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, 2003

Commission     Registrant's Name, State of Incorporation,      IRS Employer
File Number           Address and Telephone Number           Identification No.
-----------           ----------------------------           ------------------

333-90553               MIDAMERICAN FUNDING, LLC                47-0819200
                   (AN IOWA LIMITED LIABILITY COMPANY)
                        666 GRAND AVE. PO BOX 657
                         DES MOINES, IOWA 50303
                              515-242-4300

1-11505                 MIDAMERICAN ENERGY COMPANY              42-1425214
                          (AN IOWA CORPORATION)
                        666 GRAND AVE. PO BOX 657
                         DES MOINES, IOWA 50303
                              515-242-4300

Indicate  by check mark  whether  the  registrants  (1) have  filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]

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

As of April 30, 2003, all of the member's equity of MidAmerican Funding, LLC was
held by its parent company, MidAmerican Energy Holdings Company.

As of April 30, 2003, all 70,980,203  outstanding  shares of MidAmerican  Energy
Company's  voting  stock were held by its parent  company,  MHC Inc.,  a direct,
wholly owned subsidiary of MidAmerican Funding, LLC.



<PAGE>

This combined  Form 10-Q is separately  filed by  MidAmerican  Funding,  LLC and
MidAmerican  Energy  Company.  Information  herein  relating to each  individual
registrant is filed by such  registrant on its own behalf.  Accordingly,  except
for its subsidiaries,  MidAmerican  Energy Company makes no representation as to
information relating to any other subsidiary of MidAmerican Funding, LLC.


                                TABLE OF CONTENTS
                                -----------------

                       PART I. FINANCIAL INFORMATION                       Page
                                                                           ----

Item 1.       Financial Statements..........................................   3
Item 2.       Management's Discussion and Analysis of Financial Condition
                and Results of Operations...................................  22
Item 3.       Quantitative and Qualitative Disclosures About Market Risk....  36
Item 4.       Controls and Procedures.......................................  36

                           PART II. OTHER INFORMATION

Item 1.       Legal Proceedings.............................................  37
Item 2.       Changes in Securities and Use of Proceeds.....................  37
Item 3.       Defaults Upon Senior Securities...............................  37
Item 4.       Submission of Matters to a Vote of Security Holders...........  37
Item 5.       Other Information.............................................  37
Item 6.       Exhibits and Reports on Form 8-K..............................  37
Signatures..................................................................  38
Certifications..............................................................  39
Exhibit Index ..............................................................  49

                                      -2-
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.
-----------------------------

     Independent Accountants' Reports......................................    4

                           MidAmerican Energy Company

     Consolidated Balance Sheets...........................................    6
     Consolidated Statements of Income.....................................    7
     Consolidated Statements of Comprehensive Income.......................    8
     Consolidated Statements of Cash Flows.................................    9
     Notes to Consolidated Financial Statements............................   10

                            MidAmerican Funding, LLC

     Consolidated Balance Sheets...........................................   15
     Consolidated Statements of Income.....................................   16
     Consolidated Statements of Comprehensive Income.......................   17
     Consolidated Statements of Cash Flows.................................   18
     Notes to Consolidated Financial Statements............................   19

                                      -3-
<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT


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

We have reviewed the  accompanying  consolidated  balance  sheet of  MidAmerican
Energy Company and  subsidiaries  (the  "Company") as of March 31, 2003, and the
related consolidated  statements of income,  comprehensive income and cash flows
for the  three-month  periods  ended  March 31, 2003 and 2002.  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 and
statement of capitalization (not presented herein) of MidAmerican Energy Company
and  subsidiaries  as  of  December  31,  2002,  and  the  related  consolidated
statements of income,  comprehensive income,  retained earnings,  and cash flows
for the year then ended (not presented herein);  and in our report dated January
24, 2003, 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, 2002 is fairly  stated,  in all
material respects,  in relation to the consolidated  balance sheet from which it
has been derived.



/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP
Des Moines, Iowa
May 8, 2003

                                      -4-
<PAGE>


INDEPENDENT ACCOUNTANTS' REPORT


Board of Managers and Member
MidAmerican Funding, LLC
Des Moines, Iowa

We have reviewed the  accompanying  consolidated  balance  sheet of  MidAmerican
Funding,  LLC and  subsidiaries  (the  "Company") as of March 31, 2003,  and the
related consolidated  statements of income,  comprehensive income and cash flows
for the  three-month  periods  ended  March 31, 2003 and 2002.  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 and
statement of capitalization (not presented herein) of MidAmerican  Funding,  LLC
and  subsidiaries  as  of  December  31,  2002,  and  the  related  consolidated
statements of income,  comprehensive income,  retained earnings,  and cash flows
for the year then ended (not presented herein);  and in our report dated January
24, 2003, 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, 2002 is fairly  stated,  in all
material respects,  in relation to the consolidated  balance sheet from which it
has been derived.




/s/ Deloitte & Touche LLP

DELOITEE & TOUCHE LLP
Des Moines, Iowa
May 8, 2003

                                      -5-
<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                    AS OF
                                                          ---------------------------
                                                           MARCH 31,     DECEMBER 31,
                                                             2003           2002
                                                          -----------    ------------
                                                          (UNAUDITED)
                                     ASSETS
<S>                                                       <C>            <C>
UTILITY PLANT, NET
Electric ..............................................   $ 4,801,325    $ 4,731,002
Gas ...................................................       906,784        900,209
                                                          -----------    -----------
                                                            5,708,109      5,631,211
Accumulated depreciation and amortization .............    (3,097,435)    (3,011,123)
                                                          -----------    -----------
                                                            2,610,674      2,620,088
Construction work in progress .........................       247,149        205,988
                                                          -----------    -----------
                                                            2,857,823      2,826,076
                                                          -----------    -----------

CURRENT ASSETS
Cash and cash equivalents .............................       207,390         28,500
Receivables, net ......................................       376,420        321,321
Inventories ...........................................        23,044         88,492
Other .................................................        27,741         28,655
                                                          -----------    -----------
                                                              634,595        466,968
                                                          -----------    -----------

INVESTMENTS AND NONREGULATED PROPERTY, NET ............       270,570        273,864
REGULATORY ASSETS .....................................       301,955        192,514
OTHER ASSETS ..........................................        41,329         52,457
                                                          -----------    -----------
TOTAL ASSETS ..........................................   $ 4,106,272    $ 3,811,879
                                                          ===========    ===========

                         CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common shareholder's equity ...........................   $ 1,365,286    $ 1,307,067
MidAmerican Energy preferred securities ...............        31,759         31,759
Long-term debt, excluding current portion .............     1,140,436        947,691
                                                          -----------    -----------
                                                            2,537,481      2,286,517
                                                          -----------    -----------
CURRENT LIABILITIES
Notes payable .........................................            --         55,000
Current portion of long-term debt .....................         5,625        105,727
Accounts payable ......................................       276,174        239,531
Taxes accrued .........................................       107,802         83,063
Interest accrued ......................................        16,466          9,731
Other .................................................        51,352         55,464
                                                          -----------    -----------
                                                              457,419        548,516
                                                          -----------    -----------
OTHER LIABILITIES
Deferred income taxes .................................       425,826        424,153
Investment tax credit .................................        55,792         56,886
Asset retirement obligations ..........................       279,185        159,757
Regulatory liabilities ................................       132,446        118,011
Other .................................................       218,123        218,039
                                                          -----------    -----------
                                                            1,111,372        976,846
                                                          -----------    -----------
TOTAL CAPITALIZATION AND LIABILITIES ..................   $ 4,106,272    $ 3,811,879
                                                          ===========    ===========
</TABLE>

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

                                      -6-
<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                                 (In thousands)

                                              THREE MONTHS
                                             ENDED MARCH 31,
                                          ----------------------
                                            2003          2002
                                          ---------    ---------
                                               (UNAUDITED)
OPERATING REVENUES
Regulated electric ....................   $ 314,942    $ 306,778
Regulated gas .........................     413,779      220,057
Nonregulated ..........................      86,475       47,449
                                          ---------    ---------
                                            815,196      574,284
                                          ---------    ---------
OPERATING EXPENSES
Regulated:
  Cost of fuel, energy and capacity ...      88,418       72,449
  Cost of gas sold ....................     329,527      148,514
  Other operating expenses ............      82,648       98,599
  Maintenance .........................      28,282       28,945
  Depreciation and amortization .......      68,485       69,324
  Property and other taxes ............      20,557       17,294
                                          ---------    ---------
                                            617,917      435,125
                                          ---------    ---------
Nonregulated:
  Cost of sales .......................      77,389       40,963
  Other ...............................       3,732        5,629
                                          ---------    ---------
                                             81,121       46,592
                                          ---------    ---------
  Total operating expenses ............     699,038      481,717
                                          ---------    ---------

OPERATING INCOME ......................     116,158       92,567
                                          ---------    ---------

NON-OPERATING INCOME
Interest and dividend income ..........       1,126        2,446
Other income ..........................       4,438        2,365
Other expense .........................        (349)      (2,160)
                                          ---------    ---------
                                              5,215        2,651
                                          ---------    ---------

FIXED CHARGES
Interest on long-term debt ............      18,558       16,586
Other interest expense ................       1,019          825
Preferred dividends of subsidiary trust          --        1,574
Allowance for borrowed funds ..........      (1,591)        (596)
                                          ---------    ---------
                                             17,986       18,389
                                          ---------    ---------

INCOME BEFORE INCOME TAXES ............     103,387       76,829
INCOME TAXES ..........................      44,695       33,445
                                          ---------    ---------
NET INCOME ............................      58,692       43,384
PREFERRED DIVIDENDS ...................         437          848
                                          ---------    ---------

EARNINGS ON COMMON STOCK ..............   $  58,255    $  42,536
                                          =========    =========

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

                                      -7-
<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)


                                                               THREE MONTHS
                                                              ENDED MARCH 31,
                                                           --------------------
                                                             2003        2002
                                                           --------    --------
                                                             (UNAUDITED)

EARNINGS ON COMMON STOCK ...............................   $ 58,255    $ 42,536
                                                           --------    --------

OTHER COMPREHENSIVE LOSS, NET
Unrealized gains (losses) on cash flow hedges:
  Unrealized gains (losses) during period-
    Before income taxes ................................     10,668      (2,886)
    Income tax (expense) benefit .......................     (4,435)      1,199
                                                           --------    --------
                                                              6,233      (1,687)
                                                           --------    --------
  Less reclassification adjustment for realized (gains)
    losses reflected in earnings on common stock
    during period-
    Before income taxes ................................    (10,731)      1,966
    Income tax expense (benefit) .......................      4,461        (817)
                                                           --------    --------
                                                             (6,270)      1,149
                                                           --------    --------

  Other comprehensive loss, net ........................        (37)       (538)
                                                           --------    --------

COMPREHENSIVE INCOME ...................................   $ 58,218    $ 41,998
                                                           ========    ========


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

                                      -8-
<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                            THREE MONTHS
                                                                           ENDED MARCH 31,
                                                                        ----------------------
                                                                          2003         2002
                                                                        ---------    ---------
                                                                              (UNAUDITED)
<S>                                                                     <C>          <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..........................................................   $  58,692    $  43,384
Adjustments to reconcile net income to net cash provided:
   Depreciation and amortization ....................................      68,736       69,604
   Deferred income taxes and investment tax credit, net .............         605       (4,554)
   Amortization of other assets and liabilities .....................       5,111        9,318
   Cash outflows of accounts receivable securitization ..............          --       (8,000)
   Impact of changes in working capital .............................      85,361       32,576
   Other, net .......................................................       7,994       18,519
                                                                        ---------    ---------
     Net cash provided by operating activities ......................     226,499      160,847
                                                                        ---------    ---------

