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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 File No. 0-25551

MIDAMERICAN ENERGY HOLDINGS COMPANY
(Exact name of registrant as specified in its charter)


Iowa
 
94-2213782
(State or other jurisdiction of
 
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
 
 
 
 
 
 
 
666 Grand Avenue, Des Moines, Iowa
 
50309
(Address of principal executive offices)
 
(Zip Code)
 
 
 
(515) 242-4300
 
 
(Registrant’s telephone number, including area code)
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Act: N/A
Securities registered pursuant to Section 12(g) of the Act: N/A


Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

All of the shares of MidAmerican Energy Holdings Company are privately held by a limited group of investors. As of July 31, 2004, 9,081,087 shares of common stock were outstanding.
 
 
TABLE OF CONTENTS

 
PART I – FINANCIAL INFORMATION
 
 
 
 
3
20
34
34
 
 
 
 
PART II – OTHER INFORMATION
 
 
 
 
35
35
35
35
35
35
 
36
 
37

2
 
PART I – FINANCIAL INFORMATION

Item 1.   Financial Statements.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Stockholders
MidAmerican Energy Holdings Company
Des Moines, Iowa
 

We have reviewed the accompanying consolidated balance sheet of MidAmerican Energy Holdings Company and subsidiaries (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 of MidAmerican Energy Holdings Company and subsidiaries as of December 31, 2003, and the related consolidated statements of operations, stockholders’ equity, 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 2, 5 and 20), 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
 
3
 
MIDAMERICAN ENERGY HOLDINGS COMPANY
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

 

 As of 

  
 
 
 

 June 30, 

  

 December 31,

  
 

 2004

  

 2003

  
 
 
 
 

 (Unaudited) 

    
 
  
ASSETS
Current assets:
  
 
    
 
  
Cash and cash equivalents
$
1,078,567
  
$
660,213
  
Restricted cash and short-term investments
  
89,449
    
55,281
  
Accounts receivable, net
  
602,424
    
666,063
  
Inventories
  
99,663
    
123,301
  
Other current assets
  
276,007
    
371,855
  
 
 
 
Total current assets
  
2,146,110
    
1,876,713
  
 
 
 
Properties, plants and equipment, net
  
11,429,200
    
11,180,979
  
Goodwill
  
4,320,209
    
4,305,643
  
Regulatory assets
  
517,513
    
512,549
  
Other investments
231,706
228,896
Equity investments
  
233,291
    
234,370
  
Deferred charges and other assets
  
845,040
    
829,039
  
 
 
 
Total assets
$
19,723,069
  
$
19,168,189
  
 
 
 
 
  
 
    
 
  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  
 
    
 
  
Accounts payable
$
321,350
  
$
345,237
  
Accrued interest
  
219,196
    
189,635
  
Accrued property and other taxes
  
120,366
    
112,823
  
Other liabilities
  
547,263
    
443,531
  
Short-term debt
  
14,578
    
48,036
  
Current portion of long-term debt
  
507,577
    
500,941
  
Current portion of parent company subordinated debt
  
100,000
    
100,000
  
 
 
 
Total current liabilities
  
1,830,330
    
1,740,203
  
 
 
 
Other long-term accrued liabilities
  
1,946,238
    
1,827,633
  
Parent company senior debt
  
3,029,751
    
2,777,878
  
Parent company subordinated debt
  
1,773,267
    
1,772,146
  
Subsidiary and project debt
  
6,443,476
    
6,674,640
  
Deferred income taxes
  
1,560,282
    
1,433,144
  
 
 
 
Total liabilities
  
16,583,344
    
16,225,644
  
 
 
 
 
  
 
    
 
  
Deferred income
  
67,023
    
69,201
  
Minority interest
  
10,703
    
9,754
  
Preferred securities of subsidiaries
  
90,128
    
92,145
  
 
  
 
    
 
  
Commitments and contingencies (Note 7)
  
 
    
 
  
 
  
 
    
 
  
Stockholders' equity:
  
 
    
 
  
Zero-coupon convertible preferred stock – authorized 50,000 shares, no par
value, 41,263 shares issued and outstanding
  
