UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1997
-----------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------- -------
Commission Registrant's Name, State of Incorporation, IRS Employer
File Number Address and Telephone Number Identification No.
- ----------- ------------------------------------------ ------------------
1-12459 MIDAMERICAN ENERGY HOLDINGS COMPANY 42-1451822
(AN IOWA CORPORATION)
666 GRAND AVE. PO BOX 657
DES MOINES, IOWA 50303
515-242-4300
1-11505 MIDAMERICAN ENERGY COMPANY 42-1425214
(AN IOWA CORPORATION)
666 GRAND AVE. PO BOX 657
DES MOINES, IOWA 50303
515-242-4300
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Registrant Title of Each Class On which Registered
- ---------- ------------------- ---------------------
MidAmerican Energy
Holdings Company Common Stock, no par value New York Stock Exchange
MidAmerican Energy 7.98% MidAmerican Energy Company New York Stock Exchange
Company Obligated Preferred Securities of Subsidiary Trust
Securities registered pursuant to Section 12(g) of the Act:
MidAmerican Energy Preferred Stock, $3.30 Series, no par value
Company Preferred Stock, $3.75 Series, no par value
Preferred Stock, $3.90 Series, no par value
Preferred Stock, $4.20 Series, no par value
Preferred Stock, $4.35 Series, no par value
Preferred Stock, $4.40 Series, no par value
Preferred Stock, $4.80 Series, no par value
Preferred Stock, $5.25 Series, no par value
Preferred Stock, $7.80 Series, no par value
- -------------------------------------------------------------------------------
Registrant Title of each Class
<PAGE>
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants' knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X].
The aggregate market value of voting stock held by non-affiliates of MidAmerican
Energy Holdings Company was $1,954,875,719 as of February 27, 1998, when
94,595,982 shares of common stock, without par value, were outstanding.
The aggregate market value of voting stock held by non-affiliates of MidAmerican
Energy Company was zero as of February 27, 1998, when 70,980,203 shares of
common stock, without par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
A portion of Holding's Proxy Statement relating to its 1998 Annual Meeting of
Shareholders is incorporated by reference in Part III hereof.
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<PAGE>
EXHIBIT INDEX
Exhibits Filed Herewith
- -----------------------
The exhibits filed herewith are attached to this combined Form 10-K in
numerical order. They are listed below under the heading of the registrant or
registrants to whom they apply.
Holdings
12.1 Computation of ratios of earnings to fixed charges and computation of
ratios of earnings to fixed charges plus preferred dividend
requirements.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Coopers & Lybrand L.L.P.
99.1 MidAmerican Energy Company Employee Stock Purchase Plan Annual Report
on Form 11-K.
MidAmerican
3.3 Restated Articles of Incorporation of MidAmerican Energy Company, as
amended December 22, 1997.
12.2 Computation of ratios of earnings to fixed charges and computation of
ratios of earnings to fixed charges plus preferred dividend
requirements.
21.2 Subsidiaries of the Registrant.
23.3 Consent of Coopers & Lybrand L.L.P.
99.2 Iowa Power Inc. Payroll-Based Employee Stock Ownership Plan Annual
Report on Form 11-K.
Exhibits Incorporated by Reference
- ----------------------------------
Holdings
3.1 Restated Articles of Incorporation of MidAmerican Energy Holdings
Company, as amended December 19, 1996. (Filed as Exhibit 3.1 to
Holdings' Annual Report on Form 10-K for the year ended December 31,
1996, Commission File No. 1-12459.)
3.2 Bylaws of MidAmerican Energy Holdings Company, as amended July 24,
1996. (Filed as Exhibit 3.2 to Holdings' Annual Report on Form 10-K
for the year ended December 31, 1996, Commission File No. 1-12459.)
4.1 Shareholder Rights Agreement dated as of December 18, 1996 between
Holding's and Continental Stock Transfer and Trust Company. (Filed as
Exhibit 4 to Holdings' Current Report on Form 8-K dated December 18,
1996, Commission File No. 1-12459.)
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<PAGE>
10.39 Form of Indemnity Agreement between MidAmerican Energy Holdings
Company and its directors and officers. (Filed as Exhibit 10.2 to
Holdings' Annual Report on Form 10-K for the year ended December 31,
1996, Commission File No. 1-12459.)
10.40 Employment Agreement between Stanley J. Bright and MidAmerican Energy
Holdings Company dated January 24, 1996. (Filed as Exhibit 10.3 to
Holdings' Annual Report on Form 10-K for the year ended December 31,
1996, Commission File No. 1-12459.)
10.41 Employment Agreement between Russell E. Christiansen and MidAmerican
Energy Holdings Company dated January 24, 1996, as amended January 29,
1997. (Filed as Exhibit 10.4 to Holdings' Annual Report on Form 10-K
for the year ended December 31, 1996, Commission File No. 1-12459.)
