A rate refund, refocusing and early retirement programs, plusboth failed and successful merger costs wiped out PacifiCorp’s 1998earnings of $300 million, leaving the company with a $55 millionloss for the year. In comparison 1997 earnings after special itemswere $641 million; they were $350 million before special items. Thecompany’s refocusing in 1998 and 1999 includes shutdown of itsenergy marketing business, the sale of TPC Corp., and of EnergyWorks, a joint venture with Bechtel, and the closing of its Turkishenterprises.

“We have moved quickly to execute our new strategy, and I ampleased with the progress we have made so far,” CEO Keith McKennontold analysts and investors during a conference call last week. “Westill have a long way to go toward fully implementing our strategyand improving our financial performance, but the early returns aregood.”

“While 1998 was a very disappointing year financially forPacifiCorp, I am pleased that our recurring earnings for the fourthquarter – the first reporting period following the implementationof our new refocused western strategy – were in line withexpectations,” McKennon said. Fourth quarter earnings were $67million, excluding the effects of a rate case in Utah, costsassociated with the merger with Scottish Power, a write-down andspecial charges. Total fourth quarter earnings were $21 million.

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