UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON D.C. 20549

                                    FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15(d) of

                       the Securities Exchange Act of 1934

                         For the quarterly period ended

                                 March 31, 2000

                           Commission File No. 0-25551

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

                    Iowa                                         94-2213782
      --------------------------------------------             --------------
           (State or other jurisdiction of                    (I.R.S. Employer
            incorporation or organization)                   Identification No.)

           666 Grand  Avenue,  Des Moines, IA                      50309
      ----------------------------------------------           --------------
       (Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code  (515) 242-4300
                                                    ---------------


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 Yes    X                              No ____
                                     -------


As of May 15, 2000 all 9,281,087  shares of common stock of  MidAmerican  Energy
Holdings Company were held by a limited group of investors.



                       MIDAMERICAN ENERGY HOLDINGS COMPANY

                                    FORM 10-Q

                                TABLE OF CONTENTS

Part I:  Financial Information

                                                                        Page No.

ITEM 1.       Financial Statements

              Independent Accountants' Report.......................          3

              Consolidated Balance Sheets...........................          4

              Consolidated Statements of Operations.................          5

              Consolidated Statements of Cash Flows.................          6

              Notes to Consolidated Financial Statements............          7

ITEM 2.       Management's Discussion and Analysis of
                 Financial Condition and Results of Operations......         11

Part II:  Other Information

ITEM 1.       Legal Proceedings.....................................         21
ITEM 2.       Changes in Securities.................................         21
ITEM 3.       Defaults on Senior Securities.........................         21
ITEM 4.       Submission of Matters to a Vote of Security Holders...         21
ITEM 5.       Other Information.....................................         21
ITEM 6.       Exhibits and Reports on Form 8-K......................         22

Signatures    ......................................................         23

Exhibit Index ......................................................         24


                                      -2-





INDEPENDENT ACCOUNTANTS' REPORT

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

We have reviewed the  accompanying  consolidated  balance  sheet of  MidAmerican
Energy  Holdings  Company  (successor to  MidAmerican  Energy  Holdings  Company
(predecessor),  referred  to as  "MEHC  (Predecessor)")  and  subsidiaries  (the
"Company")  as of March 31, 2000,  and the related  consolidated  statements  of
operations  and cash flows for the  period  March 14, 2000 to March 31, 2000 for
the Company  and for  the period January 1, 2000  to March 13, 2000  and for the
three month period ended March 31, 1999 for MEHC (Predecessor).  These financial
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America,  the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements taken as a whole. Accordingly, we do not express such an opinion.

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

We have  previously  audited,  in accordance with auditing  standards  generally
accepted in the United States of America, the consolidated balance sheet of MEHC
(Predecessor)  and  subsidiaries  as of  December  31,  1999,  and  the  related
consolidated statements of operations,  shareholders' equity, and cash flows for
the year then ended (not presented herein);  and in our report dated January 25,
2000 (March 14, 2000 as to Note 3), we expressed an unqualified opinion on those
consolidated financial statements.  In our opinion, the information set forth in
the  accompanying  consolidated  balance sheet as of December 31, 1999 is fairly
stated, in all material respects,  in relation to the consolidated balance sheet
from which it has been derived.

DELOITTE & TOUCHE LLP
Des Moines, Iowa
April 21, 2000



                                      -3-

                       MIDAMERICAN ENERGY HOLDINGS COMPANY
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

                                                               As of
                                                       ---------------------
                                                                     MEHC
                                                                 (Predecessor)
                                                                 -------------
                                                     March 31,    December 31,
                                                       2000           1999
                                                   ------------   ------------
                                                    (Unaudited)
Assets
- ------
Current Assets:

   Cash and cash equivalents .....................   $   40,439   $  316,327
   Restricted cash and short term investments.....       33,322       36,294
   Accounts receivable............................      524,326      600,564
   Other current assets...........................      163,827      185,128
                                                     ----------   ----------
      Total Current Assets........................      761,914    1,138,313

Property, plant, contracts and equipment, net ....    5,629,120    5,463,329
Excess of cost over fair value of net assets
    acquired, net.................................    3,453,804    2,712,677
Regulatory assets.................................      268,572      278,757
Long-term restricted cash.........................      104,729      133,265
Long-term restricted investments..................      122,409      122,175
Nuclear decommissioning trust fund and other
    marketable securities.........................      231,008      226,298
Equity investments................................      211,343      208,023
Deferred charges, other investments and other
    assets........................................      768,567      483,515
                                                     ----------   ----------

   Total Assets...................................  $11,551,466  $10,766,352
                                                    ===========  ===========

Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:

   Accounts payable...............................   $  416,758   $  449,203
   Other accrued liabilities......................      436,871      458,667
   Current portion of long-term debt..............      638,430      614,725
                                                     ----------   ----------
      Total Current Liabilities...................    1,492,059    1,522,595

Other long-term accrued liabilities...............      994,802    1,054,440
Parent company debt...............................    1,831,427    1,856,318
Subsidiary and project debt.......................    3,423,997    3,642,703
Deferred income taxes.............................    1,102,865      902,868
                                                     ----------   ----------
   Total Liabilities..............................    8,845,150    8,978,924
                                                     ----------   ----------

Deferred income...................................       69,983       65,509
Minority interest.................................       28,207       29,127
Company-obligated mandatorily redeemable convertible
   preferred securities of subsidiary trusts......      350,245      450,000
Company-obligated mandatorily redeemable preferred
   securities of subsidiary trusts................      454,772            -
Subsidiary-obligated mandatorily redeemable
   preferred securities of subsidiary trust.......      100,000      101,598
Preferred securities of subsidiary................      146,600      146,606

Shareholders' Equity:
Zero coupon convertible preferred stock -
   authorized 50,000 shares, no par value,
   34,563 shares outstanding......................            -            -
Common stock - authorized 60,000 and 180,000 shares,
   no par value; 9,281 and 82,980 shares issued,
   9,281 and 59,944 shares outstanding, at March
   31, 2000 and December 31, 1999, respectively...            -            -
Additional paid in capital........................    1,553,073     1,249,079
Retained earnings.................................        3,436       507,726
Accumulated other comprehensive income............            -       (12,029)
Treasury stock - 23,036 common shares at December
   31, 1999, at cost..............................            -      (750,188)
                                                      ---------     ---------
   Total Shareholders' Equity.....................    1,556,509       994,588
                                                      ---------     ---------

Total Liabilities and Shareholders' Equity........  $11,551,466   $10,766,352
                                                    ===========   ===========

The accompanying notes are an integral part of these financial statements.

