AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 2004
REGISTRATION NO. 333-110398
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MIDAMERICAN ENERGY COMPANY
(Exact name of registrant as specified in its charter)
IOWA 42-1425214
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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666 GRAND AVENUE
DES MOINES, IOWA 50309
(515) 242-4300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
PAUL J. LEIGHTON, ESQ.
ASSISTANT GENERAL COUNSEL
MIDAMERICAN ENERGY COMPANY
666 GRAND AVENUE
DES MOINES, IOWA 50309
(515) 242-4300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
JONATHAN R. ROD
JENNIFER A. FREDERICK
LATHAM & WATKINS LLP
885 THIRD AVENUE, SUITE 1000
NEW YORK, NEW YORK 10022
(212) 906-1200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement as determined by
market conditions.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX: [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX: [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING: [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX AND LIST THE SECURITIES
ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION
STATEMENT FOR THE SAME OFFERING: [ ]
IF DELIVERY OF A PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX: [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price aggregate registration
securities to be registered(1) registered(2) per unit(3) offering price(4)(5)(6) fee(6)(7)
- ------------------------------------------------------------------------------------------------------------------------
Debt securities and preferred stock $455,000,000 -- $455,000,000 $36,810
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(1) Any securities registered under this registration statement may be sold
separately or with other securities registered hereunder or with other
securities registered under registration statement no. 333-59760 or
registration statement no. 333-101800.
(2) Includes such indeterminate amount of debt securities and shares of
preferred stock as may from time to time be issued at indeterminate prices.
Also includes such additional principal amount of debt securities issued
with an original issue discount such that the aggregate initial public
offering price of all debt securities will not exceed $455,000,000 less the
dollar amount of other securities previously issued.
(3) The proposed maximum offering price per unit may be omitted pursuant to
General Instruction II.D. of Form S-3 under the Securities Act.
(4) Estimated in accordance with Rule 457 under the Securities Act solely for
the purpose of calculating the registration fee.
(5) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or composite currencies.
(6) Pursuant to Rule 429 under the Securities Act, the prospectus included in
this registration statement also relates to (a) registration statement no.
333-59760, as to which an aggregate of $100,000,000 of debt securities and
preferred stock remain unsold, and as to which a filing fee of $25,000
associated with such securities was paid at the time such registration
statement was originally filed, and (b) registration statement no.
333-101800, as to which an aggregate of $325,000,000 of debt securities and
preferred stock remain unsold, and as to which a filing fee of $29,900
associated with such securities was paid at the time such registration
statement was originally filed. Pursuant to Rule 429 under the Securities
Act, this registration statement shall, upon effectiveness, also act as a
post-effective amendment to (a) registration statement no. 333-59760 filed
with the Securities and Exchange Commission on February 4, 2002 and amended
by post-effective amendment no. 1 to registration statement 333-101800
filed with the Securities and Exchange Commission on April 9, 2003, and (b)
registration statement no. 333-101800 filed with the Securities and
Exchange Commission on December 26, 2002 and amended by post-effective
amendment no. 1 thereto filed with the Securities and Exchange Commission
on April 9, 2003.
(7) The registration fee was paid in connection with the initial filing of the
registration statement.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
$880,000,000
MIDAMERICAN ENERGY COMPANY
Debt Securities and Preferred Stock
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We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and the applicable prospectus
supplement carefully before you invest.
INVESTING IN THE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
These securities will not be listed on any securities exchange or included
in any automated quotation system. Currently, there is no public market for
these securities.
This prospectus may not be used to sell securities unless accompanied by a
prospectus supplement.
The date of this prospectus is January , 2004.
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TABLE OF CONTENTS
PAGE
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MIDAMERICAN ENERGY COMPANY .............................................. 1
RATIO OF EARNINGS TO FIXED CHARGES ...................................... 1
RATIO OF EARNINGS TO FIXED CHARGES PLUS PREFERRED STOCK DIVIDEND
REQUIREMENTS .......................................................... 1
RISK FACTORS ............................................................ 2
FORWARD-LOOKING STATEMENTS .............................................. 6
USE OF PROCEEDS ......................................................... 7
DESCRIPTION OF DEBT SECURITIES .......................................... 7
DESCRIPTION OF CAPITAL STOCK ............................................ 13
PLAN OF DISTRIBUTION .................................................... 15
ABOUT THIS PROSPECTUS ................................................... 16
WHERE YOU CAN FIND MORE INFORMATION ..................................... 16
LEGAL MATTERS ........................................................... 17
EXPERTS ................................................................. 17
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i
MIDAMERICAN ENERGY COMPANY
We are a public utility company headquartered in Des Moines, Iowa and
incorporated in the State of Iowa. We were formed on July 1, 1995 as a result
of the merger of Iowa-Illinois Gas and Electric Company, Midwest Resources Inc.
and Midwest Power Systems Inc. We are an indirect wholly owned subsidiary of
MidAmerican Energy Holdings Company, a privately owned global energy company
with publicly traded fixed income securities.
We are principally engaged in the business of generating, transmitting,
distributing and selling electric energy and in distributing, selling and
transporting natural gas. We distribute electricity at retail in Iowa, Illinois
and South Dakota and distribute natural gas at retail in Iowa, Illinois,
Nebraska and South Dakota. In addition to retail sales, we sell electric energy
and natural gas to other utilities, marketers and municipalities outside of our
delivery system, and transport natural gas through our distribution system for
a number of end-use customers who have independently secured their supply of
natural gas.
Our headquarters and principal executive offices are located at 666 Grand
Avenue, Des Moines, Iowa 50309. Our telephone number is (515) 242-4300.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of our earnings to our fixed
charges for the periods indicated.
TWELVE MONTHS ENDED DECEMBER 31,
------------------------------------------------------ NINE MONTHS ENDED
1998 1999 2000 2001 2002 SEPTEMBER 30, 2003
---------- ---------- ---------- ---------- ---------- -------------------
Ratio of earnings to fixed charges(1) .. 3.07x 3.54x 4.52x 4.43x 4.87x 5.83x
- ----------
(1) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of net income from continuing operations plus interest
charges and preferred dividend requirements, plus income taxes, plus the
estimated interest component of rentals. "Earnings" also include
allowances for borrowed and other funds used during construction. "Fixed
charges" consist of interest charges and the estimated interest component
of rentals.
RATIO OF EARNINGS TO FIXED CHARGES
PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth the ratio of our earnings to our fixed
charges plus preferred stock dividend requirements for the periods indicated.
TWELVE MONTHS ENDED DECEMBER 31,
------------------------------------------------------ NINE MONTHS ENDED
1998 1999 2000 2001 2002 SEPTEMBER 30, 2003
---------- ---------- ---------- ---------- ---------- -------------------
Ratio of earnings to fixed charges plus
preferred stock dividend requirements(1) ......... 2.82x 3.22x 4.09x 4.02x 4.57x 5.64x
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(1) For purposes of computing the ratio of earnings to fixed charges plus
preferred stock dividend requirements, "earnings" consist of net income
from continuing operations plus interest charges and preferred dividend
requirements, plus income taxes, plus the estimated interest component of
rentals. "Earnings" also include allowances for borrowed and other funds
used during construction. "Fixed charges" consist of interest charges and
the estimated interest component of rentals. "Preferred stock dividend
requirements" represent the amount of pre-tax earnings that is required
to pay the dividends on outstanding preferred stock.
