20180807Notice of Issuance.pdf

ROCKY MOUNTAIN
HglY,H*"""
FITCEIVED
?ill$ I{Lic :7 At{ 9: l3
1407 West North Temple
Salt Lake City, Utah 84116
August 7,2018 t'
WA OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W est Washington Street
Boise,Idaho 83702
RE:CASE NO. PAC.E.14.O5
IN TIIE MATTER OF TIIE APPLICATION OF ROCKY MOT]NTAIN POWER
FOR AUTHORITY TO (1) ISSUE Ar\rD SELL OR EXCHANGE NOT MORE
TIIAN $1,575,000,000 OF DEBT, AND (2) ENTER INTO CREDIT SUPPORT
ARRANGEMENTS
Dear Ms. Hanian:
l. Prospectus Supplement dated July 10, 2018.
Underwriting Agreement between PacifiCorp and the several Underwriters listed in Schedule
A as represented by Mizuho Securities USA LLC, MUFG Securities Americas Inc., PNC
Capital Markets LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc.,
dated July 10,2018.
3. Report of Securities Issued.
With regard to the use of the proceeds from the issuance of the Bonds, please see "LJse of Proceeds"
on page S-5 of the enclosed Prospectus Supplement.
Under penalty of perjury, I declare that I know the contents of the enclosed documents, and they are
true, correct, and complete.
ee /'\ItLJ II
2.
Pursuant to Order No. 33083, in the above referenced matter, PacifiCorp submits to the Idaho Public
Utilities Commission an original and seven (7) copies of the following documents relating to
PacifiCorp's July 10, 2018 offering of $600,000,000 aggregate principal amount of First Mortgage
Bonds, (Bonds):
Idaho Public Utilities Commission
August 7,2018
Page2
Please contact me if you have any questions about this letter or the enclosed documents.
Sincerely,
Weems
and Treasurer
Enclosures
cc:Terri Carlock (Idaho Commission)
Ted Weston (PacifiCorp)
Jeff Erb (PacifiCorp)
Chris Hall @erkins Coie)
f
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY Lt,20t6
PACIFICORP
A BERKSHIRE HATHAWAY ENERGY COMPANY
$600,000,000 First Mortgage Bonds
4.l25%o Series Due 2049
The bonds will bear interest at 4.l25Vo per year and will mature on January 15,2049. We will pay
interest on the bonds on January 15 and July 15 of each year, beginning on January 15,2019.
We may redeem some or all of the bonds at any time at the applicable redemption price described
under the caption "Description of the Bonds-Optional Redemption."
We will 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 5-6 for
information on certain matters you should consider before purchasing the bonds.
Total
Public Price(1)
Discount $4,800,000
Proceeds to
(1) Plus accrued interest, if any, from July 13,2018.
The underwriters expect to deliver the bonds to purchasers through The Depository Tlust
Company on or about July 13, 2018.
Neither the U.S. Securities and Exchange Commission nor any state securities 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 criminal
offense.
loint B ook- Running Managers
Mizuho Securities
Scotiabank
BMO Capital Markets
PNC Capital Markets LLC
SMBC Nikko
CIBC Capital Markets
MUFG
Co-managers
BNY MeIIon Capital Markets, LLC nabSecurities, LLC Santander Sunltust Robinson Humphrey TD Securities
Per Bond
99.776%
0.80Vo
98.976%
The date of this prospectus supplement is July 10, 2018.
TABLE OF CONTENTS
Prospectus Supplement
About This Prospectus Supplement . . . . . . .
Prospectus Supplement Summary
About PacifiCorp
TheOffering....
Risk Factors
Summary Consolidated Financial Information
Use of Proceeds
Capitalization....
Consolidated Ratios of Earnings to Fixed Charges
Description of the Bonds
Certain U.S. Federal Income Thx Considerations
Benefit Plan Investor Considerations . .
Underwriting....
LegalMatters...
Experts
Incorporation By Reference . . . . . .
Prospectus
About This Prospectus . . . . . .
Forward-Looking Statements. .
The Company ...
Risk Factors.
Consolidated Ratios of Earnings to Fixed Charges
Where You Can Find More Information
Use of Proceeds
Description of Additional Bonds
Book-Entry, Delivery and Form
Plan of Distribution
LegalMatters.....
Experts
Page
s-1
s-2
s-2
s-4
s-6
s-7
s-7
s-8
s-8
s-8
s-11
s-15
s-17
s-21
s-22
s-22
1,
1
1,
2
J
J
4
4
8
11
12
13
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.
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." [f 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 accompanylng prospectus.
Any statement made in this prospectus supplement, the accompanying prospectus or in a
document incorporated or deemed to be incorporated by reference in this prospectus supplement will
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 filed document that
is also incorporated or deemed to be incorporated by reference in this prospectus supplement modifies
or supersedes that statement.
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 accurate only as of the date of the document
incorporated by reference. Our business, financial condition, results of operations and prospects may
have changed since those dates.
You should rely only on the information contained in or incorporated by reference in this
prospectus supplement or the accompanying prospectus. We have not, and the underwriters have 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 prospectus supplement and the accompanying
prospectus may only be used where it is legal to sell the bonds.
s-1
PROSPECTUS SUPPLEMENT SUMMARY
In this prospectus supplement, unless otherwise indicated or unless the context otherwise requires, the
words "Company," "we," "olui" "us" and "PacifiCorp" refer to PacifiCorp, an Oregon corporation, and its
subsidiaies. References to the "Mortgage" are to the Mortgage and Deed of Ti,ust, dated as of lanuary 9,
1989, as amended and supplemented, with The Bqnk of New York Mellon Tiast Company, N.A., as
successor trustee.
The following summary contains basic information about PacifiCorp and this offeing. It may not
contain all of the information that is important to you. The "Desciption of the Bonds" section of this
prospectus supplement contains more detailed information regarding the terms and conditions of the bonds.
The following summary i.s quaffied in its entirety by reference to the detailed information appeaing
elsewhere in this prospectas supplement, the accompanying prospectus and by the documents incorporated
by reference into this prospectus supplement.
s-2
ABOUT PACIFICORP
We are a U.S. regulated electric utility company headquartered in Oregon that serves 1.9 million
retail electric customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. We
are principally engaged in the business of generating, transmitting, distributing and selling electricity.
Our combined service territory covers approximately 141,000 square miles and includes diverse regional
economies across six states. No single segment of the economy dominates the service territory, which
helps mitigate our exposure to economic fluctuations. In the eastern portion of the service territory,
consisting of Utah, Wyoming and southeastern Idaho, the principal industries are manufacturing,
mining or extraction of natural resources, agriculture, technology, recreation and government. In the
western portion of the service territory, consisting of Oregon, southern Washington and northern
California, the principal industries are agriculture, manufacturing, forest products, food processing,
technology, government and primary metals. In addition to retail sales, we buy and sell electricity on
the wholesale market with other utilities, energy marketing companies, financial institutions and other
market participants to balance and optimize the economic benefits of electricity generation, retail
customer loads and existing wholesale transactions. Certain of our subsidiaries support our electric
utility operations by providing coal mining services.
Our operations are conducted under numerous franchise agreements, certificates, permits and
licenses obtained from federal, state and local authorities. The average term of the franchise
agreements is approximately 25 years, although their terms range from five years to indefinite. Several
of these franchise agreements allow the municipality the right to seek amendment to the franchise
agreement at a specified time during the term. We generally have an exclusive right to serve electric
customers within our service territories and, in turn, have an obligation to provide electric service to
those customers. In return, the state utility commissions have established rates on a cost-of-service
basis, which are designed to allow us an opportunity to recover our costs of providing services and to
earn a reasonable return on our investments.
We deliver electricity to customers in Utah, Wyoming and Idaho under the trade name Rocky
Mountain Power and to customers in Oregon, Washington and California under the trade name Pacific
Power.
We are an indirect subsidiary of Berkshire Hathaway Energy Company ("BHE"), a holding
company based in Des Moines, Iowa that owns a highly diversified portfolio of locally managed
businesses principally engaged in the energy industry and is a consolidated subsidiary of Berkshire
Hathaway Inc. BHE controls substantially all of our voting securities, which include both common and
preferred stock.
Our principal executive offices are located at 825 N.E. Multnomah Street, Portland, Oregon 97232,
and our telephone number is [phone].
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 incorporated by reference into this prospectus supplement as described in the sections
entitled "Incorporation by Reference" elsewhere in this prospectus supplement and "Where You Can
Find More Information" in the accompanying prospectus.
s-3
Issuer
Bonds Offered
MaturityDate......
Interest Payment Dates
Optional Redemption .
Sinking Fund .
Ranking and Security . .
THE OFFERING
PacifiCorp.
$600,000,000 aggregate principal amount of 4.l25Vo First
Mortgage Bonds due 2049 (the "bonds"). The bonds are a
series of securities that will be issued under a twenty-ninth
supplement to the Mortgage.
January 15,2049.
January 15 and July L5, beginning on January t5,2019.
At any time prior to July 1.5,2048 (which is the date that is six
months prior to the maturity of the bonds (the "par call
date")), 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) l00Vo of the principal amount of the bonds then
outstanding 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 that would be due if the bonds
matured on the par call date (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 a discount rate
equal to the Tieasury Rate plus 20 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 July L5, 2048 (which is the date that is
six 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 will not be subject to a mandatory sinking fund.
The bonds will be secured by a first mortgage lien on certain
utility property owned by us. The bonds will 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-4
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.
We intend to use the net proceeds from the sale of the bonds
to fund capital expenditures and for general corporate
purposes, including the repayment at maturity of $500 million
aggregate principal amount of our 5.65Vo bonds due July 2018.
The Bank of New York Mellon Tiust Company, N.A. will be
the trustee for the holders of the bonds. See "Description of
Additional Bonds-The Mortgage Tiustee" in the
accompanying prospectus.
Use of Proceeds
Thustee
s-5
RISK FACTORS
lnvesting in the bonds involves risk. Before purchasing the bonds, you should carefully consider the
risk factors included in the accompanying prospectus and our Annual Report on Form 10-K for the
year ended December 31,2017 (the "Form 10-K") and our Quarterly Report on Form 10-Q for the
quarterly period ended March 31,2018 (the "Form LO-Q"), 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 "lncorporation by Reference" elsewhere in this prospectus
supplement and "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.
The terms of the Tbenty-Ninth Supplemental Indenture to the Mortgage and the Mortgage do not prohibit us
trom incurring additional indebtedness, which could adversely affect our financial condilion.
The terms of the Twenty-Ninth Supplemental Indenture to the Mortgage and the Mortgage, which
governs our rights and obligations with respect to the bonds do not prohibit us from incurring
indebtedness in addition to the bonds. Accordingly, we could enter into acquisitions, refinancings,
recapitalizations or other highly leveraged transactions that could significantly increase our total
amount of outstanding indebtedness. The interest payments needed to service this increased level of
indebtedness could have a material adverse effect on our operating results. A highly leveraged capital
structure could also impair our overall credit quality, making it more difficult for us to finance our
operations, and could result in a downgrade in the ratings of our indebtedness, including the bonds, by
credit rating agencies.
There is no ert$ing market for the bonds and we make no assurance that an active trading market will
develop.
There is no existing market for the bonds and we make no assurance that an active trading market
will develop. If a market for the bonds develops, future trading prices would depend on many factors,
including prevailing interest rates, our operating results and the market for similar securities. We do
not intend to apply for listing or quotation of the bonds on any securities exchange, stock market or
automated dealer quotation system. As a result, it may be difficult for you to find a buyer for your
bonds at the time you want to sell them, and even if you find a buyer, you might not get the price you
want.
s-6
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
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 31,2077
and 2016, and our unaudited historical consolidated financial statements as of and for the three-month
periods ended March 37, 201.8 and 2017. 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 and the Form 10-Q.
Three-Month
Periods Ended
March 31,
Years Ended
December 31,
2018 2017 2017 2016
(in millions)
Consolidated Statements of Operations
Information:
Operating revenue
Operating income
Net income
Other Consolidated Financial Information:
Net cash flows from operating activities . . . . .
Net cash flows from investing activities
Net cash flows from financing activities . . . . .
$1,184
247
148
$1,281
339
t79
$5,237
1,462
768
5,201
1,426
763
$ s33 $ s88(237) (178)(2e3) (413)
$1,575
(72e)
(84e)
1,568
(86e)
(6e4)
As of
March 31,
2018 2017 2016
(in millions)
Consolidated Balance Sheet Information:
Total assets
Long-term debt and capital lease obligations(l)
PacifiCorp shareholders' equity
$21.,825
6,938
7,453
21,920
7,025
7,555
22,394
7,079
7,390
(1) Includes current portion
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the bonds to fund capital expenditures and for
general corporate purposes, including the repayment at maturity of $500 million aggregate principal
amount of our 5.65Vo bonds due July 2018.
s-7
CAPITALIZATION
The table below shows our capitalization on a consolidated basis as of March 31, 201.8. The "As
Adjusted" column reflects our capitalization as of that date after giving effect to this offering of bonds
and the use of the net proceeds from this offering. You should read this table along with the
Consolidated Financial Statements contained in the Form 10-K and the Form L0-Q.
As of March 31, 2018
Actual As Adjusted
Amounts(in millions)
$ 124
851
6,087
Amounts(in millions)Vo Vo
Short-term debt .
Long-term debt and capital lease obligations, currently
maturing
Long-term debt and capital lease obligations, net of current
maturities . . .
Total short- and long-term debt
Preferred stock.
Total common equity
Total capitalization
0.9% $ 24
5.9 351
41,.9 6,687
0.2%
2.4
46.1
7,062
2
7,451
48.7
0.0
51.3
7,062
2
7,451
48.7
0.0
51.3
$14,515 1.00.0Vo $14,515 100.0Vo
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Three-Month
Period Ended
March 31, 2018
Years Ended December 31,
2017 2015 2014
2.8x 3.9x 3.7x 3.6x
DESCRIPTION OF THE BONDS
The bonds will be issued pursuant to a twenty-ninth supplemental indenture to the Mortgage (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 U.S. Thust 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 lndenture.