-
    
-
  
Common stock – authorized 60,000 shares, no par value, 9,081 and 9,281
shares issued and outstanding at June 30, 2004, and December 31, 2003,
respectively
  
-
    
-
  
Additional paid-in capital
  
1,950,267
    
1,957,277
  
Retained earnings
  
1,191,283
    
999,627
  
Accumulated other comprehensive loss, net
  
(169,679
)
  
(185,459
)
 
 
 
Total stockholders' equity
  
2,971,871
    
2,771,445
  
 
 
 
Total liabilities and stockholders' equity
$
19,723,069
  
$
19,168,189
  
 
 
 

The accompanying notes are an integral part of these financial statements.
 
4
 
MIDAMERICAN ENERGY HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands)

 

 Three Months 

  

 Six Months 

  
 

 Ended June 30, 

  

 Ended June 30, 

  
 
 
 
 

 2004

  

 2003

  

 2004

  

 2003

  
 
 
 
 
 
       

(Unaudited) 

        
Revenues:
  
 
    
 
    
 
    
 
  
Operating revenue
$
1,563,373
  
$
1,347,891
  
$
3,326,676
  
$
2,926,509
  
Income on equity investments
  
5,823
    
13,546
    
9,291
    
21,001
  
Interest and dividend income
  
7,295
    
19,314
    
14,464
    
33,185
  
Other income
  
22,969
    
29,515
    
31,330
    
46,939
  
 
 
 
 
 
Total revenue
  
1,599,460
    
1,410,266
    
3,381,761
    
3,027,634
  
 
 
 
 
 
 
  
 
    
 
    
 
    
 
  
Costs and expenses:
  
 
    
 
    
 
    
 
  
Cost of sales
  
689,683
    
529,870
    
1,449,722
    
1,216,034
  
Operating expense
  
429,077
    
367,792
    
807,731
    
724,285
  
Depreciation and amortization
  
161,954
    
160,782
    
332,237
    
302,631
  
Interest expense
  
227,012
    
183,033
    
465,414
    
369,878
  
Less interest capitalized
  
(5,294
)
  
(7,616
)
  
(8,902
)
  
(23,148
)
 
 
 
 
 
Total costs and expenses
  
1,502,432
    
1,233,861
    
3,046,202
    
2,589,680
  
 
 
 
 
 
Income before provision for income taxes
  
97,028
    
176,405
    
335,559
    
437,954
  
Provision for income taxes
  
36,297
    
32,471
    
124,885
    
105,471
  
 
 
 
 
 
Income before minority interest and
preferred dividends
  
60,731
    
143,934
    
210,674
    
332,483
  
Minority interest and preferred dividends
  
3,275
    
63,993
    
6,028
    
121,906
  
 
 
 
 
 
Net income available to common and
preferred stockholders
$
57,456
  
$
79,941
  
$
204,646
  
$
210,577
  
 
 
 
 
 

The accompanying notes are an integral part of these financial statements.
 
5
 
MIDAMERICAN ENERGY HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

 

 Six Months 

  
 

 Ended June 30, 

  
 
 
 

 2004

  

 2003

  
 
 
 
   
(Unaudited) 
  
Cash flows from operating activities:
  
 
    
 
  
Net income
$
204,646
  
$
210,577
  
Adjustments to reconcile net income to cash flows from operating activities:
  
 
    
 
  
Distributions less income on equity investments
  
243
    
21,041
  
(Gain) loss on other items
  
10,717
    
(6,743
)
Depreciation and amortization
  
332,237
    
302,631
  
Amortization of regulatory assets and liabilities and other
  
(4,508
)
  
(19,892
)
Amortization of deferred financing costs
  
10,358
    
17,516
  
Provision for deferred income taxes
  
115,345
    
104,946
  
Other
  
43,988
    
36,700
  
Changes in other items:
  
 
    
 
  
   Accounts receivable and other current assets
  
93,051
    
122,877
  
   Accounts payable and other accrued liabilities
  
87,595
    
(81,051
)
   Deferred income
  
(1,851
)
  
(4,427
)