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Former shareholders of Utah Power & Light Co. gave up a free lunch to become new owners of PacifiCorp. But it appears worth the sacrifice.

Instead of the traditional luncheon at the utility's annual meeting Wendesday, shareholders gathered at the Salt Palace convention center were treated to a dividend increase by PacifiCorp, which acquired UP&L earlier this year."It's about time. They were getting carried away with that lunch thing," said one stockholder, apparently pleased with UP&L's new parent and particularly a larger dividend.

Greated by applause from about 1,000 shareholders, PacifiCorp president and chief executive A.M. Gleason announced a 3-cent increase in the company's quarterly dividend - from 66 cents to 69 cents - bringing the annual dividend to $2.76 a share.

The 4.5 percent increase will be payable Aug. 15 to shareholders of record July 24. The ex-dividend date is July 18.

Gleason attributed the jump in dividends to the 1988 financial performance of the diversified utility, of which UP&L is now a division. In addition to finger food and soda pop, shareholders were served a slick presentation of the Portland, Ore.-based company and its electric utility, telecommunications, mining and financial services operations.

All units turned in record revenues and earnings for 1988, Gleason said, and with the benefits from merging Pacific Power with Utah Power now flowing to the bottom line, 1989 should be even better.

In 1988, electric operations experienced a 2.3 percent growth rate and contributed 61.4 percent of PacifiCorp's total $3.5 billion in revenues, while non-electric companies had 15 percent growth rate in 1988, accounting for 38.6 percent of total revenues.

For the first quarter of 1989, executive vice president Gerard K. Drummond said adjusted earnings were 7 percent higher than the same period a year ago.

Drummond noted that the merger with UP&L has made PacifiCorp the third largest electric utility in the western United States and the 14th largest in the country, earning it membership on the Standard & Poor's 500 listing.

The merger has also made UP&L territory PacifiCorp's largest service area, representing 60 percent of total corporate revenues. Given that clout, Gleason said PacifiCorp found it appropriate to hold its 1989 annual meeting in Salt Lake City rather than Portland, but he didn't go as far as to commit to future annual meetings in Utah.

The merger has forced the diversified utility to rethink its diversification strategy. Gleason said PacifiCorp's $2 billion financial services unit is up for sale as part of a long-term plan to focus the corporation's efforts toward its traditional utility-related businesses.

Gleason didn't specify what financial services assets will be sold or kept, only that the goal of the move is to "narrow and refocus our financial service activities to complement the company's other businesses rather than to build a separate major company."

As for the electric utility operations, Pacific Telecom and the NERCO mining operations, Gleason said the initial decision has been to keep them intact and develop them as separate business entities.

"In the case of the two electric divisions, their continued focus will be on achieving the project merger savings that are necessary to enable us to both show increased earnings and reduced electric rates," he said.