                                     -4-



                       MIDAMERICAN ENERGY HOLDINGS COMPANY
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                 (In thousands)
                                   (Unaudited)


                                                                           MEHC (Predecessor)
                                                                         ---------------------
                                                 March 14, 2000    January 1, 2000    Three Months
                                                     through           through            Ended
                                                 March 31, 2000    March 13, 2000     March 31, 1999
                                               -----------------  -----------------  ----------------
Revenues:

                                                                               
   Operating revenue......................          $213,822         $1,043,072         $797,885
   Interest and other income..............             3,494             19,484           39,960
   Gain on non-recurring items............                 -                  -           20,173
                                                   ----------        ----------        ---------
   Total revenues.........................           217,316          1,062,556          858,018
                                                   ----------        ----------        ---------

Costs and expenses:
   Cost of sales..........................           110,547            561,386          447,198
   Operating expense......................            54,050            219,303          153,870
   Depreciation and amortization..........            22,310             97,278           79,351
   Interest expense.......................            23,298            101,330          116,881
   Less interest capitalized..............            (3,646)           (15,516)         (16,041)
   Loss on non-recurring items............                 -              7,605                -
                                                   ---------         ----------        ---------
Total costs and expenses..................           206,559            971,386          781,259
                                                   ---------         ----------        ---------

Income before provision for income taxes..            10,757            91,170           76,759

Provision for income taxes................             2,301            31,008           26,065
                                                   ---------         ----------        ---------

Income before minority interest...........             8,456            60,162           50,694

Minority interest.........................             5,020             8,850           10,903
                                                   ---------         ----------        ---------

Income before extraordinary item..........             3,436            51,312           39,791

Extraordinary item, net of tax............                 -                 -          (31,520)
                                                   ---------         ----------        ---------

Net income available to common

   shareholders...........................         $   3,436         $  51,312         $  8,271
                                                   =========         =========         ========



The accompanying notes are an integral part of these financial statements.



                                      -5-



                       MIDAMERICAN ENERGY HOLDINGS COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)


                                                                                       MEHC (Predecessor)
                                                                                       ------------------
                                                               March 14, 2000   January 1, 2000       Three
                                                                   through          through        Months Ended
                                                               March 31, 2000   March 13, 2000    March 31, 1999
                                                               --------------   ---------------   --------------

Cash flows from operating activities:
                                                                                           
Net income....................................................    $   3,436        $  51,312        $   8,271
Adjustments to reconcile to net cash flows from
    operating activities:
   Gain on non-recurring items................................            -                -          (20,173)
   Extraordinary item, net of tax.............................            -                -           31,520
   Depreciation and amortization..............................       17,230           83,194           67,953
   Amortization of excess of cost over fair value of
       net assets acquired....................................        5,080           14,084           11,398
   Amortization of deferred financing costs and other costs...          860            4,334            6,032
   Provision for deferred income taxes........................       28,918           (9,342)         (78,545)
   Undistributed earnings on equity investments...............          228           (3,459)             831
   Changes in other items:
     Accounts receivable......................................       52,913           46,436          192,756
     Accounts payable, accrued liabilities, deferred income
       and other..............................................     (130,435)          80,524              577
                                                                  ---------         --------         --------
Net cash flows from operating activities......................      (21,770)         267,083          220,620
                                                                  ---------         --------         --------

Cash flows from investing activities:

Purchase of MEHC (Predecessor) and MidAmerican, net of
     cash acquired............................................    (2,048,266)             -        (2,501,425)
Proceeds from sale of qualified facilities, net of cash disposed           -              -           365,074
Purchase of marketable securities.............................        (1,580)        (8,251)           (3,087)
Proceeds from sale of marketable securities...................         1,903         10,665             2,553
Capital expenditures relating to operating projects...........        (8,004)       (21,685)            1,936
Construction and other development costs......................       (14,198)       (56,720)          (12,939)
Philippine-construction in progress...........................        (3,911)       (22,736)          (16,674)
Decrease (increase) in restricted cash and investments........       (11,535)        42,809            43,988
Decrease (increase) in other assets...........................          (380)       (88,096)            1,131
                                                                  ----------      ---------        ----------
Net cash flows from investing activities......................    (2,085,971)      (144,014)       (2,119,443)
                                                                  -----------     ---------        ----------

Cash flows from financing activities:

Proceeds from issuances of common and preferred stock  .......     1,428,024              -                 -
Proceeds from issuance of trust preferred securities..........       454,772              -                 -
Proceeds from subsidiary and project debt.....................        28,152          6,043         1,118,617
Proceeds from parent company debt.............................        10,000              -                 -
Repayment of subsidiary and project debt......................       (75,901)      (133,060)          (77,045)
Repayment of parent company debt..............................             -              -          (605,822)
Purchase of treasury stock....................................             -              -           (22,194)
Other.........................................................          (478)          (149)           10,621
                                                                  ----------      ---------       -----------
Net cash flows from financing activities......................     1,844,569       (127,166)          424,177
                                                                  ----------      ---------       -----------

Effect of exchange rate changes on cash.......................             -         (8,619)          (13,080)
                                                                  ----------      ---------       -----------

Net decrease in cash and cash equivalents.....................      (263,172)       (12,716)       (1,487,726)
Cash and cash equivalents at beginning of period..............       303,611        316,327         1,606,148
                                                                  ----------      ---------       -----------
Cash and cash equivalents at end of period....................    $   40,439      $ 303,611       $   118,422
                                                                  ==========      =========       ===========

Interest paid, net of amount capitalized......................    $   67,441      $  35,057       $   108,646
                                                                  ==========      =========       ===========
Income taxes paid.............................................    $   47,768      $       -       $     7,661
                                                                  ==========      =========       ===========

The accompanying notes are an integral part of these financial statements.


                                      -6-



                       MIDAMERICAN ENERGY HOLDINGS COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   General

In the opinion of management of MidAmerican  Energy Holdings Company  (successor
to  MidAmerican  Energy  Holdings  Company  (Predecessor),  referred to as "MEHC
(Predecessor)")  and subsidiaries  (collectively  referred to as the "Company"),
the  accompanying   unaudited  consolidated  financial  statements  contain  all
adjustments  (consisting only of normal recurring accruals) necessary to present
fairly the financial position as of March 31, 2000 and the results of operations
and cash  flows for the period March 14, 2000 to March 31, 2000 for the  Company
and for the period January 1, 2000 to March  13,  2000 and for the three  months
ended March 31, 1999 for MEHC  (Predecessor).  The results of operations for the
period March  14, 2000 to  March 31, 2000 and for the Company and for the period
January 1, 2000 to March 13, 2000 and for the three months ended  March 31, 199
for  MEHC (Predecessor) are not  necessarily  indicative  of  the  results to be
expected for the full year.

The consolidated  financial  statements  include the accounts of the Company and
its wholly and majority  owned  subsidiaries.  Other  investments  and corporate
joint  ventures,  where the  Company  has the  ability to  exercise  significant
influence  are  accounted for under the equity  method.  Investments,  where the
Company's  ability to influence  is limited,  are  accounted  for under the cost
method of accounting.

Certain  amounts  in the  1999  financial  statements  and  supporting  footnote
disclosures  have been  reclassified to conform to the 2000  presentation.  Such
reclassification  did not impact  previously  reported  net  income or  retained
earnings.

Reference is made to the  Company's  most  recently  issued  annual  report that
included  information  necessary or useful to the understanding of the Company's
business and financial statement presentations.