General
The bonds will be issued as a series of First Mortgage Bonds under the Mortgage. The bonds will
initially be limited in aggregate principal amount to $600,000,000. The entire principal amount of the
bonds will mature and become due and payable, together with any accrued and unpaid interest thereon,
on January 75,2049. The bonds are not subject to any sinking fund provision. The bonds are available
for purchase in minimum denominations of $2,000 and any integral multiple of $1,000 in excess thereof.
2013
3.5x
2016
3.9x
s-8
Interest
Each bond will bear interest at the rate of 4.125Vo per annum from the date of original issuance.
Interest on the bonds will be payable semi-annually in arrears on January 15 and July 15 of each year
(each, an "Interest Payment Date"). The initial Interest Payment Date is January 15,2019. The amount
of interest payable will 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 will 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 form only, the record date for each Interest Payment
Date will 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 will be the
close of business on the 1st calendar day of the month in which the applicable Interest Payment Date
occurs (whether or not a business day).
Ranking and Security
The bonds will be issued under the Mortgage and secured by a first mortgage lien on certain utility
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 will be equally and ratably secured with all other bonds issued under the Mortgage.
Further Issuances
The bonds will initially be limited in aggregate principal amount to $600,000,000. 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 date,
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 bonds offered by this prospectus
supplement.
Optional Redemption
At any time prior to July 15,2048 (which is the date that is six months prior to the maturity of the
bonds (the "par call date")), 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:
. l00Vo 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 that would be due if the bonds matured on the par call date (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 a discount rate equal to the Tleasury Rate, plus 20 basis points, as
calculated by an Independent lnvestment 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 July L5, 2048 (which is the date that is six 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
s-9
price equal to 700Vo of the principal amount of the bonds to be redeemed, plus accrued and unpaid
interest, if any, thereon to the date of redemption.
We will mail a notice of redemption at least thirty days before the redemption date to each holder
of bonds to be redeemed. If we elect to partially redeem the bonds, the bonds to be redeemed will be
selected by lot; provided, that if the bonds are in book-entry only form, interests in such bonds shall be
selected for redemption by The Depository Tiust Company in accordance with its standard procedures
therefor.
Unless we default in payment of the redemption price, on and after the redemption date, interest
will cease to accrue on the bonds or portions thereof called for redemption.
"Comparable Tieasury Issue" means the United States Tieasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the bonds
(assuming, for this purpose, that the bonds matured on their par call date) to be redeemed that would
be utilized, 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.
"Comparable Theasury Price" means, with respect to any redemption date, the Reference Tieasury
Dealer Quotation for such redemption date.
"Independent Investment Banker" means an investment banking institution of international
standing appointed by us.
"Reference Tieasury Dealer" means a primary U.S. government securities dealer in New York City
appointed by us.
"Reference Tieasury Dealer Quotation" means, with respect to the Reference Tieasury Dealer and
any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable
Tieasury Issue (expressed in each case as a percentage of its principal amount and quoted in writing to
us by such Reference Tieasury Dealer at 5:00 p.m. on the third business day in New York City
preceding such redemption date).
"Tleasury Rate" means the rate per annum equal to the semi-annual equivalent or interpolated
(on a daycount basis) yield to maturity of the Comparable Tleasury Issue, assuming a price for the
Comparable Tleasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Tieasury Price for that redemption date.
s-10
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the material U.S. 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 at the offering price on the cover page of this prospectus supplement and who hold the
bonds as capital assets for tax purposes. 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, U.S. Holders (as defined below) whose functional currency is not the
U.S. dollar, persons subject to special tax accounting rules as a result of any item of gross income with
respect to the bonds being taken into account in an applicable financial statement, 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-U.S. 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
will 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.
This discussion is based on the provisions of the U.S. Internal Revenue Code of 1986, as amended
(the "Code"), U.S. Tieasury regulations issued thereunder ("Tieasury 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 will not seek any rulings from the U.S. Internal Revenue Service ("[RS")
with respect to the matters discussed below. There can be no assurance that the IRS will 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.
U.S. Holders
This section applies to you if you are a "IJ.S. Holder." A U.S. Holder means a beneficial owner of
the bonds that is a U.S. citizen, a U.S. resident alien, a corporation (or other entity taxable 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.
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 Tleasury Regulations to be
treated as a U.S. person.
Interest
It is expected, and the following discussion assumes, that the bonds will not be treated as issued
with original issue discount for U.S. federal income tax purposes. Accordingly, you generally must
s-11
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.
Certain U.S. Holders who are individuals, estates or trusts are subject to an additional 3.8Vo tax
on, among other things, interest on the bonds. You should consult your tax advisor regarding the effect,
if any, of this tax on your ownership of the bonds.
Salc or Other Taxnblc Disposition ol the Bonds
You generally will recognize garn or loss on the sale, exchange, redemption, retirement or other
taxable disposition of a bond equal to the difference between (a) 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 will be taxable as ordinary interest income unless previously taken into
income) and (b) your adjusted tax basis in the bond. Your adjusted tax basis in a bond generally will be
your purchase price of the bond. Gain or loss recognized generally will be a capital gain or loss, and
will 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 U.S. Holders (including individuals) are taxed at preferential capital gains
tax rates. Your ability to deduct capital losses may be limited.
Certain U.S. Holders who are individuals, estates or trusts are subject to an additional 3.8Vo tax
on, among other things, capital gains from the sale or other taxable disposition of the bonds. You
should consult your tax advisor regarding the effect, if any, of this tax on your disposition of the bonds.
Information Reporting and Baclurp llithhoWing
ln general, information reporting will apply to payments of interest and to the proceeds from the
sale (including a redemption or retirement) of bonds paid to you unless you are an exempt recipient.
Additionally, backup withholding (currently at a rate of 24Vo) will apply to such payments if you fail to
provide a correct taxpayer identification number or certification of exempt status, have been notified by
the tRS that you are subject to backup withholding for failure to report your full dividend and interest
income or otherwise fail to comply with applicable requirements of the backup withholding rules.
Backup withholding is not an additional tax. If backup withholding applies, you may use the
amounts withheld as a credit against your U.S. federal income tax liability, and may be entitled to a
refund, as long as you timely provide certain information to the IRS.
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.
Payments of Interest
Subject to the discussions of foreign accounts and backup withholding below, payments to you of
interest generally will not be subject to U.S. federal income or withholding tax, provided that:
. the interest is not effectively connected with the conduct by you of a trade or business in the
United States (and, if a tax treaty requires, is not attributable to a permanent establishment or
fixed base by you in the U.S.);
. you do not actually or constructively own llVo or more of the total combined voting power of all
classes of our stock entitled to vote;
. you are not a controlled foreign corporation that is related to us actually or constructively
through stock ownership;
s-12
. you are not a bank receiving certain types of interest; and
. we, or the applicable withholding agent, receive appropriate documentation, generally a
completed IRS Form W-SBEN or W-SBEN-E (or other applicable form), establishing that you
are not a United States person within the meaning of the Code in compliance with applicable
requirements or you satis$r certain documentary evidence requirements for establishing that you
are not a United States person (this certification may also be provided by (i) a securities clearing
organization, (ii) a bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business or (iii) a "qualified intermediary" that has entered into a
withholding agreement with the IRS and other conditions are met).
If any of these requirements is not satisfied, payments of interest to you will be subject to a 30Vo
U.S. federal withholding tax unless you provide us or the applicable withholding agent, as the case may
be, with a properly executed (a) tRS Form W-BBEN or W-8BEN-E (or other applicable form) claiming
an exemption from or reduction in withholding under an applicable income tax treaty or (b) IRS
Form W-SECI (or other applicable form) stating that interest paid on the bonds is not subject to U.S.
federal withholding tax because it is effectively connected with your conduct of a trade or business in
the United States (as discussed below).
The interest on the bonds will be taxed at regular U.S. federal net income tax rates and will not be
subject to U.S. federal withholding tax if: (a) the interest constitutes income that is effectively
connected with the conduct by you of a U.S. trade or business, and (b) if required by an income tax
treaty, the interest is attributable to a U.S. permanent establishment or fixed base under the terms of
such treaty, provided that a proper certification is received. In addition, if you are a foreign
corporation, such income may also be subject to a "branch profits tax" at a rate of 307o (or lowet
applicable income tax treaty rate).
Salc or Other Taxable Disposition ol the Bonds
Subject to the discussions of foreign accounts and backup withholding below, and except with
respect to accrued but unpaid interest (which may be subject to tax as described above under
"-Payments of Interest"), gain realized by you on the sale, redemption or other taxable disposition of
a bond generally will not be subject to U.S. federal income or withholding tax, unless:
. such gain is effectively connected with the conduct by you of a trade or business within the
United States (and, if required by an income tax treaty, is attributable to a permanent
establishment or fixed base in the United States); or
. 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 described in the first bullet point generally will 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 a branch profits tax at a rate of 30Vo (or lower applicable income tax treaty
rate).
If you are a Non-U.S. Holder described in the second bullet point above, you generally will be
subject to U.S. federal income tax at a rate of 30% (or lower applicable income tax treaty rate) on any
gain derived from the disposition, which may be offset by certain U.S. source capital losses (even
though you are not considered a resident of the United States).
If you are a Non-U.S. Holder, you should consult your tax advisor regarding potentially applicable
income tax treaties that may provide for different rules.
s-13
Information Reporting and Backup Withholding
If you are a Non-U.S. Holder, you generally will be exempt from backup withholding (currently at
a rate of 24%) and information reporting with respect to interest on the bonds, provided that the
certification procedures required to claim the exemption described under the heading "Payments of
Interest" above are satisfied or you otherwise certiff as to your status as not a United States person or
establish another exemption. However, we or our paying agent may be required to report to you and to
the IRS payments of interest on the bonds and the amount of tax, if any, withheld with respect to those
payments. Copies of the information returns reporting such interest payments and any U.S. federal
withholding may also be made available to the tax authorities in the country in which you reside under
the provisions of a treaty or agreement.
If you are a Non-U.S. Holder, proceeds received from the sale (including a redemption or
retirement) of a bond to or through the U.S. office of a broker generally are subject to information
reporting and backup withholding, unless you certiff as to your status as not a United States person or
otherwise establish an exemption from information reporting and backup withholding.
Generally, information reporting and backup withholding will not apply to proceeds received from
the sale (including a redemption or retirement) of a bond where the transaction is effected outside the
United States through a non-United States office of a broker. However, if the broker is considered a
U.S. payor or U.S. middleman (within the meaning of the Tieasury Regulations), information reporting
(but not backup withholding) will apply to a payment of disposition proceeds where the transaction is
effected outside the United States unless the broker maintains documentary evidence that you are not
a United States person and certain other condition are met.
Backup withholding is not an additional tax. If backup withholding applies, you may use the
amounts withheld as a refund against your U.S. federal income tax liability, and you may be entitled to
a refund, as long as you timely provide certain information to the IRS.
Foreign Accounts
Pursuant to Sections 147L to 7474 of the Code and the Tleasury Regulations promulgated
thereunder (the provisions commonly known as "FAICA'), interest and, beginning January 7,2019, the
gross proceeds of sale or other disposition of the bonds, paid to certain non-U.S. entities will be subject
to a 30Vo U.S. federal withholding tax unless various information reporting requirements are satisfied.
Among other requirements, foreign financial institutions generally must enter into an agreement with
the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax
authorities substantial information about their U.S. account holders and provide the withholding agent
with a certification that it is eligible to receive payment free of FATCA withholding, while non-financial
foreign entities must provide the withholding agent with a certification which includes information
about the entity's substantial U.S. owners. A foreign financial institution or non-financial foreign entity
generally can meet the certification requirements by providing a properly executed IRS
Form W-SBEN-E or IRS Form W-SECI, as applicable. Foreign financial institutions located in
jurisdictions that have an intergovernmental agreement with the United States governing FATCA may
be subject to different rules. Under certain circumstances, a U.S. Holder or Non-U.S. Holder might be
eligible for refunds or credits of the taxes withheld under EAICA from the IRS. The rules under
EAICA are complex. You are encouraged to consult with your own tax advisors regarding the possible
implications of FAICA on your investment in our bonds.
