2009 EEI Financial Conference
Patrick J. Goodman
Senior Vice President and Chief Financial Officer
Patrick J. Goodman
Senior Vice President and Chief Financial Officer
Forward-Looking Statements
This report contains statements that do not directly or exclusively relate to historical facts. These statements are “forward-
looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by the use of forward-looking
words, such as “may,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “intend,” “potential,”
“plan,” “forecast” and similar terms. These statements are based upon MidAmerican Energy Holdings Company’s (“MEHC”)
and its subsidiaries’ (collectively, the “Company”) current intentions, assumptions, expectations and beliefs and are subject to
risks, uncertainties and other important factors. Many of these factors are outside the Company’s control and could cause
actual results to differ materially from those expressed or implied by the Company’s forward-looking statements. These
factors include, among others:
looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements can typically be identified by the use of forward-looking
words, such as “may,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “intend,” “potential,”
“plan,” “forecast” and similar terms. These statements are based upon MidAmerican Energy Holdings Company’s (“MEHC”)
and its subsidiaries’ (collectively, the “Company”) current intentions, assumptions, expectations and beliefs and are subject to
risks, uncertainties and other important factors. Many of these factors are outside the Company’s control and could cause
actual results to differ materially from those expressed or implied by the Company’s forward-looking statements. These
factors include, among others:
– general economic, political and business conditions in the jurisdictions in which the Company’s facilities operate;
– changes in governmental, legislative or regulatory requirements affecting the Company or the electric or gas
utility, pipeline or power generation industries;
utility, pipeline or power generation industries;
– changes in, and compliance with, environmental laws, regulations, decisions and policies that could increase
operating and capital costs, reduce plant output or delay plant construction;
operating and capital costs, reduce plant output or delay plant construction;
– the outcome of general rate cases and other proceedings conducted by regulatory commissions or other
governmental and legal bodies;
governmental and legal bodies;
– changes in economic, industry or weather conditions, as well as demographic trends, that could affect customer
growth and usage or supply of electricity and gas or the Company’s ability to obtain long-term contracts with
customers;
growth and usage or supply of electricity and gas or the Company’s ability to obtain long-term contracts with
customers;
– a high degree of variance between actual and forecasted load and prices that could impact the hedging strategy and
costs to balance electricity and load supply;
costs to balance electricity and load supply;
– changes in prices and availability for both purchases and sales of wholesale electricity, coal, natural gas, other fuel
sources and fuel transportation that could have a significant impact on generation capacity and energy costs;
sources and fuel transportation that could have a significant impact on generation capacity and energy costs;
– the financial condition and creditworthiness of the Company’s significant customers and suppliers;
– changes in business strategy or development plans;
– availability, terms and deployment of capital, including severe reductions in demand for investment-grade
commercial paper, debt securities and other sources of debt financing and volatility in the London Interbank
Offered Rate, the base interest rate for MEHC’s and its subsidiaries’ credit facilities;
commercial paper, debt securities and other sources of debt financing and volatility in the London Interbank
Offered Rate, the base interest rate for MEHC’s and its subsidiaries’ credit facilities;
Forward-Looking Statements
– changes in MEHC’s and its subsidiaries’ credit ratings;
– performance of the Company’s generating facilities, including unscheduled outages or repairs;
– risks relating to nuclear generation;
– the impact of derivative instruments used to mitigate or manage volume, price and interest rate risk, including
increased collateral requirements, and changes in the commodity prices, interest rates and other conditions that
affect the value of derivative instruments;
increased collateral requirements, and changes in the commodity prices, interest rates and other conditions that
affect the value of derivative instruments;
– the impact of increases in healthcare costs and changes in interest rates, mortality, morbidity, investment
performance and legislation on pension and other postretirement benefits expense and funding requirements;
performance and legislation on pension and other postretirement benefits expense and funding requirements;
– changes in the residential real estate brokerage and mortgage industries that could affect brokerage transaction
levels;
levels;
– unanticipated construction delays, changes in costs, receipt of required permits and authorizations, ability to fund
capital projects and other factors that could affect future generating facilities and infrastructure additions;
capital projects and other factors that could affect future generating facilities and infrastructure additions;
– the impact of new accounting pronouncements or changes in current accounting estimates and assumptions on
financial results;
financial results;
– the Company’s ability to successfully integrate future acquired operations into its business;
– other risks or unforeseen events, including litigation, wars, the effects of terrorism, embargoes and other
catastrophic events; and
catastrophic events; and
– other business or investment considerations that may be disclosed from time to time in MEHC’s filings with the
United States Securities and Exchange Commission (the “SEC”) or in other publicly disseminated written
documents.
