and expenses. For example, affiliates of the underwriter act as agents and as lenders under our credit
facilties, which we may repay from time to time with proceeds of the offering and for which they
receive customary fees and expenses. The underwriter may, from time to time, engage in transactions
with and perform services for us or our affiiates in the ordinary course of its business.
We have agreed to indemnify the underwiter against certain liabilties, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments the underwriter may be required
to make because of those liabilities.
Sellng Restnctions
In relation to each Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a Relevant Member State), the underwriter has represented and agreed
that with effect from and including the date on which the Prospectus Directive is implemented in that
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Relevant Member State (the Relevant Implementation Date) it has not made and will not make an
offer of the bonds to the public in that Relevant Member State other than:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant
provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified
investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive,
subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by us for any
such offer; or;
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of bonds shall require us or any underwriter to publish a prospectus
pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an "offer of bonds to the public" in relation to
any bonds in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the bonds to be offered so as to enable an investor
to decide to purchase the bonds, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State, the expression "Prospectus Directive"
means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to
the extent implemented in the Relevant Member State), and includes any relevant implementing
measure in the Relevant Member State and the expression "2010 PD Amending Directive" means
Directive 201O/73/EU.
This prospectus has been prepared on the basis that any offer of the bonds in any Member State
of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant
Member State") wil be made pursuant to an exemption under the Prospectus Directive from the
requirement to publish a prospectus for offers of bonds. Accordingly any person makng or intending to
make an offer in that Relevant Member State of the bonds may only do so in circumstances in which
no obligation arises for us or the underwriter to publish a prospectus pursuant to Article 3 of the
Prospectus Directive, in each case, in relation to such offer. The underwriter has not authorized, nor do
we authorize, the makig of any offer of bonds in circumstances in which an obligation arises for us or
the underwriter to publish a prospectus for such offer.
The underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated (and wil only communicate or
cause to be communicated) an invitation or inducement to engage in investment activity (within
the meaning of Section 21 of the Financial Services & Market Act (the "FSMA")) received by it in
connection with the issue or sale of the bonds in circumstances in which Section 21(1) of the
FSMA does not apply to us; and
(b) it has complied and wil comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the bonds in, from or otherwise involving the United
Kingdom.
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LEGAL MATTERS
Certain legal matters with respect to the bonds we are offering wil be passed upon for us by
Mark C. Moench, General Counsel of PacifiCorp, and by Perkins Coie LLp' Portland, Oregon. Certain
legal matters wil be passed upon for the underwriter by Latham & Watkins LLp' New York, New York.
Latham & Watkis LLP from time to time represents us or certain of our affiliates.
EXPERTS
The consolidated financial statements incorporated in this prospectus supplement by reference
from PacifiCorp's Annual Report on Form lO-K for the year ended December 31, 2011 have been
audited by Deloitte & Touche LLp' an independent registered public accounting firm, as stated in their
report, which is incorporated herein by reference. Such financial statements have been so incorporated
in reliance upon the report of such firm given upon their authority as experts in accounting and
auditing.
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PROSPECTUS
PACIFICORP
FIRST MORTGAGE BONDS
PacifiCorp, an Oregon corporation, may from time to time offer First Mortgage Bonds
("Additional Bonds" or "Securities") in one or more issuances or series at prices and on terms to be
determined at the time of sale.
We wil provide specific terms of the Securities, including, as applicable, the amount offered,
offering prices, interest rates, maturities and redemption or repurchase provisions, in supplements to
this prospectus. The supplements may also add, update or change information contained in this
prospectus. You should read this prospectus and any supplements carefully before you invest.
We may sell the Securities directly through agents designated from time to time or through
underwriters or dealers. The supplements to this prospectus wil describe the terms of any particular
plan of distribution, including any underwriting arrangements. The "Plan of Distribution" section in this
prospectus provides more information on this topic.
This prospectus may not be used to consummate sales of Securities unless accompanied by a
prospectus supplement relating to the Securities offered.
Investing in our Securities involves risks. See the "Risk Factors" section
beginning on page 2 of this prospectus for information on certin matters you should
consider before buying our Securities.
NEITHER THE SECURITIES AND EXCHAGE COMMISSION NOR AN STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. AN
REPRESENTATION TO THE CONTRAY IS A CRIMINAL OFFENSE.
The date of this prospectus is December 3, 2010.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS ................................................. 1
FORWARD-LOOKING STATEMENTS .......................................... 1
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES .................... 3
WHERE YOU CAN FIND MORE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DESCRIPTION OF ADDITIONAL BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
BOOK-ENTRY ISSUANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
PLA OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 13
LEGAL MATTRS ......................................................... 14
EXPERTS................................................................ 14
We have not authorized anyone to give you any information other than this prospectus and any
supplements to this prospectus. You should not assume that the information contained in this
prospectus, any prospectus supplement, any document incorporated by reference in this prospectus or
any free writing prospectuses is accurate as of any date other than the date mentioned on the cover
page of those documents. Our business, financial condition and results of operations may have changed
since that date. We are not offering to sell the Securities and we are not soliciting offers to buy the
Securities in any jurisdiction in which offers are not permitted.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that PacifiCorp filed with the
Securities and Exchange Commission (the "SEC") using the "shelf" registration process. Under this
shelf registration process, we may from time to time sell the Securities described in this prospectus in
one or more offerings. This prospectus provides a general description of the Securities. Each time we
sell Securities, we wil provide a prospectus supplement that wil contain specific information about the
terms of that offering. That prospectus supplement may include or incorporate by reference a detailed
and current discussion of any risk factors and wil discuss any special considerations applicable to those
securities. The prospectus supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement together with
additional information described under "Where You Can Find More Information." If there is any
inconsistency between the information in this prospectus and any prospectus supplement, you should
rely on the information contained in that prospectus supplement.
Unless otherwise indicated or unless the context otherwise requires, in this prospectus, the words
"PacifiCorp," "Company," "we," "our" and "us" refer to PacifiCorp, an Oregon corporation, and its
subsidiaries.
For more detailed information about the Securities, you can read the exhibits to the registration
statement. Those exhibits have been either filed with the registration statement or incorporated by
reference to earlier SEC filings listed in the registration statement. See "Where You Can Find More
Information. "
FORWAR-LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement and the additional information
described under the heading "Where You Can Find More Information" may contain "forward-looking
statements" within the meaning of Section 27 A of the Securities Act and Section 21E of the Exchange
Act, which are subject to the safe harbor created by the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact are "forward-looking statements" for
purposes of these provisions. Examples include discussions as to our expectations, beliefs, plans, goals,
objectives and future financial or other performance or assumptions concerning matters discussed,
including through incorporation by reference, in this prospectus. This information, by its nature,
involves estimates, projections, forecasts, risks and uncertainties that could cause actual results or
outcomes to differ substantially from those expressed in the forward-looking statements found in this
prospectus and the documents incorporated by reference in this prospectus.
Our business is influenced by many factors that are difficult to predict, involve uncertainties that
may materially affect actual results and are often beyond our ability to control. We have identified a
number of these factors in our filings with the SEC, including the Form 10-1( the Forms 10-Q and the
Forms 8-K incorporated by reference in this prospectus, and we refer you to those reports for further
information.
Any forward-looking statement speaks only as of the date on which it is made, and we undertake
no obligation to update any forward-looking statement to reflect events or circumstances after the date
on which it is made. The forward-looking statements in this prospectus and the documents incorporated
by reference in this prospectus are qualified in their entirety by the preceding cautionary statements.
1
THE COMPAN
We are a regulated electricity company serving retail customers, including residential, commercial,
industrial and other customers in portions of the states of Utah, Oregon, Wyoming, Washington, Idaho
and California. We own, or have interests in, a number of thermal, hydroelectric, wind-powered and
geothermal generating facilities, as well as electric transmission and distribution assets. We also buy and
sell electricity on the wholesale market with public and private utilities, energy marketing companies
and incorporated municipalities. We are subject to comprehensive state and federal regulation and the
regulatory commission in each state approves rates for retail electric sales within that state.
We are an indirect subsidiary of MidAerican Energy Holdings Company ("MEHC"), a holding
company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses.
MEHC is a consolidated subsidiar of Berkshire Hathaway Inc.
Our principal executive offices are located at 825 N.E. Multnomah, Suite 2000, Portland, Oregon
97232 and our telephone number is [phone]. We were initially incorporated in 1910 under the
laws of the state of Maine under the name Pacific Power & Light Company. In 1984, Pacific Power &
Light Company changed its name to PacifiCorp. In 1989, we merged with Utah Power and Light
Company, a Utah corporation, in a transaction wherein both corporations merged into a newly formed
Oregon corporation. The resulting Oregon corporation was re-named PacifiCorp, which is the operating
entity today.
For additional information concerning our business and affairs, including our capital requirements
and external financing arrangements, and pending legal and regulatory proceedings, including
descriptions of those laws and regulations to which we are subject, prospective purchasers should refer
to the documents incorporated by reference into this prospectus as described in the section entitled
"Where You Can Find More Information".
RISK FACTORS
Investing in our Securities involves risk. Before purchasing any Securities we offer, you should
carefully consider the risk factors described in our periodic reports filed with the SEC and the
following risk factors related to the Securities, as well as the other information contained in this
prospectus, any prospectus supplement and the information incorporated by reference herein in order
to evaluate an investment in our Securities. See "Forward-Looking Statements" and "Where You Can
Find More Information" in this prospectus. Additional risks and uncertainties that are not yet
identified or that we currently believe are immaterial may also materially harm our business, operating
results and financial condition and could result in a loss on your investment.
We have not appraised the collateral subject to the mortgage securing our Additional Bonds
("Mortgage") and, if there is a default or a foreclosure sale, the value of the collateral may not be
suffcient to repay the holders of any Additional Bonds.
We have not made any formal appraisal of the value of the collateral subject to the Mortgage,
which wil secure any Additional Bonds. The value of the collateral in the event of liquidation wil
depend on market and economic conditions, the availability of buyers, the timing of the sale of the
collateral and other factors. We cannot assure you that the proceeds from a sale of all of the collateral
would be sufficient to satisfy the amounts outstanding under the Additional Bonds and our other fist
mortgage bonds secured by the same collateral or that such payments would be made in a timely
manner. If the proceeds were not sufficient to repay amounts outstanding under the Additional Bonds,
then holders of the Additional Bonds, to the extent not repaid from the proceeds of the sale of the
collateral, would only have an unsecured claim against our remaining assets.