PERSONS CONSIDERING THE PURCHASE OF THE BONDS SHOULD CONSULT THEIR
owN TAX ADVTSORS WrTH RESPECT TO THE U.S. FEDERAL TNCOME TA)( CONSEQUENCES
OF THE PURCHASE, OWI\ERSHIP AND DISPOSITION OF BONDS IN LIGHT OF TIIEIR
PARTICULAR CIRCUMSTAI\CES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR
FOREIGN TAX I.AWS OR ANY APPLICABLE TAX TREATY.
s-14
BENEFIT PI,AN I}IVESTOR CONSIDERATIONS
The bonds may be purchased and held by or with the assets of an employee benefit plan subject to
Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA'), an
individual retirement account or other plan or arrangement subject to Section 4975 of the Code
(together with plans subject to Title I of ERISA, "ERISA Plans") or an employee benefit plan
sponsored by a state or local government or othenrise subject to laws that include restrictions
substantially similar to ERISA and Section 4975 of the Code (any such law, a "Similar Law," and
togetherwith ERISA and Section 4975 of the Code,'Applicable Benefit Plan Regulations"). A
fiduciary of an employee benefit plan subject to any Applicable Benefit Plan Regulation(s) must
determine that the purchase and holding of the bonds are consistent with its fiduciary duties under
such Applicable Benefit Plan Regulation(s). Such fiduciary, as well as any other prospective investor
subject to any Applicable Benefit Plan Regulation(s), 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. Section 406 of ERISA and Section 4975 of the
Code prohibit ERISA Plans from engaging in specified transactions (including, without limitation, an
extension of credit) involving plan assets with persons who are "parties in interest" within the meaning
of ERISA or "disqualified persons" within the meaning of Section 4975 of the Code, unless a statutory,
class or individual exemption applies. A party in interest or disqualified person who engages in a
nonexempt prohibited transaction may be subject to excise taxes, penalties or liabilities under
Applicable Benefit Plan Regulations, and the transaction may be subject to rescission. A fiduciary of an
ERISA Plan or a plan subject to Similar Law that causes such plan to engage in a transaction that the
fiduciary knows or should have known is a non-exempt prohibited transaction may be subject to liability
under Applicable Benefit Plan Regulations. In addition, an individual retirement account or annuity
that engages in a prohibited transaction may lose its tax-deferred status. Because the bonds constitute
an extension of credit by the purchaser to us, the acquisition or holding of the bonds by an ERISA
Plan or a plan subject to Similar Law with respect to which we are considered a party in interest or a
disqualified person might constitute or result in a direct or indirect prohibited transaction, unless the
investment is acquired in accordance with an applicable statutory, class or individual prohibited
transaction exemption. In this regard, the U.S. Department of Labor has issued prohibited transaction
class exemptions ("PTCEs") that may apply to the acquisition and holding of the bonds. These class
exemptions include, without limitation, PTCE 84-14, respecting transactions determined by independent
qualified professional asset managers, PTCE 90-1, respecting insurance company pooled separate
accounts, PTCE 91-38, respecting bank collective investment funds, PTCE 95-60, respecting life
insurance company general accounts and PTCE 96-23, respecting transactions determined by in-house
asset managers. [n addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code provide
relief from the prohibited transaction provisions of ERISA and Section 4975 of the Code for certain
transactions, provided that neither the issuer of the bonds nor any of its affiliates (directly or indirectly)
has or exercises any discretionary authority or control or renders any investment advice with respect to
the assets of any ERISA Plan involved in the transaction and provided further that the ERISA Plan
pays no more than adequate consideration in connection with the transaction. Each of these PTCEs
and statutory exemptions contain conditions and limitations on their application and do not provide
relief from the self-dealing prohibitions under ERISA and the Code. It should also be noted that even
if the conditions specified in one or more of these exemptions are met, the scope of relief provided by
these exemptions may not necessarily cover all acts that might be construed as prohibited transactions.
There can be no, and we do not provide any, assurance that any of these exemptions or any other
exemption will apply with respect to the acquisition and holding of the bonds. Because the bonds
constitute an extension of credit by the purchaser to us each purchaser and transferee of the bonds
who is subject to any Applicable Benefit Plan Regulation(s) will 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 such Applicable Benefit Plan Regulation(s).
s-15
Such purchaser or transferee should consult legal counsel before purchasing the bonds. Nothing herein
shall be construed as a representation that an exemption from the prohibited transaction rules would
apply to the acquisition or holding of the bonds or 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 individual retirement account subject to any Applicable Benefit Plan Regulation(s).
s-16
UNDERWRITING
Mizuho Securities USA LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC, Scotia
Capital (USA) Inc. and SMBC Nikko Securities America, [nc. are acting as our joint book-running
managers for this offering and as representatives for the underwriters named below. Subject to certain
terms and conditions in the undenvriting agreement dated the date of this prospectus supplement, each
underwriter has severally agreed to purchase, and we have agreed to sell to each underwriter, the
principal amount of bonds indicated in the following table:
Underwriters
Mizuho Securities USA LLC
MUFG Securities Americas Inc.
PNC Capital Markets LLC .
Scotia Capital (USA) Inc. . .
SMBC Nikko Securities America, [nc.
BMO Capital Markets Corp. . . . . . .
CIBC World Markets Corp.
BNY Mellon Capital Markets, LLC .
nabSecurities, LLC
Santander Investment Securities Inc.
SunThust Robinson Humphrey, Inc.
TD Securities (USA) LLC. .
Principal Amount
of Bonds
$ 87,000,000
87,000,000
87,000,000
87,000,000
87,000,000
51.,000,000
51,000,000
12,600,000
12,600,000
12,600,000
12,600,000
12,600,000
Total $600,000,000
The underwriting agreement provides that the obligations of the underwriters to purchase the
bonds included in this offering are subject to approval of legal matters by counsel and to other
conditions. The underwriters are obligated to purchase all the bonds if they purchase any of the bonds.
The underwriters propose to offer the bonds directly to the public at the public offering price set
forth on the cover page of this prospectus supplement. The underwriters may offer the bonds to
selected dealers at the public offering price less a concession not to exceed 0.450Vo of the principal
amount of the bonds. In addition, the underwriters may allow, and those selected dealers may reallow,
a concession not to exceed 0.250% of the principal amount of the bonds to certain other dealers. After
the initial offering of the bonds to the public, the public offering price and concessions may be
changed.
The bonds are a new issue of securities with no established trading market. We have been advised
by the underwriters that the underwriters intend to make a market in the bonds but are not obligated
to do so and may discontinue market making at any time without notice. No assurance can be given as
to the liquidity of any trading market for the bonds.
In connection with this offering, the undenrriters may purchase and sell the bonds in the open
market. These transactions may include short sales, stabilizing transactions and purchases to cover
positions created by short sales. Short sales involve the sale by the underwriters of a greater number of
bonds than they are required to purchase in the offering. Stabilizing transactions consist of certain bids
or purchases made for the purpose of preventing or slowing a decline in the market price of the bonds
while the offering is in progress.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays
to another underwriter a portion of the undenvriting discount received by it because another
underwriter has repurchased bonds sold by or for the account of such underwriter in stabilizing or short
covering transactions.
s-17
These activities by the underwriters, as well as other purchases by the underwriters for their own
accounts, 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. [f these
activities are commenced, they may be discontinued by the underwriters at any time. These transactions
may be effected in the over-the-counter market or otherwise.
We estimate that our total offering expenses, not including the underwriting discount, will be
approximately $850,000.
We expect that delivery of the bonds will be made against payment therefor on or about July 13,
2018, which is the third business day following the date of pricing of the bonds (such settlement being
referred to as "T+3"). Under Rule L5c6-1 of the Exchange Act, trades in the secondary market are
required to settle in two business days, unless the parties to any such trade expressly agree otherwise.
Accordingly, purchasers who wish to trade the bonds on the date of pricing will be required, by virtue
of the fact that the notes will initially settle in T+3, to speci$ an alternate settlement cycle at the time
of any such trade to prevent a failed settlement. Purchasers of bonds who wish to trade the bonds on
the date of pricing should consult their own advisors.
Affiliations
The underwriters and their respective affiliates are full service financial institutions 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 their various business activities, the underrrriters and their respective
affiliates 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 our
or our affiliates' securities and instruments. Certain of the underwriters or their affiliates that have a
lending relationship with us routinely hedge their credit exposure to us consistent with their customary
risk management policies. Typically, such underwriters and their 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. The underwriters and their
respective affiliates 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.
Certain of the underwriters and their affiliates have performed commercial banking, investment
banking, corporate trust and advisory services for us from time to time for which they have received
customary fees and expenses. For example, affiliates of several of the underwriters act as agents and as
lenders under our credit facilities, which we may repay from time to time with proceeds of the offering
and for which they receive customary fees and expenses. The underwriters may, from time to time,
engage in transactions with and perform services for us or our affiliates in the ordinary course of their
business.
We have agreed to indemniff each of the underwriters against certain liabilities, including liabilities
under the U.S. Securities Act of 1933, as amended, or to contribute to payments the underwriters may
be required to make because of those liabilities.
s-18
Selling Restrictions
European Economic Area
The bonds are not intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the EEA. For these purposes, a retail
investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of
Article a(1) of Directive 201,416518U (as amended, "MiFID I["); or (ii) a customer within the meaning
of Directive 20021921E,C (as amended, the "lnsurance Mediation Directive"), where that customer
would not qualify as a professional client as defined in point (10) of Article a(1) of MiFID II; or
(iii) not a qualified investor as defined in Directive 2003l7llBc (as amended, the "Prospectus
Directive"). No key information document required by Regulation (EU) No 1286/2014 (as amended,
the "PRIIPs Regulation") for offering or selling packaged retail and insurance-based investment
products or otherwise making them available to retail investors in the EEA has been prepared and
therefore offering or selling the bonds or othenrise making them available to any retail investor in the
EEA may be unlawful under the PRIIPS Regulation. This prospectus supplement and the
accompanying prospectus have been prepared on the basis that any offer of bonds in any Member State
of the EEA will be made pursuant to an exemption under the Prospectus Directive from the
requirement to publish a prospectus for offers of bonds. This prospectus supplement and the
accompanying prospectus are not a prospectus for the purposes of the Prospectus Directive.
Canada
The bonds may be sold only to purchasers purchasing, or deemed to be purchasing, as principal
that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or
subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National
Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any
resale of the bonds must be made in accordance with an exemption from, or in a transaction not
subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with
remedies for rescission or damages if this prospectus supplement (including any amendment thereto)
contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the
purchaser within the time limit prescribed by the securities legislation of the purchaser's province or
territory. The purchaser should refer to any applicable provisions of the securities legislation of the
purchaser's province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to Section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the
underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding
undenwriter conflicts of interest in connection with this offering.
United Kingdom
This prospectus supplement is only being distributed to, and is only directed at, persons in the
United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus
Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) high net worth entities,
and other persons to whom it may lawfully be communicated, falling within Article a9Q)@) to (d) of
the Order (each such person being referred to as a "relevant person"). This prospectus supplement and
its contents are confidential and should not be distributed, published or reproduced (in whole or in
part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United
Kingdom that is not a relevant person should not act or rely on this document or any of its contents.
s-19
Switzerland
This prospectus supplement does not constitute an issue prospectus pursuant to Article 652a or
Article 1156 of the Swiss Code of Obligations and the new bonds will not be listed on the SIX Swiss
Exchange. Therefore, this prospectus supplement may not comply with the disclosure standards of the
listing rules (including any additional listing rules or prospectus schemes) of the SIX Swiss Exchange.
Accordingly, the bonds may not be offered to the public in or from Switzerland, but only to a selected
and limited circle of investors who do not subscribe to the bonds with a view to distribution. Any such
investors will be individually approached by the undenvriters from time to time.
Thiwan
The bonds may be made available for purchase outside Thiwan by investors residing in Thiwan
(either directly or through properly licensed Thiwan intermediaries acting on behalf of such investors)
but may not be offered or sold in Thiwan.
Hong Ibng
The bonds may not be offered or sold in Hong Kong by means of any document other than (i) in
circumstances which do not constitute an offer to the public within the meaning of the Companies
Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to "professional investors" within the meaning of the
Securities and Futures Ordinance (Cap.57l, Laws of Hong Kong) and any rules made thereunder, or
(iii) in other circumstances which do not result in the document being a "prospectus" within the
meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation
or document relating to the bonds may be issued or may be in the possession of any person for the
purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the
contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to
do so under the laws of Hong Kong) other than with respect to bonds which are or are intended to be
disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning
of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder.
Japan
The bonds offered in this prospectus supplement have not been and will not be registered under
the Financial Instruments and Exchange Law of Japan. The bonds have not been offered or sold and
will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of
Japan (including any corporation or other entity organized under the laws of Japan), except
(i) pursuant to an exemption from the registration requirements of the Financial Instruments and
Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.
Singapore
This prospectus supplement has not been registered as a prospectus with the Monetary Authority
of Singapore. Accordingly, this prospectus supplement and any other document or material in
connection with the offer or sale, or invitation for subscription or purchase, of the bonds may not be
circulated or distributed, nor may the bonds be offered or sold, or be made the subject of an invitation
for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an
institutional investor under Section2T4 of the Securities and Futures Act, Chapter 289 of Singapore
(the "SFA'), (ii) to a relevant person pursuant to Section 275(l), or any person pursuant to
Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or
(iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of
the SFA, in each case subject to compliance with conditions set forth in the SFA.
s-20
Where the bonds are subscribed or purchased under Section 275 of. the SFA by a relevant person
which is:
. a corporation (which is not an accredited investor (as defined in Section 4,A' of the SEA)) the
sole business of which is to hold investments and the entire share capital of which is owned by
one or more individuals, each of whom is an accredited investor; or
. a trust (where the trustee is not an accredited investor) whose sole purpose is to hold
investments and each beneficiary of the trust is an individual who is an accredited investor,
shares, debentures and units of shares and debentures of that corporation or the beneficiaries'
rights and interest (howsoever described) in that trust shall not be transferred within six months
after that corporation or that trust has acquired the bonds pursuant to an offer made under
Section 275 of the SFA except:
. to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant
person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is
made on terms that such shares, debentures and units of shares and debentures of that
corporation or such rights and interest in that trust are acquired at a consideration of not
less than 5$200,000 (or its equivalent in a foreign currency) for each transaction, whether
such amount is to be paid for in cash or by exchange of securities or other assets, and
further for corporations, in accordance with the conditions specified in Section 275 of the
SFA;
. where no consideration is or will be given for the transfer; or
. where the transfer is by operation of law.
United Arab Emirates
The bonds have not been, and are not being, publicly offered, sold, promoted or advertised in the
United Arab Emirates (including the Abu Dhabi Global Market and the Dubai International Financial
Centre) other than in compliance with the laws, regulations and rules of the United Arab Emirates, the
Abu Dhabi Global Market and the Dubai lnternational Financial Centre governing the issue, offering
and sale of securities. Further, this prospectus supplement does not constitute a public offer of
securities in the United Arab Emirates (including the Abu Dhabi Global Market and the Dubai
International Financial Centre) and is not intended to be a public offer. This prospectus supplement
has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities
and Commodities Authority, the Financial Services Regulatory Authority or the Dubai Financial
Services Authority.