1
RISK FACTORS
Before you invest in any of the securities described in this prospectus,
you should be aware of the significant risks described below. You should
carefully consider these risks, together with all of the other information
included in this prospectus, the accompanying prospectus supplement and the
information incorporated by reference, before you decide to purchase our
securities.
WE ARE ACTIVELY DEVELOPING AND CONSTRUCTING NEW FACILITIES, THE COMPLETION
AND EXPECTED COST OF WHICH IS SUBJECT TO SIGNIFICANT RISK.
We are developing and constructing three new electric generating plants in
Iowa, and in the future we expect to pursue the development, construction,
ownership and operation of additional new or expanded facilities, the
completion of any of which is subject to substantial risk and may expose us to
significant costs. We cannot assure you that our development or construction
efforts on any particular project, or our efforts generally, will be
successful. Also, a proposed new or expanded facility may cost more than
planned to complete, and such excess costs, if found to be imprudent, may not
be recoverable in rates. The inability to avoid unsuccessful projects or to
recover any excess costs may materially affect our business, financial
position, results of operations and ability to service the securities.
WE ARE SUBJECT TO OPERATING UNCERTAINTIES WHICH MAY ADVERSELY AFFECT OUR
FINANCIAL POSITION, RESULTS OF OPERATIONS AND ABILITY TO SERVICE THE
SECURITIES.
The operation of a complex electric and gas utility (including generating,
transmission and distribution systems) involves many risks associated with
operating uncertainties and events beyond our control. These risks include the
breakdown or failure of power generation equipment, compressors, pipelines,
transmission and distribution lines or other equipment or processes, fuel
interruption, performance below expected levels of output, capacity or
efficiency, operator error, operating limitations imposed by environmental or
other regulatory requirements, labor disputes, sustained mild weather patterns
and catastrophic events such as severe storms, fires, earthquakes or
explosions. A casualty occurrence might result in injury or loss of life,
extensive property damage or environmental damage. The realization of any of
these risks could significantly reduce or eliminate our revenues or
significantly increase our expenses. For example, if we cannot operate our
electric facilities at full capacity due to restrictions imposed by
environmental regulations, our revenues could decrease due to decreased
wholesale sales and/or our expenses could increase due to the need to obtain
energy from higher cost sources. Any reduction of revenues for such reason, or
any other reduction of revenues or increase in expenses resulting from the
risks described above, could decrease our net cash flow and provide us with
less funds to service the securities. Further, we cannot assure you that our
current and future insurance coverage will be sufficient to replace lost
revenue or cover repair and replacement costs, especially in light of the
changes in the insurance markets following the September 11, 2001 terrorist
attacks that make it more difficult or more costly to obtain certain types of
insurance.
ACTS OF SABOTAGE AND TERRORISM AIMED AT OUR FACILITIES, THE FACILITIES OF
OUR FUEL SUPPLIERS OR CUSTOMERS, OR AT REGIONAL TRANSMISSION FACILITIES COULD
ADVERSELY EFFECT OUR BUSINESS.
Since the September 11, 2001 terrorist attacks, the United States
government has issued warnings that energy assets, specifically our nation's
electric utility infrastructure, may be the future targets of terrorist
organizations. These developments have subjected our operations to increased
risks. Damage to the assets of our fuel suppliers, our customers' assets, our
own assets or at regional transmission facilities inflicted by terrorist groups
or saboteurs could result in a significant decrease in revenues and significant
repair costs, force us to increase security measures, cause changes in the
insurance markets and cause disruptions of fuel supplies, energy consumption
and markets, particularly with respect to natural gas and electric energy. Any
of these consequences of acts of terrorism could materially affect our results
of operations and decrease the amount of funds we have available to make
payments on the securities. Instability in the financial markets as a result of
terrorism or war could also materially adversely affect our ability to raise
capital.
2
WE ARE SUBJECT TO COMPREHENSIVE ENERGY REGULATION AND CHANGES IN
REGULATION AND RATES MAY ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND ABILITY TO SERVICE THE SECURITIES.
We are subject to comprehensive regulation by various United States
federal, state and local regulatory agencies, all of which significantly
influence our operating environment, our rates, our capital structure, our
costs and our ability to recover our costs from customers. These regulatory
agencies include, among others, the Federal Energy Regulatory Commission, the
Environmental Protection Agency, the Nuclear Regulatory Commission, the Iowa
Utilities Board, the Illinois Commerce Commission, other state utility boards
and numerous local agencies. In addition, our parent, MidAmerican Energy
Holdings Company, is currently exempt from the requirement to register with the
Securities and Exchange Commission under the Public Utility Holding Company Act
of 1935, as amended, or PUHCA, but if it were to cease to be exempt or if we
were to become a subsidiary of a non-exempt holding company, we would become
subject to additional regulation by the Securities and Exchange Commission
under PUHCA. Under PUHCA, registered holding companies and their subsidiaries
are subject to regulation and restrictions with respect to certain of their
activities, including securities issuances, acquisitions, investments and
affiliate transactions. We are unable to predict the impact on our operating
results of the future regulatory activities of any of these agencies or the
Securities and Exchange Commission under PUHCA. Changes in regulations or the
imposition of additional regulations by any of these entities could have a
material adverse impact on our results of operations. For example, such changes
could result in increased retail competition in our service territory, the
acquisition by a municipality (by negotiation or condemnation) of our
distribution facilities or a negative impact on our current transportation and
cost recovery arrangements.
The structure of federal and state energy regulation is currently
undergoing change and has in the past, and may in the future, be the subject of
various challenges, initiatives and restructuring proposals by policy makers,
utilities and other industry participants. Following the cascading blackouts
that occurred in parts of the Midwest and Northeast United States and Eastern
Canada on August 14, 2003, federal, state and Canadian officials, as well as
non-governmental organizations charged with electric reliability
responsibilities, are considering measures designed to promote the reliability
of the electric transmission and distribution systems. The implementation of
regulatory changes in response to such challenges, initiatives and
restructuring proposals could result in the imposition of more comprehensive or
stringent requirements on us or other industry participants, which would result
in increased compliance costs and could have a material adverse effect on our
business, financial condition, results of operations and ability to service the
securities.
WE ARE SUBJECT TO ENVIRONMENTAL, SAFETY AND OTHER LAWS AND REGULATIONS
WHICH MAY ADVERSELY IMPACT US.
We are subject to a number of environmental, safety and other laws and
regulations affecting many aspects of our present and future operations,
including air emissions, water quality, wastewater discharges, solid wastes,
hazardous substances and safety matters. We may incur substantial costs and
liabilities in connection with our operations as a result of these regulations.
In particular, the cost of future compliance with federal, state and local
clean air laws, such as those that require certain generators, including some
of our electric generating facilities, to limit nitrogen oxide emissions and
potential other pollutants, may require us to make significant capital
expenditures which may not be recoverable through future rates. In addition,
these costs and liabilities may include those relating to claims for damages to
property and persons resulting from our operations. The implementation of
regulatory changes imposing more comprehensive or stringent requirements on us,
to the extent such changes would result in increased compliance costs or
additional operating restrictions, could have a material adverse effect on our
business, financial condition, results of operations and ability to service the
securities.