2
There is no existing market for the Securities, and we cannot assure you that an active trading market
for the Securities will develop.
We do not intend to apply for listing of the Securities on any securities exchange or automated
quotation system. There can be no assurance as to the liquidity of any market that may develop for the
Securities. Accordingly, the ability of holders to sell the Securities that they hold or the price at which
holders wil be able to sell the Securities may be limited. Future trading prices of the Securities wil
depend on many factors, including, among other things, prevailng interest rates, our operating results
and the market for similar securities.
We do not know whether an active trading market wil develop for the Securities. To the extent
that an active trading market does develop, the price at which a holder may be able to sell the
Securities that it holds, if at all, may be less than the price paid for them. Consequently, a holder may
not be able to liquidate its investment readily, and the Securities may not be readily accepted as
collateral for loans.
CONSOLIDATED RATIOS OF EARINGS TO FIXED CHAGES
Nine-Month Period Ended
September 30, 2010
3.1x
Years Ended December 31,
2009 2008 2007
3.Ox
Nine.Month Penod Ended
December 31, 2006
2.lx
Year Ended
March 31, 2006
2.9x 3.Ox 2.9x
3
WHERE YOU CAN FIND MORE INFORMTION
This prospectus is part of a registration statement filed with the SEC. The registration statement
contains additional information and exhibits not included in this prospectus and refers to documents
that are filed as exhibits to other SEC filngs. We file annual, quarterly and special reports and other
information with the SEC. Our SEC filngs are available to the public over the Internet at the SEC's
web site at http://ww.sec.gov. You may also read and copy any document we file at the SEC's Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1 -800-SEC-0330 for further information regarding the public reference rooms. Our SEC filings are also
available through the Financial Information section of our website at ww.pacificorp.com. The
information found on our website, other than any of our SEC filngs that are incorporated by reference
herein, is not part of this prospectus.
The SEC allows us to "incorporate by reference" the information we fie with them, which means
that we can disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this prospectus and later information
that we file with the SEC wil automatically update or supersede this information. We incorporate by
reference the documents listed below and any future filngs made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (but only to the extent
the information therein is filed and not furnished) until all of the securities covered by this prospectus
have been sold:
· Annual Report on Form lO-K for the year ended December 31, 2009.
· Quarterly Reports on Form lO-Q for the quarters ended March 31, 2010, June 30, 2010 and
September 30, 2010.
· Current Report on Form 8-K filed January 20, 2010.
You may request a copy of these filngs (other than exhibits to such documents unless such exhibits
are specifically incorporated by reference therein), at no cost, by writing or telephoning us at the
following address:
PacifiCorp
825 N.E. Multnomah, Suite 1900
Portland, Oregon 97232-4116
Telephone: [phone]
Attention: Treasury
You should rely only on the information contained in, or incorporated by reference in, this
prospectus and the prospectus supplement. We have not, and any underwiters, agents or dealers have
not, authorized anyone. else to provide you with different information. We are not, and any
underwiters, agents or dealers are not, makng an offer of these Securities in any state where the offer
or sale is not permitted. You should not assume that the information contained in this prospectus and
the prospectus supplement is accurate as of any date other than the date on the front of the prospectus
supplement or that the information incorporated by reference in this prospectus is accurate as of any
date other than the date on the front of those documents.
4
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net proceeds to be received by us from
the issuance and sale of the Securities wil initially become part of our general funds and wil be used
for capital expenditures or utilty asset purchases, to repay all or a portion of our short-term
borrowings and for general corporate purposes, including repayment of long-term debt.
DESCRIPTION OF ADDITIONAL BONDS
General
Additional Bonds may be issued from time to time under our Mortgage and Deed of Trust, dated
as of January 9, 1989, as amended and supplemented (the "Mortgage"), with The Bank of New York
Mellon Trust Company, N.A. (as successor trustee to JPMorgan Chase Bank, N.A.) (the "Mortgage
Trustee"). The following summary is subject to the provisions of and is qualified by reference to the
Mortgage, a copy of which is an exhibit to the Registration Statement. Whenever particular provisions
or defined terms in the Mortgage are referred to herein, those provisions or defined terms are
incorporated by reference herein. Section and Article references used below are references to
provisions of the Mortgage unless otherwise noted. When we refer to "bonds," we refer to all first
mortgage bonds issued under the Mortgage, including the Additional Bonds.
We expect to issue Additional Bonds in the form of fully registered bonds and, except as may be
set forth in any prospectus supplement relating to those Additional Bonds, in denominations of $1,000
and any multiple thereof. They may be transferred without charge, other than for applicable taxes or
other governmental charges, at the offices of the Mortgage Trustee, New York, New York. Any
Additional Bonds issued wil be equally and ratably secured with all other bonds issued under the
Mortgage. See "Book-Entry Issuance."
Maturity and Interest Payments
The prospectus supplement relating to any Additional Bonds wil set forth the date or dates on
which those Additional Bonds wil mature, the rate or rates per annum at which those Additional
Bonds wil bear interest and the times at which any interest wil be payable. Those terms, as well as
other terms and conditions of the Additional Bonds, including those related to redemption and
purchase referred to under "Redemption or Purchase of Additional Bonds" below, wil be established
by resolution of our Board of Directors at the time we issue the Additional Bonds.
Redemption or Purchase of Additional Bonds
The Additional Bonds may be redeemable, in whole or in part, on not less than 30 days' notice
either at our option or as required by the Mortgage or may be subject to repurchase at the option of
the holder.
The prospectus supplement relating to any Additional Bonds wil set forth the redemption or
repurchase terms and other specific terms of those Additional Bonds.
If, at the time notice of redemption is given, the redemption amount is not held by the Mortgage
Trustee, the redemption may be made subject to the receipt of the redemption amount by the
Mortgage Trustee on or before the date fixed for redemption. A redemption notice wil be of no effect
unless the redemption amount is received.
The Mortgage, as described below, contains provisions for the maintenance of the Mortgaged and
Pledged Property. There is no sinng or analogous fund in the Mortgage.
Cash deposited under any provisions of the Mortgage may be applied (with specific exceptions) to
the redemption or repurchase of bonds of any series. (Section 7.03, Article XII and Section 13.06)
5
Secunty and Pnonty
The Additional Bonds wil be issued under the Mortgage and secured by a first mortgage lien on
certain utilty property owned from time to time by us and/or by Class ''/' Bonds, if any, held by the
Mortgage Trustee.
There are excepted from 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 energy, gas, water, steam
and other products for sale, distribution or other use; natural gas wells; gas transportation lines or
other propert 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; our interest in the Wyodak
Facility; and all properties that have been released from the discharged Mortgages and Deeds of Trust,
as supplemented, of Pacific Power & Light Company and Utah Power & Light Company 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 lien of the Mortgage is
also subject to Excepted Encumbrances, including tax and construction liens, purchase money liens and
other specific exceptions. We have reserved the right, without any consent or other action by holders of
bonds of the Ninth Series or any subsequently created series of bonds, to amend the Mortgage in order
to except from the lien of the Mortgage allowances allocated to steam-electric generating plants owned
by us, or in which we have 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 mortgage lien thereof.
These provisions may be limited, at our option, in the case of consolidation or merger (whether or not
we are the surviving corporation), conveyance or transfer of all or substantially all of the utilty
property of another electric utility company to us or sale of substantially all of our assets.
(Section 18.03) In addition, after-acquired property may be subject to a Class ''/' Mortgage, purchase
money mortgages and other liens or defects in title.
The Mortgage provides that the Mortgage Trustee shall have a lien on the mortgaged property,
prior to the holders of bonds, for the payment of its reasonable compensation and expenses and for
indemnity against certain liabilities. (Section 19.09)
Issuance of Additional Bonds
The maxmum principal amount of bonds that may be issued under the Mortgage is unlimited.
Bonds of any series may be issued from time to time on the basis of:
(1) 70% of qualified Property Additions after adjustments to offset retirements;
(2) Class ''/' Bonds (which need not bear interest) delivered to the Mortgage Trustee;
(3) retirement of bonds or certain prior lien bonds; and/or
( 4) deposits of cash.
With certain exceptions in the caSe of clauses (2) and (3) above, the issuance of bonds is subject to
our Adjusted Net Earnings for 12 consecutive months out of the preceding 15 months, before interest
expense and income taxes, being at least twice the Annual Interest Requirements on all outstanding
bonds iSsued under the Mortgage, all outstanding Class ''/' Bonds held other than by the Mortgage
Trustee or by us, all other indebtedness secured by a lien prior to the lien of the Mortgage and all
bonds then applied for in pending bond issuance applications under the Mortgage. In general, interest
on variable interest bonds, if any, is calculated using the rate then in effect. (Section 1.07 and
Articles IV through VII)
6
Property Additions generally include electric, gas, steam and/or hot water utilty property but not
fuel, securities, automobiles, other vehicles or aircraft, or property used principally for the production
or gathering of natural gas. (Section 1.04)
The issuance of bonds on the basis of Property Additions subject to prior liens is restricted. Bonds
may, however, be issued against the deposit of Class "1t' Bonds. (Sections 1.04 through 1.06 and
Articles IV and V)
Release and Substitution of Property
Property subject to the Mortgage may be released on the basis of:
(1) the release of that property from a Class "1t' Mortgage;
(2) the deposit of cash or, to a limited extent, purchase money mortgages;
(3) Property Additions, after makng adjustments for certain prior lien bonds outstanding against
Propert Additions; and/or
(4) a waiver of the right to issue bonds on the basis of the released property.
Funded Cash, as defined in Section 1.05 of the Mortgage, may be withdrawn upon the bases stated
in (1), (3) and (4) above. Property that does not constitute Funded Property, as defined in Section 1.05
of the Mortgage, may be released without substituting other Funded Property. Similar provisions are in
effect as to cash proceeds from 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.