LEGAL MATTERS
Certain legal matters with respect to the bonds we are offering will be passed upon for us by the
Chief Corporate Counsel and Corporate Secretary of Berkshire Hathaway Energy, as appointed counsel
for PacifiCorp, and by Perkins Coie LLR Portland, Oregon. Certain legal matters will be passed upon
for the underwriters by Latham & Watkins LLB New York, New York. Latham & Watkins LLP from
time to time represents certain of our affiliates.
s-21
EXPERTS
The consolidated financial statements incorporated in this prospectus supplement by reference
from PacifiCorp's Annual Report on Form 10-K, 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 consolidated 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 for the periods ended
March 31,,201,8 and2017, 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 report included in PacifiCorp'5 Quarterl| Report on
Form 10-Q for the quarter ended March 31, 2018 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 report 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 U.S. Securities Act of 1933, as amended, for their report on the
unaudited interim consolidated financial information because that report is not a "report" or a "part"
of the registration statement prepared or certified by an accountant within the meaning of Sections 7
and 11 of the U.S. Securities Act of 1933.
INCORPORATION BY REFERENCE
We file annual, quarterly and current reports and other information with the SEC. You may read
and copy any document that we file or furnish to the SEC at the public reference facilities maintained
by the SEC at 100 F Street, N.E., Washington, D.C.20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains an internet site at www.sec.gov that contains reports and other information regarding
registrants that file electronically, including PacifiCorp.
The SEC allows us to "incorporate by reference" the information that we file with it, which means
that we can disclose important information to you by referring you to another document separately
filed with the SEC. The information incorporated by reference is considered to be part of this
prospectus supplement and the accompanying prospectus. The information filed by us with the SEC in
the future and incorporated by reference will automatically update and supersede this information.
We incorporate by reference our filings listed below and any additional documents that we may file
with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of
this prospectus supplement and prior to the termination of this offering; except that we are not
incorporating by reference any information furnished (but not filed) under ltem 2.02 or Item 7.01 of
any Current Report on Form 8-K, unless specifically noted below:
. our Annual Report on Form 10-K, filed with the SEC on February 26,20L8;
. our Quarterly Report on Form 10-Q, filed with the SEC on Nlay 7,2018; and
. our Current Report on Form 8-K, filed with the SEC on January 11,2018.
You may request a copy of these filings, at no cost, by writing or calling us at the following address
or telephone number:
PacifiCorp
825 N.E. Multnomah Street
Portland, Oregon 97232
[phone]
s-22
PROSPECTUS
PACIFICORP
$1,325,ooo,ooo
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 such that the aggregate initial offering price thereof will not exceed
$1,325,000,000.
We will 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 or through agents designated from time to time or through
underwriters or dealers. The supplements to this prospectus will 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 certain matters you should
consider before buying our Securities.
NETTHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STAIE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR DETERMINED TF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTAIION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is January 11,2016.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
FORWARD -LOOKING STAIEMENTS
THECOMPANY....
RISKEACTORS.....
CONSOLTDAIED RATIOS OF EARNINGS TO FIXED CHARGES . .
WHERE YOU CAN FIND MORE INFORMAIION. . .
USE OF PROCEEDS
DESCRIPTTON OF ADDITIONAL BONDS
BOOK-ENTRY, DELIVERY AND FORM
PI-A.N OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
1
1
I
2
J
4
4
8
11
t2
13
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 U.S.
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 will provide a prospectus supplement that will 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 will 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 related to
offered Securities, 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."
FORWARD.LO OKING STATEMENTS
This prospectus, any accompanying prospectus supplement and the additional information
described under the heading "Where You Can Find More lnformation" may contain "forward-looking
statements" within the meaning of Section 27Aof the Securities Act of 1933, as amended (the
"Securities Act") and Section 218 of the Securities Exchange Act of 1934, as amended (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 L0-K, 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.
THE COMPANY
We are a U.S. regulated, vertically integrated electric utility company serving retail customers,
including residential, commercial, industrial, irrigation and other customers in portions of the states of
I
Utah, Oregon, Wyoming, Washington, ldaho 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 other
utilities, energy marketing companies, financial institutions and other market participants to balance
and optimize the economic benefits of electricity generation, retail customer loads and existing
wholesale transactions. We are subject to comprehensive state and federal regulation. Our subsidiaries
support our electric utility operations by providing coal mining services.
We are an indirect subsidiary of Berkshire Hathaway Energy Company ("BHE"), a holding
company based in Des Moines, Iowa that owns subsidiaries principally engaged in energy businesses.
BHE is a consolidated subsidiary of Berkshire Hathaway Inc. BHE controls substantially all of our
voting securities, which include both common and preferred stock.
Our principal executive offices are located at 825 N.E. Multnomah Street, Portland, Oregon 97232
and our telephone number is [phone].
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 lnformation."
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 (uMortgage')
and, if there is a defauh or a foreclasure sale, the value of the colhteral may not be sufficient to repay the
hoWers of any Additional Bonds.
We have not made any formal appraisal of the value of the collateral subject to the Mortgage,
which will secure any Additional Bonds. The value of the collateral in the event of liquidation will
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 satis$ the amounts outstanding under the Additional Bonds and our other first
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.
There is no *isting market for the Securities, and we cannot assure you that an active trading market lor 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 will be able to sell the Securities may be limited. Future trading prices of the Securities will
2
depend on many factors, including, among other things, prevailing interest rates, our operating results
and the market for similar securities.
We do not know whether an active trading market will 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 EARNINGS TO FIXED CHARGES
Years Ended December 31,
2014 2012 20tt
3.3x 3.6x 2.9x 2.9x 3.0x
WHERE YOU CAN FIND MORE INFORMATION
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 filings. We file annual, quarterly and current reports and other
information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's
web site at http://www.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 operation of its Public Reference Room. Our
SEC filings can also be accessed through the Financial Information section of our website at
www.pacificorp.com. The information found on our website, other than any of our SEC filings that are
incorporated by reference herein, is not part of this prospectus.
The SEC allows us to "incorporate by reference" the information we file with it, 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 will automatically update or supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act (but only to the extent the information therein is filed and not furnished),
including all such documents we may file with the SEC after the date of the initial registration
statement and prior to the effectiveness of the registration statement, until all of the Securities covered
by this prospectus have been sold:
. Annual Report on Form 10-K for the year ended December 31,2014;
. Quarterly Reports on Form 10-Q for the quarters ended March 31,2015 and June 30,201.5; and
. Current Report on Form 8-K filed June 19, 2015.
You may request a copy of these filings (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 Street, Suite 1900
Portland, Oregon 97232
Telephone: [phone]
Attention: Tieasury
Six-Month
Period Ended
June 30, 2015 201020t3
3.5x
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 underwriters, agents or dealers have
not, authorized anyone else to provide you with different information. We are not, and any
undenvriters, agents or dealers are not, making 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.
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 will initially become part of our general funds and will be used
for capital expenditures or utility asset purchases, to repay all or a portion of our short- or long-term
borrowings and for general corporate purposes.
DESCRIPTION OF ADDITIONAL BONDS
General
Additional Bonds may be issued from time to time under our Mortgage and Deed of Tiust, dated
as of January 9, 1989, as amended and supplemented (the "Mortgage"), with The Bank of New York
Mellon Tlust Company, N.A. (as successor trustee to JPMorgan Chase Bank, N.A.) (the "Mortgage
Tiustee"). The following summary is subject to the provisions of and is qualified by reference to the
Mortgage, a copy of which is incorporated by reference as an exhibit to this 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 $2,000
and any integral multiples of $1,000 in excess thereof. The Additional Bonds may be transferred
without charge, other than for applicable taxes or other governmental charges, at the offices of the
Mortgage Tlustee, New York, New York. Any Additional Bonds issued will be equally and ratably
secured with all other bonds issued under the Mortgage. See "Book-Entry, Delivery and Form."
Maturity and Interest Payments
The prospectus supplement relating to any Additional Bonds will set forth the date or dates on
which those Additional Bonds will mature, the rate or rates per annum at which those Additional
Bonds will bear interest and the times at which any interest will 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, will be established
by resolution of our Board of Directors at the time we issue the Additional Bonds.
Redemption or Purchase of Additional Bonds
The prospectus supplement relating to any Additional Bonds will 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
Tiustee, the redemption may be made subject to the receipt of the redemption amount by the
4
Mortgage Tiustee on or before the date fixed for redemption. Such redemption notice will be of no
effect unless the redemption amount is received. (Section 12.02)
The Mortgage, as described below, contains provisions for the maintenance of the Mortgaged and
Pledged Property. There is no sinking or analogous fund in the Mortgage.
Cash deposited under any provisions of the Mortgage may, upon the request of the Company, be
applied (with specific exceptions) to the redemption or repurchase of bonds of any series. (Section 7.03,
Section 12.05 and Section 13.06)
Security and Priority
The Additional Bonds will be issued under the Mortgage and secured by a first mortgage lien on
certain utility property owned from time to time by us and/or by Class 'A' Bonds, if any, held by the
Mortgage Tlustee. (Section 10.02)
There are excepted from the Mortgage, among others, 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, boats and vessels;
timber, crops, minerals, mineral rights and royalties; receivables, contracts, leases and operating
agreements (except those specifically pledged); electric energy, gas, water, steam and other products for
sale, distribution or other use; natural gas wells; gas transportation lines or other property used in the
sale of natural gas to customers or to a natural gas distribution or pipeline company, up to the point of
connection with any distribution system; our interest in the Wyodak Facility; and all properties that
have been released from the discharged Mortgages and Deeds of Tiust, 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.
(Section 1.06) 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. (See Section 2.01 of the Twenty-Eighth
Supplemental [ndenture)
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 utility
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 'A' Mortgage, purchase
money mortgages and other liens or defects in title.
The Mortgage provides that the Mortgage Tiustee 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 maximum 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) 70Vo of qualified Property Additions after adjustments to offset retirements;
(2) Class 'A' Bonds (which need not bear interest) delivered to the Mortgage Tlustee;
5
(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 L2 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'A' Bonds held other than by the Mortgage Ti"ustee, 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)
Property Additions generally include electric, gas, steam and/or hot water utility property but not
fuel, securities, automobiles, other vehicles or aircraft, or property used principally for the production
or gathering of natural gas. (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 'A' 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 Qualified Lien;
(2) the deposit of cash or, to a limited extent, purchase money mortgages;
(3) Property Additions, after making adjustments for certain prior lien bonds outstanding against
Property Additions; and/or
(4) 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 (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 in respect of deposited prior lien
bonds. (Sections 7.05,7.02,9.05, 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 'A' Mortgage. (Section 11.06) Bonds thereafter issued pursuant to the
additional mortgage would be Class 'A' 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 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. (Article IX)
6
Dividend Restrictions
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.
Foreign Currency Denominated Bonds
The Mortgage authorizes the issuance of bonds denominated in foreign currencies, provided that
we deposit with the Mortgage Tiustee 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 accountant, appraiser or other 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 type of currency exchange agreement will provide effective protection against currency
exchange fluctuations. However, if the other party to the exchange agreement defaults and the foreign
currency is valued higher at the date of maturity than at the date of issuance of the relevant bonds,
holders of 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 Thustee
The Bank of New York Mellon Tiust Company, N.A. or its affiliates may act as a lender, trustee
or agent under other agreements and indentures involving us and our affiliates.
Modification
The rights of bondholders may be modified with the consent of holders of at least 60Va of the
principal amount of the bonds outstanding, or, if not all series of bonds are adversely affected, the
consent of the holders of at least 60Vo of the principal amount of the outstanding bonds adversely
affected. [n 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 Tiustee generally is required to vote
Class 'A' Bonds held by it with respect to any amendment of the applicable Class 'A' Mortgage
proportionately with the vote of the holders of all Class 'A' Bonds then actually voting. (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 bankruptcy, insolvency or reorganization;
(5) default in other covenants for 90 days after notice; or
7
(6) the existence of any default under a Class 'A' Mortgage that permits the declaration of the
principal of all the bonds secured by the Class 'A' Mortgage and the interest accrued
thereupon due and payable. (Section 15.01)
An effective default under any Class 'A' Mortgage or under the Mortgage will result in an
effective default under all those mortgages. The Mortgage Tlustee 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 Tlustee or the holders of 25% of the principal amount of the bonds outstanding
may declare the principal and interest due and payable on Default, but a majority may annul the
declaration if the Default has been cured. (Section 15.03) No holder of bonds may enforce the lien of
the Mortgage unless the Mortgage Tiustee is given written notice of a Default and the Mortgage
Tfustee fails to act after the holders of 257o of the principal amount of the bonds outstanding have
requested in writing the Mortgage Tiustee to act, offered it reasonable opportunity to act and offered
an indemnity satisfactory to it against the costs, expenses and liabilities 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 Tiustee or
exercising any trust or power conferred on the Mortgage Tiustee. (Section 15.07) The Mortgage Tiustee
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 will be discharged from any and all obligations under the
Mortgage in respect of the bonds of any series if we deposit with the Mortgage Tiustee, 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 Tlustee 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) will not recognize income, gain or loss for federal income tax purposes as
a result of the deposit, and/or ensuing discharge and will 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)
BOOK-ENTRX DELTVERY AND FORM
Unless we indicate differently in a prospectus supplement, the Additional Bonds initially will be
issued in book-entry form and represented by one or more global bonds without interest coupons. The
global bonds will be deposited with, or on behalf of, The Depository Tlust Company, New York, New
York, as depositary, or DTC, and registered in the name of Cede & Co., the nominee of DTC. Unless
and until it is exchanged for individual certificates evidencing Additional Bonds under the limited
circumstances described below, a global bond may not be transferred except as a whole by the
depositary to its nominee or by the nominee to the depositary, or by the depositary or its nominee to a
successor depositary or to a nominee of the successor depositary.
