SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 12, 1999
Commission Exact Name Of Registrant As IRS Employer
File Number Specified In Its Charter Identification No.
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1-11505 MidAmerican Energy Company 42-1425214
(An Iowa Corporation)
666 Grand Avenue, P. O. Box 657, Des Moines, Iowa 50303-0657
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 515/242-4300
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Item 1. Changes in Control of the Registrant.
On March 12, 1999, the parties to an Agreement and Plan of Merger dated
August 11, 1998 completed a transaction whereby MidAmerican Energy
Company, an Iowa corporation and operating public utility company (the
"Company"), became a wholly owned indirect subsidiary of MidAmerican
Energy Holdings Company, an Iowa corporation and the successor by
merger to CalEnergy Company, Inc. ("CalEnergy"). Prior to this merger
CalEnergy was a Delaware corporation, however, it merged with and into
its wholly owned subsidiary, Maverick Reincorporation Sub, Inc., an
Iowa corporation ("Maverick") with the surviving entity being an Iowa
corporation (the "Reincorporation Merger"). Immediately following the
Reincorporation Merger, MAVH Inc., an Iowa corporation and wholly owned
subsidiary of CalEnergy, merged (the "Holdings Merger") with and into
the Company's parent, MidAmerican Energy Holdings Company, an Iowa
corporation ("Holdings"). As a part of the Holdings Merger, Holdings
changed its name to MHC Inc. Subsequent to the Holdings Merger,
Maverick changed its name to MidAmerican Energy Holdings Company ("Mid-
American"). As a result of the Reincorporation Merger and the Holdings
Merger, the Company remained a wholly owned subsidiary of MHC Inc. but
became an indirect subsidiary of MidAmerican, all other direct and
indirect subsidiaries of Holdings each became an indirect subsidiary of
MidAmerican and each outstanding share of common stock of Holdings was
converted into the right to receive $27.15 in cash.
CalEnergy and its wholly owned subsidiary MidAmerican Funding LLC
("Funding") financed the purchase of all outstanding shares of Holdings
common stock with the net proceeds of a $700 million offering of
Funding's senior secured notes and bonds and an equity contribution
from CalEnergy. A portion of the CalEnergy equity contribution was
provided from approximately $930 million in net proceeds to CalEnergy
from its sale of senior notes in September and November of 1998. The
balance of the CalEnergy equity contribution was funded from cash on
hand, from available borrowings under CalEnergy's lines of credit and
from the proceeds of CalEnergy's recently completed sales of a least
50% of its interest in all of its qualifying facility projects.
A copy of the news release with respect to such transaction is attached
as an exhibit to this report.
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Item 4. Changes in Registrant's Certifying Accountant.
a. On March 12, 1999, MidAmerican Energy Company and its affiliates
(the "Company") became an indirect wholly owned subsidiary of CalEnergy
Company, Inc. in a transaction approved by the Board of Directors of
the Company's parent on August 11, 1998. Deloitte & Touche LLP serves
as the independent accounting firm engaged to audit the financial
statements of CalEnergy Company, Inc. and all of its subsidiaries.
Accordingly, on March 12, 1999, Company management informed Pricewater-
houseCoopers LLP that as a result of the Board-approved transaction,
the firm would no longer be engaged as independent accountants for
the Company for accounting periods subsequent to the fiscal year ended
December 31, 1998. Such termination will be effected upon the filing of
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
PricewaterhouseCoopers LLP's reports on the Company's financial
statements for the two most recent fiscal years ended December 31, 1997
and 1998 contained no adverse opinion or disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.
During the two most recent fiscal years ended December 31, 1997 and
1998, and during the subsequent interim period through March 12, 1999,
there were no disagreements with PricewaterhouseCoopers LLP on any
matter of accounting principles or practices, financial statement
disclosures, or auditing scope or procedures, which disagreements, if
not resolved to the satisfaction of PricewaterhouseCoopers LLP, would
have caused it to make a reference to the subject matter of the
disagreements in connection with its audit reports.
During the two most recent fiscal years ended December 31, 1997 and
1998, and during subsequent interim periods through March 12, 1999,
there were no reportable events (as defined in Securities and Exchange
Commission Regulation S-K Item 304(a)(1)(v)).