(Sections 1.05, 7.02, 9.05, 10.01 through 10.04 and 13.03 through 13.09)
Merger or Consolidation
The Mortgage provides that in the event of the merger or consolidation of another company with
or into us or the conveyance or transfer to us by another company of all or substantially all of that
company's property that is of the same character as Property Additions, as defined in the Mortgage, an
existing mortgage constituting a first lien on operating properties of that other company may be
designated by us as a Class "1t' Mortgage. (Section 11.06) Bonds thereafter issued pursuant to the
additional mortgage would be Class "1t' Bonds and could provide the basis for the issuance of bonds
under the Mortgage.
Certain Covenants
The Mortgage contains a number of covenants by us for the benefit of the holders of the bonds,
including provisions requiring us to maintain the mortgaged propert as an operating system or systems
capable of engaging in all or any of the generating, transmission, distribution or other utility businesses
described in the Mortgage. (Article IX)
Dividend Restnctions
The Mortgage provides that we may not declare or pay dividends (other than dividends payable
solely in shares of our common stock) on any shares of our common stock if, after giving effect to the
declaration or payment, we would not be able to pay our debts as they become due in the usual course
of business. (Section 9.07) The notes to our audited consolidated financial statements included in our
Report on Form 10-K incorporated by reference herein contain information relating to other
restrictions.
7
Foreign Currency Denominated Bonds
The Mortgage authorizes the issuance of bonds denominated in foreign currencies, provided that
we deposit with the Mortgage Trustee a currency exchange agreement with an entity having, at the time
of the deposit, a financial rating at least as high as our financial rating that, in the opinion of an
independent expert, gives us at least as much protection against currency exchange fluctuation as is
usually obtained by similarly situated borrowers. (Section 2.03) We believe that this tye of currency
exchange agreement wil 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 those bonds would have
a claim on our assets that is greater than the claim to which holders of dollar-denominated bonds
issued at the same time would be entitled.
The Mortgage Trstee
The Bank of New York Mellon Trust Company, N.A. or its affiliates may act as a lender, trustee
or agent under other agreements and indentures involving us and our affiiates.
Modification
The rights of bondholders may be modified with the consent of holders of at least 60% of the
bonds, or, if not all series of bonds are adversely affected, the consent of the holders of at least 60% of
the series of 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 the holder. (Section 21.07)
Unless we are in default in the payment of the interest on any bonds then Outstanding under the
Mortgage or there is a Default under the Mortgage, the Mortgage Trustee generally is required to vote
Class ''P' bonds held by it with respect to any amendment of the applicable Class ''P' Mortgage
proportionately with the vote of the holders of all Class ''P' Bonds then actually voting. (Section 11.03)
Defaults and Notice Thereof
"Defaults" are defined in the Mortgage as:
(1) default in payment of principal;
(2) 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;
(3) default in payment of principal or interest with respect to certain prior lien bonds;
(4) certain events in bankrptcy, insolvency or reorganization;
(5) default in other covenants for 90 days after notice; or
(6) the existence of any default under a Class ''P' Mortgage that permits the declaration of the
principal of all the bonds secured by the Class ''/' Mortgage and the interest accrued
thereupon due and payable. (Section 15.01)
An effective default under any Class ''/' Mortgage or under the Mortgage wil result in an
effective default under all those mortgages. The Mortgage 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. (Section 15.02)
The Mortgage 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 the declaration if the Default has been cured.
8
(Section 15.03) No holder of bonds may enforce the lien of the Mortgage unless the Mortgage Trustee
is given written notice of a Default and the Mortgage Trustee fails to act after the holders of 25% of
the bonds have requested in writing the Mortgage Trustee to act, offered it reasonable opportunity to
act and offered an indemnity satisfactory to it against the costs, expenses and liabilties that may be
incurred when enforcing the lien. (Section 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 Mortgage
Trustee or exercising any trust or power conferred on the Mortgage Trustee. (Section 15.07) The
Mortgage 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. (Section 19.08)
Defeasance
Under the terms of the Mortgage, we wil be discharged from any and all obligations under the
Mortgage in respect of the bonds of any series if we deposit with the Mortgage Trustee, in trust,
moneys or government obligations, in an amount sufficient to pay all the principal of, premium (if any)
and interest on, the bonds of those series or portions thereof, on the redemption date or maturity date
thereof, as the case may be. The Mortgage Trustee need not accept the deposit unless it is
accompanied by an opinion of counsel to the effect that (a) we have received from, or there has been
published by, the Internal Revenue SerVice a ruling or, (b) since the date of the Mortgage, there has
been a change in applicable federal income tax law, in either case to the effect that, and based thereon
the opinion of counsel shall confirm that, the holders of the bonds or the right of payment of interest
thereon (as the case may be) wil not recognize income, gain or loss for federal income tax purposes as
a result of the deposit, and/or ensuing discharge and wil be subject to federal income tax on the same
amount and in the same manner and at the same times, as would have been the case if the deposit,
and/or discharge had not occurred. (Section 20.02)
Upon the deposit, our obligation to pay the principal of (and premium, if any) and interest on
those bonds shall cease, terminate and be completely discharged and the holders of such bonds shall
thereafter be entitled to receive payment solely from the funds deposited. (Section 20.02)
9
BOOK.ENTRY ISSUANCE
Except as set forth below, the Additional Bonds wil be issued in registered global form without
interest coupons. Unless otherwise specified in the applicable prospectus supplement, The Depository
Trust Company ("DTC") in New York, New York, wil act as securities depositary for each series of the
Additional Bonds. The Additional Bonds wil be issued as fully registered securities registered in the
name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC, in each case for the credit to an account of a direct or indirect
participant in DTC, as described below.
Transfers of beneficial interests in the Additional Bonds wil be subject to the applicable rules and
procedures of DTC and its direct or indirect participants (including, if applicable, those of the
Euroclear System ("Euroclear") and Clearstream Banking, S.A. ("Clearstream")), which may change
from time to time.
The following description of the operations and procedures of DTC is provided solely as a matter
of convenience. These operations and procedures are solely within the control of DTC and are subject
to changes by it. We take no responsibility for these operations and procedures and urge investors to
contact DTC or its participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company created to hold securities for its
participating organizations (collectively, the "Participants") and to facilitate the clearance and
settlement of transactions in those securities between Participants through electronic book-entry
changes in accounts of its Participants. The Participants include securities brokers and dealers
(including the underwriters), banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's system is also available to other entities, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect
Participants. The ownership interests in, and transfers of ownership interests in, each security held by
or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised us that, pursuant to procedures established by it:
(1) upon deposit of the Additional Bonds, DTC wil credit the accounts of the Participants
designated by the underwriters with portions of the principal amount of the Additional Bonds;
and
(2) ownership of these interests in the Additional Bonds wil be shown on, and the transfer of
ownership of these interests wil be effected only through, records maintained by DTC (with
respect to the Participants) or by the Participants and the Indirect Participants (with respect to
other owners of beneficial interests in the Additional Bonds).
Investors in the Additional Bonds who are Participants may hold their interests therein directly through
DTC. Investors in the Additional Bonds who are not Participants may hold their interests therein
indirectly through organizations (including Euroclear and Clearstream) which are Participants. All
interests in the Additional Bonds, including those held through Euroclear or Clearstream, may be
subject to the procedures and requirements of DTC. Those interests held through Euroclear or
Clearstream may also be subject to the procedures and requirements of such systems. The laws of some
states require that certain persons take physical delivery in definitive form of securities that they own.
Consequently, the ability to transfer beneficial interests in Additional Bonds to such persons will be
limited to that extent. Because DTC can act only on behalf of the Participants, which in turn act on
behalf of the Indirect Participants, the ability of a person having beneficial interests in an Additional
Bond to pledge such interests to persons that do not participate in the DTC system, or otherwise take
10
actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such
interests.
Except as described below, owners of an interest in the Additional Bonds wil not have bonds
registered in their names, wil not receive physical delivery of certificated Additional Bonds and will not
be considered the registered owners or "Holders" thereof under any supplemental indenture to the
Mortgage for any purpose.
We may decide to discontinue use of the system of book-entry only transfers through DTC or any
successor depositary. In that event, Additional Bond certificates wil be printed and delivered to DTC.
Payments in respect of the principal of, and interest and premium, if any, on an Additional Bond
registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered
holder. Under the terms of any supplemental indenture to the Mortgage, the Company and the
Mortgage Trustee will treat the persons in whose names the Additional Bonds are registered as the
owners of the Additional Bonds for the purpose of receiving payments and for all other purposes.
Consequently, neither the Company, the Mortgage Trustee nor any agent of ours or of the Mortgage
Trustee has or wil have any responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect Participant's records relating to,
or payments made on account of, beneficial ownership interests in the Additional Bonds or
for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect
Participant's records relating to the beneficial ownership interests in the Additional Bonds; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or
Indirect Participants.
DTC has advised us that its current practice, at the due date of any payment in respect of securities
such as the Additional Bonds, is to credit the accounts of the relevant Participants with the payment on
the payment date unless DTC has reason to believe that it wil not receive payment on such payment
date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of
an interest in the principal amount of the bonds as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of bonds will be governed by standing
instructions and customary practices and wil be the responsibility of the Participants or the Indirect
Participants and wil not be the responsibility of DTC, the Mortgage Trustee or us. Neither we nor the
Mortgage Trustee wil be liable for any delay by DTC or any of its Participants in identifying the
beneficial owners of the Additional Bonds, and the Company and the Mortgage Trustee may
conclusively rely on and wil be protected in relying on instructions from DTC or its nominee for all
purposes.
Transfers between Participants in DTC wil be effected in accordance with DTC's procedures, and
wil be settled in same-day funds, and transfers between participants in Euroclear and Clearstream wil
be effected in accordance with their respective rules and operating procedures.
Subject to compliance with any transfer restrictions specified herein and in the applicable
prospectus supplement, cross-market transfers between the Participants in DTC, on the one hand, and
Euroclear or Clearstream participants, on the other hand, wil be effected through DTC in accordance
with DTC's rules on behalf of Euroclear or Clearstream, as the case may be, by its depositary;
however, such cross-market transactions wil require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and
procedures and within the established deadlines (Brussels time) of such system. Euroclear or
Clearstream, as the case may be, wil, if the transaction meets its settlement requirements, deliver
instructions to its respective depositary to take action to effect final settlement on its behalf by
delivering or receiving interests in the relevant Additional Bond in DTC, and makng or receiving
payment in accordance with normal procedures for same-day funds settlement applicable to DTC.