8
DTC has advised us that it is:
. a limited-purpose trust company organized under the New York Banking Law;
. a "banking organization" within the meaning of the New York Banking Law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the New York Uniform Commercial Code; and
. a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement
among its participants of securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants' accounts, thereby eliminating the
need for physical movement of securities certificates. "Direct participants" in DTC include securities
brokers and dealers, including underwriters, banks, trust companies, clearing corporations and other
organizations. DTC is a wholly-owned subsidiary of The Depository Tiust & Clearing Corporation, or
DTCC. DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the
users of its regulated subsidiaries. Access to the DTC system is also available to others, which we
sometimes refer to as indirect participants, that clear through or maintain a custodial relationship with
a direct participant, either directly or indirectly. The rules applicable to DTC and its participants are on
file with the SEC.
Purchases of securities under the DTC system must be made by or through direct participants,
which will receive a credit for the securities on DTC's records. The ownership interest of the actual
purchaser of a security, which we sometimes refer to as a beneficial owner, is in turn recorded on the
direct and indirect participants' records. Beneficial owners of securities will not receive written
confirmation from DTC of their purchases. However, beneficial owners are expected to receive written
confirmations providing details of their transactions, as well as periodic statements of their holdings,
from the direct or indirect participants through which they purchased securities. Tlansfers of ownership
interests in global securities are to be accomplished by entries made on the books of participants acting
on behalf of beneficial owners. Beneficial owners will not receive certificates representing their
ownership interests in the global securities, except under the limited circumstances described below.
To facilitate subsequent transfers, all global bonds deposited by direct participants with DTC will
be registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of global bonds with DTC and their
registration in the name of Cede & Co. or such other nominee will not change the beneficial ownership
of the global bonds. DTC has no knowledge of the actual beneficial owners of the global bonds. DTC's
records reflect only the identity of the direct participants to whose accounts the global bonds are
credited, which may or may not be the beneficial owners. The participants are responsible for keeping
account of their holdings on behalf of their customers.
So long as the Additional Bonds are in book-entry form, you will receive payments and may
transfer the Additional Bonds only through the facilities of the depositary and its direct and indirect
participants. We will maintain an office or agency in the location specified in the prospectus
supplement for the applicable Additional Bonds, where notices and demands in respect of the
Additional Bonds and the Mortgage may be delivered to us and where certificated securities may be
surrendered for payment, registration of transfer or exchange.
Conveyance of notices and other communications by DTC to direct participants, by direct
participants to indirect participants and by direct participants and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any legal requirements in effect from
time to time.
9
Redemption notices will be sent to DTC. If less than all of the Additional Bonds of a particular
series are being redeemed, DTC's practice is to determine by lot the amount of the interest of each
direct participant in the Additional Bonds of such series to be redeemed.
Neither DTC nor Cede & Co. (or such other DTC nominee) will consent or vote with respect to
the Additional Bonds. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as
possible after the record date. The omnibus prory assigns the consenting or voting rights of
Cede & Co. to those direct participants to whose accounts the Additional Bonds of such series are
credited on the record date, identified in a listing attached to the omnibus proxy.
So long as Additional Bonds are in book-entry form, we will make payments on those Additional
Bonds to the depositary or its nominee, as the registered owner of such Additional Bonds, by wire
transfer of immediately available funds. If Additional Bonds are issued in definitive certificated form
under the limited circumstances described below, we will have the option of making payments by check
mailed to the addresses of the persons entitled to payment or by wire transfer to bank accounts in the
United States designated in writing to the applicable trustee or other designated party at least 15 days
before the applicable payment date by the persons entitled to payment, unless a shorter period is
satisfactory to the applicable trustee or other designated party.
Redemption proceeds on the Additional Bonds will be made to Cede & Co., or such other
nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit
direct participants' accounts upon DTC's receipt of funds and corresponding detail information from us
on the payment date in accordance with their respective holdings shown on DTC records. Payments by
participants to beneficial owners will be governed by standing instructions and customary practices, as is
the case with securities held for the account of customers in bearer form or registered in "street
name." Those payments will be the responsibility of participants and not of DTC or us, subject to any
statutory or regulatory requirements in effect from time to time. Payment of redemption proceeds to
Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is
our responsibility, disbursement of payments to direct participants is the responsibility of DTC, and
disbursement of payments to the beneficial owners is the responsibility of direct and indirect
participants.
Neither we, the Mortgage Tlustee nor any agent of ours or of the Mortgage Tiustee has or will
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.
Except under the limited circumstances described below, purchasers of Additional Bonds will not
be entitled to have such Additional Bonds registered in their names and will not receive physical
delivery of such Additional Bonds. Accordingly, each beneficial owner must rely on the procedures of
DTC and its participants to exercise any rights under the Additional Bonds and the Mortgage.
The laws of some jurisdictions may require that some purchasers of securities take physical
delivery of securities in definitive form. Those laws may impair the ability to transfer or pledge
beneficial interests in the Additional Bonds.
DTC may discontinue providing its services as securities depositary with respect to the Additional
Bonds at any time by giving reasonable notice to us. Under such circumstances, in the event that a
10
successor depositary is not obtained, certificates representing the Additional Bonds are required to be
printed and delivered.
As noted above, beneficial owners of a particular series of Additional Bonds generally will not
receive certificates representing their ownership interests in those Additional Bonds. However, if:
. DTC notifies us that it is unwilling or unable to continue as a depositary for the global security
or securities representing such series of Additional Bonds or if DTC ceases to be a clearing
agency registered under the Exchange Act at a time when it is required to be registered and a
successor depositary is not appointed within 90 days of the notification to us or of our becoming
aware of DTC's ceasing to be so registered, as the case may be;
. we determine, in our sole discretion and subject to DTC's procedures, not to have such
Additional Bonds represented by one or more global securities; or
. an Event of Default has occurred and is continuing with respect to such series of Additional
Bonds,
we will prepare and deliver certificates for such Additional Bonds in exchange for beneficial interests in
the global bonds. Any beneficial interest in a global bond that is exchangeable under the circumstances
described in the preceding sentence will be exchangeable for Additional Bonds in definitive certificated
form registered in the names that the depositary directs. It is expected that these directions will be
based upon directions received by the depositary from its participants with respect to ownership of
beneficial interests in the global bonds.
We have obtained the information in this section and elsewhere in this prospectus concerning DTC
and DTC's book-entry system from sources that are believed to be reliable, but we take no
responsibility for the accuracy of this information.
PLAN 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 will set forth the
specific terms of the offering of those Securities, including the name or names of any undenrriters,
dealers or agents, the purchase price of those Securities and the proceeds to us from the sale, any
underwriting 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
underwriters. Those Securities will 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
prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.
The underwriter or underwriters with respect to a particular undenrritten offering of Securities will be
named in the prospectus supplement relating to that offering and, if an undenvriting syndicate is used,
the managing underwriter or underwriters will 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 underrrriters
to dealers, will 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
undenvriters to purchase the Securities will be subject to specific conditions, and the underwriters will
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 will 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
11
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 will 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 will 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, involved in the offer or sale
of any of the Securities will be named, and any commissions payable by us to the agent will be set
forth, in the prospectus supplement relating to that offer or sale. Unless otherwise indicated in the
prospectus supplement, any agent will be acting on a reasonable best efforts basis for the period of its
appointment.
In connection with a particular underwritten offering of Securities, and in compliance with
applicable law, the underwriters may engage in transactions that stabilize, maintain or othenvise 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, will 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 will indicate in a prospectus supplement the extent to which we anticipate that a secondary
market for the Securities will 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 undenvriters, the underwriters may
make a market in such Securities, as permitted by applicable laws and regulations. No underwriter
would be obligated, however, to make a market in the Securities, and any market-making could be
discontinued at any time at the sole discretion of the underwriters. Accordingly, we cannot assure you
as to the liquidity of, or trading markets for, the Securities of any series.
Underwriters, 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 indemni$ the
several underwriters, dealers or agents and their controlling persons against specific civil 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 affiliated 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 will be passed upon for us by Perkins Coie LLP, counsel to the
Company, 1120 N.W. Couch Street, Tenth Floor, Portland, Oregon 97209.
t2
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, 2014 have been audited by
Deloitte & Touche LLB an independent registered public accounting firm, as stated in their report,
which is incorporated herein by reference. Such consolidated 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 for the periods ended
March 37,20L5 and2014 and June 30,2075 and2074, which is incorporated herein by reference,
Deloitte & Touche LLB 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 quarters ended March 31.,20'1.5 and June 30,
2015 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 for
their reports on the unaudited interim consolidated 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 Securities Act.
t3
$600,000,000 First Mortgage Bonds
4.L25Vo Series Dae 2049
A BERKSHIRE HATHAWAY ENERGY COMPANY
PROSPECTUS SUPPLEMENT
July 10, 2018
loint Book-Running Managers
MUFG
l%crFrCoRP
Mizuho Securities
Scotiabank
BMO Capital Markets
PNC Capital Markets LLC
SMBC Nikko
CIBC Capital Markets
Co-managers
BNY Mellon Capital Markets, LLC nabSecurities, LLC Santander SunThust Robinson Humphrey TD Securities
Execution Version
PACIFICORP
$600,000,000
First Mortgage Bonds
4.l25Yo Series Due 2049
UI\DERWRITING AGREEMENT
July 10,2018
MIZUHO SECURITIES USA LLC
MUFG SECURITIES AMERICAS TNC.
PNC CAPITAL MARKETS LLC
SCOTIA CAPITAL (USA) INC.
SMBC NIKKO SECURITIES AMERICA, INC.
As Representatives (the "Representatives") of the several Underwriters listed
In Schedule A hereto
c/o Mizuho Securities USA LLC
320 Park Avenue
New York, New York 10022
c/o MUFG Securities Americas Inc.
l22l Avenue of the Americas, 66 floor
NewYork,NewYork 10020
c/o PNC Capital Markets LLC
4720 Piedmont Row Drive, Suite 200
Charlotte, North Carol ina 2821 0
c/o Scotia Capital (USA) Inc.
250 Vesey Sffeet
New York, New York 10281
c/o SMBC Nikko Securities Americ4 Inc.
277 ParkAvenue
New York, New York 10172
Ladies and Gentlemen:
l. Introductory. PacifiCorp, an Oregon corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several underwriters listed in Schedule A
hereto (the "Underwriters") (D U.S. $600,000,000 principal amount of its First Mortgage Bonds,
4.125% Series due 2049 (the "Offered Securities") to be issued under that certain Mortgage and Deed of
Trust, dated as of January 9, 1989, with The Bank of New York Mellon Trust Company, N.A., as
successor trustee (the "Truste€"), as heretofore amended and supplemented by the supplemental
us-Docs\101679383.8
indentures thereto and as further amended and supplemented by a supplemental indenture dated as of July
l, 2018 (collectively, the "Mortgage") pursuant to the registration statement on Form S-3 (File No. 333-
207687) filed on October 30,2015, as amended to date (the "Initial Registration Statement"). The
Mortgage has been qualified under the U.S. Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the U.S. Securities and Exchange Commission (the
"Commission") under the Trust Indenture Act. The U.S. 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 several Underwriters as follows:
2. Representations and llarranties of the Company. Ttrc Company represents and warrants
to, and agrees with, the several Underwriters 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
Underwriters and, excluding exhibits to the Initial Registration Statement but including all
documents incorporated by reference in the prospectus contained in such Initial Registration
Statement (the 'oBase Prospectus"), including any prospectus supplement relating to the Offered
Securities that is frled with the Commission and deemed by virtue of Rule 4308 under the Securities
Act to be part of the Initial Regisfration Statement, was declared effective by the Commission on
January ll, 2016; other than a regisfration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement" together with the Initial Registation Statement, the
"Registration Statemenf'), filed pursuant to Rule 462(b) under the Securities Act, whictr, if so
filed, became effective upon filing, 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 filed after the filing date of the Initial Registation
Statement under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
prospectuses filed pursuant to Rule 424@) of the Rules and Regulations, each in the form
heretofore delivered to the Underwriters); and no stop order suspending the effectiveness of the
Initial Registation Statement, any post-effective amendment thereto or the Rule 462(b)
Regisfration Statement, if any, has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission.
(b) A preliminary prospectus supplement relating to the Offered Secwities has been
prepared by the Company and a final prospectus supplement relating to the Offered Securities will
be prepared by the Company in accordance with Section 5(a) hereto. Such preliminary prospectus
supplement (including the documents incorporated by reference therein), together with the Base
Prospectus, is hereinafter referred to as the "Preliminary Prospectus;" such final prospectus
supplement relating to the Offered Securities to be filed with the Commission pursuant to Rule
424(b) under the Securities Act (including the documents incorporated by reference therein),
together with the Base Prospectus, is hereinafter referred to as the "Prospectus." The Preliminary
Prospectus, as amended or supplemented as of the Applicable Time (as defined below), when
considered together with the final term sheet filed pursuant to Section 5(a) hereof (the "Disclosure
Package"), as of the Applicable Time, did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Prospectus, as of its date and as
amended or supplemented as of the Closing Date (as defined below), does not and will not include
any untrue statement of a material fact or omit to state any material fact required to be stated therein
2
us-Docs\101679383.8
or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; and each Issuer Free Writing Prospectus (as defined in Rule 433 under
the Securities Act) listed on Schedule B(ii) hereto does not conflict with the information contained
in the Registration Statement the Preliminary Prospectus or the Prospectus and each such Issuer
Free Writing Prospectus, as supplemented by and taken together with the Disclosure Package as of
the Applicable Time, did not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements thereirl in the light of the circumstances
under which they were made, not misleading; provided, the preceding two sentences do not apply
to statements in or omissions from the Preliminary Prospectus, the Disclosure Package, the
Prospectus or any Issuer Free Writing Prospectus based upon written information furnished to the
Company by the Underwriters 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 purposes of this
Agreement, the "Applicable Time" is 3:40 p.m., New York City Time, on the date of this
Agreement.