The Company requested PricewaterhouseCoopers LLP to furnish a letter
addressed to the Commission stating whether it agrees with the above
statements. PricewaterhouseCoopers LLP's letter dated March 12, 1999 is
filed as Exhibit 16 to this Form 8-K.
b. By action taken on March 12, 1999, MidAmerican Energy Company's
Board of Directors approved the appointment of the accounting firm of
Deloitte & Touche LLP as independent accountants for the Company for
1999. During the last two fiscal years ending December 31, 1997 and
1998, and during the subsequent interim period through March 12, 1999,
the Company did not consult Deloitte & Touche LLP regarding any of the
matters or events set forth in Securities and Exchange Commission
Regulation S-K Item 304(a)(2)(i) and (ii).
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. 16 - Letter from PricewaterhouseCoopers LLP dated
March 12, 1999.
Exhibit No. 99 - News Release of MidAmerican Energy Company
dated March 12, 1999.
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Signature
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 COMPANY
/s/ Paul J. Leighton
Paul J. Leighton
Vice President and Corporate Secretary
March 12, 1999
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Exhibit 16
[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]
March 12, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We have read the statements made by MidAmerican Energy Company (copy attached),
which we understand will be filed with the Commission, pursuant to Item 4 of
Form 8-K, as part of the Company's Form 8-K report dated March 12, 1999. We
agree with the statements concerning our Firm in such Form 8-K. We have no basis
to agree or disagree with the Company's statements in paragraph b.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
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Exhibit 99
[MidAmerican Energy Holdings Company letterhead]
CalEnergy and MidAmerican Close Merger
FOR IMMEDIATE RELEASE
OMAHA, NEBRASKA and DES MOINES, IOWA, March 12, 1999 --- CalEnergy Company, Inc.
("CalEnergy") (NYSE: CE; PCX and London) and MidAmerican Energy Holdings Com-
pany ("MidAmerican Energy") (NYSE: MEC) have combined to form a new fast-growing
competitive energy company following the closing today of CalEnergy's acquisi-
tion of MidAmerican Energy.
CalEnergy has reincorporated in Iowa under its new name, MidAmerican Energy
Holdings Company ("MidAmerican" or the "Company"), becoming the state's largest
publicly traded company based on combined 1998 revenues of $4.62 billion.
As of Monday, March 15, 1999, the Company stock will trade under the 'MEC'
symbol.
"We are extremely excited to launch the new MidAmerican, a company which is
uniquely positioned for growth in the deregulating global energy markets," said
David L. Sokol, Chairman and Chief Executive Officer of the Company. "Today
marks a crucial milestone in our quest to become a leading global provider of a
full range of energy services. Through the merger we've nearly doubled our
generating capacity and gained access to retail markets in the United States. We
will strengthen our focus on delivering the best possible service to our
customers and to increasing operating efficiencies as we continue to grow our
core businesses. The completion of this merger is good news for our customers,
our shareholders, employees and communities worldwide."
Highlights of the new MidAmerican include:
Serves 3.37 million customers worldwide
(2.15 million electricity customers and 1.22 million natural gas
customers)
Has $11 billion in assets and $4.62 billion in total 1998 combined
revenues
Owns interests in 10,000 megawatts of total generating capacity through
41 generating facilities worldwide
Employs 9,700 people throughout the world
Primary subsidiary operations include:
- Northern Electric and Gas, a rapidly growing U.K. utility with
experience in a deregulated energy market;
- MidAmerican Energy, a Midwestern U.S. utility serving customers in
Illinois, Iowa, Nebraska and South Dakota;
- CalEnergy, the entity under which independent power production
facilities and non-regulated businesses are developed;
- MidAmerican Realty Services, the second largest real estate brokerage
organization in the U.S. with operations in seven states.
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MidAmerican Energy Holdings Company
March 12, 1999
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To complete the transaction, CalEnergy paid $27.15 for each outstanding common
share of MidAmerican Energy stock, for a total of approximately $2.42 billion. A
pro-rated dividend for the period commencing March 1, 1999 and ending March 11,
1999 of approximately 3.59 cents per share will be paid to shareholders of
record of the former MidAmerican Energy as of March 12, 1999. The dividend
will be processed and mailed to all shareholders of the former company during
the next several weeks.