NET CASH FLOWS FROM INVESTING ACTIVITIES
Utility construction expenditures ...................................     (76,555)     (62,480)
Less non-cash and change in accrued utility construction expenditures      (6,199)         303
Quad Cities Station decommissioning trust fund ......................      (2,075)      (2,075)
Nonregulated capital expenditures ...................................        (522)        (191)
Other investing activities, net .....................................       4,087       (2,143)
                                                                        ---------    ---------
  Net cash used in investing activities .............................     (81,264)     (66,586)
                                                                        ---------    ---------

NET CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid ......................................................        (437)     (30,848)
Issuance of long-term debt, net .....................................     272,572      391,438
Retirement of long-term debt, including reacquisition cost ..........    (183,480)        (283)
Reacquisition of preferred securities ...............................          --     (100,000)
Net decrease in notes payable .......................................     (55,000)     (89,350)
                                                                        ---------    ---------
  Net cash provided by financing activities .........................      33,655      170,957
                                                                        ---------    ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS ...........................     178,890      265,218
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................      28,500       20,020
                                                                        ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..........................   $ 207,390    $ 285,238
                                                                        =========    =========

ADDITIONAL CASH FLOW INFORMATION
Interest paid, net of amounts capitalized ...........................   $   9,703    $  11,964
                                                                        =========    =========
Income taxes paid (received), net ...................................   $   3,544    $  (2,232)
                                                                        =========    =========
</TABLE>

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

                                      -9-
<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.  GENERAL

The  consolidated  financial  statements  included  herein have been prepared by
MidAmerican Energy Company  ("MidAmerican  Energy"),  without audit, pursuant to
the rules and  regulations of the Securities  and Exchange  Commission.  Certain
information and disclosures  normally included in financial  statements prepared
in accordance with generally accepted accounting  principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of MidAmerican
Energy, all adjustments,  consisting of normal recurring adjustments,  have been
made to present fairly the financial position, the results of operations and the
changes in cash flows for the periods  presented.  Prior year  amounts have been
reclassified  to a basis  consistent  with the current  year  presentation.  All
significant intercompany transactions have been eliminated. Although MidAmerican
Energy  believes  that the  disclosures  are  adequate  to make the  information
presented not  misleading,  it is suggested that these  financial  statements be
read in conjunction  with the  consolidated  financial  statements and the notes
thereto included in MidAmerican Energy's latest Annual Report on Form 10-K.

MidAmerican  Energy is a public utility with electric and natural gas operations
and is the  principal  subsidiary  of MHC Inc ("MHC").  MHC is a direct,  wholly
owned subsidiary of MidAmerican Funding, LLC ("MidAmerican Funding"), whose sole
member is MidAmerican Energy Holdings Company.

2.  ENVIRONMENTAL MATTERS

a. Manufactured Gas Plant Facilities:

The  United  States  Environmental  Protection  Agency  ("EPA"),  and the  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 such contaminants are in sufficient  quantities and
at such concentrations as to warrant remedial action.

MidAmerican  Energy has evaluated or is  evaluating 27 properties  that 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  MidAmerican  Energy has any  responsibility  for
remedial action. MidAmerican Energy is currently conducting field investigations
at 21 sites, has conducted  interim removal actions at 14 sites and has received
regulatory  closure on two sites.  MidAmerican  Energy is continuing to evaluate
several of the sites to determine the future  liability,  if any, for conducting
site investigations or other site activity.

MidAmerican  Energy  estimates  the range of possible  costs for  investigation,
remediation  and monitoring for the sites  discussed  above to be $16 million to
$54 million. As of March 31, 2003, MidAmerican Energy has recorded a $21 million
liability  for  these  sites and a  corresponding  regulatory  asset for  future
recovery through the regulatory process.  MidAmerican Energy projects that these
amounts will be paid or incurred over the next four years.

The estimate of probable  remediation  costs is established  on a  site-specific
basis. The costs are accumulated in a three-step process. First, a determination
is made as to whether  MidAmerican  Energy has potential legal liability for the
site and whether  information exists to indicate that contaminated wastes remain
at the site. If so, the costs of performing a preliminary  investigation and the
costs of removing known  contaminated soil are accrued.  As the investigation is
performed and if it is determined

                                      -10-
<PAGE>

remedial action is required, the best estimate of remedial costs is accrued. The
estimated recorded  liabilities for these properties include  incremental direct
costs of the remediation effort,  costs for future monitoring at sites and costs
of  compensation  to  employees  for time  expected to be spent  directly on the
remediation effort. The estimated recorded  liabilities for these properties are
based upon preliminary  data. Thus, actual costs could vary  significantly  from
the  estimates.  The  estimate  could  change  materially  based  on  facts  and
circumstances  derived from site  investigations,  changes in required  remedial
action and changes in technology  relating to remedial  alternatives.  Insurance
recoveries have been received for some of the sites under  investigation.  Those
recoveries are intended to be used principally for accelerated  remediation,  as
specified by the Iowa Utilities Board ("IUB"),  and are recorded as a regulatory
liability.

Although  the timing of potential  incurred  costs and recovery of such 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 MidAmerican Energy's financial position or results of operations.

b. Air Quality:

In July 1997,  the EPA adopted  revisions  to the  National  Ambient Air Quality
Standards  for ozone and a new standard for fine  particulate  matter.  Based on
data to be obtained from monitors  located  throughout each state,  the EPA will
determine  which  states have areas that do not meet the air  quality  standards
(i.e., areas that are classified as nonattainment). The standards were subjected
to legal  proceedings,  and in February  2001,  the United States  Supreme Court
upheld the  constitutionality  of the standards,  though  remanding the issue of
implementation  of the ozone  standard  to the EPA.  As a result  of a  decision
rendered  by the United  States  Circuit  Court of Appeals  for the  District of
Columbia,  the EPA is moving  forward  in  implementation  of the ozone and fine
particulate  standards  and is analyzing  existing  monitored  data to determine
attainment status.

The impact of the new  standards on  MidAmerican  Energy is  currently  unknown.
MidAmerican  Energy's  generating stations may be subject to emission reductions
if  the  stations  are  located  in   nonattainment   areas  or   contribute  to
nonattainment  areas in other states. As part of state  implementation  plans to
achieve  attainment of the  standards,  MidAmerican  Energy could be required to
install control  equipment on its generating  stations or decrease the number of
hours during which these stations operate.

The ozone and fine  particulate  matter standards could, in whole or in part, be
superceded by one of a number of multi-pollutant  emission  reduction  proposals
currently under  consideration  at the federal level. In July 2002,  legislation
was  introduced  in Congress to  implement  the  Administration's  "Clear  Skies
Initiative,"  calling for  reduction in emissions  of sulfur  dioxide,  nitrogen
oxides and mercury through a  cap-and-trade  system.  Reductions  would begin in
2008 with additional emission reductions being phased in through 2018.

While  legislative  action is necessary for the Clear Skies  Initiative or other
multi-pollutant emission reduction initiatives to become effective,  MidAmerican
Energy has  implemented  a planning  process that  forecasts  the  site-specific
controls and actions  required to meet emissions  reductions of this nature.  On
April 1, 2002, in accordance  with Iowa law passed in 2001,  MidAmerican  Energy
filed with the IUB its first  multi-year plan and budget for managing  regulated
emissions from its generating facilities in a cost-effective manner. MidAmerican
Energy expects the IUB to rule on the prudence of the multi-year plan and budget
in 2003.

In recent years,  the EPA has requested from several  utilities  information and
support  regarding their capital  projects for various  generating  plants.  The
requests  were  issued  as  part of an  industry-wide  investigation  to  assess
compliance with the New Source Review and the New Source  Performance  Standards
of the Clean Air Act. In December 2002,  MidAmerican  Energy  received a request
from the

                                      -11-
<PAGE>

EPA to provide  documentation  related to its capital  projects  from January 1,
1980, to the present for its Neal,  Council Bluffs,  Louisa and Riverside Energy
Centers.  MidAmerican  Energy has  responded  to this  request  and at this time
cannot predict the outcome of this request.

3.  RATE MATTERS

Under  a  settlement  agreement  approved  by the  IUB  on  December  21,  2001,
MidAmerican  Energy's Iowa retail electric rates in effect on December 31, 2000,
are effectively  frozen through December 31, 2005. In approving that settlement,
the IUB  specifically  allows the filing of electric  rate design and/or cost of
service  rate  changes  that  are  intended  to keep  overall  company  revenues
unchanged,  but could result in changes to  individual  tariffs.  Under the 2001
settlement  agreement,  an amount equal to 50% of revenues  associated with Iowa
retail  electric  returns on equity  between 12% and 14%, and 83.33% of revenues
associated with Iowa retail  electric  returns on equity above 14%, in each year
is recorded as a regulatory liability to be used to offset a portion of the cost
to Iowa customers of future generating plant investments. An amount equal to the
regulatory  liability is recorded as a  regulatory  charge in  depreciation  and
amortization expense when the liability is accrued.  Interest expense is accrued
on the portion of the regulatory liability related to prior years.  Beginning in
2002,  the liability is being relieved as it is credited  against  allowance for
funds used during construction,  or capitalized financing costs, associated with
generating  plant  additions.  As of March  31,  2003,  the  related  regulatory
liability reflected on the Consolidated Balance Sheet totaled $117.4 million.

Illinois law provides for Illinois  electric  earnings above a computed level of
return on common equity to be shared equally  between  customers and MidAmerican
Energy.  MidAmerican Energy's computed level of return on common equity is based
on a rolling two-year average of the Monthly Treasury Long-Term Average Rate, as
published by the Federal Reserve System, plus a premium of 8.5% for 2000 through
2004 and a premium of 12.5% for 2005 and 2006. The two-year  average above which
sharing  must occur for 2002 was 14.03%.  The law allows  MidAmerican  Energy to
mitigate the sharing of earnings  above the  threshold  return on common  equity
through accelerated recovery of electric assets.

On November 8, 2002, the IUB approved a settlement  agreement  previously  filed
with it by  MidAmerican  Energy and the Iowa  Office of Consumer  Advocate.  The
settlement agreement provided for an increase in rates of $17.7 million annually
for MidAmerican Energy's Iowa retail natural gas customers and effectively froze
base rates through  November  2004.  However,  MidAmerican  Energy will continue
collecting  fluctuations  in gas costs  through  its  purchased  gas  adjustment
clause. The new rates were implemented for usage beginning November 25, 2002.

4.  ACCOUNTING FOR THE EFFECTS OF CERTAIN TYPES OF REGULATION

MidAmerican  Energy's  utility  operations  are subject to the regulation of the
IUB,  the  Illinois  Commerce  Commission,  the South  Dakota  Public  Utilities
Commission,  and the Federal Energy Regulatory Commission.  MidAmerican Energy's
accounting  policies  and the  accompanying  consolidated  financial  statements
conform to generally accepted accounting principles applicable to rate-regulated
enterprises and reflect the effects of the ratemaking process.

A possible consequence of deregulation in the utility industry is that Statement
of Financial  Accounting  Standards ("SFAS") No. 71, "Accounting for the Effects
of Certain Types of  Regulation,"  may no longer  apply.  SFAS No. 71 sets forth
accounting  principles  for  operations  that are  regulated and meet the stated
criteria. For operations that meet the criteria, SFAS No. 71 allows, among other
things,  the deferral of expense or income that would  otherwise  be  recognized
when  incurred.  Predominantly  all of  MidAmerican  Energy's  electric  and gas
utility  operations  currently  meet  the  criteria  of  SFAS  No.  71,  but its
applicability is periodically reexamined.  If portions of its utility operations
no longer meet the criteria

                                      -12-
<PAGE>

of SFAS No. 71,  MidAmerican  Energy  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 deregulation legislation.