(c) At the earliest time after the filing of the Initial Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2) under the Securities Act) of the Offered Securities, the Company was not an
"ineligible issuer" as defined in Rule 405 under the Securities Act.
(d) The Regisfration Statement and the Prospectus conform, and any further
amendments or supplements to the Regisffation Statement or the Prospectus when made will
conform, in all material respects to the requirements of the Securities Act and the Rules and
Regulations and the Regisfration Statement conforms, and any further amendments or supplements
to the Regisffation Statement when made will conform, in all material respects to the requirements
of the Trust Indenture Act, and the rules and regulations of the Commission thereunder. The
Registration Statement, as of the applicable effective date, and any arnendments thereto as of the
Closing Date did not and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading.
(e) 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 Disclosure Package and 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 ffansact 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 qualificatiorl except where the failure to so qualifr
would not have a material adverse effect on the financial conditiorl business or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse Effecf').
(D The Mortgage has been duly authorized, and when duly executed and delivered by
the Company, shall constitute a valid and legally binding instrument of the Company enforceable
against the Company in accordance with its terms, except as limited by bankruptcy, 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 Disclosure Package and the
Prospectus.
(g) The documents incorporated by reference in the Prospectus and the Disclosure
Package, at the time they were or hereafter are filed with the Commission, complied or when so
3
us-Docs\101679383.8
filed will comply, as the case may be, in all material respects with the requirements ofthe Exchange
Act and the rules and regulations promulgated thereunder, and, when read together with the other
information in the Prospectus and the Disclosure Package, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were or are
made, not misleading.
(h) 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,
will constitute valid and legally binding obligations of the Company enforceable against the
Company in accordance with their terms, except as limited by bankruptcy, 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 will
be entitled to the benefit of the security afforded by the Mortgage; and the Offered Securities
conform to the description thereof in the Disclosure Package and the Prospectus.
(i) No consent, approval, authorization or order of, or filing or registration by the
Company with, any court, governmental agency or third party 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 Disclosure Package and the Prospectus, except such as
have been obtained or made.
(j) 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 bankruptcy, 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.
(k) Except as disclosed in the Disclosure Package and the Prospectus, the Company
has good and sufficient title to all the material properties described as owned and good and
sufficient leasehold interest in all ofthe properties described as leased by it (he "Properties"),
subject to minor defects and inegularities customarily found in properties of like size and character
that do not materially impair the use ofthe property affected thereby in the operation of the business
of the Company.
0) The Company is not (i) in violation of its Third Restated 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 party 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 govemmental body, the effect of which, in the case of (ii) and (iii), would result in
aMaterial Adverse Effect, and neither the execution and delivery ofthis 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 will conflict 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 instrument to which it is now a party 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
4
us-Docs\101679383.8
having jurisdiction over the Company or over its properties, the effect of which, singly or in the
a1gregate, would have aMaterial Adverse Effect.
(m) Except as disclosed in the Disclosure Package and 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 subsidiary would
be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect or a
material adverse effect on the ability of the Company to perform its obligations under this
Agreement or the Mortgage.
(n) The consolidated financial statements included or incorporated by reference in the
Disclosure Package and 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 Disclosure Pack4ge and 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 Securities Act and the Regulations thereunder.
(o) Except as reflected in, or contemplated by, the Disclosure Package and the
Prospectus, since the respective most recent dates as of which information is given in the Disclosure
Package and 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 ordinary course of business),
or any material adverse change in the business, affairs, business prospects, property or financial
condition of the Company and its subsidiaries taken as a whole, whether or not arising in the
ordinary course ofbusiness, and since such dates there has not been any material transaction entered
into by the Company other than ffansactions contemplated by the Disclosure Package and the
Prospectus, and fansactions in the ordinary course of business; and the Company has no material
contingent obligation that is not disclosed in the Disclosure Package and the Prospectus.
(p) 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 sufficient to provide reasonable assurances that (1) fansactions are executed in accordance
with management's general or specific authorization; (2) tansactions axe recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting
principles or any other criteria applicable to such statements and to maintain accountability for
assets; (3) access to assets is permitted only in accordance with management's general or specific
authorization; and (a) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences.
(q) There is and has been no failure on the part of the Company or, to the knowledge
of the Compmy, my of the Company's directors or executive officers in their respective capacities
as such, to comply in all material respects with the provisions of the U.S. Sarbanes-Oxley Act of
2002 andthe rules and regulations promulgated in connection therewith.
G) The Company (i) is in compliance with applicable U.S. federal, state and local laws
and regulations relating to (A) the protection of human health and safety and the environment and
(B) hazardous, toxic substances, wastes, pollutants or contaminants ("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-
5
us-Docs\101679383.8
compliance with Environmental Laws, or failure to receive or be in compliance with required
permits, licenses or other approvals, or liability either (x) would not be reasonably likely to have a
Material Adverse Effect, or (y) is set forth in or contemplated in the Disclosure Package and the
Prospectus (exclusive of any supplement thereto).
(s) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, after due inquiry, any director, officer, agent, employee or other representative
authorized to act on behalf of the Company or any of its subsidiaries, has in the course of its actions
for, or on behalf of, the Company (i) used any corporate funds for any unlawful contributiorl gift,
entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic govemment officials, "foreign office" as defined in
the United States Foreign Comrpt Practices Act of 1977, as amended, and the rules and regulations
thereunder (collectively, the "FCPA") or employee from corporate funds; (iii) violated or is in
violation of any provision of the FCPA, the Bribery Act 2010 of the United Kingdom, as amended,
or any other applicable anti-bribery or anti-comrption law or statutes; or (iv) made any bribe, rebate,
payoff, influence, payment, kickback or other unlawful payments to any domestic govemment
official, foreign offrcial or employee; and each of the Company and its subsidiaries has conducted
its business in compliance with the FCPA, the Bribery Act 2010 of the United Kingdom, as
amended, and any other applicable anti-bribery or anti-comrption laws or statutes, and has
instituted and maintains policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.
(t) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company after due inquiry, any director, offrcer, employee or affiliate of the Company or any of
its subsidiaries (i) is cunently the target of any United States sanctions administered by the Offrce
of Foreign Assets Conffol of the United States Treasury Departnent, the United States DeparEnent
of State, the United Nations Secwity Council, the European Union, Her Majesty's Treasury, or
other relevant sanctions authority (collectively, "Sanctions"); or (ii) is located, organized or
resident in a country that is the subject of Sanctions (including, without limitation, Cub4 Iran,
North Korea, Sudan, Syri4 Venezuela and the Crimea region of Ukraine); and the Company will
not directly or indirectly use the proceeds of the offering of the Offered Securities, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or
other person or entitSr, for the purpose of financing the activities of any person, or in any coun@
or territory, that is currently the subject or target of Sanctions or in any other manner that will result
in a violation by any person (including any person participating in the fransaction whether as an
underwriter, advisor, investor or otherwise) of Sanctions. The Company has not knowingly engaged
in for the past five years, and is not now knowingly engaged in, any dealings or tansactions with
any individual or entity, or in any counfiy or territory, that at the time of the dealing or transaction
is or was the subject or taxget of Sanctions.
(u) The operations of the Company and each of its subsidiaries are and have been
conducted at all times in compliance with the applicable financial recordkeeping and reporting
requirements of the United States Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all applicable jurisdictions where the Company and its
subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws") and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any
of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company, tlreatened.
6
us-Docs\101679383.8
(v) The interactive data in eXtensible Business Reporting Language included or
incorporated by reference in the Regisfration Statement fairly presents the information called for in
all material respects and has been prepared in compliance with the Commission's rules and
guidelines applicable 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 Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Company at a purchase price of 98.976Yo of the principal arnount thereof plus accrued
interest, if any, from July 13, 2018 to the Closing Date (as hereinafter defined), the respective principal
amounts of the Offered Securities set forth opposite the names of the several Underwriters in Schedule A
hereto.
The Company will deliver against payment of the purchase price for the Offered Securities to be
purchased by each Underwriter hereunder and to be offered and sold by such 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 Securities will be held only in book-
entry form through DTC, except in the limited circumstances described in the Disclosure Package and the
Prospectus.
Payment for the Offered Securities shall be made by the Underwriters in Federal (same day) funds
by wire transfer to an account at a bank acceptable to the Underwriters drawn to the order of the Company
at 10:00 a.m., (New York time), on July 13,2018, or at such other time not later than seven full business
days thereafter as the Underwriters 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 will be made available for checking at the office of Latham & Watkins LLP, 885 Third Avenue,
New Yorlg l.IY 10022, at least 24 hours prior to the Closing Date.
4. Representations by Underwriters; Resale by Underwriters. Each of the Underwriters
severally represents and agrees that:
(a) (i) It has only communicated or caused to be communicated (and will only
communicate or cause to be communicated) an invitation or inducement to engage in investnent
activity (within the meaning of Section 2l of the U.K. 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 will 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.
O) It has not offered, sold or otherwise made available and will not offer, sell or
otherwise make available any of the Offered Securities to any retail investor in the Ewopean
Economic Area. For the purposes of this provision: (i) the expression "retail investor" means a
person who is one (or more) of the following: (A) a retail client as defined in point (11) of Article
4(l) of Directive 2014165/EU (as amended, *MiFID II"); (B) a customer within the meaning of
Directive 20021921EC, where that customer would not qualiff as a professional client as defined in
point (l) of Article a(1) of MiFID II; or (C) not a qualified investor as defined in Directive
2003/7llEC; and (ii) the expression "offer" includes 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 to the Offered Securities.
us-Docs\101679383.8
7
that:
(c) Without the prior consent of the Company and the Representatives, other than one
or more term sheets relating to the Offered Securities containing customary information, it has not
made and will 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 filed with the Commission; and
any such free writing prospectus the use of which has been consented to by the Company and the
Representatives (including the final term sheet prepared and filed pursuant to Section 5(a) hereof)
is listed on Schedule B hereto.
5. Certain Agreements of the Company. T}:rc Company agrees with the several Underwriters
(a) It will prepare the Prospectus in a form approved by you and to file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the Commission's close of business
on the second business day following the date of this Agreement; to make no frrther 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 Regisfration
Statement has been filed or becomes effective or any amendment or supplement to the Prospectus
has been filed and to furnish you with copies thereof; to prepare a final term sheet, containing solely
a description of the Offered Securities, in a form approved by you and to file such term sheet
pursuant to Rule 433(d) under the Securities Act within the time required by such Rule; to file
promptly all other material required to be filed by the Company with the Commission pursuant to
Rde a33(d) under the Securities Act; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), l3(c), 14 or 15(d) ofthe Exchange Act subsequent to the date ofthe Prospectus and
for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the Securities Act) is required in connection with the offering or sale of the Offered
Securities; to advise yor:, prompfly 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 any Preliminary
Prospectus or other prospectus in respect of the Offered Securities, 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 purpose, or of any request by the Commission for the
amending or supplementing of the Regisfration 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 any Preliminary Prospectus or other prospectus or suspending any such
qualification, to promptly use its best efforts 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 necessary to permit offers and sales of the Offered Securities by the
Underwriters (references herein to the Registation Statement shall include any such amendment
or new registration statement).
(b) Prior to 10:00 a.m., New York City time, on the New York business day next
succeeding the date of this Agteement and from time to time, to furnish the Underwriters with
written and electronic copies of the Prospectus in New York City in such quantities as you may
reasonably request, and, ifthe delivery ofa prospectus (or in lieu thereol the notice referred to in
Rule 173(a) under the Securities Act) is required at any time prior to the expiration of nine months
after the time of issue of the hospectus 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 untrue statement of a material fact or omit to state
8
us-Docs\101679383.8
any material fact necessary 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
necessary during such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order to comply with
the Securities Act, the Exchange Act or the Trust Indenture Act, to notiff you and upon your request
to file such document and to prepare and fumish without charge to each Underwriter and to any
dealer in securities as many written and electonic copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus that will correct such statement
or omission or effect such compliance; and in case any Underwriter is required under the Securities
Act to deliver a prospectus (or in lieu thereof, the notice refened 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 such
Underwriter, to prepare and deliver to such Underwriter as many written and elechonic copies as
you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of
the 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 Securities Act), an eamings statement of the Company and its subsidiaries
(which need not be audited) complying with Section l1(a) of the Securities Act and the Rules and
Regulations thereunder (including, at the option of the Company, Rule 158).
(d) The Company will arrange for the qualification of the Offered Securities for sale
and the determination of their eligibility for invesfrnent under the laws of such jurisdictions in the
United States as the Underwriters designate and will continue such qualifications in effect so long
as required for the resale of the Offered Securities by the Underwriters, provided that the Company
will not be required to qualiff as a foreign corporation, to file a general consent to service ofprocess
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 will pay all expenses incident to the performance of its obligations
under this Agreement and the Mortgage, for any filing fees and other expenses (including fees and
disbursements of counsel) incurred in connection with qualification of the Offered Securities for
sale and determination of their eligibility for investnent under the laws of such jurisdictions as the
Underwriters designate 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 and initial delivery of the Offered Securities, the preparation and printing of this
Agreement, the Offered Securities, the Disclosure Package and the Prospectus, any Issuer Free
Writing 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 investrnent rating agencies for the rating of the Offered Securities, for any travel
expenses of the Company's officers 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 Disclosure Package, the Prospectus or any
Issuer Free Writing Prospectus (including any amendments and supplements thereto) to the
Underwriters. Except as otherwise provided in this Section 5(e) or in Section 9 of this Agreement,
the Underwriters will pay all of their costs and expenses, including fees and expenses of their
us-Docs\101679383.8
9
counsel, transfer taxes on the resale of the Offered Securities and any advertising and travel
expenses incurred by them.
(0 In connection with the offering, until the earlier of (i) 180 days following the
Closing Date and (ii) the date the Underwriters shall have notified the Company of the completion
of the resale of the Offered Securities, neither the Company nor any of its affiliates has or will,
either alone or with one or more other persons, bid for or purchase for any account in which it or
any of its afFrliates 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 affrliates will make bids or
purchases for the purpose ofcreating actual, or apparent, active trading in, or ofraising the price
of, the Offered Securities.