MidAmerican Energy
3.4 Restated Bylaws of MidAmerican Energy Company, as amended July 24,
1996. (Filed as Exhibit 3.1 to MidAmerican's Quarterly Report on Form
10-Q for the period ended June 30, 1996, Commission File No. 1-11505.)
Holdings and MidAmerican Energy
4.2 General Mortgage Indenture and Deed of Trust dated as of January 1,
1993, between Midwest Power Systems Inc. and Morgan Guaranty Trust
Company of New York, Trustee. (Filed as Exhibit 4(b)-1 to Midwest
Resources' Annual Report on Form 10-K for the year ended December 31,
1992, Commission File No. 1-10654.)
4.3 First Supplemental Indenture dated as of January 1, 1993, between
Midwest Power Systems Inc. and Morgan Guaranty Trust Company of New
York, Trustee. (Filed as Exhibit 4(b)-2 to Midwest Resources' Annual
Report on Form 10-K for the year ended December 31, 1992, Commission
File No. 1-10654.)
4.4 Second Supplemental Indenture dated as of January 15, 1993, between
Midwest Power Systems Inc. and Morgan Guaranty Trust Company of New
York, Trustee. (Filed as Exhibit 4(b)-3 to Midwest Resources' Annual
Report on Form 10-K for the year ended December 31, 1992, Commission
File No. 1-10654.)
4.5 Third Supplemental Indenture dated as of May 1, 1993, between Midwest
Power Systems Inc. and Morgan Guaranty Trust Company of New York,
Trustee. (Filed as Exhibit 4.4 to Midwest Resources' Annual Report on
Form 10-K for the year ended December 31, 1993, Commission File No.
1-10654.)
4.6 Fourth Supplemental Indenture dated as of October 1, 1994, between
Midwest Power Systems Inc. and Harris Trust and Savings Bank, Trustee.
(Filed as Exhibit 4.5 to Midwest Resources' Annual Report on Form 10-K
for the year ended December 31, 1994, Commission File No. 1-10654.)
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<PAGE>
4.7 Fifth Supplemental Indenture dated as of November 1, 1994, between
Midwest Power Systems Inc. and Harris Trust and Savings Bank, Trustee.
(Filed as Exhibit 4.6 to Midwest Resources' Annual Report on Form 10-K
for the year ended December 31, 1994, Commission File No. 1-10654.)
4.8 Indenture of Mortgage and Deed of Trust, dated as of March 1, 1947.
(Filed by Iowa-Illinois as Exhibit 7B to Commission File No. 2-6922.)
4.9 Sixth Supplemental Indenture dated as of July 1, 1967. (Filed by
Iowa-Illinois as Exhibit 2.08 to Commission File No. 2-28806.)
4.10 Twentieth Supplemental Indenture dated as of May 1, 1982. (Filed as
Exhibit 4.B.23 to Iowa-Illinois' Quarterly Report on Form 10-Q for the
period ended June 30, 1982, Commission File No. 1-3573.)
4.11 Resignation and Appointment of successor Individual Trustee. (Filed by
Iowa-Illinois as Exhibit 4.B.30 to Commission File No. 33-39211.)
4.13 Twenty-Eighth Supplemental Indenture dated as of May 15, 1992. (Filed
as Exhibit 4.31.B to Iowa-Illinois' Current Report on Form 8-K dated
May 21, 1992, Commission File No. 1-3573.)
4.14 Twenty-Ninth Supplemental Indenture dated as of March 15, 1993. (Filed
as Exhibit 4.32.A to Iowa-Illinois' Current Report on Form 8-K dated
March 24, 1993, Commission File No. 1-3573.)
4.15 Thirtieth Supplemental Indenture dated as of October 1, 1993. (Filed
as Exhibit 4.34.A to Iowa-Illinois' Current Report on Form 8-K dated
October 7, 1993, Commission File No. 1-3573.)
4.16 Sixth Supplemental Indenture dated as of July 1, 1995, between Midwest
Power Systems Inc. and Harris Trust and Savings Bank, Trustee. (Filed
as Exhibit 4.15 to MidAmerican's Annual Report on Form 10-K dated
December 31, 1995, Commission File No. 1-11505.)
4.17 Thirty-First Supplemental Indenture dated as of July 1, 1995, between
Iowa-Illinois Gas and Electric Company and Harris Trust and Savings
Bank, Trustee. (Filed as Exhibit 4.16 to MidAmerican's Annual Report
on Form 10-K dated December 31, 1995, Commission File No. 1-11505.)
10.1 MidAmerican Energy Company Severance Plan For Specified Officers dated
November 1, 1996. (Filed as Exhibit 10.1 to Holdings' and
MidAmerican's respective Annual Reports on the combined Form 10-K for
the year ended December 31, 1996, Commission File Nos. 1-12459 and
1-11505, respectively.)
10.2 MidAmerican Energy Company Deferred Compensation Plan for Directors.
(Filed as Exhibit 10.1 to MidAmerican's Annual Report on Form 10-K
dated December 31, 1995, Commission File No. 1-11505.)