In addition, regulatory compliance for existing facilities and the
construction of new facilities is a costly and time-consuming process, and
intricate and rapidly changing environmental regulations may require major
expenditures for permitting and create the risk of expensive delays or material
impairment of value if projects cannot function as planned due to changing
regulatory requirements or local opposition.
3
In addition to operational standards, environmental laws also impose
obligations to clean up or remediate contaminated properties or to pay for the
cost of such remediation, often upon parties that did not actually cause the
contamination. Accordingly, we may become liable, either contractually or by
operation of law, for remediation costs even if the contaminated property is
not presently owned or operated by us, or if the contamination was caused by
third parties during or prior to our ownership or operation of the property.
Given the nature of the past industrial operations conducted by us and others
at our properties, there can be no assurance that all potential instances of
soil or groundwater contamination have been identified, even for those
properties where an environmental site assessment or other investigation has
been conducted. Although we have accrued reserves for our known remediation
liabilities, future events, such as changes in existing laws or policies or
their enforcement, or the discovery of currently unknown contamination, may
give rise to additional remediation liabilities which may be material.
Any failure to recover increased environmental or safety costs incurred by
us may have a material adverse effect on our business, financial condition,
results of operations and ability to service the securities.
INCREASED COMPETITION RESULTING FROM LEGISLATIVE, REGULATORY AND
RESTRUCTURING EFFORTS COULD HAVE A SIGNIFICANT FINANCIAL IMPACT ON US AND
CONSEQUENTLY DECREASE OUR REVENUE.
In recent years, some state legislative and regulatory authorities have
implemented measures to establish a competitive energy market. The move towards
a competitive environment could result in the emergence of numerous strong and
capable competitors, many of which may have more extensive operating experience
and greater financial resources than us. Retail competition and the unbundling
of regulated electric and gas service could have a significant adverse
financial impact on us due to an impairment of assets, a loss of customers,
lower profit margins and/or increased costs of capital. The total impacts of
restructuring may have a significant effect on our financial position, results
of operations and cash flows. We cannot predict if and when we will be subject
to changes in legislation or regulation, nor can we predict the impacts of
these changes on our financial position, results of operations or cash flows.
The wholesale generation segment of the electric industry has been and
will continue to be significantly impacted by competition. Competition in the
wholesale market has resulted in a proliferation of power marketers and a
substantial increase in market activity. Many of these marketers have
experienced financial difficulties and the market continues to be volatile.
Margins from wholesale electric transactions have a material impact on our
results of operations. Accordingly, significant changes in the wholesale
electric markets could have a material adverse effect on our financial
position, results of operations and ability to service the securities.
OUR OPERATIONS ARE SUBJECT TO POWER AND FUEL PRICE FLUCTUATIONS AND OTHER
COMMODITY PRICE RISKS AND CREDIT RISKS THAT COULD ADVERSELY AFFECT OUR RESULTS
OF OPERATIONS.
We are exposed to commodity price risks, energy transmission price risks
and credit risks in our operations. Specifically, such risks include commodity
price changes, market supply shortages, interest rate changes and counterparty
default, all of which could have an adverse effect on our financial condition,
results of operation and ability to service the securities. For example, the
sale of electric power and natural gas is generally a seasonal business, which
seasonality results in commodity price fluctuations. Our revenues are
negatively impacted by low commodity prices resulting from low demand for
electricity. Demand for electricity often peaks during the hottest summer
months and coldest winter months and softens during the other months. As a
result of these variations in demand and resulting price fluctuations, our
overall operating results in the future may fluctuate substantially on a
seasonal basis. We have historically earned less income when weather conditions
are milder. We expect that unusually mild weather in the future could decrease
our revenues and provide us with less funds available to service the
securities.
Also, in Iowa, we do not have an ability to pass through fuel price
increases for electricity in our rates (an energy adjustment clause), so any
significant increase in fuel or purchased power costs for
4
electricity generation could have a negative impact on us, despite our efforts
to minimize this negative impact through the use of hedging instruments. The
impact of these risks could result in our inability to fulfill contractual
obligations, significantly higher energy or fuel costs relative to
corresponding sales contracts or increased interest expense. Any of these
consequences could decrease our net cash flow and impair our ability to make
payments on the securities.
DUE TO THE LIMITED NUMBER OF SUPPLIERS AND SERVICE PROVIDERS WE ENGAGE,
THE FAILURE OF ANY OF THESE THIRD PARTIES TO FULFILL ITS CONTRACTUAL OBLIGATION
MAY MATERIALLY INCREASE OUR COSTS.
Our electric generating facilities are often dependent on a single or
limited number of entities to supply or transport gas, coal or other fuels, to
dispose of wastes or to deliver electricity. The failure of any of these third
parties to fulfill its contractual obligations could increase the costs
incurred by us to provide electric service to our customers.
WE ARE SUBJECT TO THE UNIQUE RISKS ASSOCIATED WITH NUCLEAR GENERATION.
The risks of nuclear generation include the following:
(1) the potential harmful effects on the environment and human health
resulting from the operation of nuclear facilities and the storage, handling
and disposal of radioactive materials;
(2) limitations on the amounts and types of insurance commercially
available to cover losses that might arise in connection with nuclear
operations; and
(3) uncertainties with respect to the technological and financial aspects
of decommissioning nuclear plants at the end of their licensed lives.
The Nuclear Regulatory Commission has broad authority under federal law to
impose licensing and safety-related requirements for the operation of nuclear
generating facilities. In the event of non-compliance, the Nuclear Regulatory
Commission has the authority to impose fines or shut down a unit, or both,
depending upon its assessment of the severity of the situation, until
compliance is achieved. Revised safety requirements promulgated by the Nuclear
Regulatory Commission have, in the past, necessitated substantial capital
expenditures at nuclear plants, including the Quad Cities Generating Station
described in the documents incorporated by reference in this prospectus, and
additional expenditures could be required in the future. In addition, although
we have no reason to anticipate a serious nuclear incident at the Quad Cities
Generating Station, if an incident did occur, it could have a material but
presently undeterminable adverse effect on our financial condition, results of
operations and ability to service the securities.
OUR ULTIMATE STOCKHOLDER, MIDAMERICAN ENERGY HOLDINGS COMPANY, MAY
EXERCISE ITS SIGNIFICANT INFLUENCE OVER US IN A MANNER THAT WOULD BENEFIT
MIDAMERICAN ENERGY HOLDINGS COMPANY TO THE DETRIMENT OF OUR CREDITORS AND
PREFERRED STOCKHOLDERS, INCLUDING THE HOLDERS OF THE SECURITIES.
We are an indirect wholly owned subsidiary of MidAmerican Energy Holdings
Company and, therefore, MidAmerican Energy Holdings Company has significant
influence over the decision of all matters submitted for shareholder approval
and our management and affairs. In circumstances involving a conflict of
interest between MidAmerican Energy Holdings Company, on the one hand, and our
creditors and preferred stockholders, on the other, MidAmerican Energy Holdings
Company could exercise its influence in a manner that would benefit MidAmerican
Energy Holdings Company to the detriment of our creditors and preferred
stockholders, including the holders of the securities.
THE RIGHTS OF THE HOLDERS OF OUR SUBORDINATED DEBT SECURITIES WILL BE
SUBJECT TO THE RIGHTS OF THE HOLDERS OF OUR SENIOR DEBT.