(g) From the date hereof through and including the Closing Date, the Company will
not, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file 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) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement withthe Commission in compliance with Rule 462(b) by 10:00
p.m., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give
furevocable instructions for the payment of such fee pursuant to Rule I I I under the Securities Act.
(D The Company (i) represents and agrees that, other than the final term sheet
prepared and flled pursuant to Section 5(a) hereof, without the prior consent ofthe Representatives,
it has not made and will not make any offer relating to the Offered Securities that would constitute
a "free writing prospectus" as defrned in Rule 405 under the Securities Act and (ii) has complied
and will comply with the requirements of Rule 433 under the Securities Act applicable to any Issuer
Free Writing Prospectus, including timely filing with the Commission or retention where required
and legending.
6. Conditions of the Obligations of the Underwriters. The obligations of the several
Underwriters to pwchase and pay for the Offered Secwities will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the accuracy of the statements of
officers 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 filed with the Commission pursuant to Rule 424(b) within the applicable
time period prescribed for such filing (without reliance on Rule 424(bX8) by the Rules and
Regulations and in accordance with Section 5(a) hereof; if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Regisfration Statement shall have become effective by 10:00 p.m.,
Washington, D.C. time, on the date hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereofshall have been issued and no proceeding for that purpose
shall have been initiated or to the knowledge of the Company threatened by the Commission; and
all requests for additional information on the part of the Commission shall have been complied
with.
(b) The Underwriters shall have received from Deloitte & Touche LLP a comfort letter
dated the date hereof and a bring-down comfort letter dated the Closing Date, in form and content
l0
us-Docs\101679383.8
satisfactory to the Underwriters and their counsel, acting reasonably, containing statements and
information of the type ordinarily included in accountants' long-form comfort letters to
underwriters with respect to the financial statements and other financial information of the
Company and its subsidiaries included in the Disclosure Package and the Preliminary Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-off' date no more than three
business days prior to the Closing Date.
(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,
properties or results of operations of the Company and its subsidiaries taken as a whole, which, in
the judgment ofthe Representatives, 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 ofthe
Exchange Act), or any public announcement that any such organization has under surveillance or
review its rating of any debt securities or prefened stock of the Company (other than an
announcement 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 ffading in
securities generally on the New York Stock Exchange, or any setting of minimum prices for trading
on such exchange; (iv) any suspension oftrading ofany securities ofthe Company on any exchange
or in the over-the-counter market; (v) any banking 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 attack on, or outbreak or escalation of hostilities or act of terrorism
involving, the United States, any declaration of war by the United States Congress or any other
substantial national or international calamity or emergency if, in the judgment of the
Representatives, the effect of any such attack, outbrealg 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 Underwriters shall have received an opinion, dated the Closing Date, of
Jeffery B. Erb, Chief Corporate Counsel and Corporate Secretary of Berkshire Hathaway Enerry,
as appointed counsel for the Company, substantially in the form of Exhibit A hereto.
(e) The Underwriters shall have received an opinion, dated the Closing Date, of
Perkins Coie LLP, special counsel to the Company, substantially in the form of Exhibit B hereto.
(f) The Underwriters shall have received from Latham & Watkins LLP, counsel for
the Underwriters, such opinion or opinions, dated the Closing Date, in form and substance
satisfactory to the Underwriters, and the Company shall have fumished to such counsel such
documents as they request for the purpose of enabling them to pass upon such matters. In rendering
such opinion or opinions, Latham & Watkins LLP may rely as to the incorporation ofthe Company
and all other matters govemed by Oregon law upon the opinion of Perkins Coie LLP referred to
above.
(g) The Underwriters shall have received a certificate, dated the Closing Date, of the
President or any Vice President and a principal financial or accounting officer of the Company in
which such officers, to the best of their knowledge after reasonable investigation, shall state that:
(i) the representations and warranties of the Company in this Agreement are true and correct, or
true and correct in all material respects where such representations and warranties are not qualified
by materiality or Material Adverse Effect and (ii) that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date; and (iii) that, subsequent to the date of the most recent financial statements in,
us-Docs\101679383.8
ll
or incorporated by reference in, the Preliminary 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 Disclosure Package and the Prospectus or as described in such
certificate.
The Company will (i) fumish the Underwriters with such conformed copies of such opinions,
certificates, letters and documents as the Underwriters reasonably request. The Underwriters may waive
compliance with any conditions to their obligations hereunder.
7. Indemnification and Contribution (a) The Company will indemnify and hold harmless
each Underwriter, its parfrers, members, directors and offrcers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject, under the Securities Act or the
Exchange Act or othenvise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in the Regisfration Statement, the Preliminary Prospectus, the Disclosure Package, 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" filed or required to be filed
pursuant to Rule 433(d) under the Securities Act, arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary in order to make the statements therein made, in light of
the circumstances under which they were made (in the case of the Regisfration Statement, necessary in
order to make the statements therein not misleading), not misleading, including any losses, claims, damages
or liabilities arising out of or based upon the Company's failure to perform its obligations under Section
5(a) of this Agreement and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission from any of such docurnents
in reliance upon and in conformity with written information fumished to the Company by the
Representatives on behalf of the Underwriters 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;
provided, further, that the foregoing indemnity with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter, or any person controlling such Underwriter, from whom the person
asserting any such losses, claims, damages or liabilities (or actions in respect thereof), in connection with
clauses (i) through (iii) below, purchased Offered Securities, where it shall have been determined by a court
of competent jurisdiction by final and non-appealable judgment that (i) prior to the Applicable Time the
Company has notified such Underwriter that the Preliminary Prospectus, dated July 10, 2018, contains an
untrue statement of material fact or omits to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading, (ii) such
untrue statement or omission of a material fact was corrected in an amended or supplemented Preliminary
Prospectus and such corrected Preliminary Prospectus was provided to such Underwriter sufficiently in
advance of the Applicable Time so that such corrected Preliminary Prospectus could have been conveyed
to such person prior to the Applicable Time and (iii) such corrected Preliminary Prospectus was not
conveyed to such person at or prior to the Applicable Time to such person.
(b) Each Underwriter will severally and not jointly indemniS and hold harmless the
Company, its directors and officers and each person, if any, who controls the Company within the meaning
of Section l5 of the Securities Act, against any losses, claims, damages or liabilities to which the Company
may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue
t2
us-Docs\101679383.8
statement or alleged untue statement of any material fact contained in the Regisfiation Statement, the
Preliminary Prospectus, the Disclosure Package, 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 necessary in order to make the statements therein, in the light of the circumstances under which they
were made (in the case of the Regisfration Statement, necessary in order to make the statements therein not
misleading), not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with
written information fumished to the Company by the Representatives on behalf of the Underwriters
specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Preliminary Prospectus and Prospectus fumished
on behalf of each Underwriter: under the caption "Underwriting," paragraphs 3, 4 (second sentence only),
5 and 6; provided, however, that the Underwriters shall not be liable for any losses, claims, damages or
liabilities 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 party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against
the indemniffing party under subsection (a) or (b) above, notiff the indemniffing party of the
commencement thereof; but the omission so to notiff the indemniffing party will not relieve it from any
liability which it may have to any indemnified party 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 notiff the indemniffing party shall not
relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified parfy and it notifies the indemniffing
party of the commencement thereof, the indemniffing party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifring party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemniffing party), and after notice from the
indemniffing party to such indemnified party of its election so to assume the defense thereof, the
indemnifuing party will not be liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the indemnified party shall have the right to
employ counsel to represent the indemnified party and their respective controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity may be sought by the indemnified
party against the indemniffing party under this Section 7 if the employment of such counsel shall have been
authorized in writing by the indemniffing party in connection with the defense of such action, if in the
written opinion of counsel to either the indemniffing party or the indemnified party, representation of both
parties by the same counsel would be inappropriate due to actual or likely conflicts of interest between them
or the indemniffing party shall have failed to employ counsel within a reasonable period of time, and in
that event the fees and expenses ofone firm ofseparate counsel (in addition to the fees and expenses ofone
local counsel in each applicable jurisdiction) shall be paid by the indemniffing party. No indemni$ing
party shall, without the prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been aparty and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release of such indemnified party
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, culpability or failure to act by or on behalf of any indemnified party.
us-Docs\101679383.8
13
(d) If the indemnification provided for in this Section is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemniffing party shall
contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages
or liabilities 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 Underwriters 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 Underwriters on the
other in connection with the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters 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 Securities received
by the Company bear to the total discounts and commissions received by the Underwriters 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 untrue 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
Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The amount paid by an indemnified party 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 party 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), no Underwriter shall 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 such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person gurlty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Securities Act) shall be entitled to
confribution from any penion who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to connibute are several in proportion to their respective purchase
obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who conffols any Underwriter within the meaning of the Securities Act or the Exchange
Act; and the obligations of the Underwriters under this Section shall be in addition to any liability which
the respective Underwriters 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. Default of Underwriters. If any Underwriter or Underwriters defaults in its or their
obligations to purchase the Offered Securities hereunder and the aggregate principal amount ofthe Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to pwchase does not exceed
l0Yo of the total principal amount of the Offered Secwities, the non-defaulting Underwriters may make
arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons,
including themselves, but if no such axrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severallyo in proportion to their respective commifrnents hereunder, to
purchase the Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so defaults and the aggregate principal amount of the Offered
Securities with respect to which such default or defaults occur exceeds l0% of the total principal amount
of the Offered Securities and arrangements satisfactory to the non-defaulting Underwriters and the
Company for the purchase of such Offered Securities by other persons are not made within 36 hours after
us-Docs\101679383.8
t4
such default, this Agreement will terminate without liability on the part of the non-defaulting Underwriters
or the Company, except as provided in Section 9. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing herein, including the
Company's obligations pursuant to Section t hereot will relieve a defaulting Underwriter from liability for
is default.
9. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Company or its officers and of the
several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by or on behalf of any
Underwriter, the Company or any of their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered Securities. If this Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Offered Securities by the Underwriters is not
consummated other than such default by an 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 Underwriters pursuant to Section 7 shall remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurence of any event specified in clause (iii), (v), (vi) or (vii) of
Section 6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees
and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered
Securities, provided that the Company shall not be obligated under this Section 9 to reimburse the
Underwriters for any expenses (including any reasonable fees and disbursements of counsel) in excess of
$175,000.
10. No Fiduciary Duty. T'be Company acknowledges and agrees that in connection with this
ofitering or any other services the Underwriters may be deemed to be providing hereunder, notwithstanding
any preexisting relationship, advisory or otherwise, between the parties or any oral representations or
assurances previously or subsequently made by the Underwriters: (i) no fiduciary or agency relationship
between the Company and any other persorl on the one hand, and the Underwriters, on the other, exists in
connection with the offering of the Offered Securities; (ii) the Underwriters axe not acting as advisors,
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 Underwriters, on the other, is entirely and
solely commercial, based on arms-length negotiations; (iii) any duties and obligations that the Underwriters
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 Underwriters and their respective affiliates
may have interests that differ from those ofthe Company. Any review by the Underwriters ofthe Company,
the tansactions contemplated hereby or other matters related to such fransactions will be performed solely
for the benefit of the Underwriters and not on behalf of the Company. The Company hereby waives any
claims that the Company may have against the Underwriters with respect to any breach of fiduciary duty
in connection with this offering.
I l. Notices. All communications hereunder will be in writing and, if sent to the Underwriters,
will be mailed, delivered or faxed and confirmed to each of (i) Mizuho Securities USA LLC, 320 Park
Avenue, 126 Floor, New York, New York 10022, Attention: Debt Capital Markets, facsimile (212) 205-
7812; (ii) MUFG Securities Americas lnc.,l22l Avenue of the Americas, 66 Floor, New York, New York
10020, Attention: Capital Markets Group, facsimile: [phone];(iii) PNC Capital Markets LLC,300
Fifth Avenue, Pittsburgh, Pennsylvania 15222, Attention: Head of Corporate Services, facsimile: (412)
767-2760; (iv) Scotia Capital (USA) Inc., 250 Vesey Street, New York, New York 10281, Attention: Debt
Capital Markets, facsimilie: [phone]; and (v) SMBC Nikko Securities Americ4 Inc.,277 Park
Avenue, New Yorlg New York 10172, Attention: Debt Capital Markets - Transaction Management or, if
us-Docs\101679383.8
15
sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at PacifiCorp, 825 NE
Multnomah, Suite 2000, Portland, OF.97232, Attention: Legal Department; provided, however, that any
notice to a particular Underwriter pursuant to Section 7 will be mailed, delivered or faxed and confirmed
to such Underwriter.
12. Srccessors. This Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the confolling persons referred to in Section 7, and no other person will
have any right or obligation hereunder. This Agreement and the rights and obligations hereunder shall not
be assignable by the Company without the prior written consent of the Representatives (which consent shall
not be unreasonably withheld). This Agreement may not be modified or amended except by an instrument
in writing signed by the Company and the Representatives.
13. Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts 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 conflicts of laws.
15. lil'aiver of Jury. TO TI{E FULLEST EXTENT PERMITTED BY LAW, EACH OF TI{E
PARTIES I{ERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY FURTT{ER WAIVES ANTY RIGHT TO CONSOLIDATE
ANIY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTI{ER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
lSignatures follow)
us-Docs\101679383.8
l6
The Company hereby submits to the exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this
Agreement or the hansactions contemplated hereby.
If the foregoing is in accordance with the Underwriters' undentanding of our agreement, kindly
sign and return to us one of the counterparts hereof whereupon it will become a binding agreement between
the Company and the several Undenn'iters in accordance with its terms.