11
Euroclear participants and Clearstream participants may not deliver instructions directly to the
depositories for Euroclear or Clearstream.
DTC has advised us that it wil take any action permitted to be taken by a holder of any
Additional Bond only at the direction of one or more Participants to whose account DTC has credited
the interests in the Additional Bond and only in respect of such portion of the aggregate principal
amount of the Additional Bond as to which such Participant or Participants has or have given such
direction.
Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate
transfers of interests in the Additional Bonds among participants in DTC, Euroclear and Clearstream,
they are under no obligation to perform or to continue to perform such procedures, and may
discontinue such procedures at any time. Neither the Company nor the Mortgage Trustee nor any of
their respective agents wil have any responsibilty for the performance by DTC, Euroclear or
Clearstream or their respective Participants or Indirect Participants of their respective obligations under
the rules and procedures governing their operations.
Any redemption notices wil be sent to Cede & Co. as the registered holder of the Additional
Bonds. If less than all of the Additional Bonds are being redeemed, DTC's practice is to determine by
lot. the amount of the interest of each Direct Participant in such issue.
Neither DTC nor Cede & Co. (nor any other DTC nominee) wil consent or vote with respect to
Additional Bonds unless authorized by a direct Participant in accordance with DTC's procedures.
Under its usual procedures, DTC mails an omnibus proxy (the "Omnibus Proxy") to the Mortgage
Trustee after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to
those direct Participants to whose accounts those Additional Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
12
PLA OF DISTRIBUTION
We may sell the Securities through underwriters, dealers or agents, or directly to one or more
purchasers. The prospectus supplement with respect to the Securities being offered wil set forth the
specific terms of the offering of those Securities, including the name or names of any underwriters,
dealers or agents, the purchase price of those Securities and the proceeds to us from the sale, any
underwiting discounts, agency fees and other items constituting underwriters' or agents' compensation,
any initial public offering price and any discounts or concessions allowed or reallowed or paid to
dealers.
If we use underwriters to sell Securities, we will enter into an underwriting agreement with the
underwiters. Those Securities wil be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, at a fixed public offering price, at market prices
prevailng at the time of sale, at prices related to such prevailing market prices or at negotiated prices.
The underwriter or underwiters with respect to a particular underwritten offering of Securities wil be
named in the prospectus supplement relating to that offering and, if an underwriting syndicate is used,
the managing underwriter or underwiters wil be set forth on the cover page of the prospectus
supplement. Any underwriting compensation paid by us to the underwriters or agents in connection
with an offering of Securities, and any discounts, concessions or commissions allowed by underwriters
to dealers, wil be set forth in the applicable prospectus supplement to the extent required by
applicable law. Unless otherwise set forth in the prospectus supplement, the obligations of the
underwriters to purchase the Securities wil be subject to specific conditions, and the underwriters wil
be obligated to purchase all of the offered Securities if any are purchased.
If a dealer is used in the sale of any Securities, we wil sell those Securities to the dealer, as
principaL. The dealer may then resell the Securities to the public at varying prices to be determined by
the 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 wil be set forth in the
prospectus supplement relating to that offering.
The Securities may be sold directly by us or through agents designated by us from time to time.
We wil describe the terms of any direct sales in a prospectus supplement. Any agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act of 1933, as amended (the
"Securities Act"), involved in the offer or sale of any of the Securities wil be named, and any
commissions payable by us to the agent wil be set forth, in the prospectus supplement relating to that
offer or sale. Unless otherwise indicated in the prospectus supplement, any agent wil be acting on a
reasonable best efforts basis for the period of its appointment.
In connection with a particular underwitten offering of Securities, and in compliance with
applicable law, the underwriters may engage in transactions that stabilize, maintain or otherwise affect
the prices of the classes or series of Securities offered, including stabilizing transactions and syndicate
covering transactions. These activities may stabilize, maintain or otherwise affect the market price of
the Securities, which may be higher than the price that might otherwise prevail in the open market, and
if commenced, may be discontinued at any time. A description of these activities, if any, wil be set
forth in the prospectus supplement relating to that offering.
Underwriters, dealers or agents and their associates may be customers of, engage in transactions
with or perform services for us and our affiliates in the ordinary course of business.
We wil indicate in a prospectus supplement the extent to which we anticipate that a secondary
market for the Securities wil be available. Unless we inform you otherwise in a prospectus supplement,
we do not intend to apply for the listing of any series of the Securities on a national securities
exchange. If the Securities of any series are sold to or through underwriters, the underwriters. may
make a market in such Securities, as permitted by applicable laws and regulations. No underwriter
13
would be obligated, however, to make a market in the Securities, and any market-makig could be
discontinued at any time at the sole discretion of the underwiters. Accordingly, we cannot assure you
as to the liquidity of, or trading markets for, the Securities of any series.
Underwiters, dealers and agents participating in the distribution of the Securities may be deemed
to be "underwriters" within the meaning of, and any discounts and commissions received by them and
any profit realized by them on resale of those Securities may be deemed to be underwriting discounts
and commissions under, the Securities Act. Subject to some conditions, we may agree to indemnify the
several underwriters, dealers or agents and their controlling persons against specific civi liabilities,
including liabilities under the Securities Act, or to contribute to payments that person may be required
to make in respect thereof.
During such time as we may be engaged in a distribution of the securities covered by this
prospectus we are required to comply with Regulation M promulgated under the Exchange Act. With
certain exceptions, Regulation M precludes us, any affilated purchasers and any broker-dealer or other
person who participates in such distributing from bidding for or purchasing, or attempting to induce
any person to bid for or purchase, any security which is the subject of the distribution until the entire
distribution is complete. Regulation M also restricts bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security. All of the foregoing may affect
the marketability of our securities.
LEGAL MATTERS
The validity of the Securities wil be passed upon for us by Perkins Coie LLp' counsel to the
Company, 1120 N.W Couch Street, Tenth Floor, Portland, Oregon 97209.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by reference from
PacifiCorp's Annual Report on Form 10-K for the year ended December 31, 2009, have been audited
by Deloitte & Touche LLp' an independent registered public accounting firm, as stated in their report,
which is incorporated herein by reference. Such financial statements have been so incorporated in
reliance upon the report. of such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim consolidated financial information of PacifiCorp for the
periods ended March 31, 2010 and 2009, June 30, 2010 and 2009 and September 30, 2010 and 2009,
which is incorporated herein by reference, Deloitte & Touche LLP an independent registered public
accounting firm, have applied limited procedures in accordance with the standards of the Public
Company Accounting Oversight Board (United States) for a review of such information. However, as
stated in their reports included in PacifiCorp's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2010, June 30, 2010 and September 30, 2010 and incorporated by reference
herein, they did not audit and they do not express an opinion on that interim consolidated 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 LLP are
not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the
unaudited interim financial information because those reports are not "reports" or a "part" of the
registration statement prepared or certified by an accountant within the meaning of Sections 7 and 11
of the Act.
14
$100,000,000 First Mortgage Bonds
2.95% Series Due 2022
~~~ÇlElfQ~
PROSPECTUS SUPPLEMENT
February 28, 2012
J.R Morgan
EXECUTION VERSION
PACIFICORP
$100,000,000
First Mortgage Bonds
2.95% Series Due 2022
UNDERWRITING AGREEMENT
February 28, 2012
J.P. MORGAN SECURTIES LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
I. Introductory. PacifiCorp, an Oregon corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to J.P. Morgan Securities LLC (the
"Underwriter") U.S. $100,000,000 principal amount of its First Mortgage Bonds, 2.95% Series due
2022 (the "Offered Securities"), to be issued under that certin Mortgage Deed and Trust, dated as of
Januar 9, 1989, with The Ban of New York Mellon Trust Company, N.A., as successor trstee (the
"Trustee"), as heretofore amended and supplemented by the supplemental indentures thereto and as
further amended and supplemented by a supplemental indenture dated Januar 1,2012, as it may be
supplemented (collectively, the "Mortgage") pursuant to the registration statement on Form S-3 (File No.
333-170954) fied on December 3, 2010, as amended to date (the "Initial Registration Statement"). The
Mortgage has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission")
under the Trust Indenture Act. The United States Securities Act of 1933, as amended, is herein referred to
as the "Securities Act," and the rules and regulations of the Commission thereunder are herein referred to
as the "Rules and Regulations."
The Company hereby agrees with the Underwriter as follows:
2. Representations and Warranties of the Company. The Company represents and warants
to, and agrees with, the Underwriter that:
(a) The Initial Registration Statement in respect of the Offered Securities has been
filed with the Commission; the Initial Registration Statement and any post-effective amendments
thereto prior to the date hereof, each in the form heretofore delivered or to be delivered to the
Underwriter and, excluding exhibits to the Initial Registration Statement but including all
documents incorporated by reference in the prospectus contained in such Initial Registration
Statement, including any prospectus supplement relating to the Offered Securities that is fied
with the Commission and deemed by virtue of Rule 430B under the Securities Act to be part of
NY\2472298.6
the Initial Registration Statement, became effective upon fiing with the Commission; no other
document with respect to the Initial Registration Statement or any document incorporated by
reference therein has heretofore been filed or transmitted for filing with the Commission with
respect to the offering contemplated by the Initial Registration Statement (other than documents
fied after the filing date of the Initial Registration Statement under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and prospectuses fied pursuant to Rule 424(b) of the
Rules and Regulations, each in the form heretofore delivered to the Underwriter); and no stop
order suspending the effectiveness of the Initial Registration Statement or any post-effective
amendment thereto has been issued and no proceeding for that purose has been initiated or
threatened by the Commission.
(b) A final prospectus relating to the Offered Securities has been prepared by the
Company. Such final prospectus relating to the Offered Securities to be fied with the
Commission pursuant to Rule 424(b) under the Securities Act (including the documents
incorporated by reference therein) is hereinafter referred to as the "Prospectus." The Prospectus,
as of the Applicable Time (as defined below) and as of the Closing Date (as defined below), did
not and wil not include any untrue statement of a material fact or omit to state any material fact
necessar in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, that the preceding sentence does not apply to
statements in or omissions from the Prospectus based upon written information furnished to the
Company by the Underwiter specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b) hereof. For puroses of this
Agreement, the "Applicable Time" is 4:30 p.m., New York City Time, on the date of this
Agreement.