The Company will be headquartered in Des Moines, Iowa with the office of the
Chairman and Chief Executive Officer remaining in Omaha, Nebraska (former
headquarters of CalEnergy) to focus on strategic planning, mergers and
acquisitions and global development.
The new President and Chief Operating Officer, Gregory E. Abel, will be based in
Des Moines, along with the Company's Senior Vice President and General Counsel,
John Rasmussen and Senior Vice President and Chief Financial Officer, Alan
Wells. Stanley Bright will serve as Vice Chairman of the Board and a member of
its Executive Committee.
Greg Abel, President and Chief Operating Officer of MidAmerican said, "Since the
merger was first announced last August, we have been pleased with the accomp-
lishments the companies have achieved. Of particular note, we are on schedule
with our planned development of a 500 megawatt gas-fired generating facility
near the Quad Cities of Iowa and Illinois. This project is part of our long-term
strategy to aggressively compete in the upper Midwest."
Underscoring MidAmerican's commitment to the communities in which it operates,
the Company also announced today that it will implement `Global Days of
Service,' an innovative community relations program that encourages volunteer
work by MidAmerican employees in their home communities around the world.
MidAmerican has pledged $250,000 to be shared among the various charitable
organizations for which the employees volunteer. This new program supplements
the more than $3.5 million in annual contributions the Company already donates
around the world.
"With our Global Days of Service initiative," Chairman Sokol said, "We want to
encourage our employees to become more involved with helping others, and also
want to recognize the many active employee volunteers who already give so much
back to the communities we serve."
MidAmerican will officially launch its Global Days of Service program in April
as part of National Volunteer month. From April 12, 1999 through April 12, 2000,
any MidAmerican employee who volunteers personal time for a not-for-profit or
charitable organization can apply to MidAmerican for a cash donation. The size
of the donation will depend on the number of hours invested by the employee and
the number of organizations served, and the contributions will be split evenly
among the organizations from the $250,000 pool MidAmerican has set aside for the
program.
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MidAmerican Energy Holdings Company
March 12, 1999
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The Company has also adopted a new Shareholder Rights Plan, which will take
effect immediately following completion of the merger, and has declared a divi-
dend thereunder of one preferred share purchase right (a "Right") for each out-
standing share of the Company's Common Stock. The new Rights Plan has terms and
conditions that are substantially the same as those contained in the previous
CalEnergy shareholder rights plan, and provides that the Rights will first
become exercisable under certain circumstances involving the acquisition of
beneficial ownership of 20% or more of the Company's Common Stock or the
commencement or announcement of a tender offer or exchange offer for 30% or more
of the Common Stock. The Rights have the effect of making a change of control
which is not approved by the Company's Board more difficult. The Rights dividend
is payable on March 15, 1999 to Company shareholders of record on that date.
MidAmerican Energy Holdings Company, headquartered in Des Moines, Iowa, USA, has
more than 9,700 employees and is the largest publicly traded company in Iowa.
Through its retail utility subsidiaries, MidAmerican Energy in the U.S. and
Northern Electric in the U.K., the Company provides electric service to 2.15
million customers and natural gas service to 1.22 million customers worldwide.
Through CalEnergy, the Company's independent power production and non-regulated
business subsidiaries and MidAmerican Energy's utility operations, MidAmerican
manages and owns interests in approximately 10,000 net megawatts of diversified
power generation facilities in operation, construction and development.
Information about MidAmerican and its three principal subsidiary companies is
available on the Internet at http://www.midamerican.com.
This press release contains forward-looking statements that are based on current
expectations and involve a number of uncertainties. Reference is made to all of
each company's SEC filings including CalEnergy's Report on Form 8-K dated March
6, 1998, incorporated herein by reference, for a description of such
uncertainties.
MidAmerican Energy Holdings Company
Alan Wells, Senior Vice President and Chief Financial Officer, (515) 242-4008
Ron Giaier, Vice President, Investor Relations, (515) 242-4303
Patti McAtee, Vice President, Corporate Communications, (402) 341-4500
Kevin Waetke, Manager, Media Relations, (515) 281-2785