United States Securities and Exchange Commission (the “SEC”) or in other publicly disseminated written
documents.
Further details of the potential risks and uncertainties affecting the Company are described in MEHC’s filings with the SEC.
The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. The foregoing review of factors should not be construed as exclusive.
The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. The foregoing review of factors should not be construed as exclusive.
MidAmerican Energy Holdings
Company Energy Assets
Company Energy Assets
• $42 billion of assets as of
June 30, 2009
June 30, 2009
• $11.8 billion of revenue(1)
• 7 million electric and
natural gas customers
worldwide
natural gas customers
worldwide
• Nearly 17,000 miles of
interstate natural gas
pipeline with
approximately 7.0 bcf
capacity
interstate natural gas
pipeline with
approximately 7.0 bcf
capacity
• Approximately 18,000
megawatts(2) of owned
generation
megawatts(2) of owned
generation
• Approximately 23 percent
of this generation is
renewable or noncarbon
of this generation is
renewable or noncarbon
___________________________
(1) $11.8 billion of revenue for the twelve
months ended June 30, 2009
months ended June 30, 2009
(2) Net owned megawatts in operation and
under construction as of June 30, 2009
under construction as of June 30, 2009
Corporate Strategy
• Own and operate a portfolio of high quality utility businesses
– Focus on operational efficiency, cost control and customer service
– Cooperative approach with regulators and customers
– Pursue internal capital investment opportunities to expand regulated asset base
• Maintain prudent financial and risk management policies
– Committed to improve holding company and subsidiary credit profile
– Stable and highly diversified asset base
• Grow and diversify through a disciplined acquisition strategy
– Target additional energy assets
– Focus on long-term risk-adjusted cash flow returns
– Continue to utilize ring-fencing approach
– Capitalize on access to long-term capital from Berkshire Hathaway
– Continue track record of proven integration capabilities and improving
financial performance
financial performance
MidAmerican’s Strategy Has Delivered Outstanding Results
MidAmerican Competitive Advantage
• Diversified portfolio of regulated assets
– Weather, customer, regulatory, generation, economic and catastrophic risk diversity
• Berkshire Hathaway provides MidAmerican with a $3.5 billion equity
commitment
commitment
– Access to capital even in times of utility and general market stress
• No other utility has this quality of explicit financial support
• No dividend requirement
– Cash flow is retained in the business and used to help fund growth and improve credit
metrics
metrics
• Berkshire Hathaway ownership
– Access to capital from Berkshire Hathaway allows us to take advantage of market
opportunities
opportunities
– Berkshire Hathaway is a long-term holder of assets, and its owner for life philosophy
promotes stability and helps make MidAmerican the buyer of choice among regulators
promotes stability and helps make MidAmerican the buyer of choice among regulators
7
Constellation Energy
Termination Fee
Cash in Lieu of Shares
Repayment of 14% Note
Proceeds on Sale of Shares
Total Proceeds
Initial Investment in Constellation Energy
8% Series A Preferred Stock
Net Proceeds
Cash Flows from Operating Activities Impact
Cash Flows from Investing Activities Impact
Net Income Attributable to MEHC Impact
$ 175
418
-
-
593
$ -
-
1,000
536
1,536
-
$ 1,536
$ 175
418
1,000
536
2,129
$ 1,129
Proceeds ($ millions)
2008
2009
Total
(1,000)
$ (407)
(1,000)
$ 175
$ 128
$ 303
$ 646
$ 418
$ 1,000
$ 668
$ (582)
$ 22
8
Growth in Shareholders’ Equity
• Termination of the Constellation Energy transaction and sale of stock
added more than $668 million to MEHC shareholders’ equity
added more than $668 million to MEHC shareholders’ equity
• BYD investment of $232 million in July 2009 is valued at more than $1.8
billion as of September 30, 2009
billion as of September 30, 2009
• Despite the difficult economic environment, MEHC shareholders’ equity
has grown from $9.3 billion at December 31, 2007, to $11 billion as of
June 30, 2009
has grown from $9.3 billion at December 31, 2007, to $11 billion as of
June 30, 2009
– BYD after-tax gain will be reflected in September 30, 2009, results
9
PacifiCorp
Calif.