5.  NEW ACCOUNTING PRONOUNCEMENTS

In January 2003,  MidAmerican Energy adopted SFAS No. 143, "Accounting for Asset
Retirement  Obligations." SFAS No. 143 requires recognition on the balance sheet
of legal  obligations  associated with the retirement of long-lived  assets that
result from the acquisition,  construction,  development and/or normal operation
of such assets.  Concurrent with the recognition of the liability, the estimated
cost of an asset  retirement  obligation is capitalized and depreciated over the
remaining life of the asset.

On  January  1,  2003,  MidAmerican  Energy  recorded  $275.2  million  of asset
retirement  obligation  ("ARO")  liabilities;  $12.6 million of  associated  ARO
assets,  net of accumulated  depreciation;  $101.8 million of regulatory assets;
and reclassified  $1.0 million of accumulated  depreciation to the ARO liability
in conjunction  with adoption of SFAS No. 143.  Adoption of SFAS No. 143 did not
impact net income. The initial ARO liability  recognized includes $266.5 million
that pertains to obligations  associated  with the  decommissioning  of the Quad
Cities   Station.   The  $266.5  million   includes  a  $159.8  million  nuclear
decommissioning  liability that had been recorded as of December 31, 2002. As of
March  31,  2003,   $157.7  million  of  assets  reflected  in  Investments  and
Nonregulated  Property, Net on the Consolidated Balance Sheet are restricted for
satisfying the Quad Cities Station obligation.

The change in the balance of the ARO liability  during the first quarter of 2003
is summarized as follows (in thousands):

                 Balance January 1, 2003 ...........   $275,228
                 Capitalized accretion .............      3,957
                 Revised estimates .................         --
                                                       --------
                 Balance March 31, 2003 ............   $279,185
                                                       ========

Regulatory assets are increased by an amount equal to accretion.  In addition to
the ARO liabilities  recognized on January 1, MidAmerican Energy has accrued for
the cost of removing  other  electric  and gas assets  through its  depreciation
rates, in accordance with accepted regulatory  practices.  As of March 31, 2003,
the estimated amount of such accruals  included in accumulated  depreciation was
approximately  $391  million  based on the cost of removal  component in current
depreciation rates.

6.  SEGMENT INFORMATION

MidAmerican  Energy has  identified  four  reportable  operating  segments based
principally on management structure.  The generation segment derives most of its
revenue from the sale of regulated and  nonregulated  wholesale  electricity and
natural gas. The energy delivery  segment derives its revenue  principally  from
the sale and delivery of regulated retail electricity and natural gas, while the
transmission  segment  obtains most of its revenue from the sale of transmission
capacity.  The marketing and sales segment receives its revenue principally from
nonregulated  retail  sales of natural  gas and  electricity.  Common  operating
costs, interest income,  interest expense,  income tax expense and equity in the
net income or loss of investees are allocated to each segment.

The energy  delivery  and  transmission  segments and  substantially  all of the
generation  segment are  regulated as to rates,  and other  factors,  related to
services  to  external  customers.  For  internal  segment  reporting  purposes,
MidAmerican  Energy has developed  transfer prices for services provided between
the

                                      -13-
<PAGE>

segments.  MidAmerican  Energy's  external  revenues by product and services are
displayed on the Consolidated Statements of Income.

The following tables provide  MidAmerican  Energy's operating  revenues,  income
before  income  taxes  and  total  assets  on an  operating  segment  basis  (in
thousands):

                                                   Three Months
                                                 Ended March 31,
                                           --------------------------
                                              2003           2002
                                           -----------    -----------
     Operating revenues:
       External revenues -
         Generation ....................   $   157,536    $   109,738
         Energy delivery ...............       569,727        425,942
         Transmission ..................         6,248          4,925
         Marketing & sales .............        81,685         33,679
                                           -----------    -----------
           Total .......................       815,196        574,284
                                           -----------    -----------

       Intersegment revenues -
         Generation ....................       130,355        131,042
         Energy delivery ...............            --             --
         Transmission ..................        14,487         13,800
         Marketing & sales .............            --             --
                                           -----------    -----------
           Total .......................       144,842        144,842

       Intersegment eliminations .......      (144,842)      (144,842)
                                           -----------    -----------
         Consolidated ..................   $   815,196    $   574,284
                                           ===========    ===========

     Income before income taxes:
       Generation ......................   $    28,831    $    14,866
       Energy delivery .................        60,580         52,146
       Transmission ....................        12,442          9,916
       Marketing & sales ...............         1,097           (947)
                                           -----------    -----------
         Total .........................       102,950         75,981
       Preferred dividends .............           437            848
                                           -----------    -----------
         Consolidated ..................   $   103,387    $    76,829
                                           ===========    ===========


                                                     As of
                                           --------------------------
                                            March 31,    December 31,
                                               2003          2002
                                           -----------   ------------
     Total assets:
       Generation ......................   $ 1,591,816    $ 1,393,271
       Energy delivery .................     2,296,432      2,224,238
       Transmission ....................       232,652        222,051
       Marketing & sales ...............        60,778         52,143
                                           -----------    -----------
         Total .........................     4,181,678      3,891,703
       Reclassifications and
         intersegment eliminations(a) ..       (75,406)       (79,824)
                                           -----------    -----------
       Consolidated ....................   $ 4,106,272    $ 3,811,879
                                           ===========    ===========

(a)  Reclassifications and intersegment  eliminations related principally to the
     reclassification  of income  tax  balances  in  accordance  with  generally
     accepted accounting principles and the elimination of intersegment accounts
     receivables and payables.

                                      -14-
<PAGE>

                            MIDAMERICAN FUNDING, LLC
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                    AS OF
                                                          ---------------------------
                                                           MARCH 31,     DECEMBER 31,
                                                             2003           2002
                                                          -----------    ------------
                                                          (UNAUDITED)

                                     ASSETS
<S>                                                       <C>            <C>
UTILITY PLANT, NET
Electric ..............................................   $ 4,801,325    $ 4,731,002
Gas ...................................................       906,784        900,209
                                                          -----------    -----------
                                                            5,708,109      5,631,211
Accumulated depreciation and amortization .............    (3,097,435)    (3,011,123)
                                                          -----------    -----------
                                                            2,610,674      2,620,088
Construction work in progress .........................       247,149        205,988
                                                          -----------    -----------
                                                            2,857,823      2,826,076
                                                          -----------    -----------

CURRENT ASSETS
Cash and cash equivalents .............................       208,389         28,915
Receivables, net ......................................       375,810        321,698
Inventories ...........................................        23,044         88,492
Other .................................................        29,635         35,009
                                                          -----------    -----------
                                                              636,878        474,114
                                                          -----------    -----------

INVESTMENTS AND NONREGULATED PROPERTY, NET ............       326,240        333,382
EXCESS OF COST OVER FAIR VALUE OF ASSETS ACQUIRED .....     1,275,143      1,275,143
REGULATORY ASSETS .....................................       301,955        192,514
OTHER ASSETS ..........................................        41,338         52,755
                                                          -----------    -----------
TOTAL ASSETS ..........................................   $ 5,439,377    $ 5,153,984
                                                          ===========    ===========

                         CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Member's equity .......................................   $ 1,917,399    $ 1,867,119
MidAmerican Energy preferred securities ...............        31,759         31,759
Long-term debt, excluding current portion .............     1,840,436      1,647,691
                                                          -----------    -----------
                                                            3,789,594      3,546,569
                                                          -----------    -----------
CURRENT LIABILITIES
Notes payable .........................................        16,350         55,000
Current portion of long-term debt .....................         5,625        105,727
Accounts payable ......................................       277,350        242,733
Taxes accrued .........................................       109,546         85,987
Interest accrued ......................................        20,475         25,487
Other .................................................        52,006         56,291
                                                          -----------    -----------
                                                              481,352        571,225
                                                          -----------    -----------
OTHER LIABILITIES
Deferred income taxes .................................       461,816        461,862
Investment tax credit .................................        55,792         56,886
Asset retirement obligations ..........................       279,185        159,757
Regulatory liabilities ................................       132,446        118,011
Other .................................................       239,192        239,674
                                                          -----------    -----------
                                                            1,168,431      1,036,190
                                                          -----------    -----------
TOTAL CAPITALIZATION AND LIABILITIES ..................   $ 5,439,377    $ 5,153,984
                                                          ===========    ===========
</TABLE>

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

                                      -15-
<PAGE>

                            MIDAMERICAN FUNDING, LLC
                        CONSOLIDATED STATEMENTS OF INCOME
                                 (In thousands)

                                                     THREE MONTHS
                                                    ENDED MARCH 31,
                                                ---------------------
                                                  2003        2002
                                                --------    ---------
                                                      (UNAUDITED)
OPERATING REVENUES
Regulated electric ..........................   $314,942    $306,778
Regulated gas ...............................    413,779     220,057
Nonregulated ................................     87,195      48,200
                                                --------    --------
                                                 815,916     575,035
                                                --------    --------
OPERATING EXPENSES
Regulated:
  Cost of fuel, energy and capacity .........     88,418      72,449
  Cost of gas sold ..........................    329,527     148,514
  Other operating expenses ..................     82,648      98,599
  Maintenance ...............................     28,282      28,945
  Depreciation and amortization .............     68,485      69,324
  Property and other taxes ..................     20,557      17,294
                                                --------    --------
                                                 617,917     435,125
                                                --------    --------
Nonregulated:
  Cost of sales .............................     77,506      41,094
  Other .....................................      4,750       7,437
                                                --------    --------
                                                  82,256      48,531
                                                --------    --------
   Total operating expenses .................    700,173     483,656
                                                --------    --------

OPERATING INCOME ............................    115,743      91,379
                                                --------    --------

NON-OPERATING INCOME
Interest and dividend income ................      1,242       4,244
Marketable securities gains and (losses), net         94      (3,218)
Other income ................................      5,157       8,963
Other expense ...............................     (2,551)     (2,294)
                                                --------    --------
                                                   3,942       7,695
                                                --------    --------
FIXED CHARGES
Interest on long-term debt ..................     30,340      28,553
Other interest expense ......................      1,044         828
Preferred dividends of subsidiaries .........        437       2,422
Allowance for borrowed funds ................     (1,591)       (596)
                                                --------    --------
                                                  30,230      31,207
                                                --------    --------

INCOME BEFORE INCOME TAXES ..................     89,455      67,867
INCOME TAXES ................................     39,102      29,439
                                                --------    --------
NET INCOME ..................................   $ 50,353    $ 38,428
                                                ========    ========

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

                                      -16-
<PAGE>

                            MIDAMERICAN FUNDING, LLC
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (In thousands)

                                                               THREE MONTHS
                                                              ENDED MARCH 31,
                                                          ---------------------
                                                            2003        2002
                                                          --------    --------
                                                               (UNAUDITED)

NET INCOME ............................................   $ 50,353    $ 38,428
                                                          --------    --------

OTHER COMPREHENSIVE LOSS, NET
Unrealized gains (losses) on available-for-sale
  securities:
  Unrealized holding losses during period-
    Before income taxes ...............................       (466)     (6,917)
    Income tax benefit ................................        163       2,421
                                                          --------    --------
                                                              (303)     (4,496)
                                                          --------    --------
  Less reclassification adjustment for realized
    losses reflected in net income during period-
    Before income taxes ...............................        410       3,040
    Income tax benefit ................................       (144)     (1,064)
                                                          --------    --------
                                                               266       1,976
                                                          --------    --------
      Net unrealized losses ...........................        (37)     (2,520)
                                                          --------    --------