10.3 MidAmerican Energy Company Deferred Compensation Plan for Executives.
(Filed as Exhibit 10.2 to MidAmerican's Annual Report on Form 10-K
dated December 31, 1995, Commission File No. 1-11505.)
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<PAGE>
10.4 MidAmerican Energy Company Supplemental Retirement Plan for Designated
Officers. (Filed as Exhibit 10.3 to MidAmerican's Annual Report on
Form 10-K dated December 31, 1995, Commission File No. 1-11505.)
10.5 MidAmerican Energy Company Key Employee Short-Term Incentive Plan.
(Filed as Exhibit 10.4 to MidAmerican's Annual Report on Form 10-K
dated December 31, 1995, Commission File No. 1-11505.)
10.6 Deferred Compensation Plan for Executives of Midwest Resources Inc.
and Subsidiaries. (Filed as Exhibit 10.1 to Midwest Resources' Annual
Report on Form 10-K for the year ended December 31, 1990, Commission
File No. 1-10654).
10.7 Deferred Compensation Plan for Board of Directors of Midwest Resources
Inc. and Subsidiaries. (Filed as Exhibit 10.2 to Midwest Resources'
Annual Report on Form 10-K for the year ended December 31, 1990,
Commission File No. 1-10654).
10.8 Midwest Resources Inc. Directors Retirement Plan. (Filed as Exhibit
10.3 to Midwest Resources' Annual Report on Form 10-K for the year
ended December 31, 1990, Commission File No. 1-10654.)
10.9 Non-Cash Bonus Award Plan for Executives of Midwest Resources Inc.
(Filed as Exhibit 10.4 to Midwest Resources' Annual Report on Form
10-K for the year ended December 31, 1990, Commission File No.
1-10654).
10.10 Midwest Resources Inc. revised and amended Executive Deferred
Compensation Plan for IOR and Subsidiaries, dated January 29, 1992.
(Filed as Exhibit 10.5 to Midwest Resources' Annual Report on Form
10-K for the year ended December 31, 1991, Commission File No.
1-10654.)
10.11 Midwest Resources Inc. revised and amended Board of Directors
Deferred Compensation Plan for IOR and Subsidiaries, dated January 29,
1992. (Filed as Exhibit 10.6 to Midwest Resources' Annual Report on
Form 10-K for the year ended December 31, 1991, Commission File No.
1-10654.)
10.12 Midwest Resources Inc. revised and amended Executive Incentive
Compensation Plan for IOR and Subsidiaries, dated January 29, 1992.
(Filed as Exhibit 10.7 to Midwest Resources' Annual Report on Form
10-K for the year ended December 31, 1991, Commission File No.
1-10654.)
10.13 Midwest Resources Inc. and Participating Subsidiaries Long-Term
Incentive Compensation Plan. (Filed as Exhibit 10.8 to Midwest
Resources' Annual Report on Form 10-K for the year ended December 31,
1991, Commission File No. 1-10654.)
10.14 Midwest Power Group 1992 Key Executive Incentive Compensation Plan.
(Filed as Exhibit 10.9 to Midwest Resources' Annual Report on Form
10-K for the year ended December 31, 1991, Commission File No.
1-10654.)
10.15 Midwest Resources Inc. Supplemental Retirement Plan (formerly the
Midwest Energy Company Supplemental Retirement Plan). (Filed as
Exhibit 10.10 to Midwest Resources' Annual Report on Form 10-K for the
year ended December 31, 1993, Commission File No. 1-10654.)
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<PAGE>
10.16 Power Sales Contract between Iowa Power Inc. and Nebraska Public Power
District, dated September 22, 1967. (Filed as Exhibit 4-C-2 to Iowa
Power Inc.'s (IPR) Registration Statement, Registration No. 2-27681.)
10.17 Amendments Nos. 1 and 2 to Power Sales Contract between Iowa Power
Inc. and Nebraska Public Power District. (Filed as Exhibit 4-C-2a to
IPR's Registration Statement, Registration No. 2-35624.)
10.18 Amendment No. 3 dated August 31, 1970, to the Power Sales Contract
between Iowa Power Inc. and Nebraska Public Power District, dated
September 22, 1967. (Filed as Exhibit 5-C-2-b to IPR's Registration
Statement, Registration No. 2-42191.)
10.19 Amendment No. 4 dated March 28, 1974, to the Power Sales Contract
between Iowa Power Inc. and Nebraska Public Power District, dated
September 22, 1967. (Filed as Exhibit 5-C-2-c to IPR's Registration
Statement, Registration No. 2-51540.)
10.20 Revised and amended Executive Compensation Plan for Iowa Resources
Inc. and Subsidiaries, dated July 24, 1985. (Filed as Exhibit 10.21 to
Iowa Resources Inc.'s (IOR) Annual Report on Form 10-K for the year
ended December 31, 1985, Commission File No. 1-7830.)