2.   Teton Transaction

On October 24, 1999,  the Company and entities  representing  an investor  group
comprised of Berkshire Hathaway Inc. ("Berkshire Hathaway"),  Walter Scott, Jr.,
a director of the  Company,  and David L. Sokol,  Chairman  and Chief  Executive
Officer of the  Company,  executed  a  definitive  agreement  and plan of merger
whereby the investor group would acquire all of the outstanding  common stock of
the Company for $35.05 per share in cash, representing a total purchase price of
approximately   $2.2   billion,   including   transaction   costs  (the   "Teton
Transaction").  The Teton  Transaction  closed on March 14,  2000 and  Berkshire
Hathaway  invested  approximately  $1.24 billion in common stock and zero coupon
convertible preferred stock and approximately  $455  million in  nontransferable
11% trust  preferred  securities  due March 14, 2010.  The 11%  trust  preferred
securities have a liquidation  preference of  $25 each and are subject to manda-
tory redemption in ten equal  semi-annual  installments, commencing December 15,
2005.  Mr. Scott, Mr. Sokol and Gregory E. Abel, Chief Operating  Officer of the
Company,  contributed cash and current  securities of the Company having a value
of approximately $310 million.  The remaining purchase price was funded with the
Company's cash.  Berkshire Hathaway owns  9.7% of  the  voting stock,  Mr. Scott
owns  approximately 86% of the  voting stock, Mr. Sokol owns approximately 3% of
the voting stock and Mr. Abel owns  approximately 1% of the voting stock.

The  merger  has been  accounted  for as a purchase  business  combination.  The
purchase price has been  allocated to assets  acquired and  liabilities  assumed
based on preliminary  valuations.  The final  purchase price  allocation has not
been completed.  The Company  recorded the estimated  excess of  cost  over fair
value of net assets acquired of approximately  $885 million that is being  amor-
tized using the straight-line method over a 40-year period.

Unaudited pro forma combined revenue, income before  extraordinary items and net
income of the Company and MEHC (Predecessor)  for  the three  months ended March
31, 2000 and 1999, as if the  Teton Transaction and the  MidAmerican  Merger had
occurred at the beginning of each year after giving effect to pro  forma adjust-
ments related

                                       -7-


to the  acquisitions,  including  the  sales  of the  qualified  facilities, the
redemption of limited  recourse  notes, the redemption of  the  senior  discount
notes, and  the  issuance of the 11% trust  preferred  securities, were $1,279.9
million, $46.3 million  and $46.3  million, respectively,  compared  to $1,260.3
million, $41.3  million  and $9.8 million, respectively.

3.   Comprehensive Income:

Comprehensive  income for the period  March 14,  2000 to March 31, 2000 does not
differ  significantly from net income for the same period.  Comprehensive income
(loss) of MEHC  (Predecessor)  for the period January 1, 2000 to March 13, 2000,
and three  months  ended  March 31, 1999 was $40.2  million and $(4.8)  million,
respectively.  Comprehensive  income  differs  from net income due  primarily to
foreign currency translation adjustments.

4.   Accounting Pronouncement:

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which established  accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value.
This  statement  is effective  for the Company  beginning  January 1, 2001.  The
Company  is  in  the  process  of  evaluating  the  impact  of  this  accounting
pronouncement.

                                      -8-




5.   Segment Information:

The Company has identified five reportable  business segments  principally based
on  geographic  area:  Domestic  electricity  generation,   foreign  electricity
generation  (primarily the Philippines),  domestic utility  operations,  foreign
utility  operations  (primarily the United Kingdom) and real estate  operations.
Information  related to the  Company's  reportable  operating  segments is shown
below (in thousands).

                                                          MEHC (Predecessor)
                                                      ------------------------
                                   March 14, 2000  January 1, 2000    Three
                                       through         through     Months Ended
                                   March 31, 2000  March 13, 2000 March 31, 1999
                                   --------------  -------------- --------------

Revenue:

Domestic generation (2)  .........   $   (12)          $ 4,520        $ 82,510
Foreign generation................    10,060             42,726         52,388
Domestic utility..................    86,696            447,583         94,562
Foreign utility...................    99,884            499,017        562,189
Real estate.......................    21,019             66,880         25,162
                                    --------         ----------      ---------
Segment revenue...................   217,647          1,060,726        816,811
Corporate.........................      (331)             1,830         41,207
                                    --------         ----------       --------
                                    $217,316         $1,062,556       $858,018
                                    ========         ==========       ========
Operating income: (1)
Domestic generation (2)  .........  $   (226)        $    3,670       $ 44,998
Foreign generation................     6,365             25,689         31,187
Domestic utility..................    13,493             87,894          9,992
Foreign utility...................    14,212             79,862         60,970
Real estate.......................       685             (4,144)         2,095
                                    --------          ---------       --------
Segment operating income..........    34,529            192,971        149,242
Corporate.........................    (4,120)           (15,987)        28,357
                                    --------          ---------       --------
                                    $ 30,409          $ 176,984       $177,599
                                    ========          =========       ========

(1)  Operating income excludes interest expense, net of capitalized interest.
(2) Domestic generation revenue and operating income are negative for the period
    March 14,  2000  through  March 31, 2000 due to the equity  investment  loss
    recorded at CE Generation for this period.

                                      -9-




                                                    March 31,       December 31,
                                                      2000              1999
                                                  -------------     ------------

Identifiable assets:

Domestic generation........................        $   871,933       $   858,812
Foreign generation.........................          1,257,556         1,263,026
Domestic utility...........................          5,076,285         5,052,466
Foreign utility............................          3,207,210         2,972,705
Real estate................................            167,265           162,714
                                                   -----------       -----------
Segment identifiable assets................         10,580,249        10,309,723
Corporate..................................            971,217           456,629
                                                   -----------       -----------
                                                   $11,551,466       $10,766,352
                                                   ===========       ===========


Long-lived assets:

Domestic generation........................        $   597,307       $   595,607
Foreign generation.........................            952,409           952,415
Domestic utility...........................          4,063,571         3,995,763
Foreign utility............................          2,360,950         2,438,877
Real estate................................            127,640           128,024
                                                   -----------       -----------
Segment long-lived assets..................          8,101,877         8,110,686
Corporate..................................            981,047            65,320
                                                   -----------       -----------
                                                   $ 9,082,924       $ 8,176,006
                                                   ===========       ===========

The remaining  differences from the segment amounts to the consolidated  amounts
described as "Corporate" relate principally to the corporate functions including
administrative  costs,  corporate cash and related interest income,  unallocated
goodwill and related goodwill  amortization, intersegment eliminations, as  well
as the gain on the sale of the qualified facilities in 1999.

                                      -10-



MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

The following is  management's  discussion  and analysis of certain  significant
factors that have  affected the  Company's  financial  condition  and results of
operations  during  the  periods  included  in the  accompanying  statements  of
operations.

Acquisitions:

On October 24, 1999,  the Company and entities  representing  an investor  group
comprised of Berkshire Hathaway Inc. ("Berkshire Hathaway"),  Walter Scott, Jr.,
a director of the  Company,  and David L. Sokol,  Chairman  and Chief  Executive
Officer of the  Company,  executed  a  definitive  agreement  and plan of merger
whereby the investor group would acquire all of the outstanding  common stock of
the Company for $35.05 per share in cash, representing a total purchase price of
approximately   $2.2   billion,   including   transaction   costs  (the   "Teton
Transaction").  The Teton  Transaction  closed on March 14,  2000 and  Berkshire
Hathaway  invested  approximately  $1.24 billion in common stock and zero coupon
convertible preferred stock and approximately $455  million  in  nontransferable
11% trust  preferred  securities  due March  14, 2010.  The 11% trust  preferred
securities  have a liquidation  preference of $25 each and are subject to manda-
tory redemption in  ten equal semi-annual  installments, commencing December 15,
2005.  Mr. Scott, Mr. Sokol and  Gregory E. Abel, Chief Operating Officer of the
Company,  contributed cash and current  securities of the Company having a value
of approximately $310 million.  The remaining purchase price was funded with the
Company's cash. Berkshire Hathaway owns 9.7% of the voting stock, Mr. Scott owns
approximately  86% of the voting  stock,  Mr. Sokol owns approximately 3% of the
voting stock and Mr. Abel owns  approximately 1% of the voting stock.