Very tnrly yours,
Name: Nikki Kobliha
Title: Vice President, Chief Financial Offrcer,
and Treasurer
(Underuriting Agree ment)
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
Mizuho USA LLC
By:
Name:s\c?arl
Title: Mrrrr$rn! Drf€Chr- L6 l5CA
MUFG Securities Americas Inc.
By:
Name:
Title:
PNC Capital Markets LLC
By:
Name:
Title:
Scotia Capital (USA) Inc.
By:
Name
Title:
SMBC Nikko Securities America, Inc.
By:
Name
Title:
On behalf of themselves and as Representatives of the several Underwriters
(U nderwr it i ng A gr eem ent)
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
Mizuho Securities USA LLC
By:
Name:
Title:
MUFG Americas Inc.
By:
/- t----\_ \_,-
Name:
Title: ManagingDirector
PNC Capital Markets LLC
Elrr.
Name:
Title:
Scotia Capital (USA) Inc.
By:
Name
Title:
SMBC Nikko Securities Americ4 Inc.
Elrr.
Name:
Title:
On behalf of themselves and as Representatives of the several Underuniters
( U nde rw r i t i ng A gr e e me nt)
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
Mizuho Securities USA LLC
By:
Name:
Title:
MUFG Securities Americas Inc.
By:
Name:
Title:
PNC LLC
By:
Name:
Title:
fuaeat 4' ,7Tt.nr,/rr
rltavqfulc D raectztl
Scotia Capital (USA) Inc.
By:
Name:
Title:
SMBC Nikko Securities Americ4 lnc.
By:
Name:
Title:
On behalf of themselves and as Representatives of the several Underwriters
( Underw ritin g I g'eem e nl)
The foregoing Undenvriting Agreement
is hereby confinned and accepted
as of the date first above rvritten.
Mizuho Securities USA LLC
By:
Nanre:
Title:
MUFC Securities Americas lnc.
By:
Name:
Title:
PNC Capital Markets LLC
By:
Name:
Title:
Scotia Capital (USA) lnc.h__By:
Narne:Tirte: PauttH(eown
Managing Dlrector & Head
SMBC Nikko Securities Americe , Inc.
By:
Name:
Title:
On behalf of themselves and as Representatives of the several Undenvriters
( Unclentriti ng Ag'eenent)
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written,
Mizulro Securities USA LLC
By:
Name:
Title:
MUFG Securities Americas Inc.
By:
Name:
Title:
PNC Capital Markets LLC
By:
Name:
Title:
Scotia Capital (USA) Inc.
By:
Nanre:
Title:
SMBC Nikko Securities America, Inc,
By:
I.1r'' YchthtmsehloI rlre: ratt$uDhdor
On behalf of themselves and as Representatives of the several Underwriters
(U ndenuri t ing A gree me nt)
SCHEDULE A
Underwriter
Principal Amount
of
Bonds
MIZUHO SECURITIES USA LLC $87,000,000
MUFG SECURITIES AMERICAS INC.$87,000,000
PNC CAPITAL MARKETS LLC $87,000,000
scorrA cAPrrAL (usA) rNC.s87,000,000
SMBC MKKO SECURITIES AMERICA, [NC.$87,000,000
BMO CAPITAL MARKETS CORP s51,000,000
CIBC WORLD MARKETS CORP.$51,000,000
BNY MELLON CAPITAL MARKETS, LLC $12,600,000
NABSECURITIES, LLC $12,600,000
SANTANDER INVESTMENT SECURITIES TNC.$12,600,000
SUNTRUST ROBINSON HUMPHREY, INC.s12,600,000
TD SECURITIES (USA) LLC $12,600,000
Total $600,000,000
us-Docs\101679383.8
SCHEDULE B(i)
Issuer Free Writing Prospectuses
See Schedule B(ii)
us-Docs\101679383.8
Issuer:
Security Type:
Legal Format:
Principal Amount:
Coupon:
Interest Payment Dates :
Trade Date:
Settlement Date:
Maturity:
Treasury Benchmark:
US Treasury Spot:
US Treasury Yield:
Spread to Treasury:
Re-offer Yield:
Price to Public (Issue Price)
Optional Redemption:
Denominations:
Joint Book-Running Managers:
Filed pursuant to Rule 433(d)
Registration No. 333-207687
Dated July 10,2018
FINAL TERM SHEET
PacifiCorp
First Mortgage Bonds ilte 2049 (the "Offered Securities")
SEC Registered
s600,000,000
4.125%
Semi-annually on January 15 and July 15, commencing on January 15,
2019
July 10,2018
July 13,2018 (T+3)*
January 15,2049
3.000% due February 15,2048
100-20
2.968%
+l l7 basis points
4.138%
99.776% of principal amount
Prior to July 15, 2048, Make Whole Call at T+20 basis points. On or
after July 15,2048,100% of the principal amount plus accrued and
unpaid interest
$2,000 and any integral multiples of $1,000 in excess thereof
Mizuho Securities USA LLC, MUFG Securities Americas Inc., PNC
Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko
Securities America,Inc., BMO Capital Markets Co.p., CIBC World
Markets Corp.
Co-Managers:BNY Mellon Capital Markets, LLC, nabSecurities, LLC, Santander
Investrnent Securities Inc., SunTrust Robinson Humphrey, Inc., TD
Securities (USA) LLC
CUSP / ISTN:695114 CT3 / US695 l 14CT39
*It is expected that delivery of the Offered Securities will be made to investors on or about July 13, 2018,
which will be the third business day following the date of this pricing term sheet (such settlement being
referred to as "T+3"). Under Rule l5c6-l under the Securities Exchange Act of 1934, as amended, trades
in the secondary market are required to settle in two business days, unless the parties to any such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade notes on the date of pricing will be
required, by virtue of the fact that the notes will initially settle in T+3, to speciff an alternate settlement
cycle at the time of any such trade to prevent a failed settlement. Purchasers of notes who wish to trade
notes on the date of pricing should consult their own advisors.
The issuer has filed a registration statement (including a prospectus) with the U.S. Securities and
Exchange Commission (SEC) for the offering to which this communication relates. Before you invest,
you should read the prospectus in that regisffation statement and other documents the issuer has filed with
the SEC for more complete information about the issuer and this offering. You may get these documents
for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will anange to send you the prospectus if you
request it by calling Mizuho Securities USA LLC at l-866-271-7403, MUFG Securities Americas Inc. at
l-877-649-6848, PNC Capital Markets LLC at l-855-881-0697, Scotia Capital (USA) Inc. at l-800-372-
3930 or SMBC Nikko Securities Americ4 Inc. at 1-888-868-6856.
EXHIBIT A
Form of Opinion of Jeffery B. Erb, Chief Corporate Counsel and Corporate Secretary of Berkshire
Hathaway Enerry, as appointed counsel for the Company
l. To my knowledge and except for the matters disclosed in the Disclosure Package, there is
no legal or govemmental action, suit or proceeding before any court, governmental agency, body or
authority, domestic or foreign, now pending or tlreatened against or involving the Company or any
subsidiary 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, property 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 Underwriting
Agreement, the Mortgage or the Bonds.
2. The execution, delivery and performance of the Underwriting Agreement and the Mortgage
and the issuance and sale ofthe Bonds and the use ofproceeds ofthe Bonds as designated in the Prospectus
do not and will not (A) conflict with the Articles of Incorporation or By-laws of the Company, @) to my
knowledge, conflict with, result in the creation or imposition of any lierl 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 party, 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 regglation, or any order, judgment or decree known to me of any court or
governmental agency, body or authority having jurisdiction over the Company or any of its properties,
where any such conflict, encumbrance, breacll 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, property
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 utility commissions and under the Federal
Power Act, no consent, authorization or order of, or filing or registration by the Company with, any court
govemmental agency or third party is required in connection with the execution, delivery and performance
by the Company of the Underwriting Agreement and the Mortgage, the consummation of the hansactions
contemplated herein and therein, and the issuance, distribution and sale of the Bonds as contemplated
therein, in each case where the effect ofthe failure to obtain such approval, authorization, consent or order,
or make such filing, is material to the Company.
4. The Company has good and sufhcient title to the Properties subject to the Mortgage, which
include substantially all of the permanent physical properties of the Company (other than those expressly
excepted), subject only to Excepted Encumbrances and defects and inegularities customarily found in
properties of like size and character that, in my opinion, do not materially impair the use of the property
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 for the Mortgage to constitute a lien thereon; ttre
Mortgage constitutes a valid lien in favor of the Trustee for the benefit of the holders of the bonds issued
pursuant to the Mortgage and, to the best of my knowledge, there is no lien on such Properties prior or equal
to the lien of the Mortgage, other than the exceptions enumerated above in this paragraph 4.
us-Docs\101679383.8
EXHIBIT B
Form of Opinion of Perkins Coie LLP, special counsel to the Company
I . The Company is a corporation validly existing under the laws of Oregon, with the corporate
power and authority to own its properties and conduct its business as described in the Preliminary
Prospectus, as supplemented by the Free Writing Prospectus, attached as Schedule B(ii) to the Underwriting
Agreement, and the Prospectus.
2- Based solely on the certificates attached as Schedule B, the Company is qualified to
transact business as a foreign corporation in Arizona, California, Colorado, Idaho, Montana, New Mexico,
Utah, Washington and Wyoming.
3. The Company has the corporate power and authority to enter into the Underwriting
Agreement and the Supplemental Indenture, to issue the Bonds and to consummate the tansactions
contemplated by the Underwriting Agreement.
4. Each of the Underwriting Agreement and the Mortgage has been duly 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 Indenture Act of 1939, as amended
(the "Trust Indenture 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 Underwriting Agreement and the Mortgage, have been
duly executed and, when authenticated by the Trustee in the manner provided in the Mortgage and delivered
against payment of the purchase price therefore pursuant to the Underwriting Agreement, will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with their
terms, and entitled to the benefits of the Mortgage.
8. The statements in the Preliminary Prospectus and the Prospectus under the captions
"Description of the Bonds" and'oDescription 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 Preliminary Prospectus and the Prospectus under the caption "Certain U.S. Federal
Income Ta:< Considerations," insofar as such statements purport to constitute summaries of United States
federal income tar 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 filing with any govemmental authority
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 Underwriting 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) as may be required under federal or state "blue slgr" securities laws and
regulations and (b) such as have been obtained or made.
us-Docs\101679383.8
10. The Idatto Public Utilities Commission and the Public Utility Commission of Oregon have
entered appropriate orders, which to our knowledge remain in full force and effect on the date of this letter,
each authorizing the issuance of the Bonds by the Company; the Company has filed a notice with the
Washington Utilities and Transportation Commission regarding the issuance and sale of the Bonds that
complies with the filing requirements of RCW 80.08.040 and WAC 480-100-242; the Company has filed
a notice of proposed securities issuance with the Idaho Public Utilities Commission regarding the issuance
and sale of the Bonds pursuant to Order No. 33083; and, together with certain exemptive orders that have
been issued by each of the Public Utilities Commission of the State of Califomi4 the Public Service
Commission of Utatr 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 governmental body legally required in
connection with the regulation of the Company as a public utility for the authorization of the issuance of
the Bonds by the Company pursuant to the terms of the Underwriting Agreement.
ll. The Regisfration Statement was declared effective by the Securities and Exchange
Commission (the "Commission") on January ll, 2016; the Prospectus was filed with the Commission
pursuant to Rule 424(b) on July 10, 20 I 8 in a manner and within the time period required by Rule 424(b)
under the Securities Act; and, based solely on the contents of the Commission's stop orders webpage located
at www.sec.gov/litigatior/stoporders.shtml, as of the date hereof, no stop order suspending the effectiveness
of the Regisfration Statement has been issued under the Securities Act and, to our knowledge, no
proceedings for that purpose have been initiated by the Commission.
12. Without independent verification of the factual accuracy, completeness or faimess of any
statements made in the Registration Statement Preliminary hospectus and the Prospectus, the Registation
Statement, as of its effective date, and the Preliminary Prospectus, as of its date, including in each case the
information deemed to be a part thereof pursuant to Rule 4308 rurder the Securities Act, and the Prospectus,
as of its date, appear on their face to be appropriately responsive 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 iq or omitted from, the Regisfiation Statements, the Preliminary Prospectus or
the Prospectus.
13. The Company is not, and, immediately after giving effect to the issuance and sale of the
Bonds in accordance with the Underwriting Agreement and to the application of the net proceeds received
by the Company from the offering and sale of the Bonds as described in the Preliminary Prospectus and the
Prospectus, will not, be required to register as an "investment company" within the meaning of the
Investrnent Company Act.
us-Docs\101679383.8
REPORT OF SECTIRITTES ISSTIED
July 13,2018
PACIT'ICORP
Descripion of securities: $600,000,000 of PacifiCorp's First Mortgage Bonds
4.125% Series due January 2049
* Denotes estimate only.
(r) PacifiCorp previously paid $133,427.50 in registration fees with respect to
$1,325,000,000 securities registered on Form S-3 under Registration No. 333-207687.
Of this previously paid registration fee, $60,420 will be applied in connection with the
issuance of $600,000,000 aggregate principal amount of Bonds.
(2) Includes estimated rating agency fees of $495,000 for the Bonds.
Description Amount
1 Face value or principal amount $600,000,000
2 Plus premium or less discount (l ,344,000)
J Gross proceeds 598,656,000
4 Underwriter's spread or commission (4,800,000)
5 Securities and Exchange Commission registration fee(l)(60,420)
6 State mortgage registration tax N/A
7 State commission fee N/A
8.Fee for recording indenture*(45,000)
9 United States document tax N/A
10.Printing and engraving expenses*(20,000)
ll Trustee's charges*(1 1,500)
12.Counsel fees*(105,000)
13.Accountants' fees*(79,7t4)
14.Cost of listing N/A
15.Miscellaneous expenses of issue*(2)
(Describe large items)
(528,366)
16.Total deductions*(5,650,000)
17.Net amount realized*$593,006,000