10.21 Revised and amended Executive Deferred Compensation Plan for IOR and
Subsidiaries, dated July 24, 1985. (Filed as Exhibit 10.22 to IOR's
Annual Report on Form 10-K for the year ended December 31, 1985,
Commission File No. 1-7830.)
10.22 Revised and amended Deferred Compensation Plan for Board of Directors
of IOR and Subsidiaries, dated July 24, 1985. (Filed as Exhibit 10.22
to IOR's Annual Report on Form 10-K for the year ended December 31,
1985, Commission File No. 1-7830.)
10.23 Revised and amended Executive Compensation Plan for IOR and
Subsidiaries, dated December 18, 1987. (Filed as Exhibit 10.14 to
IOR's Annual Report on Form 10-K for the year ended December 31, 1987,
Commission File No. 1-7830.)
10.24 Revised and amended Executive Deferred Compensation Plan for IOR and
Subsidiaries, dated December 18, 1987. (Filed as Exhibit 10.15 to
IOR's Annual Report on Form 10-K for the year ended December 31, 1987,
Commission File No. 1-7830.)
10.25 Revised and amended Deferred Compensation Plan for Board of Directors
of IOR and Subsidiaries, dated December 18, 1987. (Filed as Exhibit
10.16 to IOR's Annual Report on Form 10-K for the year ended December
31, 1987, Commission File No. 1-7830.)
10.27 Change in control agreement between Russell E. Christiansen and
Midwest Energy Company dated as of May 5, 1989. (Filed as Exhibit
10(e) in MWE's Form 10-K for the year ended December 31, 1989,
Commission File No. 1-8708.)
10.29 Amendments to Midwest Resources Executive Deferred Compensation
Plans, dated October 30, 1992. (Filed as Exhibit 10(h) to Midwest
Resource's Annual Report on Form 10-K for the year ended December 31,
1992, Commission File No. 1-10654.)
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<PAGE>
10.30 Midwest Power Systems 1993 Key Executive Incentive Compensation Plan.
(Filed as Exhibit 10.30 in Midwest Resources' Annual Report on Form
10-K for the year ended December 31, 1993, Commission File No.
1-10654.)
10.31 Supplemental Retirement Plan for Principal Officers, as amended as of
July 1, 1993. (Filed as Exhibit 10.K.2 to Iowa-Illinois' Annual Report
on Form 10-K for the year ended December 31, 1993, Commission File No.
1-3573.)
10.32 Compensation Deferral Plan for Principal Officers, as amended as of
July 1, 1993. (Filed as Exhibit 10.K.2 to Iowa-Illinois' Annual Report
on Form 10-K for the year ended December 31, 1993, Commission File No.
1-3573.)
10.33 Board of Directors' Compensation Deferral Plan. (Filed as Exhibit
10.K.4 to Iowa-Illinois' Annual Report on Form 10-K for the year ended
December 31, 1992, Commission File No. 1-3573.)
10.34 Revised and amended Supplemental Retirement Income Plan for Iowa
Resources Inc. and Subsidiaries dated October 24, 1984. (Filed as
Exhibit 10.15 to Midwest Resources' Annual Report on Form 10-K for the
year ended December 31, 1994, Commission File No. 1-10654.)
10.35 Amendment No. 1 to the Midwest Resources Inc. Supplemental Retirement
Plan. (Filed as Exhibit 10.24 to Midwest Resources' Annual Report on
Form 10-K for the year ended December 31, 1994, Commission File No.
1-10654.)
10.36 Deferred Compensation Plan of Midwest Energy Company and Subsidiary
Corporations. (Filed as Exhibit 10.25 to Midwest Resources' Annual
Report on Form 10-K for the year ended December 31, 1994, Commission
File No. 1-10654.)
10.37 Form of Indemnity Agreement between MidAmerican Energy Company and
its directors and officers. (Filed as Exhibit 10.37 to MidAmerican's
Annual Report on Form 10-K dated December 31, 1995, Commission File
No. 1-11505.)
10.38 MidAmerican Energy Company 1995 Long-Term Incentive Plan. (Filed as
Exhibit 10(a) to Holdings' Registration Statement on Form S-4, File
No. 333-01645.)
10.42 Amendment No. 5 dated September 2, 1997, to the Power Sales contract
between MidAmerican Energy Company and Nebraska Public Power District,
dated September 22, 1967. (Filed as Exhibit 10.2 to Holdings' and
MidAmerican's respective Quarterly Reports on the combined Form 10-Q
for the quarter ended September 30, 1997, Commission File Nos. 1-12459
and 1-11505, respectively.)
10.43 Amendment No. 1 dated October 29, 1997, to the MidAmerican Energy
Company 1995 Long-Term Incentive Plan. (Filed as Exhibit 10.1 to
Holdings' and MidAmerican's respective Quarterly Reports on the
combined Form 10-Q for the quarter ended September 30, 1997,
Commission File Nos. 1-12459 and 1-11505, respectively.)