At the earliest time after the fiing of the Initial Registration Statement that the Company or another
offering paricipant made a bonafide offer (within the meaning of Rule 164(h)(2) under the Act) of the
Offered Securities, the Company was not an "ineligible issuer" as defined in Rule 405 under the
Securities Act.
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus when made wil
conform, in all material respects to the requirements of the Securities Act and the Rules and
Regulations and the Registration Statement conforms, and any furher amendments or
supplements to the Registration Statement when made wil conform, in all material respects to the
requirements of the Trust Indentue Act, and the rules and regulations of the Commission
thereunder. The Registration Statement, as of the applicable effective date, and any amendments
thereto as of the Closing Date did not and wil not contain an untre statement of a material fact
or omit to state a material fact required to be stated therein or necessar to make the statements
therein not misleading, and the Prospectus, as of its date and as amended or supplemented as of
the Closing Date, does not and wil not contain an untre statement of a material fact or omit to
state a material fact required to be stated therein or necessar to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(d) The Company has been duly incorporated and is validly existing as a corporation
under the laws of the State of Oregon with corporate power and corporate authority (i) to own its
properties and conduct its business as described in the Prospectus and (ii) to execute and deliver,
and perform its obligations under, this Agreement, the Mortgage and the Offered Securities; and
the Company is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases substantial properties or in which the
conduct of its business requires such qualification, except where the failure to so qualify would
2
NY\2472298.6
not have a material adverse effect on the financial condition, business or results of operations of
the Company and its subsidiaries taen as a whole (a "Material Adverse Effect").
(e) The Mortgage has been duly authorized, executed and delivered by the
Company, and constitutes a valid and legally binding instrument of the Company enforceable
against the Company in accordance with its terms, except as limited by banptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered in a proceeding in equity or
at law); and the Mortgage conforms to the description thereof in the Prospectus.
(f) The Offered Securities have been duly authorized by the Company and, when
authenticated and delivered in accordance with the Mortgage and paid for by the purchasers
thereof, wil constitute valid and legally binding obligations of the Company enforceable against
the Company in accordance with their terms, except as limited by banuptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors'
rights generally and general equitable principles (whether considered in a proceeding in equity or
at law), and wil be entitled to the benefit of the security afforded by the Mortgage; and the
Offered Securities conform to the description thereof in the Prospectus.
(g) No consent, approval, authorization or order of, or filing or registration by the
Company with, any court, governental agency or third par is required for the consummation
of the transactions contemplated by this Agreement and the Mortgage in connection with the
issuance and sale of the Offered Securities by the Company and the use of the proceeds of the
offering of the Offered Securities as described in the Prospectus, except such as have been
obtained or made.
(h) This Agreement has been duly authorized, executed and delivered by the
Company and is a valid and legally binding agreement of the Company enforceable against the
Company in accordance with its terms, except as limited by bankptcy, insolvency, fraudulent
conveyance, reorganization and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding in equity or at
law) and subject to any principles of public policy limiting the right to enforce the
indemnification and contribution provisions contained herein.
(i) Except as disclosed in the Prospectus, the Company has good and suffcient title
to all the properties described as owned and good and suffcient leasehold interest in all of the
properties described as leased by it (the "Properties"), subject to minor defects and irregularities
customarily found in properties of like size and character that do not materially impair the use of
the propert affected thereby in the operation of the business of the Company.
G) The Company is not (i) in violation of its Articles of Incorporation (the
"Articles") or its Bylaws, as amended, (ii) in default in the performance or observance of any
material obligation, covenant or condition contained in any contract, agreement or other
instrument to which it is a par or by which it may be bound or (iii) in violation of any order,
rule or regulation applicable to the Company of any court or any federal or state regulatory body
or administrative agency or other governental body, the effect of which, in the case of (ii) and
(ii). would result in a Material Adverse Effect, and neither the execution and delivery of this
Agreement, the Mortgage, or the Offered Securities, the consummation of the transactions herein
or therein contemplated, the fulfillment of the terms hereof or thereof nor compliance with the
terms and provisions hereof or thereof wil conflct with, or result in a breach of, or constitute a
default under (x) the Articles or such Bylaws, or any material contract, agreement or other
3
NY\2472298.6
instrument to which it is now a par or by which it may be bound or (y) any order, rule or
regulation applicable to the Company of any court or any federal or state regulatory body or
administrative agency or other governmental body having jurisdiction over the Company or over
its properties, the effect of which, singly or in the aggregate, would have a Material Adverse
Effect.
(k) Except as disclosed in the Prospectus, there are no legal or governmental
proceedings pending or to the Company's knowledge threatened against the Company or its
subsidiaries that, if determined adversely to the Company or any subsidiar would be reasonably
likely to have, individually or in the aggegate, a Material Adverse Effect or a material adverse
effect on the abilty of the Company to perform its obligations under this Agreement or the
Mortgage.
(1) The consolidated financial statements included or incorporated by reference in
the Prospectus present fairly the financial condition and operations of the Company and its
consolidated subsidiaries at the respective dates or for the respective periods to which they apply;
such financial statements have been prepared in each case in accordance with generally accepted
accounting principles consistently applied throughout the periods involved except as otherwise
indicated in the Prospectus; and Deloitte & Touche LLP, who has examined certain audited
financial statements of the Company, is an independent registered public accounting firm as
required by the Act and the Regulations thereunder.
(m) Except as reflected in, or contemplated by, the Prospectus, since the respective
most recent dates as of which information is given in the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company (other than changes arising from
transactions in the ordinar course of business), or any material adverse change in the business,
affairs, business prospects, propert or financial condition of the Company and its subsidiaries
taken as a whole, whether or not arsing in the ordinary course of business, and since such dates
there has not been any material transaction entered into by the Company other than transactions
contemplated by the Prospectus, and transactions in the ordinar course of business; and the
Company has no material contingent obligation that is not disclosed in the Prospectus.
(n) The Company (i) makes and keeps books, records, and accounts, which, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company and its consolidated subsidiaries and (ii) maintains a system of internal accounting
controls suffcient to provide reasonable assurances that (l) transactions are executed in
accordance with management's general or specific authorization; (2) transactions are recorded as
necessar to permit preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements and to maintain
accountabilty for assets; (3) access to assets is permitted only in accordance with management's
general or specific authorization; and (4) the recorded accountabilty for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(0) There is and has been no failure on the par of the Company or, to the knowledge
of the Company, any of the Company's directors or executive offcers in their respective
capacities as such, to comply in all material respects with the provisions of the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated in connection therewith.
(p) The Company (i) is in compliance with any and all applicable U.S. federal state
and local laws and regulations relating to the protection of human health, safety, and the
4
NY\2472298.6
, .
environment or hazardous or toxic substances or wastes, pollutants or containants
("Environmental Laws") and (ii) has received and is in compliance with all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct its respective
businesses, except where such non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liabilty either (x) would not be reasonably likely
to have a Material Adverse Effect, or (y) is set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
waranties and agreements herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriter, and the Underwiter agrees to purchase from the Company at
a purchase price of 100.081% of the principal amount thereof plus accrued interest from Janua 6, 2012
to the Closing Date (as hereinafter defined), $100,000,000 principal amount ofthe Offered Securities.
The Company wil deliver against payment of the purchase price for the Offered Securities to be
purchased by the Underwriter hereunder and to be offered and sold by the Underwriter in the form of one
or more global securities in registered form without interest coupons (the "Global Securities") deposited
with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in the Global Securties wil be held only in book-entr form
through DTC, except in the limited circumstances described in the Prospectus.
Payment for the Offered Securities shall be made by the Underwriter in Federal (same day) funds
by wire transfer to an account at a ban acceptable to the Underwriter drawn to the order of the Company
at 10:00 A.M., (New York time), on March 6, 2012, or at such other time not later than seven full
business days thereafter as the Underwiter and the Company determine, such time being herein referred
to as the "Closing Date," against delivery to the Trustee as custodian for DTC of the Global Securities.
The Global Securities wil be made available for checking at the offce of Latham & Watkins LLP, 885
Third A venue, New York, NY i 0022, at least 24 hours prior to the Closing Date.
4. Representations by the Underwriter; Resale by the Underwriter. The Underwriter
represents and agrees that:
(a) (i) It has only communicated or caused to be communicated (and wil only
communicate or cause to be communicated) an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets Act of 2000 (the
"FSMA")) received by it in connection with the issue or sale of the Offered Securities in
circumstances in which Section 21 (l) of the FSMA does not apply to the Company; and (ii) it has
complied and wil comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Offered Securities in, from or otherwise involving the United
Kingdom.
(b) In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a "Relevant Member State"), with effect from and
including the date on which the Prospectus Directive is implemented in that Relevant Member
State (the "Relevant Implementation Date"), it has not made and wil not make an offer of the
Offered Securities to the public in that Relevant Member State, other than: (i) to any legal entity
which is a qualified investor as defined in the Prospectus Directive; (ii) to fewer than 100 or, if
the Relevant Member State has implemented the relevant provision of the 2010 PD Amending
Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus
Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of
the relevant Dealer or Dealers nominated by the Company for any such offer; or (ii) in any other
5
NY\2472298.6
circumstances fallng within Article 3(2) of the Prospectus Directive; provided that no such offer
of the Offered Securities shall require the Company or the Underwriter to publish a prospectus
pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the
expression an "offer of the Offered Securities to the public" in relation to the Offered Securities
in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the Offered Securities to be offered so as to
enable an investor to decide to purchase or subscribe the Offered Securities, as the same may be
varied in that Member State by any measure implementing the Prospectus Directive in that
Member State and the expression Prospectus Directive means Directive 2003171ÆC (and
amendments thereto, including the 20 i 0 PD Amending Directive, to the extent implemented in
the Relevant Member State) and includes any relevant implementing measure in each Relevant
Member State and the expression "2010 PD Amending directive" means Directive 2010173ÆU.
(c) Without the prior consent of the Company, it has not made and wil not make any
offer relating to the Offered Securities that would constitute an issuer free writing prospectus or a
free writing prospectus required to be fied with the Commission; and any such free writing
prospectus the use of which has been consented to by the Company.