Our subordinated debt securities will be subordinate and junior in right
of payment to our senior debt, including the debt securities described in this
prospectus. Unless otherwise specified in the applicable prospectus supplement,
the subordination terms will provide that no payments on the subordinated debt
securities may be made if any senior debt is not paid when due or the maturity
of any senior debt has been accelerated because of a default. The indenture for
the subordinated debt securities will not restrict our ability to incur senior
debt. As of September 30, 2003, we had $1,145,055,000 of senior debt
outstanding.
5
THE TERMS OF THE INDENTURES FOR THE SECURITIES DO NOT RESTRICT OUR ABILITY
TO INCUR ADDITIONAL INDEBTEDNESS THAT COULD HAVE AN ADVERSE IMPACT ON OUR
FINANCIAL CONDITION.
The indentures governing our rights and obligations with respect to the
debt securities do not restrict our ability to incur indebtedness in addition
to the debt securities. Accordingly, we could enter into acquisitions,
refinancings, recapitalizations or other highly leveraged transactions that
could significantly increase our total amount of outstanding indebtedness. The
interest payments needed to service this increased level of indebtedness could
have a material adverse effect on our operating results. A highly leveraged
capital structure could also impair our overall credit quality, making it more
difficult for us to finance our operations, and could result in a downgrade in
the ratings of our indebtedness, including the debt securities, by credit
rating agencies. Further, if our other indebtedness is accelerated due to an
event of default under such indebtedness, resulting in an event of default
under the indentures for the securities, we may not have sufficient funds to
repay the other indebtedness and the securities simultaneously.
THERE IS NO EXISTING MARKET FOR THE SECURITIES AND WE CANNOT ASSURE YOU
THAT AN ACTIVE TRADING MARKET WILL DEVELOP.
There is no existing market for the securities and we cannot assure you
that an active trading market will develop. If a market for the securities were
to develop, future trading prices would depend on many factors, including
prevailing interest rates, our operating results and the market for similar
securities. We do not intend to apply for listing or quotation of the
securities on any securities exchange or stock market. As a result, it may be
difficult for you to find a buyer for your securities at the time you want to
sell them, and even if you found a buyer, you might not get the price you want.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference statements that do
not directly or exclusively relate to historical facts. Such statements are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. You can typically identify forward-looking
statements by the use of forward-looking words, such as "may," "will," "could,"
"project," "believe," "anticipate," "expect," "estimate," "continue,"
"potential," "plan," "forecast," and similar terms. These statements represent
our intentions, plans, expectations and beliefs and are subject to risks,
uncertainties and other factors. Many of these factors are outside our control
and could cause actual results to differ materially from such forward-looking
statements. These factors include, among others:
o general economic and business conditions in the United States as a whole
and in the midwestern United States, and our service territory in
particular;
o governmental, statutory, regulatory or administrative initiatives
affecting us or the United States electric or gas utility industries;
o weather effects on sales and revenues;
o general industry trends;
o increased competition in the power generation and electric or gas
utility industries;
o fuel and power costs and availability;
o changes in business strategy, development plans or vendor relationships;
o availability, term and deployment of capital;
o availability of qualified personnel;
o unscheduled generation outages or repairs;
o risks relating to nuclear generation;
o financial or regulatory accounting principles or policies imposed by the
Financial Accounting
6
Standards Board, the Securities and Exchange Commission, the Federal
Energy Regulatory Commission and similar entities with regulatory
oversight;
o other risks and unforeseen events, including wars, the effects of
terrorism, embargoes and other catastrophic events; and
o other business or investment considerations that may be disclosed from
time to time in our Securities and Exchange Commission filings or in
other publicly disseminated written documents.
We undertake 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
exhaustive.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, we
will use the net proceeds from the sale of the securities described in this
prospectus for general corporate purposes, which may include additions to
working capital, reductions of our indebtedness, refinancing of existing
securities and financing of capital expenditures. We do not presently
contemplate a specific use of proceeds but will indicate such information in
the prospectus supplement applicable to any offering of securities. We may
invest funds not immediately required for such purposes in short-term
securities. The amount and timing of sales of the securities described in this
prospectus will depend on market conditions and the availability to us of other
funds.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes the general terms and provisions of the debt
securities that we may offer. When we offer to sell a particular series of debt
securities, we will describe the specific terms of the series in a prospectus
supplement to this prospectus. We will also indicate in the applicable
prospectus supplement whether the general terms and provisions described in
this prospectus apply to a particular series of debt securities.
GENERAL
We may issue senior debt securities or subordinated debt securities. The
senior debt securities will be our direct secured or unsecured obligations and
the subordinated debt securities will be our direct unsecured obligations. Each
of the senior debt securities and the subordinated debt securities will be
issued under an indenture to be entered into between us and a trustee named in
the applicable prospectus supplement. The following summary of the indentures
is not a complete description of all of the provisions of the indentures. We
have filed (or will file prior to issuance of the applicable debt securities)
forms of the indentures as exhibits to the registration statement of which this
prospectus is a part. Except to the extent set forth in a prospectus supplement
for a particular issue of debt securities, the indentures for the debt
securities, as amended or supplemented from time to time, will be substantially
similar to the indentures filed as exhibits to the registration statement and
described below.
A prospectus supplement relating to a series of debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
o the title of the series of debt securities;
o whether the series of debt securities are senior debt securities or
subordinated debt securities;
o the aggregate principal amount (or any limit on the aggregate principal
amount) of the series of debt securities and, if any debt securities of
a series are to be issued at a discount from their face amount, the
method of computing the accretion of such discount;
o if other than the entire principal amount thereof, the portion of the
principal amount of the debt securities payable upon declaration of
acceleration of the maturity thereof;
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o the interest rate or method for calculation of the interest rate;
o the date from which interest will accrue;
o the record dates for principal and interest payable on the series of
debt securities;
o the dates when, places where and manner in which principal and interest
will be payable;
o the securities registrar if other than the trustee;
o the terms of any mandatory redemption (including any sinking fund
requirement) or any redemption at our option;
o the terms of any repurchase or remarketing rights of third parties;
o the terms of any redemption at the option of holders of the series of
debt securities;
o the denominations in which the series of debt securities are issuable;
o whether the series of debt securities will be issued in registered or
bearer form and the terms of any such forms of debt securities;
o whether the series of debt securities will be represented by a global
security and the terms of any such global security;
o the currency or currencies (including any composite currency) in which
principal or interest or both may be paid;
o if payments of principal or interest may be made in a currency other
than that in which the series of debt securities are denominated, the
method for determining such payments;
o provisions for electronic issuance of the series of debt securities or
issuance of the series of debt securities in certificated form;
o any events of default, covenants and/or defined terms in addition to or
in lieu of those set forth in the applicable indenture;
o whether and upon what terms the series of debt securities may be
defeased;
o whether the series of debt securities will have guaranties;
o any special tax implications of the series of debt securities; and
o any other terms in addition to or different from those contained in the
applicable indenture.