Nev.
Ariz.
Utah
Wyo.
Ore.
Wash.
Mont.
Colo.
Idaho
Pacific Power Service Territory
Coal Plants
Natural Gas Plants
Wind Projects
Coal Mines
Geothermal and Other
Hydro Systems
Rocky Mountain Power Service
Territory
Territory
___________________________
(1) Net owned megawatts in operation and under construction as of
June 30, 2009
June 30, 2009
• Headquartered in Portland, Oregon
• 6,568 employees
• 1.7 million electricity customers in six western
states
states
• 10,595 megawatts(1) of owned generation
capacity
capacity
• Generating capacity by fuel type
06/30/09(1) 03/31/06
– Coal 58% 72%
– Natural gas 21% 13%
– Hydro 11% 14%
– Wind and geothermal 10% 1%
10
PacifiCorp - - Business Update
Regulatory
• Active regulatory agenda including rate cases, power cost adjustment mechanisms and
renewable adjustment clauses
renewable adjustment clauses
– Completed in 2009
– Power cost adjustment mechanism approved in Idaho effective July 1, 2009
– Utah general rate case completed - $45.0 million annual revenue increase effective May 8, 2009
– Oregon renewable cost recovery - $30.8 million effective January 21, 2009
– Oregon Senate Bill 408 tax surcharge - $20.1 million effective June 1, 2009
– Oregon transition adjustment mechanism - $9.2 million effective January 1, 2009
– Wyoming general rate case - $18.0 million annual revenue increase effective May 24, 2009
– Wyoming power cost adjustment mechanism settlement - $7.0 million effective April 1, 2009
– Idaho general rate case - $4.4 million annual revenue increase effective April 18, 2009
– Pending
– Power cost adjustment mechanism requested in Utah
– Oregon rate case and transition adjustment mechanism settlement - $50.0 million annual increase
for general rates and power costs; settlement filed and order pending
for general rates and power costs; settlement filed and order pending
– Oregon Senate Bill 408 tax surcharge - $45.1 million filed October 15, 2009
– Washington rate case settlement - $13.5 million base rate increase and $18.0 million Chehalis
deferral; new rates expected to be effective January 1, 2010
deferral; new rates expected to be effective January 1, 2010
– Utah general rate case - $66.9 million annual increase requested June 23, 2009; new rates
expected to be effective February 18, 2010
expected to be effective February 18, 2010
– Wyoming general rate case - $70.9 million annual increase requested October 2, 2009; new rates
expected to be effective August 1, 2010
expected to be effective August 1, 2010
11
PacifiCorp - - Regulatory Environment
Utah
• Integrated resource planning
• As part of RFP process, regulatory approval of investment prudence may be obtained prior to construction/acquisition
• Rates effective no later than eight months after filed date
• Regulators have accepted use of forecast test periods
• Regulators are required to allow utility to use single issue rate case or deferred accounting for major plant additions (>1% of
rate base)
rate base)
• Regulators may approve power cost recovery mechanisms - PacifiCorp filed an application in 2009 for approval of a mechanism
Oregon
• Integrated resource planning
• Rate case test periods are based on forecast data
• 10-month time limit on consideration of proposed rate increase
• Regulators authorized to approve power cost recovery mechanisms
• Annual update to forecast power costs outside of general rate case; i.e. transition adjustment mechanism
• Annual renewable resource cost recovery outside of general rate case with deferral of cost of renewable resources that come on-line
between annual proceedings
between annual proceedings
Washington
• Integrated resource planning
• Rate case test periods are based on historical data with known and measurable adjustments
• 11-month time limit on consideration of proposed rate increase
• Regulators authorized to approve power cost recovery mechanisms
• Commission required to allow deferral of costs related to eligible base-load and renewable generation resources between rate cases