Business of MEHC:

MidAmerican  Energy  Holdings  Company (the  "Company"  or "MEHC"),  is a United
States-based  privately  owned global energy company with publicly  traded fixed
income securities that generates,  distributes and supplies energy to utilities,
government entities, retail customers and other customers located throughout the
world.  Through its  subsidiaries  the Company is organized and managed on three
separate platforms:

MidAmerican:

MidAmerican  Energy Company ("MEC") is the largest energy company  headquartered
in Iowa and is a regulated public utility principally engaged in the business of
generating,  transmitting,  distributing  and  selling  electric  energy  and in
distributing,  selling and transporting natural gas. MEC distributes electricity
at the retail level in Iowa,  Illinois  and South  Dakota.  It also  distributes
natural gas at the retail level in Iowa, Illinois, South Dakota and Nebraska. As
of March 31, 2000, MEC had 664,000 retail electric  customers and 640,000 retail
natural gas customers.

In addition to retail sales,  MEC delivers  electric energy to other  utilities,
marketers and municipalities who distribute it to end-use customers. These sales
are  referred to as sales for resale or  off-system  sales.  It also  transports
natural gas through its  distribution  system for a number of end-use  customers
who have independently secured their supply of natural gas.

MEC has a  residential,  agricultural,  commercial  and  diversified  industrial
customer group, in which no single industry or customer  accounted for more than
5% of its total 1999  electric  operating  revenues  or 3% of its total 1999 gas
operating margin.  Among the primary industries served by MEC are those that are
concerned with the manufacturing,  processing and fabrication of primary metals,
real estate, food products, farm and other non-electrical  machinery, and cement
and gypsum products.

Most  of  MEC's  business  is  conducted  in a  rate-regulated  environment  and
accordingly,  many of its  decisions as to the source and use of  resources  and
other strategic matters are evaluated from a utility business perspective. MEC's

                                      -11-


operations are seasonal in nature with a disproportionate percentage of revenues
and  earnings  historically  being  earned  in the  Company's  first  and  third
quarters.

Northern:

The operations of Northern Electric plc  ("Northern"),  an indirect wholly owned
subsidiary of the Company,  consist  primarily of the distribution and supply of
electricity,  supply of natural gas and other auxiliary businesses in the United
Kingdom.  Northern's  operations are seasonal in nature with a  disproportionate
percentage of revenues and earnings  historically  being earned in the Company's
first and fourth quarters.

Northern  receives  electricity from the national grid  transmission  system and
distributes  it to  customers'  premises  using  its  network  of  transformers,
switchgear  and  cables.  Substantially  all  of  the  customers  in  Northern's
authorized  area are connected to  Northern's  network and can only be delivered
electricity through Northern's distribution system,  regardless of whether it is
supplied by Northern's own supply business or by other suppliers, thus providing
Northern  with  distribution  volume that is stable from year to year.  Northern
charges  access  fees for the use of the  distribution  system.  The  prices for
distribution  are controlled by a prescribed  formula that limits increases (and
may require  decreases)  based upon the rate of inflation in the United  Kingdom
and other regulatory action.

Northern's supply business  primarily involves the bulk purchase of electricity,
through a central  pool,  and  subsequent  resale to individual  customers.  The
supply  business  generally is a high volume  business  that tends to operate at
lower profitability levels than the distribution business. In the market between
100kW  and  1MW  of  electrical  demand,  Northern  is now  one  of the  largest
electricity  suppliers  in the U.K.  market.  As of  March  31,  2000,  Northern
supplied electricity to 1.3 million customers.

Northern also competes to supply gas inside and outside its authorized  area. In
the residential market, Northern currently supplies gas to approximately 550,000
customers.

CalEnergy:

The Company indirectly owns the Upper Mahiao,  Malitbog and Mahanagdong Projects
(collectively,  the "Philippine  Projects"),  which are geothermal  power plants
located on the island of Leyte in the  Philippines.  For purposes of  consistent
presentation,  capacity  amounts for Upper Mahiao,  Malitbog and Mahanagdong are
119, 216 and 165 net MW, respectively.

On February 8, 1999,  the Company  created a new  subsidiary,  CE Generation LLC
("CE  Generation")  and  subsequently  transferred  its interest in the Imperial
Valley  Projects and Gas Plants to CE  Generation.  For  purposes of  consistent
presentation,  plant capacity factors for Vulcan,  Hoch (Del Ranch),  Elmore and
Leathers (collectively the "Partnership Projects") are based on capacity amounts
of 34, 38, 38, and 38 net MW, respectively, and for Salton Sea I, Salton Sea II,
Salton Sea III and Salton Sea IV plants (collectively the "Salton Sea Projects")
are based on capacity amounts of 10, 20, 49.8 and 39.6 net MW, respectively (the
Partnership Projects and the Salton Sea Projects are collectively referred to as
the "Imperial  Valley  Projects").  Plant  capacity  factors for Saranac,  Power
Resources  and Yuma are based on capacity  amounts of 240,  200,  and 50 net MW,
respectively.   Each  plant  possesses  an  operating  margin  that  allows  for
production in excess of the amount listed above.  Utilization  of this operating
margin is based upon a variety of factors and can be  expected  to vary  between
calendar quarters, under normal operating conditions.

Due to the  sale of 50% of its  interests  in CE  Generation,  the  Company  has
accounted  for CE Generation as an equity  investment  beginning  March 3, 1999.
Prior to that date, CE Generation results were fully consolidated.

On  February  26,  1999,  the  Company  closed the sale of all of its  ownership
interests in the Navy I, Navy II and BLM,  (collectively  "Coso"),  to Caithness
Energy, LLC for $205 million in cash.


                                      -12-



Results of Operations:

The following is a discussion of the  historical  results of the Company for the
period March 14, 2000 through March 31, 2000, and of its  predecessor  (referred
to as "MEHC  (Predecessor)")  for the period January 1, 2000,  through March 13,
2000,  and for the three months  ended March 31,  1999.  Results for the Company
include  the  results  of  MEHC  (Predecessor)  beginning  March  14,  2000,  in
conjunction  with the  Teton  Transaction.  The  impact  of the  transaction  is
reflected  in  the  Company's  results  of  operations,  predominately  minority
interest costs on issuance of Company-obligated mandatorily redeemable preferred
securities  of  subsidiary  trusts  and  the  effects  of  purchase  accounting,
including goodwill amortization and fair value adjustments to the carrying value
of assets and liabilities.  In order to provide  comparability  between periods,
the Company has prepared pro forma results as if the Teton  Transaction  and the
MidAmerican  Merger had  occurred  at the  beginning  of each year after  giving
effect to pro forma adjustments related to the acquisition,  including the sales
of the qualified  facilities,  the  redemption of  limited  recourse notes,  the
redemption of the senior discount  notes and the  issuance of the 11% trust pre-
ferred  securites. The  discussion  therefore  will  highlight  any  significant
variances on a pro forma basis from 1999 to 2000.

