<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

(Mark One)
[x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended  September 30, 1995
                               -------------------

                                      or

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from                         to
                              -------------------------   -------------------
Commission File Number   1-11505
                        -----------------------------------------------------
                               MIDAMERICAN ENERGY COMPANY
-----------------------------------------------------------------------------
                  (Exact name of registrant as specified in its charter)

             IOWA                                           42-1425214
-------------------------------                          -------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

666 Grand Ave., P.O. Box 657, Des Moines, Iowa                  50303
---------------------------------------------            -------------------
(Address of principal executive offices)                      (Zip Code)

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

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

   Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.

   Common Stock, without par value                       100,751,713
-------------------------------------         -------------------------------
                (class)                       (outstanding at October 1, 1995)

*  MidAmerican Energy Company ("MidAmerican") is the successor by merger of
   Midwest Resources Inc. ("Midwest Resources"), Midwest Power Systems Inc.
   ("Midwest Power") and Iowa-Illinois Gas and Electric Company ("Iowa-
   Illinois") with and into MidAmerican.  The effective date of the merger
   was July 1, 1995, and prior to such effective date, MidAmerican had no
   assets or operations.  Prior to such effective date, each of Iowa-
   Illinois, Midwest Resources and Midwest Power was subject to the
   requirements of Section 13 or 15(d) of the Securities Exchange Act of
   1934, as amended ("Exchange Act"), and accordingly filed in a timely
   manner all reports required to be filed pursuant to Sections 13 or 15(d)
   of the Exchange Act during the preceding 12 months.

<PAGE>

                          MIDAMERICAN ENERGY COMPANY

                                     INDEX


                                                                 Page Number
                                                                 -----------
PART I.     FINANCIAL INFORMATION:

            Consolidated Statements of Income for the Three,
            Nine and Twelve Months Ended September 30,
            1995 and 1994                                                   3

            Consolidated Balance Sheets as of September 30, 1995
            and 1994 and December 31, 1994                                  4

            Consolidated Statements of Cash Flows for the Three
            and Nine Months Ended September 30, 1995 and 1994               5

            Notes to Consolidated Financial Statements                      6

            Management's Discussion and Analysis of Financial
            Condition and Results of Operations                            10

PART II.    OTHER INFORMATION                                              20

                                      -2-



<PAGE>

<TABLE>
<CAPTION>

                                  MIDAMERICAN ENERGY COMPANY
                               CONSOLIDATED STATEMENTS OF INCOME
                                          (Unaudited)
                           (In Thousands, except per share amounts)



                                              THREE MONTHS           NINE MONTHS             TWELVE MONTHS
                                            ENDED SEPTEMBER 30    ENDED SEPTEMBER 30       ENDED SEPTEMBER 30
                                            ------------------    ------------------       ------------------
                                              1995      1994       1995        1994         1995        1994
                                            --------  --------  ----------  ----------   ----------  ----------
<S>                                         <C>       <C>       <C>         <C>          <C>         <C>
OPERATING REVENUES
Electric. . . . . . . . . . . . . . . . . . $338,626  $289,134  $  847,989  $  785,748   $1,083,901  $1,015,787
Gas . . . . . . . . . . . . . . . . . . . .   64,609    57,332     312,436     359,815      444,636     524,364
                                            --------  --------  ----------  ----------   ----------  ----------
  Total . . . . . . . . . . . . . . . . . .  403,235   346,466   1,160,425   1,145,563    1,528,537   1,540,151
                                            --------  --------  ----------  ----------   ----------  ----------

OPERATING EXPENSES AND TAXES
Cost of fuel, energy and capacity . . . . .   65,626    56,500     177,694     162,754      228,927     213,388
Cost of gas sold. . . . . . . . . . . . . .   38,261    33,731     189,192     242,115      273,859     354,952
Cooper Nuclear Station non-fuel costs . . .   21,965    23,159      65,109      67,600       90,886      85,770
Other operating expenses. . . . . . . . . .   88,424    62,004     230,033     192,381      298,465     269,519
Maintenance . . . . . . . . . . . . . . . .   20,103    23,846      63,299      72,255       92,319     106,623
Depreciation and amortization . . . . . . .   40,183    38,678     118,392     115,416      157,205     152,792
Income Taxes. . . . . . . . . . . . . . . .   32,657    24,965      67,371      62,291       74,811      69,966
Property and other taxes. . . . . . . . . .   25,447    24,446      77,683      70,179      102,494      91,094
                                            --------  --------  ----------  ----------   ----------  ----------
  Total . . . . . . . . . . . . . . . . . .  332,666   287,329     988,773     984,991    1,318,966   1,344,104
                                            --------  --------  ----------  ----------   ----------  ----------