5. Certain Agreements of the Company. The Company agrees with the Underwiter that:
(a) It wil fie the Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the date of this Agreement; to make no further
amendment or any supplement to the Registration Statement, or the Prospectus prior to the
Closing Date that shall be reasonably disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been fied or becomes effective or any amendment or
supplement to the Prospectus has been fied and to furnish you with copies thereof; to fie
promptly all material required to be fied by the Company with the Commission pursuant to Rule
433(d) under the Securities Act; to file promptly all reports and any definitive proxy or
information statements required to be fied by the Company with the Commission pursuant to
Section 13 (a), 13 (c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
i 73(a) under the Act) is required in connection with the offering or sale of the Offered Securities;
to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of the Prospectus, of the suspension
of the qualification of the Offered Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or the Prospectus
or for additional information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of the Prospectus or suspending any such qualification, to
promptly use its best effort to obtain the withdrawal of such order; and in the event of any such
issuance of a notice of objection, promptly to take such steps including, without limitation,
amending the Registration Statement or filing a new registration statement, at its own expense, as
may be necessar to permit offers and sales of the Offered Securities by the Underwiter
(references herein to the Registration Statement shall include any such amendment or new
registration statement).
(b) On the date of this Agreement and from time to time, to furnish the Underwriter
with written and electronic copies of the Prospectus in New York City in such quantities as you
may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred
to in Rule 173(a) under the Securities Act) is required at any time prior to the expiration of nine
6
NY\2472298.6
months after the time of issue of the Prospectus in connection with the offering or sale of the
Offered Securities and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untre statement of a material fact
or omit to state any material fact necessar in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus (or in lieu thereof, the
notice referred to in Rule 173(a) under the Securities Act) is delivered, not misleading, or, if for
any other reason it shall be necessar durng such same period to amend or supplement the
Prospectus or to fie under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securties Act, the Exchange Act or the Trust Indentue
Act, to notify you and upon your request to fie such document and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many written and electronic copies as
you may from time to time reasonably request of an amended Prospectus or a supplement to the
Prospectus that wil correct such statement or omission or effect such compliance; and in case the
Underwriter is required under the Securities Act to deliver a prospectus (or in lieu thereof, the
notice referred to in Rule 173(a) under the Securities Act) in connection with sales of any of the
Offered Securities at any time nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of the Underwriter, to prepare and deliver to the UnderWiter as
many written and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) ofthe Securities Act.
(c) To make generally available to its securityholders as soon as practicable, but in
any event not later than 16 months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earings statement of the Company and its subsidiaries
(which need not be audited) complying with Section i i (a) of the Securities Act and the Rules and
Regulations thereunder (including, at the option ofthe Company, Rule 158).
(d) The Company wil arange for the qualification of the Offered Securities for sale
and the determination of their eligibilty for investment under the laws of such jurisdictions in the
United States and Canada as the Underwriter designates and wil continue such qualifications in
effect so long as required for the resale of the Offered Securities by the Underwiter, provided
that the Company wil not be required to qualify as a foreign corporation, to fie a general consent
to service of process in any such jurisdiction or to take any other action that would subject the
Company to service of process in any suits (other than those arising out of the offering of the
Offered Securities) or to taxation in respect of doing business in any jurisdiction in which it is not
otherwise subject.
(e) The Company wil pay all expenses incident to the performance of its obligations
under this Agreement and the Mortgage, for any fiing fees and other expenses (including fees
and disbursements of counsel) incured in connection with qualification of the Offered Securities
for sale and determination of their eligibilty for investment under the laws of such jurisdictions
as the Underwiter designates and the printing of memoranda relating thereto, for the fees and
expenses of the Trustee and its professional advisors, for all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Offered Securities, the
preparation and printing of this Agreement, the Offered Securities, the Prospectus, and
amendments and supplements thereto, and any other document relating to the issuance, offer, sale
and delivery of the Offered Securities, for the cost of any advertising approved by the Company
in connection with the issue of the Offered Securities, for any fees charged by investment rating
agencies for the rating of the Offered Securities, for any travel expenses of the Company's
offcers and employees, and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities and for expenses incurred
in distributing the Prospectus (including any amendments and supplements thereto) to the
7
NY\2472298.6
Underwriter. Except as otherwise provided in this Section 5(e) or in Section 9 of this Agreement,
the Underwriter wil pay all of its costs and expenses, including fees and expenses of its counsel,
transfer taes on the resale of the Offered Securities and any advertising and travel expenses
incured by them.
(f) In connection with the offering, until the earlier of (i) 180 days following the
Closing Date and (ii) the date the Underwriter shall have notified the Company of the completion
of the resale of the Offered Securities, neither the Company nor any of its affiiates has or wil,
either alone or with one or more other persons, bid for or purchase for any account in which it or
any of its affiiates has a beneficial interest any Offered Securities or attempt to induce any person
to purchase any Offered Securities; and neither it nor any of its affliates wil make bids or
purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price
of, the Offered Securities.
(g) From the date hereof through and including the Closing Date, the Company wil
not, without the prior written consent of the Underwiter, offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or fie with the Commission a registration statement
under the Securities Act relating to, any United States dollar-denominated debt securities issued
or guaranteed by the Company and having a maturity of more than one year from the date of
issue.
(h) The Company (i) represents and agrees that without the prior consent of the
Underwriter, it has not made and wil not make any offer relating to the Offered Securities that
would constitute a "free writing prospectus" as defined in Rule 405 under the Act and (ii) has
complied and wil comply with the requirements of Rule 433 under the Act applicable to any
Issuer Free Writing Prospectus (as defined in Rule 433 under the Securities Act), including timely
filing with the Commission or retention where required and legending.
6. Conditions of the Obligations of the Underwriter. The obligations of the Underwriter to
purchase and pay for the Offered Securities wil be subject to the accuracy of the representations and
waranties on the par of the Company herein, to the accuracy of the statements of offcers of the
Company made pursuant to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) The Prospectus as amended or supplemented in relation to the applicable Offered
Securities shall have been fied with the Commission pursuant to Rule 424(b) on the date hereof;
no stop order suspending the effectiveness of the Registration Statement or any par thereof shall
have been issued and no proceeding for that purose shall have been initiated or to the knowledge
of the Company threatened by the Commission; and all requests for additional information on the
par of the Commission shall have been complied with.
(b) (i) On the date hereof, Deloitte & Touche LLP shall have furnished to the
Underwriter a letter, dated as of the date hereof, in form and substance satisfactory to the
Underwriter, confirming that they are an independent registered public accounting firm with
respect to the Company and its subsidiaries within the meaning of the Securities Act, the
Exchange Act and the applicable published Rules and Regulations and stating that as of the
Applicable Time (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Prospectus as of a
paricular time not more than five business days prior to the Applicable Time) conclusions and
findings of such firm, to the effect that:
8
NY\2472298.6
.
(A) in their opinion the financial statements examined by them and
incorporated by reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Securities Act, the
Exchange Act and the related published Rules and Regulations;
(B) on the basis of a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company who have
responsibilty for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe that:
(l) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than one business
day prior to the date of this Agreement, there was any change in the
capital stock or any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such accountants, there was any
decrease in total shareholders' equity or total consolidated net curent
assets, as compared with amounts shown on the latest balance sheet
incorporated by reference in the Prospectus;
(2) for the period from the closing date of the latest statement of
income incorporated by reference in the Prospectus to the closing date of
the latest statement of income read by such accountants, there were any
decreases, as compared with the corresponding period of the previous
year, in consolidated revenue or net income;
(3) at January 31, 2012, there was any change in the capital
stock, any increases in short-term indebtedness or long-term debt, or any
decreases in net current assets or total shareholder's equity, of the
Company and its consolidated subsidiaries, in each case as compared
with amounts shown on the latest balance sheet incorporated by
reference in the Prospectus; or
(4) for the period from Januar i, 2012 to Januar 31, 2012,
there were any decreases, as compared with the corresponding period in
the preceding year, in consolidated revenue or net income; and
(C) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Prospectus (in each case to the extent that such dollar amounts, percentages
and other financial information are derived from the general accounting records
of the Company and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and. other financial information to
be in agreement with such results, except as otherwise specified in such letter.
(ii) The Underwriters shall have received a letter, dated the Closing Date, ofDeloitte
& Touche LLP which meets the requirements of subsection (b )(i) of this Section, except that the
specified date referred to in such subsection wil be a date not more than one business day prior to
the Closing Date for the purposes of this subsection.
(c) Subsequent to the Applicable Time, there shall not have been (i) any change, or
any development or event involving a prospective change, in the financial condition, business,
9
NY\2472298.6
properties or results of operations of the Company and its subsidiaries taken as a whole, which, in
the judgment of the Underwriter, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the offering or the sale of and payment for the Offered Securities;
(ii) any downgrading in the rating of any debt securities or preferred stock of the Company by
any "nationally recognized statistical rating organization" (as such term is defined in Section 3 of
the Exchange Act), or any public anouncement that any such organization has under sureilance
or review its rating of any debt securities or preferred stock of the Company (other than an
anouncement with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any material suspension or material limitation of
trading in securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange; (iv) any suspension of trading of any securties of the
Company on any exchange or in the over-the-counter market; (v) any baning moratorium
declared by U.S. Federal or New York authorities; (vi) any material disruption in settlements of
securities or clearance services in the United States; or (vii) any attck on, or outbreak or
escalation of hostilties or act of terrorism involving, the United States, any declaration of war by
Congress or any other substantial national or international calamity or emergency if, in the
judgment of the Underwriter, the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with completion of the
offering or sale of and payment for the Offered Securities.
(d) The Underwiter shall have received an opinion, dated the Closing Date, of Mark
C. Moench, General Counsel of the Company, substantially in the form of Exhibit A hereto.
(e) The Underwriter shall have received an opinion, dated the Closing Date, of
Perkins Coie LLP, special counsel to the Company, in substantially the form of Exhibit B hereto.
(f) The Underwriter shall have received from Latham & Watkins LLP, counsel for
the Underwriter, such opinion or opinions, dated the Closing Date, in form and substance
satisfactory to the Underwriter, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such matters. In
rendering such opinion, Latham & Watkins LLP may rely as to the incorporation ofthe Company
and all other matters governed by Oregon law upon the opinion of Perkins Coie LLP referred to
above.