Pro forma  operating  revenue  for the three  months  ended  March 31,  2000 was
$1,256.9  million compared with $1,186.2 million for the same period in 1999, an
increase  of 6.0%.  Northern  Electric  revenue  increased  approximately  $36.4
million due to higher volumes of electricity  supplied and distribution  revenue
from access charges. The remaining increase primarily relates to the increase of
revenue at  HomeServices,  a majority  owned  subsidiary of the Company,  due to
acquisitions in 1999.

The following  data  represents  the supply and  distribution  operations in the
U.K.:

                                                 Three Months
                                                Ended March 31,
                                              -------------------
                                              2000           1999
                                              ----           ----
Electricity Supplied (GWh)..............      5,224         4,564

Electricity Distributed (GWh)...........      4,420         4,224

Gas Supplied (Therms in millions) ......      167.2         183.7

The increase in  electricity  supplied for the three months ended March 31, 2000
is due  primarily  to the  increase  in  volumes  for  customers  outside of the
franchise  area.  The increase in electricity  distributed  for the three months
ended  March 31,  2000 is due to changes in demand in the  franchise  area.  The
reduction  in gas supplied in 2000 from 1999  reflects  lower volume in the U.K.
domestic market.

The  following  data  represents  sales from  utility  operations  for MEC.  The
financial  results of MEC are consolidated  with the Company  beginning on March
12, 1999.

                                                Three Months
                                               Ended March 31,
                                              -----------------
                                              2000         1999
                                              ----         ----
Electric Retail Sales (GWh)..............    3,944        3,838

Electric Sales for Resale (GWh)..........    2,082        1,796

Gas Throughput (Therms in millions)......      339          382


                                      -13-



MEC retail  electric  sales  increased in the first  quarter 2000 from the first
quarter 1999 due to increased customers and non-weather related sales increases.
Electric  sales for resale  increased  in the first  quarter 2000 from the first
quarter 1999 due to improved  availability in 2000 of MEC's baseload coal plants
and  favorable  market  conditions.  Gas  throughout  decreased  due  to  milder
temperatures in the first quarter of 2000 compared to the first quarter of 1999,
resulting in less heating load.

Pro forma  interest  and other  income for the three months ended March 31, 2000
was $23.0 million  compared with $54.0 million for the same period in 1999.  The
decrease was due primarily to the reduced  interest income  resulting from lower
corporate cash balances.

As a result of the sales of Coso and an interest in CE  Generation,  the Company
recorded a gain of $20.2 million in the first quarter of 1999.

Pro forma cost of sales for the three  months  ended  March 31,  2000 was $671.9
million compared with $646.1 million for the same period in 1999, an increase of
4.0%. The increase is due to increased revenue at Northern and HomeServices.

Pro forma  operating  expenses  for the three  months  ended  March 31, 2000 was
$273.4  million  compared with $281.0  million for the same period in 1999.  The
decrease was due to lower costs at both Northern and MEC.

Pro forma  depreciation and  amortization  for the three  months ended March 31,
2000 increased  marginally to $121.6  million  from $119.1 million  for the same
period in 1999.

Pro forma interest expense, less amounts capitalized, for the three months ended
March 31, 2000 was $106.4  million  compared  with  $115.2  million for the same
period in 1999, a decrease of 7.6%.  This  decrease was due to the  repayment of
the 9.5% Senior Notes in 1999 and other reduced indebtedness.

The loss on  non-recurring  items of $7.6  million in the period from January 1,
2000  through  March  13,  2000  represents  the  costs  related  to  the  Teton
Transaction.

Pro forma  tax  expense  for the three  months  ended  March 31,  2000 was $28.3
million compared with $30.8 million for the same period in 1999. The decrease is
due primarily to lower taxes on foreign earnings.

Pro forma minority  interest for the three months ended March 31, 2000 was $24.5
million  compared  with  $26.8  million  for the same  period in 1999.  Minority
interest  includes  the  dividends  on the  $455  million  of  Company-obligated
mandatorily  redeemable preferred securities of subsidiary trusts. This decrease
was due to the conversion of TIDES I to common stock in May 1999.

On January 15, 1999,  the Company  redeemed  its  remaining  outstanding  Senior
Discount  Notes at a  redemption  price of 105.125%  plus accrued  interest.  On
January 29, 1999, the Company  commenced a cash offer for all of its outstanding
Limited  Recourse  Notes.  The  Company  received  tenders  from  holders  of an
aggregate of approximately  $195.8 million  principal that were paid on March 3,
1999 at a redemption price of 110.025% plus accrued  interest.  Due to the early
retirement of the Senior Discount Notes and Limited  Recourse Notes, the Company
recorded an extraordinary item of approximately $31.5 million, net of tax.

Liquidity and Capital Resources:
- -------------------------------

The  Company  has  available  a variety  of  sources of  liquidity  and  capital
resources,  both internal and external.  These resources  provide funds required
for current  operations,  construction  expenditures,  debt retirement and other
capital requirements.


                                      -14-



The Company's cash and cash  equivalents were $40.4 million at March 31, 2000 as
compared to $316.3  million at December 31, 1999.  The majority of this decrease
was due to the cash used in the Teton  Transaction.  In  addition,  the  Company
recorded separately restricted cash and investments of $260.5 million and $291.7
million at March 31, 2000 and December 31, 1999,  respectively.  The  restricted
cash balance as of March 31, 2000 is comprised primarily of amounts deposited in
restricted  accounts from which the Company will fund the various projects under
construction. Additionally, the Philippine Projects' restricted cash is reserved
for the service of debt obligations.

Acquisitions

On October 24, 1999,  the Company and entities  representing  an investor  group
comprised of  Berkshire  Hathaway  Inc.,  Walter  Scott,  Jr., a director of the
Company,  and David L.  Sokol,  Chairman  and  Chief  Executive  Officer  of the
Company, executed a definitive agreement and plan of merger whereby the investor
group  would  acquire  all of the  outstanding  common  stock of the Company for
$35.05 per share in cash,  representing a total purchase price of  approximately
$2.2 billion, including transaction costs. The Teton Transaction closed on March
14, 2000 and Berkshire Hathaway invested  approximately  $1.24 billion in common
stock  and  zero coupon  convertible  preferred  stock  and  approximately  $455
million  in nontransferable 11%  trust  preferred securities due March 14, 2010.
The 11% trust preferred securities have a liquidation preference of $25 each and
are subject to  mandatory  redemption  in  ten equal  semi-annual  installments,
commencing  December 15, 2005.  Mr. Scott, Mr. Sokol  and Gregory E. Abel, Chief
Operating Officer of the Company, contributed cash and current securities of the
Company  having a value of  approximately $310  million.  The remaining purchase
price was  funded with the Company's cash.  Berkshire  Hathaway owns 9.7% of the
voting  stock, Mr. Scott owns  approximately  86% of the voting stock, Mr. Sokol
owns approximately 3% of the voting stock and Mr. Abel owns  approximately 1% of
the voting stock.

Construction

Minerals Extraction
- -------------------
CalEnergy  Minerals LLC, an indirect wholly owned subsidiary of the Company,  is
constructing  the  Zinc  Recovery  Project  that  will  recover  zinc  from  the
geothermal brine. Facilities will be installed near the Imperial Valley Projects
sites to extract a zinc chloride  solution from the geothermal  brine through an
ion exchange process.  This solution will be transported to a central processing
plant  where  zinc  ingots  will  be  produced   through   solvent   extraction,
electrowinning and casting  processes.  The Zinc Recovery Project is designed to
have a capacity of approximately 30,000 metric tons per year and is scheduled to
commence  commercial  operation in the third quarter of 2000. In September 1999,
CalEnergy  Minerals LLC entered into a sales agreement whereby all zinc produced
by the Zinc Recovery  Project will be sold to Cominco,  LTD. The initial term of
the agreement expires in December 2005.