Unrealized gains (losses) on cash flow hedges:
  Unrealized gains (losses) during period-
    Before income taxes ...............................     10,668      (2,886)
    Income tax (expense) benefit ......................     (4,435)      1,199
                                                          --------    --------
                                                             6,233      (1,687)
                                                          --------    --------
  Less reclassification adjustment for realized (gains)
    losses reflected in net income during period-
    Before income taxes ...............................    (10,731)      1,966
    Income tax expense (benefit) ......................      4,461        (817)
                                                          --------    --------
                                                            (6,270)      1,149
                                                          --------    --------
      Net unrealized losses ...........................        (37)       (538)
                                                          --------    --------

  Other comprehensive loss, net .......................        (74)     (3,058)
                                                          --------    --------

COMPREHENSIVE INCOME ..................................   $ 50,279    $ 35,370
                                                          ========    ========


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

                                      -17-
<PAGE>

                            MIDAMERICAN FUNDING, LLC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                              THREE MONTHS
                                                                            ENDED MARCH 31,
                                                                        ----------------------
                                                                          2003         2002
                                                                        ---------    ---------
                                                                             (UNAUDITED)

<S>                                                                     <C>          <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..........................................................   $  50,353    $  38,428
Adjustments to reconcile net income to net cash provided:
  Depreciation and amortization .....................................      68,779       69,947
  Deferred income taxes and investment tax credit, net ..............      (1,155)      (5,617)
  Amortization of other assets and liabilities ......................       4,812        8,591
  Other-than-temporary decline in value of investments ..............          --        2,913
  Loss from impairment of assets and investments ....................       2,069           --
  Income on equity investments ......................................        (262)      (5,483)
  Cash outflows of accounts receivable securitization ...............          --       (8,000)
  Impact of changes in working capital ..............................      75,681       20,395
  Other, net ........................................................       9,891       19,353
                                                                        ---------    ---------
    Net cash provided by operating activities .......................     210,168      140,527
                                                                        ---------    ---------

NET CASH FLOWS FROM INVESTING ACTIVITIES
Utility construction expenditures ...................................     (76,555)     (62,480)
Less non-cash and change in accrued utility construction expenditures      (6,199)         303
Quad Cities Station decommissioning trust fund ......................      (2,075)      (2,075)
Nonregulated capital expenditures ...................................        (770)        (252)
Notes receivable from affiliate .....................................          --       22,240
Other investing activities, net .....................................       4,463          679
                                                                        ---------    ---------
  Net cash used in investing activities .............................     (81,136)     (41,585)
                                                                        ---------    ---------

NET CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid ...............................................          --      (30,000)
Issuance of long-term debt, net .....................................     272,572      391,438
Retirement of long-term debt, including reacquisition cost ..........    (183,480)        (283)
Reacquisition of preferred securities ...............................          --     (100,000)
Net decrease in notes payable .......................................     (38,650)     (91,780)
                                                                        ---------    ---------
  Net cash provided by financing activities .........................      50,442      169,375
                                                                        ---------    ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS ...........................     179,474      268,317
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................      28,915       20,270
                                                                        ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..........................   $ 208,389    $ 288,587
                                                                        =========    =========

ADDITIONAL CASH FLOW INFORMATION
Interest paid, net of amounts capitalized ...........................   $  33,253    $  35,520
                                                                        =========    =========
Income taxes paid (received), net ...................................   $     904    $    (138)
                                                                        =========    =========
</TABLE>

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

                                      -18-
<PAGE>

                            MIDAMERICAN FUNDING, LLC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.  GENERAL

The  consolidated  financial  statements  included  herein have been prepared by
MidAmerican Funding, LLC ("MidAmerican Funding"), without audit, pursuant to the
rules  and  regulations  of the  Securities  and  Exchange  Commission.  Certain
information and disclosures  normally included in financial  statements prepared
in accordance with generally accepted accounting  principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of MidAmerican
Funding, all adjustments,  consisting of normal recurring adjustments, have been
made to present fairly the financial position, the results of operations and the
changes in cash flows for the periods  presented.  Prior year  amounts have been
reclassified  to a basis  consistent  with the current  year  presentation.  All
significant intercompany transactions have been eliminated. Although MidAmerican
Funding  believes  that the  disclosures  are  adequate to make the  information
presented not  misleading,  it is suggested that these  financial  statements be
read in conjunction  with the  consolidated  financial  statements and the notes
thereto included in MidAmerican Funding's latest Annual Report on Form 10-K.

MidAmerican Funding is an Iowa limited liability company with MidAmerican Energy
Holdings Company as its sole member.  MidAmerican Funding's direct, wholly owned
subsidiary is MHC Inc. ("MHC").  MHC, MidAmerican Funding and MidAmerican Energy
Holdings  Company are exempt public utility holding  companies  headquartered in
Des Moines,  Iowa. MHC's principal  subsidiary is MidAmerican  Energy Company, a
public utility with electric and natural gas  operations.  Other direct,  wholly
owned subsidiaries of MHC include MidAmerican  Capital Company,  Midwest Capital
Group, Inc., MidAmerican Services Company and MEC Construction Services Co.

2.  ENVIRONMENTAL MATTERS

Refer  to  Note  2 of  MidAmerican  Energy's  Notes  to  Consolidated  Financial
Statements  for  information  regarding   MidAmerican  Funding's   environmental
matters.

3.  RATE MATTERS

Refer  to  Note  3 of  MidAmerican  Energy's  Notes  to  Consolidated  Financial
Statements for information regarding MidAmerican Funding's rate matters.

4.  ACCOUNTING FOR THE EFFECTS OF CERTAIN TYPES OF REGULATION

Refer  to  Note  4 of  MidAmerican  Energy's  Notes  to  Consolidated  Financial
Statements for information  regarding  MidAmerican  Funding's accounting for the
effects of certain types of regulation.

                                      -19-
<PAGE>

5.  NEW ACCOUNTING PRONOUNCEMENTS

Refer  to  Note  5 of  MidAmerican  Energy's  Notes  to  Consolidated  Financial
Statements  for  information  regarding  MidAmerican  Funding's  new  accounting
pronouncements.

6.  SEGMENT INFORMATION

MidAmerican  Funding has identified  four  reportable  operating  segments based
principally on management structure.  The generation segment derives most of its
revenue from the sale of regulated and  nonregulated  wholesale  electricity and
natural gas. The energy delivery  segment derives its revenue  principally  from
the sale and delivery of regulated retail electricity and natural gas, while the
transmission  segment  obtains most of its revenue from the sale of transmission
capacity.  The marketing and sales segment receives its revenue principally from
nonregulated  retail  sales of natural  gas and  electricity.  Common  operating
costs, interest income,  interest expense,  income tax expense and equity in the
net income or loss of investees are allocated to each segment.

The energy  delivery  and  transmission  segments and  substantially  all of the
generation  segment are  regulated as to rates,  and other  factors,  related to
services  to  external  customers.  For  internal  segment  reporting  purposes,
MidAmerican  Energy has developed  transfer prices for services provided between
the segments.  MidAmerican  Funding's  external revenues by product and services
are displayed on the Consolidated Statements of Income.

                                      -20-
<PAGE>

The following tables provide MidAmerican  Funding's  operating revenues,  income
before  income  taxes  and  total  assets  on an  operating  segment  basis  (in
thousands):

                                                  Three Months
                                                Ended March 31,
                                           --------------------------
                                              2003           2002
                                           -----------    -----------
     Operating revenues:
       External revenues -
         Generation ....................   $   157,536    $   109,738
         Energy delivery ...............       569,727        425,942
         Transmission ..................         6,248          4,925
         Marketing & sales .............        81,685         33,679
         Other .........................           720            751
                                           -----------    -----------
           Total .......................       815,916        575,035
                                           -----------    -----------

       Intersegment revenues -
         Generation ....................       130,355        131,042
         Energy delivery ...............            --             --
         Transmission ..................        14,487         13,800
         Marketing & sales .............            --             --
         Other .........................            --             --
                                           -----------    -----------
           Total .......................       144,842        144,842

       Intersegment eliminations .......      (144,842)      (144,842)
                                           -----------    -----------
         Consolidated ..................   $   815,916    $   575,035
                                           ===========    ===========

     Income before income taxes:
       Generation ......................   $    28,831    $    14,866
       Energy delivery .................        60,580         52,146
       Transmission ....................        12,442          9,916
       Marketing & sales ...............         1,097           (947)
       Other ...........................       (13,495)        (8,114)
                                           -----------    -----------
         Total .........................   $    89,455    $    67,867
                                           ===========    ===========

                                                     As of
                                           --------------------------
                                            March 31,    December 31,
                                              2003           2002
                                           -----------   ------------
     Total assets (a):
       Generation ......................   $ 2,519,635    $ 2,321,090
       Energy delivery .................     2,559,584      2,487,390
       Transmission ....................       316,824        306,223
       Marketing & sales ...............        60,778         52,143
       Other ...........................       193,420        179,141
                                           -----------    -----------
         Total .........................     5,650,241      5,345,987
       Reclassifications and
         intersegment eliminations(b) ..      (210,864)      (192,003)
                                           -----------    -----------
       Consolidated ....................   $ 5,439,377    $ 5,153,984
                                           ===========    ===========

(a)  Total assets by operating  segment  reflect the  assignment  of goodwill to
     applicable  reporting units in accordance with SFAS No. 142,  "Goodwill and
     Other Intangible Assets."

(b)  Reclassifications  and intersegment  eliminations relate principally to the
     reclassification  of income  tax  balances  in  accordance  with  generally
     accepted accounting principles and the elimination of intersegment accounts
     receivables and payables.

                                      -21-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS.
----------------------

MidAmerican  Energy  Company  ("MidAmerican  Energy") is a public  utility  with
electric  and natural gas  operations  and is the  principal  subsidiary  within
MidAmerican Funding, LLC ("MidAmerican Funding").

Management's Discussion and Analysis ("MD&A") addresses the financial statements
of MidAmerican Funding and MidAmerican Energy as presented in this joint filing.
Information in MD&A related to MidAmerican  Energy,  whether or not  segregated,
also relates to MidAmerican  Funding.  Information related to other subsidiaries
of  MidAmerican  Funding  pertains  only  to the  discussion  of  the  financial
condition and results of operations of  MidAmerican  Funding.  Where  necessary,
discussions  have been  segregated  and  labeled to allow the reader to identify
information applicable only to MidAmerican Funding.

MD&A should be read in  conjunction  with the financial  statements  included in
this  Form  10-Q and the  notes  to  those  statements,  together  with  MD&A in
MidAmerican Energy's and MidAmerican Funding's most recently filed Annual Report
on Form 10-K.

FORWARD-LOOKING STATEMENTS

From time to time, MidAmerican Funding, or one of its subsidiaries individually,
including  MidAmerican  Energy, may make  forward-looking  statements within the
meaning of the federal securities laws that involve  judgments,  assumptions and
other  uncertainties  beyond the  control of  MidAmerican  Funding or any of its
subsidiaries  individually.  These forward-looking statements may include, among
others,  statements  concerning  revenue and cost trends,  cost  recovery,  cost
reduction strategies and anticipated  outcomes,  pricing strategies,  changes in
the  utility  industry,  planned  capital  expenditures,   financing  needs  and
availability,  statements of MidAmerican Funding's expectations, beliefs, future
plans  and  strategies,  anticipated  events  or  trends  and  similar  comments
concerning  matters that are not historical facts. These type of forward-looking
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 MidAmerican Funding 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  Private  Securities
Litigation  Reform Act of 1995,  MidAmerican  Funding has  identified  important
factors  that  could  cause  actual  results  to differ  materially  from  those
expectations,  including  weather  effects on sales volumes and  revenues,  fuel
prices,  fuel  transportation  and other  operating  uncertainties,  acquisition
uncertainty,  uncertainties  relating to economic and political  conditions  and
uncertainties regarding the impact of regulations, changes in government policy,
utility industry deregulation and competition.  Neither MidAmerican Funding, nor
any one of its subsidiaries  individually,  assumes any responsibility to update
forward-looking information contained herein.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

MidAmerican Energy's and MidAmerican Funding's  significant  accounting policies
are described in their  respective Note (1) of Notes to  Consolidated  Financial
Statements in Item 15 of their most  recently  filed Annual Report on Form 10-K.
For a  discussion  of their  critical  accounting  policies and  estimates,  see
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" in their most recently filed Annual Report on Form 10-K.