(g) The Underwiter shall have received a certificate, dated the Closing Date, of the
President or any Vice President and a principal financial or accounting offcer of the Company in
which such officers, to the best of their knowledge after reasonable investigation, shall state that:
(i) the representations and waranties of the Company in this Agreement are tre and correct, or
tre and correct in all material respects where such representations and waranties are not
qualified by materiality or Material Adverse Effect; (ii) that the Company has complied with all
agreements and satisfied all conditions on its par to be performed or satisfied hereunder at or
prior to the Closing Date; and (ii) that, subsequent to the date of the most recent financial
statements in, or incorporated by reference in, the Prospectus, there has been no material adverse
change, nor any development or event involving a prospective material adverse change, in the
financial condition, business or results of operations of the Company and its subsidiaries taken as
a whole except as set forth in the Prospectus or as described in such certificate.
The Company wil furnish the Underwriter with such conformed copies of such opinions,
certificates, letters and documents as the Underwriter may reasonably request. The Underwriter may
waive compliance with any conditions to their obligations hereunder.
7. Indemnifcation and Contribution. (a) The Company wil indemnify and hold harless
the Underwiter, its parters, members, directors and offcers and each person, if any, who controls the
10
NY\2472298.6
~
Underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages
or liabilties, joint or several, to which the Underwriter may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilties (or actions in respect
thereof) arse out of or are based upon any untre statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus, or any
amendment or supplement to the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus, or any "issuer information" fied or required to be fied pursuant to Rule 433(d) under the
Act, arse out of or are based upon the omission or alleged omission to state therein a material fact
necessar in order to make the statements therein made, in light of the circumstances under which they
were made (in the case of the Registration Statement, necessar in order to make the statements therein
not misleading), not misleading, including any losses, claims, damages or liabilties arsing out of or
based upon the Company's failure to perform its obligations under Section 5(a) of this Agreement, and
wil reimburse the Underwriter for any legal or other expenses reasonably incurred by the Underwiter in
connection with investigating or defending any such loss, claim, damage, liabilty or action as such
expenses are incurred; provided, however, that the Company wil not be liable in any such case to the
extent that any such loss, claim, damage or liabilty arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Company by the Underwriter specifically for
use therein, it being understood and agreed that the only such information consists of the information
described as such in subsection (b) below.
(b) The Underwiter wil indemnify and hold harless the Company, its directors
and offcers and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilties to which the Company may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilties (or actions in respect thereof) arise out of or are based upon any untrue statement or
alleged untre statement of any material fact contained in the Registration Statement, the Prospectus or
any Issuer Free Writing Prospectus, or any amendment or supplement to the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus or arise out of or are based upon the omission or the
alleged omission to state therein a material fact necessar in order to make the statements therein, in the
light of the circumstances under which they were made (in the case of the Registration Statement,
necessar in order to make the statements therein not misleading), not misleading, in each case to the
extent, but only to the extent, that such untre statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written information funished to the
Company by the Underwriter specifically for use therein, and wil reimburse any legal or other expenses
reasonably incured by the Company in connection with investigating or defending any such loss, claim,
damage, liabilty or action as such expenses are incurred, it being understood and agreed that the only
such information furnished by the Underwriter consists of the following information in the Prospectus:
under the caption "Underwriting," paragraphs 3, 4 (second sentence only), 5 and 7; provided, however,
that the Underwriter shall not be liable for any losses, claims, damages or liabilties arising out of or based
upon the Company's failure to perform its obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified par under this Section of notice of the
commencement of any action, such indemnified par wil, if a claim in respect thereof is to be made
against the indemnifying par under subsection (a) or (b) above, notify the indemnifying par of the
commencement thereof; but the omission so to notify the indemnifying par wil not relieve it from any
liabilty which it may have to any indemnified par under subsection (a) or (b) above except to the extent
that it has been materially prejudiced (through forfeiture or impairment of procedural or substantive rights
or defenses) by such failure; and provided further that the failure to notify the indemnifying par shall
not relieve it from any liabilty that it may have to an indemnified par otherwise than under subsection
(a) or (b) above. In case any such action is brought against any indemnified par and it notifies the
11
NY\2472298.6
indemnifying par of the commencement thereof, the indemnifying par wil be entitled to paricipate
therein and, to the extent that it may wish, jointly with any other indemnifying par similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such indemnified par (who shall not,
except with the consent of the indemnified par, be counsel to the indemnifying par), and after notice
from the indemnifying par to such indemnified par of its election so to assume the defense thereof, the
indemnifying par wil not be liable to such indemnified par under this Section for any legal or other
expenses subsequently incurred by such indemnified par in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that the indemnified par shall have the right
to employ counsel to represent the indemnified pary and their respective controllng persons who may be
subject to liabilty arising out of any claim in respect of which indemnity may be sought by the
indemnified par against the indemnifying par under this Section 7 if the employment of such counsel
shall have been authorized in writing by the indemnifying par in connection with the defense of such
action, if in the written opinion of counsel to either the indemnifying part or the indemnified par,
representation of both paries by the same counsel would be inappropriate due to actual or likely conflcts
of interest between them or the indemnifying pary shall have failed to employ counsel within a
reasonable period of time, and in that event the fees and expenses of one firm of separate counsel (in
addition to the fees and expenses of one local counsel in each applicable jurisdiction) shall be paid by the
indemnifying par. No indemnifying par shall, without the prior written consent ofthe indemnified
par (which consent shall not be unreasonably withheld), effect any settlement of any pending or
threatened action in respect of which any indemnified par is or could have been a par and indemnity
could have been sought hereunder by such indemnified par unless such settlement (i) includes an
unconditional release of such indemnified par from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to or an admission of fault, culpabilty or failure to act
by or on behalf of any indemnified par.
(d) If the indemnification provided for in this Section is unavailable or insuffcient to
hold harless an indemnified par under subsection (a) or (b) above, then each indemnifying par shall
contribute to the amount paid or payable by such indemnified par as a result of the losses, claims,
damages or liabilties referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the Underwriter on the other
from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on the one hand and the
Underwriter on the other in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilties as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other shall be deemed to be in the
same proportion as the total net proceeds (before deducting expenses) from the offering of the Offered
Securties, received by the Company bear to the total discounts and commissions received by the
Underwiter with respect to the Offered Securities, from the Company under this Agreement. The relative
fault shall be determined by reference to, among other things, whether the untrue or alleged untre
statement of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriter and the paries' relative intent, knowledge,
access to information and opportnity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified part as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified part in connection with investigating or defending any action or claim
which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the
Underwiter shall not be required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities purchased by it were resold exceeds the amount of any damages
which the Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
12
NY\2472298.6
meaning of Section II (f) of the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section shall be in addition to any
liabilty which the Company may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls the Underwiter within the meaning of the Securities Act or the
Exchange Act; and the obligations of the Underwiter under this Section shall be in addition to any
liabilty which the Underwriter may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls the Company within the meaning of the Securities Act or the
Exchange Act.
8. ¡Reserved)
9. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, waranties and other statements of the Company or its officers and of the
Underwriter set forth in or made pursuant to this Agreement wil remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by or on behalf of the
Underwriter, the Company or any of their respective representatives, offcers or directors or any
controllng person, and wil surive delivery of and payment for the Offered Securities. If for any reason
the purchase of the Offered Securities by the Underwriter is not consummated other than by default by the
Underwriter, the Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Company and the Underwiter pursuant to
Section 7 shall remain in effect. If the purchase of the Offered Securities by the Underwriter is not
consummated for any reason other than solely because of (a) the occurrence of any event specified in
clause (iii), (v), (vi) or (vii) of Section 6(c) or (b) the failure of the Underwiter to purchase the Offered
Securities on the Closing Date if all of the conditions specified in Section 6 have been satisfied and the
Company has complied with all of its agreements and covenants requiring compliance on or before the
Closing Date, the Company wil reimburse the Underwiter for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incured by it in connection with the offering of the Offered
Securities, provided that the Company shall not be obligated under this Section 9 to reimburse the
Underwriter for any expenses (including any reasonable fees and disbursements of counsel) in excess of
$200,000.
10. No Fiduciary Duty. The Company acknowledges and agrees that in connection with
this offering or any other services the Underwiter may be deemed to be providing hereunder,
notwithstanding any preexisting relationship, advisory or otherwise, between the paries or any oral
representations or assurances previously or subsequently made by the Underwiter: (i) no fiduciar or
agency relationship between the Company and any other person, on the one hand, and the Underwriter, on
the other, exists in connection with the offering of the Offered Securities; (ii) the Underwriter is not acting
as an advisor, expert or otherwise, to the Company in connection with the offering of the Offered
Securities and such relationship between the Company, on the one hand, and the Underwiter, on the
other, is entirely and solely commercial, based on ars-length negotiations; (iii) any duties and
obligations that the Underwriter may have to the Company in connection with the offering of the Offered
Securities shall be limited to those duties and obligations specifically stated herein; and (iv) the
Underwiter and its affiiates may have interests that differ from those of the Company. Any review by
the Underwriter of the Company, the transactions contemplated hereby or other matters related to such
transactions wil be performed solely for the benefit of the Underwiter and not on behalf of the
Company. The Company hereby waives any claims that the Company may have against the Underwiter
with respect to any breach of fiduciar duty in connection with this offering.
13
NY\2472298.6
"
II. Notices. All communications hereunder wil be in writing and, if sent to the Underwiter,
wil be mailed, delivered or faxed and confirmed to J.P. Morgan Securities LLC, 383 Madison Avenue,
New York, NY 10179, Facsimile number: 212-834-6081, Attn: High Grade Syndicate Desk - 3rd Floor
or, if sent to the Company, wil be mailed, delivered or telegraphed and confirmed to it at PacifiCorp, 825
NE Multnomah, 6th Floor, Portland, OR 97232, Attention: Legal Deparent.
12. Successors. This Agreement wil inure to the benefit of and be binding upon the paries
hereto and their respective successors and the controllng persons referred to in Section 7, and no other
person wil have any right or obligation hereunder.
13. Counterparts. This Agreement may be executed in any number of counterpars, each of
which shall be deemed to be an original, but all such counterpars shall together constitute one and the
same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to principles of conflcts of laws.
The Company hereby submits to the exclusive jurisdiction of the Federal and state cours in the
Borough of Manattan in The City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
(Signatures follow)
14
NY\2472298.6
If the foregoing is in accordance with the Underwriter's understading of our agreement, kindly
sign and return to us one of the eounterpars hereof, whereupon it wil become a binding agreement
between the Company and the Underwter in accordance with its terms.