The  Zinc  Recovery   Project  is  being   constructed  by  Kvaerner  U.S.  Inc.
("Kvaerner")  pursuant  to a date  certain,  fixed-price,  turnkey  engineering,
procurement  and   construction   contract.  Kvaerner is a wholly owned indirect
subsidiary of Kvaerner ASA, an international  engineering and construction  firm
experienced in the metals, mining and processing industries. Total project costs
of the Zinc  Recovery Project are expected to be approximately  $200.9  million.
The Company has incurred $134.1 million of such costs through March 31, 2000.

Casecnan
- --------
CE Casecnan  Water and Energy  Company,  Inc.,  a  Philippine  corporation  ("CE
Casecnan")  which at  completion  of the  Casecnan  Project is expected to be at
least 70% indirectly owned by the Company, is constructing the Casecnan Project,
a combined irrigation and 150 net MW hydroelectric power generation project (the
"Casecnan  Project")  located in the central  part of the island of Luzon in the
Republic of the Philippines.

CE Casecnan has entered into a fixed-price,  date certain,  turnkey engineering,
procurement  and  construction  contract to  complete  the  construction  of the
Casecnan  Project (the  "Casecnan  Construction  Contract").  The work under the
Casecnan  Construction Contract is being conducted by a consortium consisting of
Cooperative  Muratori

                                      -15-


Cementisti CMC di Ravenna and Impresa Pizzarotti & C. Spa working  together with
Siemens A.G., Sulzer Hydro Ltd., Black & Veatch and  Colenco  Power  Engineering
Ltd.

On November 20, 1999, the Casecnan  Construction  Contract was amended to extend
the Guaranteed Substantial Completion Date for the Casecnan Project to March 31,
2001. Accordingly, the Casecnan Project is now expected to become operational by
the second quarter of 2001.

Under the Project Agreement,  if the National Irrigation  Administration ("NIA")
has completed  certain work on its irrigation  system,  CE Casecnan is liable to
pay NIA  $5,000  per day for each day of delay  in  completion  of the  Casecnan
Project  beyond  July 27,  2000,  increasing  to $13,500 per day for each day of
delay in completion beyond November 27, 2000.

CE  Casecnan's  ability  to make  payments  on any of its  existing  and  future
obligations  is  dependent  on  NIA's  and  the  Republic  of  the  Philippines'
performance of their obligations under the Project Agreement and the Performance
Undertaking,  respectively.  No  shareholders,  partners  or  affiliates  of  CE
Casecnan, including the Company, and no directors,  officers or employees of the
Company  will  guarantee  or be in any way liable for  payment of CE  Casecnan's
obligations.  As a result, payment of CE Casecnan's obligations depends upon the
availability  of  sufficient  revenues  from CE  Casecnan's  business  after the
payment of operating expenses.

NIA's  payments of  obligations  under the Project  Agreement are  substantially
denominated in United States  dollars and are expected to be CE Casecnan's  sole
source of operating  revenues.  Because of CE Casecnan's  dependence on NIA, any
material failure of NIA to fulfill its obligations  under the Project  Agreement
and any  material  failure of the  Republic  of the  Philippines  to fulfill its
obligations  under the Performance  Undertaking would  significantly  impair the
ability of CE Casecnan to meet its existing and future obligations.

Cordova
- -------
Cordova  Energy  Company  LLC  ("Cordova  Energy"),  an  indirect  wholly  owned
subsidiary  of the Company,  has  commenced  construction  of a 537 MW gas-fired
power plant in the Quad Cities,  Illinois area (the "Cordova Project").  Cordova
Energy has  entered  into an engineering,  procurement and  construction ("EPC")
contract with Stone & Webster Engineering Corporation ("SWEC") to build the pro-
ject.  Total  project costs are  estimated to be approximately  $288.9  million.
The Company has also entered into a power sales agreement with a unit of El Paso
Energy  Corporation ("El Paso").  Under the power sales agreement,  El Paso will
purchase all the capacity and energy from the project  until  December 31, 2019.
However,  Cordova Energy has the option to elect on an annual basis to retain up
to 50% of the  project  output  for sales to  others.  The  construction  of the
Cordova Project is expected to be completed in mid-2001.

On September 10, 1999 Cordova Funding Corporation ("Cordova Funding"),  a wholly
owned  subsidiary of the Company,  closed the $225 million  aggregate  principal
amount  financing for the  construction of the Cordova  Project.  As part of the
financing,  approximately $93.5 million of 8.64% Series A-1 Senior Secured Bonds
due in 2019 were issued.  An additional $31.3 million of 8.79% Series A-2 Senior
Secured Bonds were issued on December 15, 1999 and $29.3 million of 9.07% Series
A-3 Senior  Secured  Bonds were issued on March 15,  2000.  Additional  Series A
Senior  Secured Bonds will be issued as required to fund  construction.  Cordova
Funding has loaned the  proceeds  to Cordova  Energy.  The Company has  incurred
$106.6  million  of  construction  costs  through  March 31, 2000.  Total equity
funding is expected to be approximately $63.9 million.

The  EPC  contractor's  parent,  Stone &  Webster,  Incorporated,  has  recently
announced  that it is having  current  liquidity  problems  and  intends to sell
substantially  all of its assets to Jacobs  Engineering  Group, Inc. in exchange
for an immediate $50 million secured  revolving credit  facility,  assumption of
substantially  all of Stone &  Webster's  balance  sheet  liabilities,  and $150
million in cash and stock,  and  subsequently  intends to seek bankruptcy  court
approval of the asset sale and credit  agreement.  The Company  does not believe
this will have any  material  adverse  effect  on the  final  completion  of the
Cordova Project or the Company.


                                      -16-



Evolution of the Domestic Utility Industry

The  utility  industry  continues  to evolve  into an  increasingly  competitive
environment. In many regions of the country,  legislative and regulatory actions
are being taken which  result in  customers  having more choices in their energy
decisions.

In the electric industry,  the traditional  vertical  integration of generation,
delivery and marketing is being  unbundled,  with the  generation  and marketing
functions  becoming  deregulated.  For local gas  distribution  businesses,  the
supply, local delivery and marketing functions are similarly being separated and
opened to competitors for all classes of customers.  Retail electric competition
is presently  not  permitted  in Iowa,  MEC's  primary  market.  Legislation  to
initiate competition was introduced in the Iowa legislature in the 2000 session,
but it did not pass.  MEC cannot  predict the timing or ultimate  outcome of any
potential electric  restructuring  legislation in Iowa.  Deregulation of the gas
supply function  related to small volume  customers is also being  considered by
the Iowa Utilities Board.  MEC has actively  participated in the legislative and
regulatory processes.

The generation and  retail  portions of MEC's  electric  business  will be  most
affected  by  competition.  The  introduction of  competition  in the  wholesale
market has resulted in a  proliferation  of power  marketers  and a  substantial
increase in market  activity.  As retail choice evolves,  competition from other
traditional utilities,  power marketers and customer-owned  generation could put
pressure on utility margins.