The debt securities will bear no interest or interest at a fixed or a
floating rate. Debt securities bearing no interest or interest at a rate that
at the time of issuance is below the prevailing market rate may be sold or
deemed to be sold at a discount below their stated principal amount. With
respect to any debt securities as to which we have the right to defer interest,
the holders of such debt securities may be allocated interest income for
federal and state income tax purposes without receiving equivalent, or any,
interest payments. Any material federal income tax consequences applicable to
any such discounted debt securities or to debt securities issued at par that
are treated as having been issued at a discount for federal income tax purposes
will be described in the applicable prospectus supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The subordinated debt securities will be subordinate and junior in right
of payment to the senior debt securities described in this prospectus and all
of our other current and future senior debt. As of September 30, 2003,
$1,145,055,000 of our senior debt was outstanding, $215,955,000 of which is
secured by certain of our assets. Unless otherwise specified in the applicable
prospectus supplement, no payments on the subordinated debt securities may be
made if (1) any senior debt is not paid when due or (2) the maturity of any
senior debt has been accelerated because of a default. Upon any distribution of
our assets to creditors upon a bankruptcy, insolvency, liquidation,
reorganization or
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similar event with respect to us, all amounts due on our senior debt must be
paid before any payments are made on the subordinated debt securities.
Subject to the payment in full of all senior debt, the rights of the
holders of subordinated debt securities will be subrogated to the rights of the
holders of our senior debt to receive payments or distributions applicable
thereto until all amounts owing on the subordinated debt securities are paid in
full.
The subordinated indenture will not limit the amount of senior debt that
we can incur.
GLOBAL SECURITIES
BOOK-ENTRY SYSTEM
The debt securities will be issued under a book-entry system in the form
of one or more global securities. Each global security will be deposited with,
or on behalf of, a depositary, which will be The Depository Trust Company, New
York, New York. The global securities will be registered in the name of the
depositary or its nominee.
The debt securities will not be issued in certificated form and, except
under the limited circumstances described below, owners of beneficial interests
in the global securities will not be entitled to physical delivery of the debt
securities in certificated form. The global securities may not be transferred
except as a whole by the depositary to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee to a successor of the depositary
or a nominee of such successor.
The depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The depositary holds securities that its direct participants deposit with
the depositary. The depositary also facilitates the post-trade settlement among
direct participants of securities transactions in deposited securities through
electronic computerized book-entry transfers and pledges between direct
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants include both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, including Euroclear Bank as operator of The
Euroclear System and Clearstream Banking societe anonyme. The depositary is
owned by a number of its direct participants and by the New York Stock
Exchange, Inc., the American Stock Exchange LLC and National Association of
Securities Dealers, Inc. Access to the depositary system is also available to
indirect participants such as both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies and clearing corporations that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to the depositary and its direct and indirect
participants are on file with the Securities and Exchange Commission.
Purchases of the debt securities under the depositary system must be made
by or through direct participants, which will receive a credit for the debt
securities on the depositary's records. The ownership interest of each actual
purchaser and beneficial owner of each debt security is in turn to be recorded
on the direct and indirect participants' records. Beneficial owners will not
receive written confirmation from the depositary of their purchase, but
beneficial owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the direct or indirect participant through which the beneficial owner
entered into the transaction. Transfers of ownership interests in the debt
securities are to be accomplished by entries made on the books of direct and
indirect participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their ownership interests in debt
securities, except in the event that use of the book-entry system for the debt
securities is discontinued.
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To facilitate subsequent transfers, all debt securities deposited by
direct participants with the depositary will be registered in the name of the
depositary's partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of the depositary. The deposit of
debt securities with the depositary and their registration in the name of Cede
& Co. or such other nominee effect no change in beneficial ownership. The
depositary has no knowledge of the actual beneficial owners of the debt
securities; the depositary's records reflect only the identity of the direct
participants to whose accounts such debt securities are credited, which may or
may not be the beneficial owners. The direct and indirect participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the depositary to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the depositary nor Cede & Co. (nor such other nominee of the
depositary) will consent or vote with respect to the debt securities unless
authorized by a direct participant in accordance with the depositary's
procedures. Under its usual procedures, the depositary mails an omnibus proxy
to us as soon as possible after the record date. The omnibus proxy assigns Cede
& Co.'s consenting or voting rights to those direct participants to whose
accounts the debt securities are credited on the record date (identified in a
listing attached to the omnibus proxy).
Principal (and premium, if any) and interest payments on the debt
securities and any redemption payments will be made to Cede & Co. (or such
other nominee as may be requested by an authorized representative of the
depositary). The depositary's practice is to credit direct participants'
accounts upon the depositary's receipt of funds and corresponding detail
information from us or our agent on the payable date in accordance with the
direct participants' respective holdings shown on the depositary's records.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participant and not of the depositary, the
trustee, or us or our agent, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal (and
premium, if any), interest and any redemption proceeds to Cede & Co. (or such
other nominee as may be requested by an authorized representative of the
depositary) is our responsibility, disbursements of such payments to direct
participants is the responsibility of the depositary, and disbursement of such
payments to the beneficial owners is the responsibility of direct and indirect
participants.
The depositary may discontinue providing its services as securities
depositary with respect to the debt securities at any time by giving reasonable
notice to us. Under such circumstances, in the event that a successor
securities depositary is not obtained, certificated debt securities are
required to be printed and delivered. We may decide to discontinue use of the
system of book-entry transfers through the depositary (or a successor
securities depositary). In that event, certificated debt securities will be
printed and delivered.
The information in this section concerning the depositary and the
depositary's book-entry system has been obtained from sources that we believe
to be reliable but has not been independently verified by us.
EXCHANGE OF GLOBAL SECURITIES FOR CERTIFICATED SECURITIES
Except as otherwise may be set forth in the applicable prospectus
supplement, the global securities may be exchanged for debt securities in
certificated form only in the following circumstances:
(1) if the depositary notifies us that it is unwilling or unable to
continue as depositary for the global securities, or if the depositary
is no longer registered as a clearing agency under the Securities
Exchange Act, and we do not appoint a replacement depositary within 90
days;
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(2) an event of default under the applicable indenture occurs; or
(3) if we determine that an issue of debt securities will no longer be
represented by global securities.
If any global securities are exchangeable for certificated securities as
described above, we will execute, and the trustee will authenticate upon our
order, certificated securities of like tenor and terms in certificated form in
an aggregate principal amount equal to the principal amount of such global
securities. These certificated securities will be delivered to persons
specified by the depositary in exchange for the beneficial interests in the
global securities being exchanged.
REDEMPTION AND REPAYMENT
The applicable prospectus supplement will specify the following:
o if the debt securities are subject to any sinking fund and the terms of
any such sinking fund;
o if we may elect to redeem the debt securities prior to maturity and the
terms of any such optional redemption;
o if we will be required to redeem the securities prior to maturity upon
the occurrence of certain events and the terms of any such mandatory
redemption; or
o if the holders of the debt securities will have the right to repayment
of the debt securities prior to maturity and the terms of any such
optional repayment.
If we elect or are required to redeem debt securities, a redemption notice
will be sent to each holder of debt securities to be redeemed at least 30 but
not more than 60 days prior to the redemption date. The redemption notice will
include the following: (1) the redemption date, the places of redemption and
the redemption price; (2) a statement that payment of the redemption price will
be made on surrender of the debt securities at the places of redemption; (3) a
statement that accrued interest to the redemption date will be paid as
specified in the notice and that after the redemption date interest will cease
to accrue; (4) if less than all of the debt securities of a series are to be
redeemed, the particular debt securities or portions thereof to be redeemed;
(5) if any debt securities are to be redeemed in part only, the portion of the
debt securities to be redeemed and a statement that, upon surrender of the debt
securities for redemption, new debt securities having the same terms will be
issued in an amount equal to the unredeemed portion; and (6) if applicable, a
statement that redemption is subject to the receipt by the trustee prior to the
redemption date of sufficient funds to make such redemption.