Very truly yours,
PacifiCorp
BY:~ lj W~
Nwme: Bruce WilliamsTitle: Vice President and Treasurer
Signature Page to Underwritng Agreement
The foregoing Undeting Agreet
is herby coir an acceed
as of the date fit abve wrtt.
J.P. Morgan Securties LLC
By:
Nam~
Title:
~'tL
~n L. Shelniir
Executive Director
SigMti Page to Ul'tVinAgreement
..
..
EXHIBIT A
Form of Opinion of Mark C. Moench, General Counsel of the Company
i. To my knowledge and except for the matters disclosed in the Prospectus, there is no legal or
governental action, suit or proceeding before any cour, governental agency, body or authority,
domestic or foreign, now pending or threatened against or involving the Company or any subsidiar of
the Company that, if determined adversely to the Company and its subsidiaries, taken as a whole, is
reasonably likely to have, individually or in the aggregate, a material adverse effect on the business,
affairs, propert or financial condition of the Company and its subsidiaries taken as a whole or a material
adverse effect on the ability of the Company to perform its obligations under the Underwting
Agreement, the Mortgage or the Bonds.
2. The execution, delivery and performance of the Underwiting Agreement and the Mortgage and
the issuance and sale of the Bonds and the use of proceeds of the Bonds as designated in the Prospectus
do not and wil not (A) conflct with the Articles ofIncorporation or By-laws ofthe Company, (B) to my
knowledge, conflct with, result in the creation or imposition of any lien, charge or other encumbrance,
other than the Mortgage, upon any asset of the Company pursuant to the terms of, or constitute a breach
of, or default under, any agreement, indenture or other instrument to which the Company is a par, or by
which the Company is bound or to which any of its properties are subject or (C) to my knowledge, result
in a violation of any statute, rule or regulation, or any order, judgment or decree known to me of any court
or governental agency, body or authority having jursdiction over the Company or any of its properties,
where any such conflct, encumbrance, breach, default or violation under clause (B) or (C) is reasonably
likely to have, individually or in the aggregate, a material adverse effect on the business, affairs, propert
or financial condition of the Company and its subsidiaries taken as a whole.
3. To my knowledge, except for such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act, the Trust Indenture Act or state securities or
blue sky laws or as may be required by applicable state public utilty commissions and under the Federal
Power Act, no consent, authorization or order of, or filing or registration by the Company with, any cour,
governental agency or third par is required in connection with the execution, delivery and
performance by the Company of the Underwriting Agreement and the Mortgage, the consummation of the
transactions contemplated herein and therein, and the issuance, distribution and sale of the Bonds as
contemplated therein, in each case where the effect of the failure to obtain such approval, authorization,
consent or order, or make such filing, is material to the Company.
4. The Company has good and sufficient title to the Properties subject to the Mortgage, which
include substantially all of the permanent physical properties and franchises of the Company (other than
those expressly excepted), subject only to Excepted Encumbrances and defects and irregularities
customarily found in properties of like size and character that, in my opinion, do not materially impair the
use of the propert affected thereby in the operation of the business of the Company; the descriptions in
the Mortgage of such of the Properties as are described therein are adequate to constitute the Mortgage as
a lien thereon; the Mortgage constitutes a valid lien on the Properties and, to the best of my knowledge,
there is no lien on the Properties prior or equal to the lien of the Mortgage, other than the exceptions
enumerated above in this paragraph 4.
NY\2472298.6
.
EXHIBITB
Form of Opinion of Perkins Coie LLP, special counsel to the Company
1. The Company has been duly incorporated and is validly existing under the laws of Oregon as a
corporation, with the corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
2. The Company is duly qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect.
3. The Company has all requisite corporate power and authority to enter into the Underwriting
Agreement and the Supplemental Indenture, to issue the Bonds and to consummate the transactions
contemplated by the Underwriting Agreement.
4. Each of the Underwriting Agreement and the Mortgage has been duly and validly authorized,
executed and delivered by the Company.
5. The Mortgage constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
6. The Mortgage has been duly qualified under the Trust Indentue Act of 1939, as amended (the
"Trust Indentue Act").
7. The Bonds are in the form contemplated by the Mortgage, have been duly authorized by the
Company for issuance and sale pursuant to the Underwiting Agreement and the Mortgage, have been
duly executed and, when authenticated by the Trustee in the maner provided in the Mortgage and
delivered against payment of the purchase price therefore pursuant to the Underwriting Agreement, wil
constitute valid and binding obligations of the Company, enforceable against the Company in accordance
their terms, and entitled to the benefits of the Mortgage.
8. The statements in the Prospectus under the captions "Description of the Bonds" and "Description
of Additional Bonds" insofar as they purport to summarize the provisions of the Mortgage and the Bonds,
fairly summarize such provisions in all material respects. The statements in the Prospectus under the
caption "Certin U.S. Federal Income Tax Considerations," insofar as such statements purport to
constitute summares of United States federal income tax law and regulations or legal conclusions with
respect thereto, fairly summarize the matters described therein in all material respects.
9. No approval, authorization, consent or order of, or fiing with any governental or regulatory
body or agency is required in connection with the issuance and sale of the Bonds by the Company, the
consummation by the Company of the transactions contemplated by the Underwiting Agreement, the due
authorization, execution or delivery of the Underwriting Agreement or the due execution, delivery or
performance of the Mortgage by the Company, in each case where the effect of the failure to obtain such
approval, authorization, consent or order, or to make such filing, could reasonably be expected to have a
Material Adverse Effect and except (a) the registration of the Bonds with the Commission under the
Securities Act pursuant to the Registration Statement and (b) such as have been obtained or made.
10. The Idaho Public Utilties Commission and the Public Utilty Commission of Oregon have
entered appropriate orders, which to our knowledge remain in full force and effect on the date of this
NY\2472298.6
"
",
letter, each authorizing the issuance of the Bonds by the Company; the Company has fied a notice with
the Washington Utilties and Transporttion Commission regarding the issuance and sale of the Bonds
that complies with the fiing requirements of RCW 80.08.040 and WAC 480-100-242; the Company has
fied a notice of proposed securities issuance with the Idaho Public Utilties Commission regarding the
issuance and sale of the Bonds pursuant to Order No. 30489; and, together with certn exemptive orders
that have been issued by each of the Public Utilties Commission of the State of California, the Public
Service Commission of Utah and the Public Service Commission of Wyoming (which to our knowledge
remain in full force and effect on the date of this letter), such orders and notices constitute the only
approval, authorization, consent or other order of, or notification to, any governental body legally
required in connection with the regulation of the Company as a public utilty for the authorization of the
issuance of the Bonds by the Company pursuant to the terms of the Underwiting Agreement.
11. The Registration Statement was declared immediately effective under the Securities Act on
December 3,2010; the Prospectus was fied with the Commission pursuat to Rule 424(b) on February
28,2012 in a maner and within the time period required by Rule 424(b) under the Securties Act; and,
based solely on a telephone conversation with representatives of the Commission, as of the date hereof,
no stop order suspending the effectiveness of the Registration Statements has been issued under the
Securities Act and, to our knowledge, no proceedings for that purpose have been initiated by the
Commission.
12. The Registration Statement, as of its effective date, including the information deemed to be a par
thereof pursuant to Rule 430B under the Securities Act, and the Prospectus, as of its date, complied as to
form in all material respects with the applicable requirements of the Securities Act and the rules
thereunder; it being understood, however, that we express no view with respect to the financial
statements, schedules, other financial data, or exhibits included or incorporated by reference in, or omitted
from, the Registration Statements, the Prospectus or Regulation S- T.
13. We have paricipated in conferences with officers and other representatives of the Company, you
and your representatives and representatives of the independent auditors of the Company at which the
contents of the Prospectus (and portions of certain documents incorporated by reference therein) and any
amendments or supplements thereto were discussed. Although we assume no responsibilty for the
factual accuracy, completeness or fairness of any statements (except with respect to paragraph (8) in the
"Opinions" portion of this letter, subject to the assumptions, exclusions and qualifications set forth in this
opinion) made in (a) the Registration Statement or any amendment thereto, (b) the Prospectus or any
amendment or supplement thereto, or (c) the documents incorporated by reference in the Prospectus or
any fuher amendment or supplement thereto, nothing has come to our attention that causes us to believe
that:
a. the Registration Statement or the prospectus included therein (except for the financial
statements and financial schedules and other financial information included therein, as to which we make
no statement) at the time the Registration Statement became effective contained any untre statement of a
material fact or omitted to state a material fact required to be stated therein or necessar to make the
statements therein not misleading, or
b. the Prospectus (except for the financial statements and financial schedules and other
financial information included therein, as to which we make no statement) as of the Applicable Time
contained or contains any untrue statement of a material fact or omitted or omits to state a material fact
necessar to make the statements therein, in light of the circumstances under which they were made, not
misleading.
NY\2472298.6
4j
..
".
REPORT OF SECURITIES ISSUED
March 9, 2012
PACIFICORP
Description of securties:$100,000,000 ofPacifiCorp's First Mortgage Bonds
2.95% Series due Februar, 2022
Description Amount
1.Face value or principal amount $100,000,000
2.Plus premium or less discount 81,000
3.Gross proceeds*100,081,000
4.Underwter's spread or commission 0
5.Securties and Exchange Commission registration fee (11,460)
6.State mortgage registration ta N/A
7.State commission fee* *N/A
8.Fee for recording indenture**(20,000)
9.United States document ta N/A
10.Printing and engraving expenses * *(10,000)
11.Trustee's charges**(2,500)
12.Counsel fees**(65,000)
13.Accountats' fees**(65,000)
14.Cost of listing N/A
15.Miscellaneous expenses of issue* * *(126,040)
(Describe large items)
16.Total deductions (300,000)
17.Net amount realized $99,781,000
*
**
***
Excludes $491,666.67 of interest accrued since January 6, 2012
Denotes estimate only.
Includes estimated rating agency fees of $120,000 for the Bonds.
S:\SHARD\FILINGS\ID\2010 ID Dockets & Filings\PAC-E-lO-02 Debt Issuance\FMB Report (3-9-12)\Report of Securties Issued 0312.doc