During  the  transition  to  full  competition,   increased  volatility  in  the
marketplace  can be  expected.  With the  elimination  of the energy  adjustment
clause in Iowa,  MEC is  financially  exposed  to  movements  in energy  prices.
Although  MEC  has  sufficient  low  cost  generation  under  typical  operating
conditions for its retail electric  needs, a loss of adequate  generation by MEC
at a time of high market prices could subject MEC to losses on its energy sales.

Domestic Legislative and Regulatory Evolution

In December 1997, the Governor of Illinois signed into law a bill to restructure
Illinois'  electric utility industry and transition it to a competitive  market.
Under the law,  beginning October 1, 1999, larger  non-residential  customers in
Illinois and 33% of the remaining non-residential Illinois customers are allowed
to select their provider of electric supply services.  All other non-residential
customers  will have supplier  choice  starting  December 31, 2000.  Residential
customers all receive the  opportunity to select their electric  supplier on May
1, 2002.

Accounting Effects of Industry Restructuring

A possible  consequence of competition in the utility industry is that Statement
of Financial  Accounting  Standards ("SFAS") No. 71 may no longer apply. SFAS 71
sets forth  accounting  principles  for  operations  that are regulated and meet
certain criteria.  For operations that meet the criteria,  SFAS 71 allows, among
other  things,  the  deferral of costs that would  otherwise  be  expensed  when
incurred. A majority of MEC's electric and gas utility operations currently meet
the  criteria  required  by SFAS  71,  but  its  applicability  is  periodically
reexamined. If portions of its utility operations no longer meet the criteria of
SFAS 71, MEC could be required to write off the  related  regulatory  assets and
liabilities from its balance sheet, and thus, a material  adjustment to earnings
in that period could result if regulatory assets are not recovered in transition
provisions of any resulting  legislation.  As of March 31, 2000, the Company had
$268.6 million of net regulatory assets on its consolidated balance sheet.


                                  -17-




Domestic Rate Matters: Electric

Under a 1997 pricing plan settlement  agreement resulting from an Iowa Utilities
Board rate proceeding,  electric prices for MEC's Iowa industrial and commercial
customers  were  reduced  through  a retail  access  pilot  project,  negotiated
individual   electric   contracts  and  a  tariffed  rate   reduction  for  some
non-contract commercial customers.

The negotiated electric contracts have differing terms and conditions as well as
prices.  The  contracts  range in length  from five to ten years,  and some have
price  renegotiation  and early  termination  provisions  exercisable  by either
party.  The vast majority of the contracts are for terms of seven years or less,
although, some large customers have agreed to ten-year contracts. Prices are set
as fixed prices;  however,  many contracts allow for potential price adjustments
with respect to environmental costs, government imposed public purpose programs,
tax changes,  and transition costs.  While the contract prices are fixed (except
for the potential  adjustment  elements),  the costs MEC incurs to fulfill these
contracts will vary. MEC presently  intends to manage this risk through  hedging
and other similar arrangements. On an aggregate basis, the annual revenues under
contract are approximately $180 million.

Under the 1997 pricing plan settlement agreement,  if MEC's annual Iowa electric
jurisdictional  return on common equity exceeds 12%, then earnings above the 12%
level will be shared  equally  between  customers and MEC. If the return exceeds
14%, then  two-thirds of MEC's share of those  earnings above the 14% level will
be used for accelerated  recovery of certain regulatory assets. The pricing plan
settlement agreement precludes MEC from filing for increased rates prior to 2001
unless the return  falls  below 9%.  Other  parties  signing the  agreement  are
prohibited from filing for reduced rates prior to 2001 unless the return,  after
reflecting  credits to customers and after the  accelerated  recovery of certain
assets,  exceeds 14%. The  agreement  also  eliminated  MEC's energy  adjustment
clause,  and,  as a  result,  the  cost  of fuel is not  directly  passed  on to
customers.

Environmental Matters

The U.S.  Environmental  Protection  Agency,  or EPA,  and  state  environmental
agencies have determined that  contaminated  wastes remaining at  decommissioned
manufactured  gas plant facilities may pose a threat to the public health or the
environment if these contaminants are in sufficient quantities and at sufficient
concentrations as to warrant remedial action.

MEC has evaluated or is evaluating 27 properties  which were, at one time, sites
of gas manufacturing plants in which it may be a potentially  responsible party.
The purpose of these  evaluations  is to determine  whether waste  materials are
present,  whether the materials  constitute an environmental or health risk, and
whether MEC has any  responsibility  for remedial action.  MEC's estimate of the
probable  costs for these  sites as of March 31,  2000,  was $28  million.  This
estimate  has been  recorded as a liability  and a  regulatory  asset for future
recovery through the regulatory process.

Although the timing of potential  incurred  costs and recovery of costs in rates
may affect the results of operations in individual periods,  management believes
that the outcome of these issues will not have a material  adverse effect on the
Company's financial position or results of operations.

On July 18, 1997, the EPA adopted  revisions to the National Ambient Air Quality
Standards for ozone and a new standard for fine particulate matter. In May 1999,
the U.S.  Court of Appeals for the  District of Columbia  Circuit  remanded  the
standards  adopted  in July  1997  back to the  EPA  indicating  the EPA had not
expressed  sufficient  justification for the basis of establishing the standards
and ruling that the EPA has exceeded its constitutionally-delegated authority in
setting the  standards.  As a result of the  court's  initial  decision  and the
current  status of the  standards,  the  impact of any new  standards  on MEC is
currently  unknown.  If the  EPA  successfully  appeals  the  court's  decision,
however,  and the new standards are implemented,  then MEC would incur increased
costs and a decrease in revenues.


                                      -18-




Nuclear Decommissioning

Each licensee of a nuclear facility is required to provide  financial  assurance
for the cost of  decommissioning  its  licensed  nuclear  facility.  In general,
decommissioning  of a nuclear  facility means to safely remove the facility from
service and restore the property to a condition allowing unrestricted use by the
operator.  Based on information  presently available,  MEC expects to contribute
approximately  $42 million  during the period 2000  through  2004 to an external
trust  established for the investment of funds for  decommissioning  Quad Cities
Station.  Approximately  65% of the trust's  funds are now  invested in domestic
corporate  debt and common  equity  securities.  The  remainder  is  invested in
investment grade municipal and U.S. Treasury bonds.

In addition,  MEC makes payments to the Nebraska Public Power District  ("NPPD")
related  to  decommissioning  the  Cooper  power  station.  These  payments  are
reflected as operating expense. NPPD estimates call for MEC to pay approximately
$57 million to NPPD  for Cooper decommissioning  during the period  2000 through
2004. NPPD invests the funds predominately in U.S. Treasury Bonds and other U.S.
Government securities.  Approximately  20%  was  invested in  domestic corporate
debt. MEC's obligation for Cooper decommissioning may be affected  by the actual
plant shutdown date and the status of the power purchase  contract at that time.
In July 1997,  NPPD filed a  lawsuit in  United  States  District  Court for the
District of Nebraska  naming MEC as the  defendant and seeking a declaration  of
MEC's rights and  obligations  in connection with Cooper nuclear decommissioning
funding.

