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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2004


Commission
 
Registrant’s Name, State of Incorporation,
 
IRS Employer
File Number
 
Address and Telephone Number
 
Identification No.
 
333-90553
 
MIDAMERICAN FUNDING, LLC
 
47-0819200
 
 
(An Iowa Limited Liability Company)
 
 
 
 
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
 
 

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 whether the registrants are accelerated filers (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

As of July 26, 2004, all of the member’s equity of MidAmerican Funding, LLC was held by its parent company, MidAmerican Energy Holdings Company.

As of July 26, 2004, all 70,980,203 outstanding shares of MidAmerican Energy Company’s voting stock were held by its parent company, MHC Inc., a direct, wholly owned subsidiary of MidAmerican Funding, LLC.

 
 
MidAmerican Funding, LLC ("MidAmerican Funding") and MidAmerican Energy Company ("MidAmerican Energy") separately file this combined Form 10-Q. Information relating to each individual registrant is filed by such registrant on its own behalf. Except for its subsidiary, MidAmerican Energy makes no representation as to information relating to any other subsidiary of MidAmerican Funding.

 

TABLE OF CONTENTS


Part I - Financial Information
 
 
 
3
24
37
37
 
Part II – Other Information
 
 
 
38
38
38
38
39
39
 
40
 
41
 

2
 

PART I - FINANCIAL INFORMATION
 
Item 1.   Financial Statements.

MidAmerican Energy Company
 
 
 
4
5
6
7
8
 
 
MidAmerican Funding, LLC
 
 
 
16
17
18
19
20



3
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors and Shareholder
MidAmerican Energy Company
Des Moines, Iowa

We have reviewed the accompanying consolidated balance sheet of MidAmerican Energy Company and subsidiary (the “Company”) as of June 30, 2004, and the related consolidated statements of operations for the three-month and six-month periods ended June 30, 2004 and 2003, and of cash flows for the six-month periods ended June 30, 2004 and 2003. These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet and statement of capitalization (not presented herein) of MidAmerican Energy Company and subsidiary as of December 31, 2003, and the related consolidated statements of operations, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated February 9, 2004 (March 1, 2004 as to Notes (1)(b), (1)(c), (1)(j) and (12)), we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2003 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.


/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Des Moines, Iowa
July 28, 2004
 
4
 
MIDAMERICAN ENERGY COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)

   

 As of

  
   
 
 
  

 June 30, 

  

 December 31,

  
 
  

 2004

  

 2003

  
   
 
 
 
  

 (Unaudited) 

    
 
  
ASSETS
Utility Plant, Net
    
 
    
 
  
Electric
  
$
5,097,185
  
$
5,030,960
  
Gas
    
933,586
    
922,099
  
   
 
 
 
    
6,030,771
    
5,953,059
  
Accumulated depreciation and amortization
    
(2,897,149
)
  
(2,810,336
)
   
 
 
 
    
3,133,622
    
3,142,723
  
Construction work in progress
    
396,946
    
217,537
  
   
 
 
 
    
3,530,568
    
3,360,260
  
   
 
 
 
    
 
    
 
  
Current Assets
    
 
    
 
  
Cash and cash equivalents
    
5,626
    
3,151
  
Receivables, net
    
269,060
    
300,643
  
Inventories
    
55,501
    
85,465
  
Other
    
31,703
    
42,459
  
   
 
 
 
    
361,890
    
431,718
  
   
 
 
 
    
 
    
 
  
Investments and Nonregulated Property, Net
    
312,977
    
299,103
  
Regulatory Assets
    
281,699
    
261,696
  
Other Assets
    
68,798
    
51,657
  
   
 
 
   
    
 
    
 
  
Total Assets
  
$
4,555,932
  
$
4,404,434
  
   
 
 
 
CAPITALIZATION AND LIABILITIES
Capitalization
    
 
    
 
  
Common shareholder’s equity
  
$
1,411,096
  
$
1,318,519
  
MidAmerican Energy preferred securities
    
30,329
    
31,759
  
Long-term debt, excluding current portion
    
982,183
    
1,072,496
  
   
 
 
 
    
2,423,608
    
2,422,774
  
   
 
 
Current Liabilities
    
 
    
 
  
Notes payable
    
9,000
    
48,000
  
Current portion of long-term debt
    
90,759
    
56,151
  
Accounts payable
    
167,008
    
198,273
  
Taxes accrued
    
61,494
    
72,558
  
Interest accrued
    
9,718
    
10,235
  
Other
    
100,179
    
67,160
  
   
 
 
 
    
438,158
    
452,377
  
   
 
 
Other Liabilities
    
 
    
 
  
Deferred income taxes
    
478,034
    
415,788
  
Investment tax credits
    
50,324
    
52,510
  
Asset retirement obligations
    
276,790
    
269,124
  
Regulatory liabilities
    
621,276
    
574,490
  
Other
    
267,742
    
217,371
  
   
 
 
 
    
1,694,166
    
1,529,283
  
   
 
 
 
    
 
    
 
  
Total Capitalization and Liabilities
  
$
4,555,932
  
$
4,404,434
  
   
 
 
 
The accompanying notes are an integral part of these financial statements.
 
5
 
MIDAMERICAN ENERGY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)

   

Three Months

  

Six Months

  
   

 Ended June 30,

  

Ended June 30,

  
   
 
 
 
  

 2004

  

 2003

  

 2004

  

 2003

  
   
 
 
 
 
 
    
 
  

 (Unaudited)

    
 
  
Operating Revenues
    
 
    
 
    
 
    
 
  
Regulated electric
  
$
344,375
  
$
329,287
  
$
707,559
  
$
644,229
  
Regulated gas
    
173,669
    
155,075
    
567,240
    
568,854
  
Nonregulated
    
55,927
    
51,521
    
139,104
    
137,996
  
   
 
 
 
 
 
    
573,971
    
535,883
    
1,413,903
    
1,351,079
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Operating Expenses
    
 
    
 
    
 
    
 
  
Regulated:
    
 
    
 
    
 
    
 
  
Cost of fuel, energy and capacity
    
99,061
    
82,454
    
213,674
    
170,872
  
Cost of gas sold
    
133,442
    
111,747
    
444,217
    
441,274
  
Other operating expenses
    
93,609
    
89,221
    
180,622
    
171,869
  
Maintenance
    
49,083
    
37,447
    
82,016
    
65,729
  
Depreciation and amortization
    
67,539
    
77,797
    
150,067
    
146,282
  
Property and other taxes
    
19,665
    
19,373
    
41,327
    
39,930
  
   
 
 
 
 
 
    
462,399
    
418,039
    
1,111,923
    
1,035,956
  
   
 
 
 
 
Nonregulated:
    
 
    
 
    
 
    
 
  
Cost of sales
    
47,641
    
43,360
    
122,445
    
120,749
  
Other
    
4,569
    
4,336
    
8,724
    
8,068
  
   
 
 
 
 
 
    
52,210
    
47,696
    
131,169
    
128,817
  
   
 
 
 
 
Total operating expenses
    
514,609
    
465,735
    
1,243,092
    
1,164,773
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Operating Income
    
59,362
    
70,148
    
170,811
    
186,306
  
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Non-Operating Income
    
 
    
 
    
 
    
 
  
Interest and dividend income
    
631
    
1,383
    
1,230
    
2,509
  
Other income
    
5,553
    
5,461
    
9,918
    
9,899