If notice of redemption is given as specified above, the debt securities
called for redemption will become due and payable on the date and at the places
stated in the notice at the applicable redemption price, together with accrued
interest to the redemption date. After the redemption date, the debt securities
subject to redemption will cease to bear interest and will not be entitled to
the benefits of the applicable indenture, other than the right to receive
payment of the redemption price together with accrued interest to the
redemption date.
If debt securities are repayable at the option of the holders prior to
maturity, a holder that elects to have its debt securities repaid will be
required to deliver such debt securities (or a guarantee of delivery from an
eligible institution) to the trustee at least 30 but not more than 45 days
prior to the repayment date. For debt securities represented by global
securities held by the depositary, the repayment option may be exercised by a
direct participant in the depositary on behalf of the beneficial owner by
sending written notice to the trustee (specifying certain information regarding
the debt securities to be repaid) at least 30 but not more than 60 days prior
to the repayment date.
COVENANTS
In addition to other covenants, if any, as may be described in the
applicable prospectus supplement and except as may otherwise be set forth in
the applicable prospectus supplement, the indentures will contain the following
covenants:
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o a covenant which requires us to maintain an office for payment and
registration of transfer or exchange of the debt securities in New York,
New York;
o a covenant which requires us to notify the trustee in writing of any
event of default under an indenture within five days after we become
aware of such event of default;
o a covenant which requires us to maintain our corporate existence, rights
and franchises, unless the maintenance of such rights and franchises is
no longer desirable in the conduct of our business; and
o a covenant which prohibits us from consolidating with or merging with or
into any other person or conveying, transferring or leasing our
properties substantially as an entirety to any other person, unless the
surviving company or transferee, as applicable, is a U.S. company and
assumes all of our obligations under the indenture.
The covenant described immediately above includes a phrase relating to a
conveyance, transfer or lease of our properties "substantially as an entirety."
Although there is a limited body of case law interpreting the phrase
"substantially as an entirety," there is no precise established definition of
the phrase under applicable law. Accordingly, the nature and extent of the
restriction on our ability to convey, transfer or lease our properties
substantially as an entirety, and the protections provided to the holders of
debt securities by such restriction, may be uncertain.
EVENTS OF DEFAULT
Except as described in the applicable prospectus supplement, the following
events will constitute events of default under the applicable indenture:
o we fail to pay interest on the debt securities and such failure
continues for 30 days;
o we fail to pay principal of the debt securities when due;
o we breach any other covenant or representation in the indenture and such
breach continues for 60 days (such period to be extended to up to 90
days if we are diligently pursuing a cure) after we receive a notice of
default with respect thereto;
o we default in the payment of any indebtedness other than the debt
securities in excess of $75,000,000, or we breach any other provision of
such indebtedness and such breach results in an acceleration of such
indebtedness, and in each case such indebtedness is not discharged or
such acceleration is not rescinded, as applicable, within 90 days after
we receive a notice of default with respect thereto;
o a final non-appealable judgment for the payment of money in excess of
$75,000,000 is entered against us and is not discharged or satisfied
within 90 days after we receive a notice of default with respect
thereto;
o a decree or order is entered against us in an involuntary bankruptcy
proceeding and is not vacated in 90 days, or a similar involuntary event
relating to our bankruptcy or insolvency occurs and continues for 90
days; and
o we commence a voluntary bankruptcy case or take similar voluntary
actions relating to our bankruptcy or insolvency.
Upon the occurrence of an event of default under an indenture, the holders
of at least a majority in aggregate principal amount of the applicable debt
securities may declare such debt securities to be immediately due and payable.
Holders of a majority in principal amount of such debt securities may rescind
the acceleration so long as the conditions set forth in the applicable
indenture have been satisfied.
Prior to acceleration, holders of a majority in aggregate principal amount
of an issuance of debt securities may waive an event of default, other than (1)
an event of default related to non-payment of principal or interest and (2) an
event of default related to a covenant or other provision of the indenture that
cannot be modified without the consent of each holder of debt securities
affected thereby.
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MODIFICATIONS TO THE INDENTURE
Except as otherwise set forth in the applicable prospectus supplement,
each indenture will contain provisions which allow us and the trustee to amend
the indenture without the consent of any holder of debt securities for the
following purposes:
o to cure ambiguities or to cure, correct or supplement any defective or
inconsistent provisions;
o to add additional covenants, events of default or collateral, or to
surrender a right or power conferred upon us in the indenture;
o to establish the form of additional debt securities in accordance with
the terms of the indenture;
o to evidence the succession of another company to us and the assumption
by the successor of our obligations under the indenture;
o to grant to or confer upon the trustee for the benefit of the holders
any additional rights, remedies, powers or authority;
o to permit the trustee to comply with any duties imposed upon it by law;
o to specify further the duties and responsibilities of, and to define
further the relationships among, the trustee and any authenticating
agent or paying agent for the debt securities; and
o to change or eliminate any of the provisions of the indenture, so long
as the change or elimination becomes effective only when there are no
debt securities outstanding that were created prior to the execution of
the supplemental indenture or other document evidencing such change or
elimination.
Except as set forth in the applicable prospectus supplement, each
indenture will contain provisions which allow us and the trustee to amend the
indenture for any other purpose with the consent of holders of a majority in
principal amount of the applicable issue of debt securities, other than
amendments which (1) extend the stated maturity of the debt securities, (2)
reduce the principal amount of the debt securities, (3) reduce the interest
rate for the debt securities, (4) extend the dates for scheduled payments of
principal and interest, (5) impair the right of a holder of debt securities to
institute suit for the payment of its debt securities, or (6) reduce the
percentage of holders of debt securities required to consent to amendments or
waive defaults under the indenture. The items described in (1) through (5)
above will require the consent of all holders affected by the change. The item
described in (6) above will require the consent of all holders.
GOVERNING LAW
The senior indenture and the subordinated indenture will be governed by
the laws of the State of New York.
DESCRIPTION OF CAPITAL STOCK
We have the authority under our articles of incorporation to issue
350,000,000 shares of common stock, no par value, and 100,000,000 shares of
preferred stock, no par value. As of September 30, 2003, 70,980,203 shares of
our common stock were outstanding, all of which are owned by MHC Inc. The
common stock is not listed on any exchange. All outstanding shares of common
stock are fully paid and non-assessable.
Also as of September 30, 2003, the following shares of our preferred stock
were outstanding: 49,451 shares of the $3.30 series; 38,305 shares of the $3.75
series; 32,630 shares of the $3.90 series; 47,362 shares of the $4.20 series;
49,945 shares of the $4.35 series; 50,000 shares of the $4.40 series; and
49,898 shares of the $4.80 series. All outstanding shares of preferred stock
are fully paid and non-assessable. The terms of these preferred securities are
described in an amendment to our articles of incorporation which is
incorporated herein by reference.
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COMMON STOCK
The shares of our authorized common stock are identical in all respects
and have equal rights and privileges. Each holder of our common stock is
entitled to one vote in the election of directors and other matters. Common
shareholders may receive dividends when declared by our board of directors.