Note: Pursuant to (b) (4) (iii)(A) of Item 601 of Regulation S-K, the
Company has not filed as an exhibit to this Form 10-K certain
instruments with respect to long-term debt not being registered if the
total amount of securities authorized thereunder does not exceed 10%
of total assets of the Company but hereby agrees to furnish to the
Commission on request any such instruments.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MIDAMERICAN ENERGY HOLDINGS COMPANY
MIDAMERICAN ENERGY COMPANY
(Registrants)
Date April 27, 1998 /s/ Larry M. Smith
--------------- ----------------------------------
Larry M. Smith
Vice President and Controller
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
---------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
------------------- ---------------------
Commission file number 1-12459
---------------------------
MIDAMERICAN ENERGY COMPANY EMPLOYEE STOCK PURCHASE PLAN
- ----------------------------------------------------------------------------
(Full title of the plan)
MIDAMERICAN ENERGY HOLDINGS COMPANY
- ----------------------------------------------------------------------------
(Name of Issuer of the securities held pursuant to the plan)
666 Grand Ave. P.O. Box 657, Des Moines, Iowa 50303
- --------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
<PAGE>
MIDAMERICAN ENERGY COMPANY
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
ASSETS
------
As of December 31
-----------------------
1997 1996
---------- ----------
INVESTMENTS
MidAmerican Energy Holdings Company
common stock held by nominee - 497,023
and 558,323 shares, respectively
Cost at date of purchase $ 7,862,871 $8,508,522
Unrealized appreciation in market value 3,071,627 354,859
----------- ----------
Market value 10,934,498 8,863,381
CONTRIBUTIONS RECEIVABLE 2,856 2,857
----------- ----------
Total $10,937,354 $8,866,238
=========== ==========
LIABILITIES AND OWNERSHIP INTEREST
----------------------------------
OWNERSHIP INTEREST $10,937,354 $8,866,238
=========== ==========
The accompanying notes to financial statements are an
integral part of these statements.
-2-
<PAGE>
MIDAMERICAN ENERGY COMPANY
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN OWNERSHIP INTEREST
<TABLE>
<CAPTION>
Period From
Inception
Year Ended Year Ended (July 3, 1995), to
December 31, December 31, December 31,
1997 1996 1995
------------ ---------- -----------------
<S> <C> <C> <C>
BALANCE, beginning of period $ 8,866,238 $8,148,700 $ -
------------ ---------- ----------
TRANSFER OF OWNERSHIP
INTEREST FROM OTHER PLANS - - 6,302,994
------------ ---------- ----------
CONTRIBUTIONS
Participants 2,095,732 2,129,815 1,192,809
Company 369,835 375,850 210,495
------------ ---------- ----------
2,465,567 2,505,665 1,403,304
------------ ---------- ----------
PLAN INCOME
Dividends on shares held by the Plan 610,319 612,650 275,721
Realized gain on distributed shares 394,122 137,597 41,459
Unrealized appreciation (depreciation)
in market value of investments 2,716,768 (601,049) 955,908
------------ ---------- ----------
3,721,209 149,198 1,273,088
------------ ---------- ----------
DISTRIBUTIONS TO PLAN PARTICIPANTS
Shares distributed 3,505,341 1,324,675 554,965
Dividends paid 610,319 612,650 275,721
------------ ---------- ----------
4,115,660 1,937,325 830,686
------------ ---------- ----------
BALANCE, end of period $10,937,354 $8,866,238 $8,148,700
=========== ========== ==========
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
-3-
<PAGE>
MIDAMERICAN ENERGY COMPANY
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
(1) THE PLAN
The following brief description of the MidAmerican Energy Company
(MidAmerican) Employee Stock Purchase Plan (the Plan) is provided for general
information purposes only. Participants should refer to the Plan document for
more complete information.
(a) General and Plan Participants
On April 24, 1996, MidAmerican shareholders approved a proposal to form
MidAmerican Energy Holdings Company (Holdings or the Company) as a holding
company for MidAmerican and its subsidiaries. Effective December 1, 1996, each
share of MidAmerican common stock was exchanged for one share of Holdings common
stock.
Under the Plan, eligible employees of the Company and its subsidiaries who
are enrolled in the Plan may purchase shares of the common stock of the Company
(Common Stock) at 85% of their fair market value. Purchases are made on the last
business day of each monthly investment period with fair market value being the
average of the high and low prices per share of Common Stock on the New York
Stock Exchange - Composite Transactions on such day or, if there is no sale of
Common Stock on that day, then on the next preceding day on which there was a
sale. The Company contributes the remaining 15% of the fair market value.
The Plan will terminate when the maximum number of shares of Common Stock
to be sold under the Plan has been purchased or by action of the board of
directors of the Company. The maximum number of shares of Common Stock which is
currently authorized to be purchased pursuant to the Plan is 1,000,000 subject
to adjustment as the result of a stock dividend, split-up or combination. During
1997, the Company purchased shares of Common Stock in the open market to meet
share obligations under the Plan. Such share purchases do not proportionately
reduce the shares available for issuance.