for future recovery
for future recovery
12
PacifiCorp - - Regulatory Environment
Idaho
• Integrated resource planning
• Rates effective no later than seven months after filed date
• Rate case test periods based on historic data with known and measurable adjustments
• Ability to use single issue rate cases for significant new investment when filed within approximately six months of prior rate change
• PacifiCorp application for power cost adjustment mechanism approved; effective July 1, 2009, with annual true-up to actual costs
• New legislation implemented that allows pre-construction regulatory approval and binding rate-making principles (as in Iowa)
Wyoming
• 10-month time period on consideration of proposed rate increase
• Rate case test periods may be historical with known and measurable adjustments or forecasted data based on each case circumstance
• Power cost adjustment mechanism in place with annual true-up
California
• Rate case test periods are based on forecast data
• Three-year rate case cycle with adjustment mechanisms
– Dollar-for-dollar recovery of power costs and annual update to forecast power costs
– Annual inflation-based adjustment mechanism
– Single-item filings provide for recovery of costs of capital additions in excess of $50 million total company
13
PacifiCorp - - Business Update
• Retail load for the six-month period ended June 30, 2009, was 25,313
gigawatt hours, a 4.8% decrease versus the first six months of 2008
gigawatt hours, a 4.8% decrease versus the first six months of 2008
• 377 megawatts of new wind generation to be added in 2009-2010
– Total owned wind generation capacity projected to be 1,033 megawatts by
year-end 2010
year-end 2010
– Total wind capacity under long-term contract is projected to be 682 megawatts
by year-end 2010
by year-end 2010
• Populus-to-Terminal segment of Energy Gateway Transmission Expansion
Project under construction
Project under construction
– Expected to be in-service during 2010
– $905 million project on budget
14
MidAmerican Energy
Iowa
Ill.
Kan.
Neb.
S.D.
Wis.
Minn.
Mo.
___________________________
(1) Net owned megawatts in operation as of June 30, 2009
• Headquartered in Des Moines, Iowa
• 3,565 employees
• 1.4 million electric and natural gas customers in
four Midwestern states
four Midwestern states
• 6,443 net megawatts generation capacity(1)
• Generating capacity by fuel type
06/30/09(1) 12/31/00
– Coal 52% 70%
– Natural gas 20% 19%
– Wind 20% 0%
– Nuclear and other 8% 11%
15
MidAmerican Energy - Business Update
• Retail load for the six-month period ended June 30, 2009, was 9,889 gigawatt
hours, a 3.5% decrease versus the first six months of 2008
hours, a 3.5% decrease versus the first six months of 2008
• On September 1, 2009, MidAmerican Energy Company became a transmission-
owning member of MISO
owning member of MISO
• Update on environmental capital expenditures
– Walter Scott, Jr. Energy Center Unit 3 scrubber in-service May 2009
– 1,679 megawatts of coal generation in-service with scrubbers
• Regulatory approval pending for up to 1,001 megawatts (nameplate ratings) of
additional wind development in Iowa for potential construction through 2012
additional wind development in Iowa for potential construction through 2012
• Continue to receive high J.D. Power and Associates customer satisfaction ratings
for gas and electric service
for gas and electric service
16
Business Overview
• 15,200 miles of natural gas pipeline
• 5.3 Bcf per day of market area design
capacity, plus 2.0 Bcf per day field
area capacity
capacity, plus 2.0 Bcf per day field
area capacity
• 73 Bcf firm storage capacity
• 78% of 2008 revenue based on
demand charges
demand charges
Major Accomplishments
• Northern Lights project — growth in
market-area transportation business
market-area transportation business
2007 400,000 Dth/day
2008 100,000 Dth/day
2009/2010 150,000 Dth/day
• Firm gas storage expansions
2006 — 6 Bcf
2008 — 8 Bcf
Northern Natural Gas
Minn.