Dividends may be paid in cash, stock or another form. In certain cases, common
shareholders may not receive dividends until we have satisfied our obligations
to any preferred shareholders. If we liquidate, dissolve or wind-up our
business, either voluntarily or not, common shareholders will share equally in
the assets remaining after we pay our creditors and preferred shareholders.
PREFERRED STOCK
We may issue, from time to time, shares of one or more series or classes
of our preferred stock with such preferences and designations as our board of
directors may determine. The following summary description sets forth some of
the general terms of the preferred stock. We will describe the specific terms
of any series of preferred stock that we issue in a prospectus supplement. To
the extent the description contained in the prospectus supplement differs from
this summary description, you should rely on the information in the prospectus
supplement. You should also read our articles of incorporation and bylaws
before purchasing the preferred stock.
Our board of directors is authorized to determine for each series of
preferred stock, and the applicable prospectus supplement will set forth with
respect to any such series:
o the designation of such series and the number of shares that constitute
such series;
o the dividend rate (or the method of calculation thereof), if any, on the
shares of such series and the priority as to payment of dividends with
respect to other classes or series of our capital stock;
o the dividend periods (or the method of calculating the dividend
periods);
o the voting rights of the shares of such series, if any;
o the liquidation preference and the priority as to payment of such
liquidation preference with respect to the classes or series of
preferred stock and any other rights of the shares of such series if we
liquidate, dissolve or wind-up our affairs;
o whether and on what terms we can redeem or repurchase the shares of such
series;
o whether the shares of such series will have the benefit of a sinking
fund; and
o any other material terms.
The shares of a series of preferred stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the applicable prospectus supplement, our
articles of incorporation or the applicable certificate of designation or as
otherwise required by law.
Except as set forth in the applicable prospectus supplement, no series of
preferred stock will be redeemable or receive the benefit of a sinking fund. If
we voluntarily or involuntarily liquidate, dissolve or wind up our affairs, the
holders of each series of preferred stock will be entitled to receive the
liquidation preference per share specified in the prospectus supplement plus
any accrued and unpaid dividends. Holders of preferred stock will be entitled
to receive these amounts before any distribution is made to the holders of
common stock, but only after the liquidation preference has been fully paid on
any shares of senior ranking preferred stock, if any. Neither the par value nor
the liquidation preference is indicative of the price at which the preferred
stock will actually trade on or after the date of issuance.
We will designate the transfer agent for each series of preferred stock in
the applicable prospectus supplement.
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PLAN OF DISTRIBUTION
We may offer and sell or exchange the securities described in this
prospectus:
o through agents,
o through one or more underwriters,
o through one or more dealers,
o directly to one or more purchasers (through a specific bidding or
auction process or otherwise), or
o through a combination of any such methods of sale.
The distribution of the securities described in this prospectus may be
effected from time to time in one or more transactions either:
o at a fixed price or prices, which may be changed,
o at market prices prevailing at the time of sale,
o at prices relating to such prevailing market prices,
o at negotiated prices, or
o at a fixed exchange ratio in return for other of our securities.
Offers to purchase or exchange the securities may be solicited by agents
designated by us from time to time. Any such agent will be named, and any
commissions payable by us to such agent will be set forth, in the applicable
prospectus supplement. Unless otherwise indicated in the applicable prospectus
supplement, any such agent will be acting on a best efforts basis for the
period of its appointment. Any such agent may be deemed to be an underwriter,
as that term is defined in the Securities Act, of the securities so offered and
sold.
If an underwriter or underwriters are utilized in the sale of the
securities, we will execute an underwriting agreement with such underwriter or
underwriters at the time an agreement for such sale is reached. The names of
the specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transactions, including compensation of the
underwriters and dealers, which may be in the form of discounts, concessions or
commissions, if any, will be set forth in the applicable prospectus supplement,
which will be used by the underwriters to make resales of the securities.
If a dealer is utilized in the sale of the securities, we or an
underwriter will sell such securities to the dealer as principal. The dealer
may then resell such securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the dealer and the
terms of the transactions will be set forth in the applicable prospectus
supplement relating thereto.
Offers to purchase or exchange the securities may be solicited directly by
us and sales or exchanges thereof may be made by us directly to institutional
investors or others. The terms of any such sales, including the terms of any
bidding or auction process, if utilized, will be described in the applicable
prospectus supplement relating thereto.
We may enter into agreements with agents, underwriters and dealers under
which we agree to indemnify them against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments they may be
required to make in respect thereof. The terms and conditions of such
indemnification or contribution will be described in the applicable prospectus
supplement. Certain of the agents, underwriters or dealers, or their
affiliates, may be customers of, engage in transactions with or perform
services for us in the ordinary course of business.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed
with the Securities and Exchange Commission using a "shelf" registration
process. Using this process, we may offer the securities described in this
prospectus, either separately or with other securities registered hereunder, in
one or more offerings with an aggregate principal amount of up to $880,000,000.
This prospectus provides you with a general description of the securities we
may offer. Each time we offer securities, we will provide a prospectus
supplement to this prospectus. The prospectus supplement will describe the
specific terms of that offering. The prospectus supplement may also add, update
or change the information contained in this prospectus. Please carefully read
this prospectus and the applicable prospectus supplement, in addition to the
information contained in the documents we refer you to under the heading "Where
You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the Securities and Exchange Commission. You may read and copy any document we
file at the Securities and Exchange Commission's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the
Securities and Exchange Commission at 1-800-732-0330 for further information on
the public reference rooms. You may also obtain copies of these materials from
the public reference section of the Securities and Exchange Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Our Securities
and Exchange Commission filings are also available to the public from the
Securities and Exchange Commission's web site at http://www.sec.gov.
This prospectus is part of a registration statement we have filed with the
Securities and Exchange Commission relating to the securities described in this
prospectus. As permitted by Securities and Exchange Commission rules, this
prospectus does not contain all of the information set forth in the
registration statement. You should read the registration statement for further
information about us and the securities described in this prospectus. You may
inspect the registration statement and its exhibits without charge at the
office of the Securities and Exchange Commission at 450 Fifth Street, N.W., in
Washington, D.C. 20549, and you may obtain copies from the Securities and
Exchange Commission at prescribed rates. You may also access the registration
statement at the Securities and Exchange Commission's web site described above.
The Securities and Exchange Commission allows us to "incorporate by
reference" the information that we file with them, which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus. The information filed by us with the Securities and Exchange
Commission in the future will automatically update and supersede this
information. We incorporate by reference, among others, our Annual Report on
Form 10-K for the fiscal year ended December 31, 2002, our Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 2003, June 30, 2003 and
September 30, 2003, our Form 8-K filed on October 20, 2003 and any filings made
by us with the Securities and Exchange Commission under Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the initial filing of
the registration statement that contains this prospectus and until the
termination of the offering of securities commenced by us pursuant to this
prospectus.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address or telephone number:
Treasurer
MidAmerican Energy Company
666 Grand Avenue
Des Moines, Iowa 50309
(515) 242-4300
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. You should
not assume that the information in this prospectus or any prospectus supplement
is accurate as of any date other than the date on the front of these documents.