At December 31, 1997 and 1996, there were 1,704 and 2,020 participants,
respectively in the Plan.
(b) Administration
The Plan is administered by the Company at the Company's expense.
(c) Contributions
Participants' contributions to the Plan are made through payroll
deductions which are credited to a purchase account established for each
participant. Participants may authorize contributions up to the lesser of 15% of
base pay, as defined in the Plan, or $21,250 annually.
-4-
<PAGE>
(d) Ownership Interest
Shares of Common Stock purchased for all participants each monthly
investment period are issued on the last day of that period to a nominee for the
benefit of the participants. A separate account is maintained to reflect the
Common Stock balance of each participant. The Company is the nominee for the
Plan.
(e) Dividends
Cash dividends on shares of Common Stock earned on each participant's
account are paid to the participant by the Company or, at the participant's
election, reinvested in Common Stock. Such reinvested dividends are held in, and
under the terms of, the Company's Shareholder Options Plan.
(f) Vesting and Withdrawal of Shares
Participants have a vested right to all shares of Common Stock credited to
their accounts. Shares of Common Stock held in the Plan cannot be withdrawn from
the Plan until the shares have been held under the Plan for at least six months
except that, in the event of a participant's death or termination of employment
or eligibility, a participant's account will be totally distributed. Upon
withdrawal from the Plan, all whole shares in a participant's account will be
deposited in safekeeping under the Company's Shareholder Options Plan unless the
participant requests that a certificate be issued, and a cash payment will be
made for fractional shares.
(g) Legal and Income Tax Status
The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974. The Company believes that the Plan qualifies under Section
423 of the Internal Revenue Code (the Code) as a non-compensatory employee stock
purchase plan. An employee's federal income tax status with respect to the Plan
would be determined by such section of the Code. The Plan is not subject to
federal income tax.
(2) ACCOUNTING POLICIES
(a) Basis of Accounting
The statements are presented on the accrual basis of accounting, and
accordingly, contributions of participants and the Company are reflected in the
year in which the participants earned the related wages. The Plan's obligation
to purchase Common Stock with the accrued contributions is reflected in
Ownership Interest. The cost of Common Stock distributed by the Plan is
determined on an average cost basis.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes in ownership interest. Actual results could differ from those estimates.
-5-
<PAGE>
(b) Valuation of Investments
Common Stock held under the Plan is reported at market value as determined
by the closing price at year-end on the New York Stock Exchange - Composite
Transaction listing. The market value per share as of December 31, 1997 and 1996
was $22 and $15.875, respectively.
-6-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To MidAmerican Energy Company:
We have audited the accompanying statement of financial condition of the
MidAmerican Energy Company Employee Stock Purchase Plan (the Plan) as of
December 31, 1997, and the related statement of changes in ownership interest
for the year then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan as of December 31,
1997, and the changes in ownership interest for the year then ended in
conformity with generally accepted accounting principles.
Kansas City, Missouri /s/ Coopers & Lybrand L.L.P.
----------------------------
March 20, 1998 COOPERS & LYBRAND L.L.P.
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To MidAmerican Energy Company:
We have audited the accompanying statement of financial condition of the
MidAmerican Energy Company Employee Stock Purchase Plan as of December 31, 1996,
and the related statement of changes in ownership interest for the twelve month
period ended December 31, 1996 and from inception (July 3, 1995) to December 31,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the MidAmerican Energy Company
Employee Stock Purchase Plan as of December 31, 1996, and the changes in
ownership interest for the twelve month period ended December 31, 1996, and from
inception (July 3, 1995) to December 31, 1995, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 14, 1997
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, MidAmerican
Energy Holdings Company has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
MIDAMERICAN ENERGY COMPANY
EMPLOYEE STOCK PURCHASE PLAN
Date March 20, 1998 By /s/ A. L. Wells
--------------------------
A. L. Wells
Senior Vice President and
Chief Financial Officer
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<PAGE>
EXHIBITS INDEX
The following exhibit is filed herewith:
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Arthur Andersen LLP
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<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
MidAmerican Energy Holdings Company on Form S-8 (File No. 33-60849) of our
report dated March 20, 1998 on our audit of the MidAmerican Energy Company
Employee Stock Purchase Plan as of December 31, 1997 and for the year then
ended, which report is included in this Annual Report on Form 11-K.
Kansas City, Missouri /s/ Coopers & Lybrand L.L.P.
April 23, 1998 ----------------------------
COOPERS & LYBRAND L.L.P.
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<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants, we hereby consent to the incorporation of our
report included in this Annual Report on Form 11-K, into MidAmerican Energy
Company's previously filed Form S-8 Registration Statement File No. 33-60849.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 21, 1998
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1997
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------------ ---------------------
Commission file number 1-12459
---------------------------------------------------
IOWA POWER INC. PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP PLAN
- --------------------------------------------------------------------------
(Full title of the plan)
MIDAMERICAN ENERGY HOLDINGS COMPANY
- ---------------------------------------------------------------------------
(Name of Issuer of the securities held pursuant to the plan)
666 Grand Ave. P.O. Box 657, Des Moines, Iowa 50303
- ------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
<PAGE>
IOWA POWER INC.