                                      -22-
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003, COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 2002

Regulated Electric Gross Margin
-------------------------------

                                            Three Months
                                           Ended March 31,
                                           ---------------
                                            2003     2002
                                           ------   ------
                                            (In millions)
     Operating revenues ................   $314.9   $306.8
     Cost of fuel, energy and capacity..     88.4     72.4
                                           ------   ------
          Electric gross margin ........   $226.5   $234.4
                                           ======   ======

Electric  gross  margin for the first  quarter of 2003  decreased  $7.9  million
compared to the first quarter of 2002.

Effective  August 1, 2002,  MidAmerican  Energy and the  Nebraska  Public  Power
District  ("NPPD")  restructured  their  contract  for Cooper  Nuclear  Station.
Accordingly,  MidAmerican  Energy's costs for energy and capacity purchased from
Cooper  Nuclear  Station are now  classified  differently  on the  statement  of
income.  As a  result,  electric  gross  margin  for the first  quarter  of 2003
decreased  by $8.0  million  compared  to the first  quarter  of 2002 due to the
change in classification of the related costs. Prior to August 1, 2002, only the
fuel costs for energy purchased from Cooper Nuclear Station were classified as a
cost of  fuel,  energy  and  capacity.  Other  costs  under  the  contract  were
classified as other operating expenses.  Following the restructuring,  all costs
for  energy  and  capacity   purchased  under  that  contract  are  included  in
MidAmerican Energy's cost of fuel, energy and capacity,  as with other purchased
power costs.  Other  operating  expenses  decreased  accordingly.  Refer to Note
(1)(h) of Notes to Consolidated  Financial  Statements in Item 15 of MidAmerican
Energy's most recently  filed Annual Report on Form 10-K for a discussion of the
contract restructuring.

Temperature  conditions during the first quarter of 2003 were colder than in the
first  quarter of 2002,  resulting in  approximately  an $8 million  increase in
electric margin.  Electricity  usage factors not dependent on weather  increased
electric  margin  by  $1.4  million  compared  to the  first  quarter  of  2002.
Additionally,  a decrease in fuel costs related to Iowa retail  electric  sales,
excluding  the impact of  restructuring  the Cooper  Nuclear  Station  contract,
increased  electric margin by $2.5 million  relative to first quarter of 2002. A
decrease in the average retail rate decreased  electric  margin by $6.4 million.
In total,  retail  electric  sales volumes  increased  4.8% for the three months
ended March 31, 2003.

In addition  to the effect of  restructuring  the  contract  for Cooper  Nuclear
Station, MidAmerican Energy's gross margin on electric wholesale sales decreased
$2.6  million  for first  quarter  of 2003 due to a decrease  in sales  volumes,
partially offset by an increase in prices compared to the first quarter of 2002.
Wholesale sales are the sales of energy to other utilities,  municipalities  and
marketers inside and outside of MidAmerican Energy's delivery system.

MidAmerican Energy sells and purchases  electric  capacity.  The net margin from
those sales and purchases  decreased $3.9 million  compared to the first quarter
of 2002.

                                      -23-
<PAGE>

Regulated Gas Gross Margin
--------------------------

                                   Three Months
                                 Ended March 31,
                                 ---------------
                                  2003     2002
                                 ------   ------
                                  (In millions)
     Operating revenues ......   $413.8   $220.1
     Cost of gas sold ........    329.5    148.5
                                 ------   ------
          Gas gross margin ...   $ 84.3   $ 71.6
                                 ======   ======

Regulated gas revenues  include  purchased gas adjustment  clauses through which
MidAmerican  Energy is allowed  to recover  the cost of gas sold from its retail
gas utility customers. Consequently, fluctuations in the cost of gas sold do not
affect  gross  margin  or  net  income  because  revenues   reflect   comparable
fluctuations from purchased gas adjustment  clauses. An increase in the per-unit
cost of gas for the  three-month  period ended March 31,  2003,  compared to the
same period in 2002,  increased  revenues and cost of gas sold by  approximately
$163 million.

Gas margin for the three months ended March 31, 2003,  increased  $12.7  million
compared to the three months ended March 31, 2002.

Increases  in retail gas rates  initiated  in 2002  improved  gas margin by $8.5
million  compared to the first quarter of 2002. On February 20, 2002,  the South
Dakota Public  Utilities  Commission  approved a settlement  agreement  allowing
increased natural gas rates of $3.1 million annually,  effective immediately. On
June 12, 2002,  the Iowa  Utilities  Board ("IUB")  issued an order  granting an
interim  rate  increase  of  approximately  $13.8  million  annually,  effective
immediately.  On  November  8, 2002,  the IUB  approved  a  proposed  settlement
agreement previously filed by MidAmerican Energy and the Iowa Office of Consumer
Advocate that provided for a final  increase,  implemented on November 25, 2002,
of $17.7  million  annually for  MidAmerican  Energy's  Iowa retail  natural gas
customers. On September 11, 2002, MidAmerican Energy received a final order from
the Illinois  Commerce  Commission to increase its Illinois natural gas rates by
$2.2 million  annually and implemented the rates on September 18, 2002. Refer to
the "Rate Matters" section of MD&A for comments on the Iowa gas rate settlement.

Colder  temperature  conditions during the first quarter of 2003 compared to the
same  quarter in 2002  resulted in  approximately  a $6 million  increase in gas
gross margin. A $2.2 million loss on a weather derivative  financial  instrument
partially offset the increase due to colder temperature conditions.  Other usage
factors not dependent on weather  decreased gas margin by $4.5 million  compared
to the first quarter of 2002.  Total natural gas retail sales volumes  increased
11.9%.

Additionally,  gas gross margin increased  compared to the first quarter of 2002
due to a  $2.0  million  increase  in  revenues  from  the  recovery  of  energy
efficiency costs and a $2.3 million increase from gas transported.

Regulated Operating Expenses
----------------------------

Regulated other operating expenses for the first quarter of 2003 decreased $16.0
million  compared  to the first  quarter  of 2002.  Effective  August  1,  2002,
MidAmerican  Energy and NPPD  restructured  their  contract  for Cooper  Nuclear
Station.  Accordingly,  MidAmerican  Energy's  costs  for  energy  and  capacity
purchased  from Cooper  Nuclear  Station are now  classified  differently on the
statement of income. As a result, other operating expenses for the first quarter
of 2003 decreased by $24.1 million  compared to the first quarter of 2002. Prior
to August 1, 2002,  costs  under the  contract  other than fuel costs for energy
purchased  were   classified  as  other   operating   expenses.   Following  the
restructuring,  all costs for energy

                                      -24-
<PAGE>

and capacity purchased under that contract are included in MidAmerican  Energy's
cost of fuel, energy and capacity,  as with other purchased power. Refer to Note
(1)(h) of Notes to Consolidated  Financial  Statements in Item 15 of MidAmerican
Energy's most recently  filed Annual Report on Form 10-K for a discussion of the
contract restructuring.

The decrease in other operating expenses due to Cooper Nuclear Station costs was
partially  offset by  increases  of $3.3  million in energy  efficiency  program
costs, $2.2 million in pension and other  postretirement  costs and $1.6 million
for health care and other benefit costs.

Property and other taxes  increased  $3.3 million due to an increase in property
taxes.

Nonregulated Operating Revenues and Operating Expenses
------------------------------------------------------

                                               Three Months
                                              Ended March 31,
                                              ---------------
                                               2003     2002
                                              -----    -----
                                               (In millions)
     MidAmerican Energy -
        Nonregulated operating revenues ..    $86.5    $47.4
        Nonregulated cost of sales .......     77.4     41.0
                                              -----    -----
            Nonregulated gross margin ....    $ 9.1    $ 6.4
                                              =====    =====


     MidAmerican Funding Consolidated -
        Nonregulated operating revenues ..    $87.2    $48.2
        Nonregulated cost of sales .......     77.5     41.1
                                              -----    -----
            Nonregulated gross margin ....    $ 9.7    $ 7.1
                                              =====    =====

MidAmerican Energy -

All gains and losses on MidAmerican  Energy's  energy trading  contracts are now
reported net on the statement of income in accordance  with Emerging Issues Task
Force  ("EITF")  Issue No. 02-3,  and 2002 amounts have been  reclassified  to a
consistent  presentation.  MidAmerican Energy's  nonregulated  wholesale gas and
electric  marketing  activities  qualify as "energy trading" contracts under the
guidance of EITF Issue No. 02-3.

MidAmerican  Energy's  nonregulated  gross margin for the first  quarter of 2003
increased $2.7 million compared to the first quarter of 2002.

Nonregulated  revenues and cost of sales consist  substantially  of nonregulated
retail natural gas marketing  operations.  Gross margin for MidAmerican Energy's
nonregulated  retail  natural  gas  operations  increased  $0.8  million to $1.7
million for the first quarter of 2003. The  improvement in gross margin reflects
a 66.9% increase in margin per unit and a 16.8% increase in sales volumes. Sales
volumes increased 1.3 million MMBtus.  Revenues from nonregulated retail natural
gas operations increased $31.7 million to $65.4 million for the first quarter of
2003. The increase in revenues was due principally to an increase in the average
price per unit sold,  which reflects a 66.1% increase in the average cost of gas
and accounts for $26.1 million of the increase in  nonregulated  retail  natural
gas revenues.

Electric  retail  customers  in  Illinois,  except for those  served by electric
cooperatives  and  municipalities,  are allowed to select their  electric  power
supplier.  For the first  quarter of 2003  compared to the same

                                      -25-
<PAGE>

quarter  in 2002,  gross  margin for  nonregulated  retail  electric  operations
increased $0.5 million to $2.3 million.  Related revenues increased $6.2 million
to $15.5  million  for the first  quarter of 2003 while cost of sales  increased
$5.7 million to $13.2 million.

Energy trading net revenues increased from $0.6 million for the first quarter of
2002 to $0.7  million  for the first  quarter of 2003 due to an  increase in net
revenues,   or  gross  margin,  on  MidAmerican   Energy's  gas  energy  trading
operations.  Gross margin for MidAmerican Energy's gas energy trading operations
increased $0.2 million to $0.6 million for the first quarter of 2003 compared to
the first  quarter of 2002 due to an increase  in the margin per unit sold.  Gas
trading volumes  decreased 28.5%, or 6.9 million MMBtus; an MMBtu is one million
British thermal units.  Gross margin for electric trading  operations  decreased
$0.1 million compared to the first quarter of 2002.

Nonregulated  revenues include income from sharing  arrangements under regulated
natural gas tariffs.  Related  income totaled $3.3 million for the first quarter
of 2003, an increase of $2.2 million compared to the first quarter of 2002.

Nonregulated  revenues  decreased  relative to the first quarter of 2002, as the
2002  quarter  included  $1.2  million  for  emergency  storm  restoration  work
performed outside of MidAmerican Energy's service territory.

Nonregulated  other  operating  expenses  decreased  $1.9  million for the three
months ended March 31, 2003,  due  principally to costs related to the emergency
storm restoration work discussed above.

Interest and Dividend Income
----------------------------

The  decrease in interest  and  dividend  income was due  principally  to a $1.2
million decrease in interest income on a note receivable  related to MidAmerican
Energy's accounts receivable sold. The related arrangement terminated in October
2002.