Cooper and Quad Cities Station  decommissioning  costs charged to Iowa customers
are included in base rates,  and recovery of increases in those  amounts must be
sought  through the normal  ratemaking  process.  Cooper  decommissioning  costs
charged to Illinois  customers  are  recovered  through a rate rider on customer
billings that is reviewed annually.

Development Activity

The  Company is  actively  seeking to  develop,  construct,  own and operate new
energy projects, both domestically and internationally, the completion of any of
which is subject to  substantial  risk.  Development  can require the Company to
expend significant sums for preliminary  engineering,  permitting,  fuel supply,
resource  exploration,  legal and other expenses in preparation  for competitive
bids  which the  Company  may not win or before it can be  determined  whether a
project is  feasible,  economically  attractive  or  capable of being  financed.
Successful  development and construction is contingent upon, among other things,
negotiation on terms  satisfactory to the Company of engineering,  construction,
fuel supply and power sales contracts with other project  participants,  receipt
of required  governmental  permits and  consents  and timely  implementation  of
construction.  There  can  be no  assurance  that  development  efforts  on  any
particular  project,  or the Company's  development  efforts generally,  will be
successful.

The  financing,  construction  and  development  of projects  outside the United
States entail  significant  political and financial  risks  (including,  without
limitation,  uncertainties  associated with first time privatization  efforts in
the  countries   involved,   currency  exchange  rate   fluctuations,   currency
repatriation   restrictions,    political   instability,    civil   unrest   and
expropriation)  and other  structuring  issues that have the  potential to cause
substantial  delays or material  impairment  of the value of the  project  being
developed,  which the Company may not be fully capable of insuring against.  The
uncertainty of the legal  environment in certain foreign  countries in which the
Company may develop or acquire  projects  could make it more  difficult  for the
Company to enforce its rights under  agreements  relating to such  projects.  In
addition, the laws and regulations of certain countries may limit the ability of
the  Company to hold a majority  interest  in some of the  projects  that it may
develop or acquire. The Company's  international projects may, in certain cases,
be  terminated  by  a  government.  Projects  in  operation,   construction  and
development are subject to a number of uncertainties more specifically described
in the Company's Form 8-K,  dated March 26, 1999,  filed with the Securities and
Exchange Commission.

New Accounting Pronouncement

In June 1998, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities,"  which
established  accounting and reporting  standards for derivative

                                      -19-



instruments and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial  posi-
tion and measure those  instruments  at fair value.  This statement is effective
for the  Company beginning  January 1, 2001.  The  Company is in the  process of
evaluating the impact of this accounting pronouncement.

Forward-looking Statements

Certain information included in this report contains forward-looking  statements
made pursuant to the Private  Securities  Litigation Reform Act of 1995 ("Reform
Act"). Such statements are based on current expectations and involve a number of
known and unknown risks and  uncertainties  that could cause the actual  results
and  performance of the Company to differ  materially  from any expected  future
results or performance, expressed or implied, by the forward-looking statements.
In connection with the safe harbor provisions of the Reform Act, the Company has
identified   important  factors  that  could  cause  actual  results  to  differ
materially  from  such  expectations,  including  development  and  construction
uncertainty,  operating  uncertainty,  acquisition  uncertainty,   uncertainties
relating to doing business outside of the United States,  uncertainties relating
to geothermal  resources,  uncertainties  relating to domestic and international
(and  in   particular,   Indonesia)   economic  and  political   conditions  and
uncertainties regarding the impact of regulations, changes in government policy,
industry deregulation and competition. Reference is made to all of the Company's
SEC filings,  including the  Company's  Report on Form 8-K dated March 26, 1999,
incorporated herein by reference, for a description of such factors. The Company
assumes  no  responsibility  to  update  forward-looking  information  contained
herein.


                                      -20-




PART II - OTHER INFORMATION

Item 1  Legal proceedings.
- ------  -----------------

         As of March  31,  2000,  there  are no  material  outstanding  lawsuits
         against the Company; however as discussed in the Company's December 31,
         1999 Form 10-K,  several of the Company's projects and subsidiaries are
         involved in ongoing litigation.

Item 2  Changes in Securities and Use of Proceeds.
- ------  ---------------------

          On March  14,  2000,  MidAmerican  Energy  Holdings  Company,  an Iowa
          corporation   ("MidAmerican"),   announced   that  an  investor  group
          including  Berkshire Hathaway Inc., Walter Scott, Jr., David L. Sokol,
          Gregory E. Abel and  certain of their  affiliates  had  completed  its
          acquisition  of  MidAmerican   pursuant  to  a  previously   disclosed
          Agreement  and Plan of Merger,  dated as of October  24,  1999,  among
          MidAmerican,  Teton Formation L.L.C. and Teton  Acquisition Corp. As a
          result of the  merger,  an  aggregate  of  9,281,087  shares of common
          stock,  no par value, of  MidAmerican,  and 34,563,395  shares of Zero
          Coupon Convertible Preferred Stock, no par value, of MidAmerican, were
          issued  to the  members  of the  investor  group  in  exchange  for an
          aggregate of  $1,428,024,379.65 in cash and securities of MidAmerican.
          The Zero Coupon Convertible Preferred Stock is convertible into common
          stock of MidAmerican  pursuant to the terms set forth in MidAmerican's
          Amended and Restated  Articles of Incorporation  (filed as Exhibit 3.1
          to  MidAmerican's  Report on Form 10-K/A for year ending  December 31,
          1999) which is incorporated  herein by reference.  The securities were
          issued in a transaction exempt from registration under Section 4(2) of
          the Securities Act of 1933.

Item 3  Defaults on Senior Securities.
- ------  -----------------------------

         Not applicable.

Item 4  Submission of Matters to a Vote of Security Holders.
- ------  ---------------------------------------------------

         The Company held a special meeting of shareholders on January 27, 2000.
At the meeting,  shareholders  voted on one issue.  The result of the vote is as
follows:

                                                   For      Against   Abstaining
                                                   ---      -------   ----------
A.       Vote regarding approval on an
         Agreement and Plan of Merger among     44,556,736  3,240,176   50,997
         Teton Formation L.L.C., Teton Acquisition
         Corp. and the Company, and the merger
         of Teton Acquisition Corp. with and into
         the Company

Item 5  Other Information.
- ------  -----------------

         Not applicable.
                                      -21-



Item 6  Exhibits and Reports on Form 8-K.
- ------  --------------------------------

(a)      Exhibits:

Exhibits Filed Herewith
- -----------------------

         Exhibit 15 - Awareness Letter of Independent Accountants.

         Exhibit 27 - Financial Data Schedule.

(b)      Reports on Form 8-K

         During  the  quarter  ended  March  31,  2000  the  Company  filed  the
         following:

         (i)   Current  Report  on  Form  8-K  dated  and  filed  March 14, 2000
               announcing the  consummation of the  merger between  the  Company
               and Teton Formation L.L.C. and Teton Acquisition Corp.

                                      -22-



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                            MIDAMERICAN ENERGY HOLDINGS COMPANY

                                                        (Registrant)





Date:  May 15, 2000                                /s/  Patrick J. Goodman
                                            ------------------------------------
                                                        Patrick J. Goodman
                                             Senior  Vice  President  &  Chief
                                             Financial Officer




                                      -23-




                                  EXHIBIT INDEX

Exhibit No.                                                           Page No.
- -----------                                                           --------

15             Awareness Letter of Independent Accountants               25

27             Financial Data Schedule                                   26






                                      -24-