PAYROLL-BASED
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31
-----------------------
1997 1996
----------- ----------
INVESTMENTS
MidAmerican Energy Holdings Company
common stock held by Trustee-- 185,740
shares and 205,841 shares, respectively
Value at date of contribution $1,905,966 $2,108,834
Unrealized appreciation in market value 2,180,306 1,158,897
--------- ----------
Market value as of December 31 4,086,272 3,267,731
OTHER ASSETS 10 10
----------- ----------
TOTAL $4,086,282 $3,267,741
========== ==========
The accompanying notes to financial statements are an
integral part of these statements.
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<PAGE>
IOWA POWER INC.
PAYROLL-BASED
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Year Ended December 31
------------------------------------
1997 1996 1995
---------- ---------- ----------
BALANCE, beginning of year $3,267,741 $4,419,407 $3,841,812
---------- ---------- ----------
PLAN INCOME
Dividends on stock held by Trustee 231,623 277,216 316,003
Net appreciation (depreciation)
in fair value of investments 1,162,990 (153,461) 798,985
---------- ---------- ----------
1,394,613 123,755 1,114,988
---------- ----------- ----------
DISTRIBUTIONS TO PLAN PARTICIPANTS
Shares distributed 344,449 998,205 221,390
Dividends paid 231,623 277,216 316,003
---------- ---------- ----------
576,072 1,275,421 537,393
---------- ---------- ----------
BALANCE, end of year $4,086,282 $3,267,741 $4,419,407
========== ========== ==========
The accompanying notes to financial statements are an
integral part of these statements.
-3-
<PAGE>
IOWA POWER INC.
PAYROLL-BASED
EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
(1) THE PLAN:
The following brief description of the Iowa Power Inc. Payroll-Based
Employee Stock Ownership Plan (the Plan) is provided for general information
purposes only. Participants should refer to the Plan document for more complete
information.
(a) General and Plan Participants
Iowa Resources Inc. (Iowa Resources) adopted the Iowa Resources Inc. Tax
Reduction Act Employee Stock Ownership Plan (Prior Plan) without change from
Iowa Power and Light Company on November 1, 1979. The Prior Plan was amended in
1980 to comply with certain changes in tax laws. The Prior Plan was amended to
the Iowa Resources Inc. Payroll-Based Employee Stock Ownership Plan effective
January 1, 1983 to comply with changes in federal tax laws which replaced the
investment-based tax credit with a payroll-based tax credit. Pursuant to the
merger of Iowa Resources and Midwest Energy Company into Midwest Resources Inc.
(Resources) on November 7, 1990, Iowa Power Inc. (formerly Iowa Power and Light
Company) became the sponsor and the Plan became the Iowa Power Inc.
Payroll-Based Employee Stock Ownership Plan. Pursuant to the merger of Iowa
Power and Iowa Public Service Company with and into Midwest Power Systems Inc.
(Midwest) on July 22, 1992, Midwest became the sponsor of the Plan. On July 1,
1995, Resources, Iowa-Illinois Gas and Electric Company (Iowa-Illinois) and
Midwest merged with and into MidAmerican Energy Company (MidAmerican) and
MidAmerican became the plan sponsor.
On April 24, 1996, MidAmerican shareholders approved a proposal to form
MidAmerican Energy Holdings Company (Holdings or Company) as a holding company
for MidAmerican and its subsidiaries. Effective December 1, 1996, each share of
MidAmerican common stock was exchanged for one share of Company common stock.
All share amounts are presented in equivalent Holdings shares.
The Plan terminates by its own terms "at midnight on the last day of the
Plan-Year immediately preceding the first Plan-Year in which the payroll-based
credit is no longer available under the Code." The 1986 Tax Reform Act
eliminated the payroll-based credit, and therefore, the Plan terminated December
31, 1986. Iowa Resources discontinued its contributions in 1987, and no further
employee-matching contributions were permitted under the Plan. Nonetheless, the
Payroll-Based Employee Stock Ownership Trust provides that the Trustee shall
continue to fulfill all holding requirements under the Plan.
At December 31, 1997, 1996 and 1995, there were 571, 632, and 791
participants, respectively, in the Plan. Included in the assets of the Plan at
December 31, 1997 are 5,948 shares of Holdings common stock valued at $130,848
held for 24 former employees who elected to defer the distribution of their
stock to future periods.
(b) Trustee Arrangements
Contributions made under the Plan are held, managed and controlled by use
of a trust (the Trust) by a trustee and administered by a committee designated
by Holding's Board of Directors, pursuant to the Iowa Power Inc. Payroll-Based
Employee Stock Ownership Plan Agreement.