Marketable Securities Gains and Losses, Net
-------------------------------------------

MidAmerican Funding -

Net losses on marketable securities decreased $3.3 million compared to the first
quarter of 2002 due to a $2.9 million loss  recorded in the 2002 period  related
to  other-than-temporary  declines in two of MidAmerican  Funding's common stock
investments.

Other Income and Other Expense
------------------------------

MidAmerican Energy -

As a regulated public utility,  MidAmerican Energy is allowed to capitalize, and
record as  income,  a cost of  construction  for  equity  funds  used,  based on
guidelines set forth by the Federal Energy Regulatory Commission ("FERC"). Other
income for the  capitalized  allowance on equity funds used during  construction
totaled  $3.9 million in the first  quarter of 2003  compared to $1.2 million in
the first quarter of 2002.  MidAmerican Energy anticipates  recording income for
the  allowance  on equity funds used during  construction  over the next several
years while the announced generating plants are constructed.

Other expense includes a discount on MidAmerican  Energy's  accounts  receivable
sold to  MidAmerican  Energy Funding  Corporation.  The discount was designed to
cover the expenses of MidAmerican Energy Funding Corporation, including bad debt
expense,  subservicer  fees,  monthly  administrative  costs and

                                      -26-
<PAGE>

interest. The discount was recorded in other expense because it is not reflected
in utility cost of service for regulatory  purposes.  The discount  totaled $1.7
million for the first  quarter of 2002.  The related  arrangement  terminated in
October 2002

MidAmerican Funding -

Other income for the first  quarter of 2003 and 2002  includes  $0.3 million and
$5.3  million,  respectively,  of  income  from  MidAmerican  Capital  Company's
("MidAmerican  Capital")  equity  method  investments.  Equity  income  for 2002
includes $5.3 million of income for a  distribution  of common stock held by one
of MidAmerican Capital's venture capital fund investments.

Other  expense for the first  quarter of 2003 includes a $2.1 million write down
for the impairment of a special purpose fund investment.

Fixed Charges and Preferred Dividends
-------------------------------------

The increase in interest on  long-term  debt was due to interest on $400 million
of  MidAmerican  Energy notes  issued in February  2002 and another $275 million
issued in January 2003. The increase was partially  offset by the effect of debt
maturities  in 2002 and 2003 and  lower  variable  interest  rates in the  first
quarter of 2003.

Other  interest  expense  increased in the first quarter of 2003 for interest on
regulatory  liabilities associated with the electric revenue sharing arrangement
in Iowa and the restructuring of MidAmerican Energy's contract related to Cooper
Nuclear Station.

MidAmerican  Energy's preferred  dividends of its subsidiary trust decreased due
to the  reacquisition  of all of the related  preferred  securities on March 11,
2002. In addition,  preferred  dividends  decreased due to the  reacquisition of
preferred securities in May 2002.

                                      -27-

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

MidAmerican  Energy and MidAmerican  Funding have available a variety of sources
of liquidity and capital resources,  both internal and external. These resources
provide  funds  required  for  current  operations,  construction  expenditures,
dividends, debt retirement and other capital requirements.

As reflected on the Consolidated Statements of Cash Flows,  MidAmerican Energy's
net cash provided by operating  activities was $226.5 million and $160.8 million
for the three  months ended March 31, 2003 and 2002,  respectively.  MidAmerican
Funding's  net cash  provided by  operating  activities  was $210.2  million and
$140.5 million for the three months ended March 31, 2003 and 2002, respectively.

Investing Activities and Plans
------------------------------

Utility Construction Expenditures -

MidAmerican   Energy's   primary  need  for  capital  is  utility   construction
expenditures.   For  the  first  three  months  of  2003,  utility  construction
expenditures  totaled $76.6 million,  including  allowance for funds used during
construction,  or capitalized  financing  costs, and Quad Cities Station nuclear
fuel purchases.

Forecasted utility construction expenditures, including allowance for funds used
during  construction,  are $368 million for 2003. Capital  expenditure needs are
reviewed  regularly by management  and may change  significantly  as a result of
such reviews.

Through 2007,  MidAmerican  Energy plans to develop and construct three electric
generating  projects in Iowa.  The projects  would provide  service to regulated
retail electricity customers and, subject to regulatory  approvals,  be included
in regulated rate base in Iowa,  Illinois and South Dakota.  Wholesale sales may
also be made from the plants to the extent the power is not needed for regulated
retail service. MidAmerican Energy expects to invest approximately $1.44 billion
in the three projects.

The first project is a natural  gas-fired  combined cycle unit with an estimated
cost of $357  million,  plus  allowance  for  funds  used  during  construction.
MidAmerican Energy will own 100% of the plant and operate it. MidAmerican Energy
has received a certificate  from the Iowa Utilities Board ("IUB") allowing it to
construct  the  plant.  Also,  on May 29,  2002,  the IUB  issued an order  that
provides the ratemaking  principles for the plant. The plant will be operated in
simple  cycle mode during 2003 and 2004,  resulting in 327  megawatts  ("MW") of
accredited capacity.  Commercial operation of the simple cycle mode began on May
5, 2003. The combined cycle operation is expected to commence in 2005, resulting
in an expected additional 190 MW of accredited capacity.

The second project is currently under development and is expected to be a 790-MW
(based on expected accreditation)  super-critical-temperature,  coal-fired plant
fueled with low-sulfur coal. If constructed, MidAmerican Energy will operate the
plant and expects to own approximately 475 MW of the plant.  MidAmerican  Energy
expects to invest approximately $759 million in the project,  plus allowance for
funds  used  during  construction.   Municipal,  cooperative  and  public  power
utilities will own the remainder,  which is a typical ownership  arrangement for
large base-load plants in Iowa. On January 23, 2003, MidAmerican Energy received
an order  approving  the issuance of a  certificate  from the IUB allowing it to
construct  the  plant.  MidAmerican  Energy  has made a filing  with the IUB for
approval of  ratemaking  principles  pertaining  to this plant.  On February 12,
2003,   MidAmerican  Energy  executed  a  contract  with  Mitsui  &  Co.  Energy
Development, Inc. for the engineering, procurement and construction of the plant
and issued a limited notice to proceed authorizing detailed engineering.  A full
notice to proceed authorizing construction is expected following approval of the
ratemaking principles. Continued development of this plant is subject

                                      -28-
<PAGE>

to obtaining  environmental  and other  required  permits,  as well as receiving
orders  from  the IUB  approving  construction  of the  associated  transmission
facilities and  establishing  ratemaking  principles  which are  satisfactory to
MidAmerican Energy.

The third  project is  currently  under  development  and is expected to be wind
power  facilities  totaling  310 MW based  on the  nameplate  rating.  Generally
speaking, accredited capacity ratings for wind power facilities are considerably
less than the nameplate ratings. If constructed, MidAmerican Energy will own and
operate these facilities, which are expected to cost approximately $323 million,
plus associated transmission facilities.  MidAmerican Energy's plan to construct
the wind project is in conjunction with a settlement  proposal to extend through
December 31,  2010,  a rate freeze that is currently  scheduled to expire at the
end of 2005. The proposed settlement is subject to approval by the IUB. Refer to
the "Rate Matters"  section below for more discussion of the rate aspects of the
proposed settlement.

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,   MidAmerican  Energy  expects  to
contribute  approximately  $41 million  during the period 2003  through  2007 to
external trusts established for the investment of funds for decommissioning Quad
Cities Station.  Approximately 60% of the fair value of the trusts' funds is now
invested in domestic corporate debt and common equity securities.  The remainder
is invested in investment grade municipal and U.S.  Treasury bonds.  Funding for
Quad Cities Station nuclear decommissioning is reflected as depreciation expense
in the Consolidated  Statements of Income.  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.

                                      -29-

<PAGE>

Contractual Obligations and Commercial Commitments -

MidAmerican Energy and MidAmerican Funding have various contractual  obligations
and commercial commitments. The following table summarizes as of March 31, 2003,
the material cash obligations of MidAmerican Energy and MidAmerican  Funding (in
millions).  The table has been  updated  from  December  31,  2002,  to  reflect
issuances and retirements of long-term debt and on-going  changes in commitments
due to operating lease and fuel transactions.
<TABLE>
<CAPTION>

                                                                     Period Payments are Due
                                                              -------------------------------------
                                                              April 1 to
                                                                Dec. 31,  2004-    2006-    After
Type of Obligation                                     Total     2003     2005     2007     2007
------------------                                   -------- ---------- ------   ------   --------

<S>                                                  <C>        <C>      <C>      <C>      <C>
MidAmerican Energy:
Long-term debt, excluding unamortized
     debt premium and discount, net ..............   $1,151.9   $  5.6   $147.0   $162.0   $  837.3
Operating leases (1) .............................       19.5      5.7      8.8      4.2        0.8
Coal, electricity and natural gas
     contract commitments (1) ....................      561.9    141.2    253.3     74.2       93.2
                                                     --------   ------   ------   ------   --------
     Total .......................................    1,733.3    152.5    409.1    240.4      931.3

MidAmerican Funding parent and other subsidiaries:
Long-term debt, excluding unamortized
     debt premium and discount, net ..............      700.0       --       --       --      700.0
                                                     --------   ------   ------   ------   --------
     Total .......................................   $2,433.3   $152.5   $409.1   $240.4   $1,631.3
                                                     ========   ======   ======   ======   ========
</TABLE>

(1)  The operating  leases and fuel and energy  commitments are not reflected on
     the  Consolidated  Balance  Sheets.  Refer  to  Note  (4)(f)  in  Notes  to
     Consolidated  Financial  Statements in Item 15 of MidAmerican  Energy's and
     MidAmerican  Funding's most recently filed Annual Report on Form 10-K for a
     discussion of the nature of these commitments.

The  above  table  includes  MidAmerican  Energy's  and  MidAmerican   Funding's
unconditional  purchase  obligations.  MidAmerican  Energy  has  other  types of
commitments  that are subject to change and relate primarily to the items listed
below. For additional  information,  refer, where applicable,  to the respective
referenced  note in Notes to  Consolidated  Financial  Statements of MidAmerican
Energy's and  MidAmerican  Funding's  most recently  filed Annual Report on Form
10-K.

-    Construction expenditures: Refer to the "Utility Construction Expenditures"
     section above.
-    Manufactured gas plant facilities (see Note 2 a. of this Form 10-Q)
-    Nuclear  decommissioning costs (see Note (4)(d) of MidAmerican Energy's and
     MidAmerican Funding's most recently filed Annual Report on Form 10-K)
-    Residual  guarantees  on operating  leases (see Note (1)(j) of  MidAmerican
     Energy's and  MidAmerican  Funding's  most recently  filed Annual Report on
     Form 10-K)

Financing Activities, Plans and Availability
--------------------------------------------

Debt Authorizations and Credit Facilities -

MidAmerican  Energy has authority from the Federal Energy Regulatory  Commission
("FERC")  to  issue  through  April  14,  2005,  short-term  debt in the form of
commercial  paper and bank notes  aggregating $500

                                      -30-
<PAGE>

million.  MidAmerican  Energy currently has in place a $370.4 million  revolving
credit facility that supports its $250 million  commercial paper program and its
variable  rate  pollution  control  revenue  obligations.  The facility  expires
January 15,  2004.  In addition,  MidAmerican  Energy has a $5.0 million line of
credit, which expires July 1, 2003.

On  January  14,  2003,   MidAmerican  Energy  issued  $275  million  of  5.125%
medium-term notes due in 2013. The proceeds were used to refinance existing debt
and for other corporate purposes.