16
LEGAL MATTERS
The validity of the debt securities described in this prospectus has been
passed upon for us by Latham & Watkins LLP, 885 Third Avenue, Suite 1000, New
York, New York 10022. The validity of the preferred stock described in this
prospectus has been passed upon for us by Paul J. Leighton, Esq., our Assistant
General Counsel.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference to our Annual Report on Form 10-K
for the year ended December 31, 2002 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and has been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended March 31, 2003 and 2002, June 30, 2003 and 2002 and September 30,
2003 and 2002, which is incorporated herein by reference, Deloitte & Touche LLP
have applied limited procedures in accordance with professional standards for a
review of such information. However, as stated in their reports included in our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003, June 30,
2003 and September 30, 2003, and incorporated by reference herein, they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act for their reports on the unaudited interim financial
information because those reports are not "reports" or a "part" of the
registration statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Securities Act.
17
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by
MidAmerican Energy Company in connection with the issuance and distribution of
the securities being registered. All amounts are estimates other than the
Securities and Exchange Commission registration fee.
AMOUNT TO BE PAID
------------------
Registration fee ...................... $ 36,810
Printing expenses ..................... 150,000
Legal fees and expenses ............... 200,000
Accounting fees and expenses .......... 50,000
Rating agency fees .................... 100,000
Trustee fees and expenses ............. 10,000
Miscellaneous expenses ................ 50,000
--------
Total ................................ $596,810
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 490.850-490.859 of the Iowa Business Corporation Act permit
corporations organized thereunder to indemnify directors, officers, employees
and agents against liability under certain circumstances. The Restated Articles
of Incorporation, as amended, and the Restated Bylaws, as amended, of
MidAmerican Energy Company provide for indemnification of directors, officers
and employees to the full extent provided by the Iowa Business Corporation Act.
The Articles of Incorporation and the Bylaws state that the indemnification
provided therein shall not be deemed exclusive. MidAmerican Energy Company may
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of MidAmerican Energy Company or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not MidAmerican Energy Company would
have the power to indemnify such person against such expense, liability or loss
under the Iowa Business Corporation Act. Pursuant to Section 490.857 of the
Iowa Business Corporation Act, the Articles of Incorporation and the Bylaws,
MidAmerican Energy Company, through MidAmerican Energy Holdings Company,
maintains directors' and officers' liability insurance coverage. MidAmerican
Energy Company has also entered into indemnification agreements with certain
directors and officers, and expects to enter into similar agreements with
future directors and officers, to further assure such persons indemnification
as permitted by Iowa law.
As permitted by Section 490.202 of the Iowa Business Corporation Act and
Article XI.B. of the Articles of Incorporation, the Articles of Incorporation
are deemed to provide that no director shall be personally liable to
MidAmerican Energy Company or its shareholders for money damages for any action
taken, or any failure to take any action, as a director, except liability for
any of the following: (1) the amount of a financial benefit received by a
director to which the director is not entitled; (2) an intentional infliction
of harm on the corporation or the shareholders; (3) a violation of section
490.833 (relating to certain unlawful distributions to shareholders); or, (4)
an intentional violation of criminal law.
The form of distribution agreement filed as Exhibit 1.1 hereto and the
form of underwriting agreement filed as Exhibit 1.2 hereto include provisions
requiring the underwriters, dealers or agents, as applicable, to indemnify
directors, officers and certain controlling persons of MidAmerican Energy
Company in certain circumstances.
II-1
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
--------
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
1.1 Form of Distribution Agreement
1.2** Form of Underwriting Agreement
4.1 Form of Indenture (Senior Debt Securities)
4.2 Form of Indenture (Subordinated Debt Securities)
5.1 Opinion of Latham & Watkins LLP regarding the validity of the debt securities
5.2 Opinion of Paul J. Leighton, Esq. regarding the validity of the preferred stock
12.1* Computation of Ratios of Earnings to Fixed Charges and computation of Ratios of
Earnings to Fixed Charges plus Preferred Stock Dividend Requirements
15.1 Awareness Letter of Deloitte & Touche LLP
23.1 Consent of Latham & Watkins LLP (included in their opinion filed as Exhibit 5.1)
23.2 Consent of Paul J. Leighton, Esq. (included in his opinion filed as Exhibit 5.2)
23.3 Consent of Deloitte & Touche LLP
24.1* Power of Attorney
25.1** Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
1939 (Senior Debt Securities)
25.2** Statement of Eligilibity and Qualification (Form T-1) under the Trust Indenture Act of
1939 (Subordinated Debt Securities)
- ------------
* Filed as an exhibit to MidAmerican Energy Company's Registration Statement
on Form S-3 filed with the Securities and Exchange Commission on November
10, 2003.
** To be filed as an exhibit to an amendment hereto or as an exhibit to a
document to be incorporated by reference herein.
(b) Financial Data Schedules
------------------------
Schedule II -- Valuation and Qualifying Accounts (Filed as Schedule II to
MidAmerican Energy Company's Annual Report on Form 10-K for
the year ended December 31, 2002, as amended, Registration
No. 1-11505)
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts of events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the
changes in volume and price present no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
II-2
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To file an application for the purpose of determining the eligibility
of the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939 in accordance with the rules and regulations prescribed
by the Commission under Section 305(b)(2) of the Trust Indenture Act of 1939.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referred to in Item 15 of
this registration statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 2 to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Des Moines, State of Iowa, on January 16, 2004.
MIDAMERICAN ENERGY COMPANY
By: /s/ Paul J. Leighton
---------------------------------
Name: Paul J. Leighton
Title: Assistant General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated.
Signature Title Date
- --------- ----- ----
* Senior Vice President and
- --------------------------- Director (co-principal executive January 16, 2004
Jack L. Alexander officer)
* Senior Vice President and January 16, 2004
- --------------------------- Director (co-principal executive
Todd M. Raba officer)
* Vice President and Controller January 16, 2004
- --------------------------- (principal financial officer and
Thomas B. Specketer principal accounting officer)
*By /s/ Paul J. Leighton
Attorney-In-Fact
II-4
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
1.1 Form of Distribution Agreement
1.2** Form of Underwriting Agreement
4.1 Form of Indenture (Senior Debt Securities)
4.2 Form of Indenture (Subordinated Debt Securities)
5.1 Opinion of Latham & Watkins LLP regarding the validity of the debt securities
5.2 Opinion of Paul J. Leighton, Esq. regarding the validity of the preferred securities
12.1* Computation of Ratios of Earnings to Fixed Charges and computation of Ratios of
Earnings to Fixed Charges plus Preferred Stock Dividend Requirements
15.1 Awareness Letter of Deloitte & Touche LLP
23.1 Consent of Latham & Watkins LLP (included in their opinion filed as Exhibit 5.1)
23.2 Consent of Paul J. Leighton, Esq. (included in his opinion filed as Exhibit 5.2)
23.3 Consent of Deloitte & Touche LLP
24.1* Power of Attorney
25.1** Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
1939 (Senior Debt Securities)
25.2** Statement of Eligilibity and Qualification (Form T-1) under the Trust Indenture Act of
1939 (Subordinated Debt Securities)
- ----------
* Filed as an exhibit to MidAmerican Energy Company's Registration
Statement on Form S-3 filed with the Securities and Exchange Commission
on November 10, 2003.
** To be filed as an exhibit to an amendment hereto or as an exhibit to a
document to be incorporated by reference herein.