Wis.
Iowa
S.D.
Neb.
Kan.
Okla.
Texas
17
Business Overview
• 1,700 miles of natural gas pipeline
• 1.8 million Dth/day of natural gas to
markets in Utah, Nevada and California
markets in Utah, Nevada and California
• 65% of 2008 revenue based on demand
charges
charges
Major Accomplishments
• Received FERC approval for 2010
Expansion for 145,000 Dth/day,
in-service anticipated December 31, 2009
Expansion for 145,000 Dth/day,
in-service anticipated December 31, 2009
• Anticipate FERC approval in December
2010 for Apex expansion for 266,000
Dth/day
2010 for Apex expansion for 266,000
Dth/day
Kern River
Calif.
Nev.
Ariz.
Utah
Wyo.
Business Overview
• 3.8 million end-users in northeast England
• 57,000 miles of distribution lines
• 72% of 2008 distribution revenue from
residential and commercial customers
residential and commercial customers
2008 Distribution Revenue (£ millions)
Accomplishments
• Continuing negotiations with Ofgem in
preparation for next price control period; final
proposals expected in December 2009
preparation for next price control period; final
proposals expected in December 2009
• Improvement in customer service standards
continues
continues
• Excellent safety performance in each of the last
five years
five years
• Financial performance remains stable despite
economic climate
economic climate
CE Electric UK
Northern Electric service territory
Yorkshire Electricity service territory
Financial Results
A2/A-/A
Regulated Gas and
Electric Utility
Electric Utility
Independent
Electric Power
Producer
Electric Power
Producer
A2/A/A
Regulated Gas
Transmission
Transmission
A3/A-/A-
Regulated Gas
Transmission
Transmission
Real Estate
Brokerage
Brokerage
Baa1/BBB+/BBB+
Holding Company
A2/A/A-(2)
Regulated Electric
Utility
Utility
Aa2(1)/AAA/AA+(1)
A3/A-/A
U.K. Regulated
Electric
Distribution
Electric
Distribution
A3/A-/A
U.K. Regulated
Electric
Distribution
Electric
Distribution
“Forever is our holding period” - Berkshire ownership philosophy
___________________________
(1) Moody’s and Fitch ratings for Berkshire Hathaway Inc.
are Issuer Ratings
are Issuer Ratings
(2) PacifiCorp ratings are Senior Secured
Organizational Structure
MEHC Growth Summary
Net Income Attributable to MEHC
MEHC Shareholders’ Equity
Property, Plant and Equipment (Net)
Cash Flows From Operations
CAGR = 18.1%
CAGR = 16.1%
CAGR = 28.2%
CAGR = 19.6%
(1) $646m and $668m after-tax gains are related to the termination fee and profit from investment in
Constellation Energy; CAGR calculation excludes this amount
Constellation Energy; CAGR calculation excludes this amount
(2) $2,587m and $3,077m cash flows from operations include $175 and $303 for 2008 and LTM 6/30/09, respectively, related
to the termination fee and profit from investment in Constellation Energy; CAGR calculation excludes this amount
to the termination fee and profit from investment in Constellation Energy; CAGR calculation excludes this amount
22
Business Information ($ millions)
23
Business Information ($ millions)
24
Business Information ($ millions)
25
Business Information ($ millions)
26
Business Information ($ millions)
27
Business Information ($ millions)
28
Business Information ($ millions)
29
Capitalization ($ millions)
• As of June 30, 2009, approximately 96% of total debt was fixed rate debt
• As of June 30, 2009, long-term debt had a weighted average life of approximately
16.6 years and a weighted average interest rate of approximately 6.0%
16.6 years and a weighted average interest rate of approximately 6.0%