On February 10, 2003,  MidAmerican Energy redeemed all $75 million of its 7.375%
series of mortgage  bonds,  and on March 17, 2003, it redeemed all $6.94 million
of its 7.45% series of mortgage bonds. Additionally, MidAmerican Energy's 7.125%
series of mortgage bonds totaling $100 million matured on February 3, 2003.

MidAmerican  Energy has on file with the  Securities  and Exchange  Commission a
registration statement providing for an additional $425 million in various forms
of senior and subordinated,  unsecured long-term debt and preferred  securities.
MidAmerican  Energy  also has  authorization  from the  FERC to  issue,  through
November  30, 2004,  an  additional  $425 million in various  forms of long-term
debt.

MidAmerican  Energy  is  required  to  obtain  authorization  from the  Illinois
Commerce  Commission ("ICC") prior to issuing any securities.  If 90% or more of
the proceeds  from a  securities  issuance  are used for  refinancing  purposes,
MidAmerican  Energy need only provide the ICC with an "informational  statement"
prior to the issuance which sets forth the type,  amount and use of the proceeds
of the  securities  to be issued.  If less than 90% of the proceeds are used for
refinancing,   MidAmerican  must  file  a  comprehensive   application   seeking
authorization  prior to issuance.  The ICC is required to hold a hearing  before
issuing its  authorization.  MidAmerican Energy currently has authority from the
ICC  to  issue  up  to  approximately  $15  million  of  medium-term  notes  for
refinancing purposes.

Other Information -

MHC Inc.,  MidAmerican  Energy's  parent  company,  has a $4.0  million  line of
credit,  expiring July 1, 2003, to provide for short-term  financing needs, none
of which was  outstanding  at March 31,  2003.  MidAmerican  Capital  has a $6.1
million line of credit  expiring July 1, 2003,  none of which was outstanding at
March 31, 2003.

MidAmerican  Funding or one of its subsidiaries,  including  MidAmerican Energy,
may from time to time seek to retire its outstanding debt through cash purchases
and/or  exchanges for equity  securities,  in open market  purchases,  privately
negotiated transactions or otherwise. The repurchases or exchanges, if any, will
depend  on  prevailing  market  conditions,   the  issuing  company's  liquidity
requirements,  contractual  restrictions and other factors. The amounts involved
may be material.

CREDIT RATINGS RISKS

Debt and preferred  securities of MidAmerican Funding and MidAmerican Energy are
rated by nationally  recognized credit rating agencies.  Assigned credit ratings
are  based on each  rating  agency's  assessment  of  MidAmerican  Funding's  or
MidAmerican Energy's ability to, in general, meet the obligations of the debt or
preferred  securities issued by the rated company.  The credit ratings are not a
recommendation to buy, sell or hold securities, and there is no assurance that a
particular  credit rating will continue for any given period of time. Other than
the energy trading agreements  discussed below,  neither MidAmerican Funding nor
MidAmerican  Energy has any credit  agreements  that  require  termination  or a
material change in collateral requirements or payment schedule in the event of a
downgrade  in  the  credit  ratings  of  the  respective  company's  securities.
MidAmerican  Funding's long-term debt agreements provide that no

                                      -31-

<PAGE>

additional  debt can be issued by MidAmerican  Funding if doing so would cause a
downgrade in MidAmerican Funding's credit ratings.

In conjunction with its wholesale marketing and trading activities,  MidAmerican
Energy  must meet  credit  quality  standards  as  required  by  counterparties.
MidAmerican  Energy has energy  trading  agreements  that,  in  accordance  with
industry practice,  either specifically  require it to maintain investment grade
credit  ratings  or provide  the right for  counterparties  to demand  "adequate
assurances" in the event of a material  adverse  change in MidAmerican  Energy's
creditworthiness.  If one or more of MidAmerican Energy's credit ratings decline
below  investment  grade,  MidAmerican  Energy  may be  required  to  post  cash
collateral,  letters of credit or other  similar  credit  support to  facilitate
ongoing  wholesale  marketing  and  trading  activities.  As of March 31,  2003,
MidAmerican  Energy's  estimated  potential   collateral   requirements  totaled
approximately $157 million.  MidAmerican Energy's collateral  requirements could
fluctuate  considerably due to seasonality,  market price volatility,  a loss of
key MidAmerican Energy generating facilities or other related factors.

RATE MATTERS

Under  a  settlement  agreement  approved  by the  IUB  on  December  21,  2001,
MidAmerican  Energy's Iowa retail electric rates in effect on December 31, 2000,
are effectively  frozen through December 31, 2005. In approving that settlement,
the IUB  specifically  allows the filing of electric  rate design and/or cost of
service  rate  changes  that  are  intended  to keep  overall  company  revenues
unchanged  but could  result in changes to  individual  tariffs.  Under the 2001
settlement  agreement,  an amount equal to 50% of revenues  associated with Iowa
retail  electric  returns on equity  between 12% and 14%, and 83.33% of revenues
associated with Iowa retail  electric  returns on equity above 14%, in each year
is recorded as a regulatory liability to be used to offset a portion of the cost
to Iowa customers of future generating plant investments. An amount equal to the
regulatory  liability is recorded as a  regulatory  charge in  depreciation  and
amortization expense when the liability is accrued.  Interest expense is accrued
on the portion of the regulatory liability related to prior years.  Beginning in
2002,  the liability is being relieved as it is credited  against  allowance for
funds used during construction,  or capitalized financing costs, associated with
generating  plant  additions.  As of March  31,  2003,  the  related  regulatory
liability reflected on the Consolidated Balance Sheet totaled $117.4 million.

On March 20, 2003,  MidAmerican  Energy and the Iowa Office of Consumer Advocate
agreed upon a proposed settlement in which the rate freeze described above would
be extended  through  December 31,  2010.  Under the  proposed  settlement,  for
calendar years 2006 through 2010, an amount equal to 40% of revenues  associated
with Iowa retail  electric  returns on equity between  11.75% and 13.0%;  50% of
revenues  associated with Iowa retail  electric  returns on equity between 13.0%
and 14.0%; and 83.3% of revenues associated with Iowa retail electric returns on
equity  greater  than 14.0% will be applied as a reduction to offset some of the
capital costs on the Iowa portion of three generation projects. In addition, the
proposed settlement provides that if Iowa retail electric returns on equity fall
below 10% in any consecutive 12-month period after January 1, 2006,  MidAmerican
Energy  may seek to file for a  general  increase  in rates.  However,  prior to
filing for a general  increase in rates,  MidAmerican  Energy is required by the
proposed  settlement to conduct 30 days of good faith  negotiations  with all of
the  signatories  to the  proposed  settlement  to  attempt  to avoid a  general
increase in rates.  The proposed  settlement  is subject to approval by the IUB.
The IUB is expected to rule on the proposal during the second half of 2003.

                                      -32-

<PAGE>

LEGISLATIVE AND REGULATORY EVOLUTION

Electric Deregulation
---------------------

Under  Illinois law, as of December 31, 2000, all  non-residential  customers in
Illinois had been phased in to allow them to select  their  provider of electric
supply  services.  Residential  customers all received the opportunity to select
their electric supplier beginning May 1, 2002.

Illinois law also provides for Illinois electric earnings above a computed level
of  return  on  common  equity  to  be  shared  equally  between  customers  and
MidAmerican  Energy.  MidAmerican  Energy's  computed  level of return on common
equity is based on a rolling two-year average of the Monthly Treasury  Long-Term
Average Rate, as published by the Federal Reserve System, plus a premium of 8.5%
for 2000  through  2004 and a premium of 12.5% for 2005 and 2006.  The  two-year
average  above  which  sharing  must occur for 2002 was  14.03%.  The law allows
MidAmerican  Energy to  mitigate  the sharing of  earnings  above the  threshold
return on common equity through accelerated recovery of electric assets.

The energy crisis and related  events in  California  have  heightened  concerns
nationally about deregulation of the electric utility industry. Accordingly, the
pace of deregulation in Iowa and elsewhere has slowed considerably.

Regional Transmission Organizations
-----------------------------------

In December  1999,  the FERC issued  Order No.  2000  establishing,  among other
things,   minimum   characteristics  and  functions  for  regional  transmission
organizations.  Public utilities that were not a member of an independent system
operator  at the time of the order were  required  to submit a plan by which its
transmission   facilities  would  be  transferred  to  a  regional  transmission
organization.  On September 28, 2001, MidAmerican Energy and five other electric
utilities filed with the FERC a plan to create  TRANSLink  Transmission  Company
LLC  and to  integrate  their  electric  transmission  systems  into  a  single,
coordinated system operating as a for-profit independent transmission company in
conjunction with a FERC-approved  regional transmission  organization.  On April
25,  2002,  the FERC  issued an order  approving  the  transfer  of  control  of
MidAmerican  Energy and other  utilities'  transmission  assets to  TRANSLink in
conjunction   with  TRANSLink's   participation   in  the  Midwest   Independent
Transmission   System  Operator,   Inc.  regional   transmission   organization.
MidAmerican  Energy has filed an application for state regulatory  approval with
the IUB and  anticipates a ruling in mid-2003.  Transferring  the operations and
control of  MidAmerican  Energy's  transmission  assets to other  entities could
increase costs for MidAmerican Energy;  however,  the actual impact of TRANSLink
on MidAmerican Energy's future transmission costs is not yet known.

Standard Electricity Market Design
----------------------------------

On July 31, 2002, the FERC issued a notice of proposed  rulemaking  with respect
to Standard  Market  Design.  The FERC initially  characterized  the proposal as
portending  "sweeping  changes"  to the  use  and  expansion  of the  interstate
transmission and wholesale bulk power systems in the United States. The proposal
includes numerous proposed changes to the current regulation of transmission and
generation  facilities designed "to promote economic efficiency" and replace the
"obsolete  patchwork we have today," according to the FERC's chairman.  The FERC
recently  issued a White  Paper  indicating  that a final  rule may focus on the
formation  of  regional  transmission   organizations  and  allow  for  regional
differences.  The  proposed  rule may impact the costs of  MidAmerican  Energy's
electricity  and  transmission  products.  A final rule is  unlikely to be fully
implemented  until at least 2004.  MidAmerican  Energy is still  evaluating  the
proposed rule and  recognizes  there is uncertainty as to the timing and

                                      -33-
<PAGE>

outcome of this rulemaking.  Accordingly, the likely impact of the proposed rule
on MidAmerican Energy's transmission and generation businesses is unknown.

ENVIRONMENTAL MATTERS

The  U.S.  Environmental  Protection  Agency  ("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.

MidAmerican  Energy has evaluated or is  evaluating 27 properties  that 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  MidAmerican  Energy has any  responsibility  for
remedial  action.  As of March 31, 2003,  MidAmerican  Energy has recorded a $21
million  liability  for these  sites and a  corresponding  regulatory  asset for
future  recovery  through the regulatory  process.  Refer to Note 2a of Notes to
Consolidated  Financial  Statements  in Item 1 of this  Form  10-Q  for  further
discussion  of  MidAmerican   Energy's   environmental   activities  related  to
manufactured gas plant sites and cost recovery.

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
MidAmerican Energy's financial position or results of operations.

In July 1997,  the EPA adopted  revisions  to the  National  Ambient Air Quality
Standards for ozone and a new standard for fine particulate  matter. In February
2001,  the United  States  Supreme  Court  upheld the  constitutionality  of the
standards, though remanding the issue of implementation of the ozone standard to
the EPA.  The impact of the new  standards  on  MidAmerican  Energy is currently
unknown. These standards could be superceded,  in whole or in part, by a variety
of multi-pollutant emission reduction initiatives.  Refer to Note 2b of Notes to
Consolidated  Financial  Statements  in Item 2 of this  Form  10-Q  for  further
discussion of this issue.