-4-
<PAGE>
(c) Ownership Interest
A separate account is maintained to reflect the common stock balance of
each participant.
(d) Dividends
Cash dividends on shares of common stock allocated to each participant's
account are paid to the participant when received by the Trustee or, at the
participant's election, reinvested in common stock under the terms of Holding's
Shareholder Options Plan.
(e) Benefits and Vesting
Participants have a vested right to all shares of common stock allocated to
their accounts and dividends reinvested under the optional election described in
(d) above. Common stock in the trust can be withdrawn at the option of the
participants. In the event of termination of employment, death or permanent
disability, a participant's account will be totally distributed. Distribution of
participants' accounts will be made in common stock except for fractional
shares. Fractional shares will be purchased for cash at the then current market
value.
(f) Legal and Income Tax Status
The Plan is subject to the Employee Retirement Income Security Act of 1974
(ERISA), which was enacted to protect the interests of participants and their
beneficiaries. Iowa Resources received a formal Internal Revenue Service
determination on February 4, 1985 that Iowa Resources' contributions to the Plan
were qualified under Section 401 of the Internal Revenue Code of 1954, as
amended. The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the Plan
is currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, they believe that the plan
was qualified and tax-exempt as of the financial statement date.
(2) ACCOUNTING POLICIES:
(a) Basis of Accounting
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
that affect the reported amounts of assets available for plan benefits at the
date of the financial statements and the amounts of the changes in net assets
available for plan benefits during the reporting period. Actual results may
differ from those estimates.
The financial statements are presented on the accrual basis and,
accordingly, income is reflected when earned.
(b) Valuation of Investments
Common stock of Holdings held in the Trust is reported at market value as
determined by the closing price at year-end on the New York Stock
Exchange-Composite Transaction Listing. The market value per share as of
December 31, 1997 and 1996 was $22 and $15 7/8, respectively.
-5-
<PAGE>
(c) Dividend Distributions
Cash dividends distributed or reinvested are allocated among participants
to the nearest cent based upon each participant's ownership interest.
(d) Net Appreciation (Depreciation)
The Plan presents in the statement of changes in net assets available for
Plan benefits the net appreciation (depreciation) in the fair value of
investments, which consists of the realized gain or losses on investments and
the unrealized appreciation (depreciation) on those investments.
(3) RECLASSIFICATIONS
Certain amounts in the 1996 financial statements have been reclassified to
conform to the 1997 presentation.
-6-
<PAGE>
Report of Independent Accountants
To MidAmerican Energy Company:
We have audited the accompanying statement of net assets available for plan
benefits of the Iowa Power Inc. Payroll-Based Employee Stock Ownership Plan (the
Plan) as of December 31, 1997, and the related statement of changes in net
assets available for plan benefits for the year then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1997, and the changes in net assets available for plan benefits
for the year then ended in conformity with generally accepted accounting
principles.
Kansas City, Missouri /s/ Coopers & Lybrand L.L.P.
------------------------------
March 20, 1998 COOPERS & LYBRAND L.L.P.
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To MidAmerican Energy Company:
We have audited the accompanying Statement of Net Assets Available for Plan
Benefits of the Iowa Power Inc. Payroll-Based Employee Stock Ownership Plan as
of December 31, 1996, and the related Statements of Changes in Net Assets
Available for Plan Benefits for each of the two years in the period ended
December 31, 1996. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all
material respects, the net assets available for plan benefits of the Iowa Power
Inc. Payroll-Based Employee Stock Ownership Plan as of December 31, 1996 and the
changes in net assets available for plan benefits for each of the two years in
the period ended December 31, 1996 in conformity with generally accepted
accounting principles.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 14, 1997
-8-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Iowa
Power Inc. Payroll-Based Employee Stock Ownership Plan Committee has duly caused
this annual report to be signed by the undersigned thereunto duly authorized.
IOWA POWER INC. PAYROLL-BASED
EMPLOYEE STOCK OWNERSHIP PLAN
By /s/ J. S. Rozema, Trustee
---------------------------
J. S. Rozema, Trustee
Dated: March 20, 1998
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<PAGE>
EXHIBITS INDEX
The following exhibit is filed herewith:
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Arthur Andersen LLP
-10-
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
MidAmerican Energy Holdings Company on Form S-8 (File No. 2-85102) of our
report dated March 20, 1998 on our audit of the Iowa Power Inc. Payroll-Based
Employee Stock Ownership Plan as of December 31, 1997 and for the year then
ended, which report is included in the Annual Report on Form 11-K.
Kansas City, Missouri /s/ Coopers & Lybrand L.L.P.
April 23, 1998 ----------------------------
COOPERS & LYBRAND L.L.P.
-11-
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants, we hereby consent to the incorporation of our
report included in this Annual Report Form 11-K, into MidAmerican Energy
Company's previously filed Form S-8 Registration Statement File No. 2-85102.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 21, 1998
-12-