In  2001,  the  state  of  Iowa  passed  legislation  that,  in  part,  requires
rate-regulated  utilities to develop a  multi-year  plan and budget for managing
regulated emissions from their generating facilities in a cost-effective manner.
MidAmerican  Energy's proposed plan and associated budget ("the Plan") was filed
with the IUB on April 1, 2002, in accordance with state law.  MidAmerican Energy
expects the IUB to rule on the prudence of the Plan in 2003.  MidAmerican Energy
is required to file updates to the Plan at least every two years.

The  Plan  provides  MidAmerican  Energy's  projected  air  emission  reductions
considering  the current  proposals  that are being debated at the federal level
and  describes  a  coordinated  long-range  plan to achieve  these air  emission
reductions.  The  Plan  also  provides  specific  actions  to be  taken  at each
coal-fired generating facility and the related costs and timing for each action.

The Plan  outlines  $732.0  million in  environmental  investments  to  existing
coal-fired  generating  units, some of which are jointly owned, over a nine-year
period from 2002 through 2010.  MidAmerican  Energy's share of these investments
is $546.6  million,  $67.9  million of which was projected to be incurred in the
years 2002 through 2005,  when  MidAmerican  Energy's Iowa retail electric rates
are effectively  frozen. The Plan also identifies expenses that will be incurred
at the generating facilities to operate and maintain the environmental equipment
installed as a result of the Plan.

                                      -34-
<PAGE>

Following the expiration of MidAmerican  Energy's 2001  settlement  agreement on
December 31, 2005,  the Plan  proposes the use of an  adjustment  mechanism  for
recovery of Plan costs,  similar to the tracking mechanisms for cost recovery of
renewable energy and energy  efficiency  expenditures that are presently part of
MidAmerican  Energy's  regulated  electric  rates.  Refer to the preceding "Rate
Matters" section for a discussion of the settlement agreement.

Under the New Source  Review  ("NSR")  provisions of the Clean Air Act ("CAA") a
utility  is  required  to obtain a permit  from the EPA  prior to (1)  beginning
construction of a new major stationary  source of an NSR-regulated  pollutant or
(2) making a  physical  or  operational  change (a "major  modification")  to an
existing facility that potentially  increases emissions,  unless the changes are
exempt under the  regulations.  In general,  projects subject to NSR regulations
are subject to  pre-construction  review and permitting  under the Prevention of
Significant  Deterioration ("PSD") provisions of the CAA. Under the PSD program,
a project that emits  threshold  levels of regulated  pollutants  must undergo a
Best  Available  Control  Technology  analysis and  evaluate the most  effective
emissions  controls.  These  controls  must be  installed  in order to receive a
permit.  Routine maintenance,  repair and replacement are not subject to the NSR
provisions; however, these types of activities have historically been subject to
changing interpretations under the NSR program. The EPA has proposed a change to
the NSR  provisions  relating to routine  maintenance,  repair and  replacement.
Violation  of NSR  regulations  potentially  subjects a utility to fines  and/or
other  sanctions.  The impact on  MidAmerican  Energy of any final  rules is not
currently known.

In recent years,  the EPA has requested from several  utilities  information and
support  regarding their capital  projects for various  generating  plants.  The
requests  were  issued  as  part of an  industry-wide  investigation  to  assess
compliance with the NSR and the New Source Performance  Standards of the CAA. In
December 2002,  MidAmerican  Energy  received an initial request from the EPA to
provide  documentation  related to its capital projects from January 1, 1980, to
the present for its Neal,  Council Bluffs,  Louisa and Riverside Energy Centers.
MidAmerican  Energy is in the process of responding to requests and at this time
cannot predict the outcome of the requests.

GENERATING CAPABILITY

In July 2002,  retail  customer usage of electricity  caused a new record hourly
peak demand of 3,889 megawatts on MidAmerican Energy's energy system, surpassing
the  previous  record peak of 3,833 MW set in July 1999.  MidAmerican  Energy is
interconnected  with  Iowa  and  neighboring  utilities  and is  involved  in an
electric  power  pooling  agreement  known  as  Mid-Continent  Area  Power  Pool
("MAPP"). Each MAPP participant is required to maintain for emergency purposes a
net generating  capability reserve of at least 15% above its system peak demand.
For the 2002 cooling season,  MidAmerican Energy's reserve was approximately 21%
above its system peak demand.

MidAmerican  Energy believes it has adequate  electric  capacity reserve through
2003 and  continues  to manage its  generating  resources  to ensure an adequate
reserve in the future.  MidAmerican  Energy is in the process of  constructing a
natural gas-fired  combined cycle unit to be completed in two phases in 2003 and
2005.  The first phase,  totaling 327 MW, began  commercial  operation on May 5,
2003.  MidAmerican Energy expects the second phase to provide  approximately 190
MW of  additional  accredited  capacity.  Up to an  additional  475 MW of  owned
coal-fired  generation  is  expected  to be  operational  by the summer of 2007.
MidAmerican Energy has also announced a plan to construct wind power facilities,
subject  to  approval  by the  IUB.  However,  significantly  higher-than-normal
temperatures during the cooling season could cause MidAmerican  Energy's reserve
to fall below the 15%  minimum.  If  MidAmerican  Energy  fails to maintain  the
appropriate  reserve,  significant  penalties could be contractually  imposed by
MAPP.

                                      -35-
<PAGE>

MidAmerican Energy is financially exposed to movements in energy prices since it
no longer recovers fluctuations in its energy costs through an energy adjustment
clause  in  Iowa.  Although   MidAmerican  Energy  believes  it  has  sufficient
generation under typical  operating  conditions for its retail electric needs, a
loss of adequate  generation  by  MidAmerican  Energy  requiring the purchase of
replacement  power at a time of high market  prices  could  subject  MidAmerican
Energy to losses on its energy sales.

NEW ACCOUNTING PRONOUNCEMENT

On April 30, 2003, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting Standards ("SFAS") No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends SFAS No. 133
for derivative instruments, including certain derivative instruments embedded in
other  contracts and for hedging  activities.  SFAS No. 149 also amends  certain
other  existing  pronouncements  and  will  require  contracts  with  comparable
characteristics  to be accounted  for  similarly.  In  particular,  SFAS No. 149
clarifies   when  a  contract   with  an  initial  net   investment   meets  the
characteristic  of a derivative and clarifies when a derivative  that contains a
financing  component  will require  special  reporting in the  statement of cash
flows. SFAS No. 149 is effective for MidAmerican Energy and MidAmerican  Funding
for contracts entered into or modified after June 30, 2003.  MidAmerican  Energy
and MidAmerican  Funding are evaluating the impact of adopting the  requirements
of SFAS No. 149.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
-------------------------------------------------------------------

Reference  is  made to  MidAmerican  Energy's  and  MidAmerican  Funding's  most
recently filed Annual Report on Form 10-K,  and in particular,  Notes (1)(i) and
(8) in Notes to Consolidated  Financial Statements in Item 15 of that report. As
of March 31,  2003,  there have been no  material  changes  in the market  risks
described therein.

ITEM 4. CONTROLS AND PROCEDURES.
--------------------------------

MidAmerican  Funding's  and  MidAmerican  Energy's  respective  chief  executive
officer and chief financial  officer have established  "disclosure  controls and
procedures"  (as defined in Rule  13a-14(c) and Rule 15d-14(c) of the Securities
and Exchange Act of 1934) to ensure that material  information  of the companies
and their  subsidiaries  is made known to them by others  within the  respective
companies. Under their supervision, an evaluation of the disclosure controls and
procedures  was performed  within 90 days prior to the filing of this  quarterly
report.  Based on that evaluation,  the above-mentioned  officers have concluded
that, as of the date of the evaluation,  the disclosure  controls and procedures
were operating effectively. Additionally, the above-mentioned officers find that
there have been no significant changes in internal controls, or in other factors
that could  significantly  affect internal  controls,  subsequent to the date of
that evaluation.

                                      -36-
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.
---------------------------

MidAmerican  Funding  and its  subsidiaries  currently  have no  material  legal
proceedings.

Information on  MidAmerican  Energy's  environmental  matters is included in the
"Environmental  Matters" section of Management's Discussion and Analysis in Item
2 of this Form 10-Q.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.
--------------------------------------------------

Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.
-----------------------------------------

Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------------------------------------------------------------

Not applicable.

ITEM 5.  OTHER INFORMATION.
---------------------------

Not applicable.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
------------------------------------------

(A)      EXHIBITS

Reference is made to the accompanying Exhibit Index for a list of exhibits filed
as a part of this Quarterly Report.

(B)      REPORTS ON FORM 8-K

          None.

                                      -37-
<PAGE>

                                   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 FUNDING, LLC
                           MIDAMERICAN ENERGY COMPANY
                           --------------------------
                                  (Registrants)







Date  May 12, 2003        /s/  Patrick J. Goodman
    --------------        ----------------------------
                               Patrick J. Goodman
                          Vice President and Treasurer
                           of MidAmerican Funding, LLC




                          /s/  Thomas B. Specketer
                  --------------------------------------------
                               Thomas B. Specketer
                          Vice President and Controller
                          of MidAmerican Energy Company
                  (principal financial and accounting officer)


                                      -38-
<PAGE>

                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, David L. Sokol, certify that:

1. I have reviewed this quarterly  report on Form 10-Q of  MidAmerican  Funding,
LLC;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

                                      -39-
<PAGE>

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 12, 2003
                               /s/ David L. Sokol
                               ------------------
                                 David L. Sokol
                             Chief Executive Officer

                                      -40-

<PAGE>

                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, Patrick J. Goodman, certify that:

1. I have reviewed this quarterly  report on Form 10-Q of  MidAmerican  Funding,
LLC;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

                                      -41-
<PAGE>

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  May 12, 2003
                             /s/ Patrick J. Goodman
                             ----------------------
                               Patrick J. Goodman
                          Vice President and Treasurer
                            (chief financial officer)

                                      -42-
<PAGE>


                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, Jack L. Alexander, certify that:

1. I have  reviewed this  quarterly  report on Form 10-Q of  MidAmerican  Energy
Company;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly  report our conclusions
about the  effectiveness of the disclosure  controls and procedures based on our
evaluation as of the  Evaluation  Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

                                      -43-

<PAGE>

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 12, 2003
                              /s/ Jack L. Alexander
                              ---------------------
                                Jack L. Alexander
                              Senior Vice President
                          (co-chief executive officer)

                                      -44-

<PAGE>


                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, Todd M. Raba, certify that:

1. I have  reviewed this  quarterly  report on Form 10-Q of  MidAmerican  Energy
Company;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

                                      -45-

<PAGE>


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 12, 2003
                                /s/ Todd M. Raba
                                ----------------
                                  Todd M. Raba
                              Senior Vice President
                          (co-chief executive officer)

                                      -46-

<PAGE>


                     SECTION 302 CERTIFICATION FOR FORM 10-Q
CERTIFICATIONS
--------------

I, Thomas B. Specketer, certify that:

1. I have  reviewed this  quarterly  report on Form 10-Q of  MidAmerican  Energy
Company;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

                                      -47-

<PAGE>

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  May 12, 2003
                             /s/ Thomas B. Specketer
                             -----------------------
                               Thomas B. Specketer
                          Vice President and Controller
                            (chief financial officer)

                                      -48-

<PAGE>

EXHIBIT INDEX

EXHIBIT NO.
-----------

MidAmerican Energy
------------------

15        Awareness Letter of Independent Accountants

99.1      Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002 (co-chief executive officer)

99.2      Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002 (co-chief executive officer)

99.3      Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002 (chief financial officer)

MidAmerican Funding
-------------------

99.4      Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002 (chief executive officer)

99.5      Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002 (chief financial officer)

                                      -49-