OPERATING INCOME. . . . . . . . . . . . . .   70,569    59,137     171,652     160,572      209,571     196,047
                                            --------  --------  ----------  ----------   ----------  ----------

OTHER INCOME (LOSS)
Subsidiaries
  Revenues. . . . . . . . . . . . . . . . .   32,536    35,363     107,963     132,216      151,061     176,120
  Other income. . . . . . . . . . . . . . .   (9,721)    8,862      11,848      30,308       20,888      38,322
  Expenses. . . . . . . . . . . . . . . . .  (31,435)  (38,914)   (122,592)   (149,402)    (172,612)   (199,055)
                                            --------  --------  ----------  ----------   ----------  ----------

      Net income (loss) . . . . . . . . . .   (8,620)    5,311      (2,781)     13,122         (663)     15,387
Miscellaneous . . . . . . . . . . . . . . .   (4,280)   (2,794)     (4,215)     (2,509)      (2,446)        968
                                            --------  --------  ----------  ----------   ----------  ----------
  Total . . . . . . . . . . . . . . . . . .  (12,900)    2,517      (6,996)     10,613       (3,109)     16,355
                                            --------  --------  ----------  ----------   ----------  ----------

INCOME BEFORE UTILITY INTEREST CHARGES. . .   57,669    61,654     164,656     171,185      206,462     212,402
                                            --------  --------  ----------  ----------   ----------  ----------

UTILITY INTEREST CHARGES
Interest on long-term debt. . . . . . . . .   19,970    18,290      60,081      54,651       79,352      73,500
Other interest expense. . . . . . . . . . .    1,619     2,045       6,832       4,649        8,822       6,043
Allowance for borrowed funds. . . . . . . .   (1,377)     (806)     (3,965)     (2,455)      (5,465)     (3,070)
                                            --------  --------  ----------  ----------   ----------  ----------

  Total . . . . . . . . . . . . . . . . . .   20,212    19,529      62,948      56,845       82,709      76,473
                                            --------  --------  ----------  ----------   ----------  ----------

INCOME FROM CONTINUING OPERATIONS . . . . .   37,457    42,125     101,708     114,340      123,753     135,929
                                            --------  --------  ----------  ----------   ----------  ----------

INCOME (LOSS) FROM DISCONTINUED
  OPERATIONS (NET OF INCOME TAXES)  . . . .       --    (4,236)        516      (5,598)         469      (4,791)
                                            --------  --------  ----------  ----------   ----------  ----------

NET INCOME. . . . . . . . . . . . . . . . .   37,457    37,889     102,224     108,742      124,222     131,138

PREFERRED AND PREFERENCE DIVIDENDS. . . . .    1,677     2,574       6,240       7,720        9,071      10,164
                                            --------  --------  ----------  ----------   ----------  ----------

EARNINGS ON COMMON STOCK. . . . . . . . . . $ 35,780  $ 35,315    $ 95,984    $101,022     $115,151    $120,974
                                            --------  --------  ----------  ----------   ----------  ----------
                                            --------  --------  ----------  ----------   ----------  ----------

AVERAGE COMMON SHARES OUTSTANDING . . . . .  100,752    98,785     100,364      98,277      100,035      98,159
                                            --------  --------  ----------  ----------   ----------  ----------
                                            --------  --------  ----------  ----------   ----------  ----------

EARNINGS PER COMMON SHARE
Continuing operations . . . . . . . . . . . $   0.36  $   0.40  $     0.95  $     1.09   $     1.15  $     1.28
Discontinued operations . . . . . . . . . .       --     (0.04)       0.01       (0.06)          --       (0.05)
                                            --------  --------  ----------  ----------   ----------  ----------

Earnings per average common share . . . . . $   0.36  $   0.36  $     0.96  $     1.03   $     1.15  $     1.23
                                            --------  --------  ----------  ----------   ----------  ----------
                                            --------  --------  ----------  ----------   ----------  ----------

DIVIDENDS DECLARED PER SHARE. . . . . . . . $   0.30  $   0.29  $     0.88  $     0.88   $     1.18  $     1.17
                                            --------  --------  ----------  ----------   ----------  ----------
                                            --------  --------  ----------  ----------   ----------  ----------

</TABLE>

The accompanying notes are an integral part of these statements.

                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                          MIDAMERICAN ENERGY COMPANY
                          CONSOLIDATED BALANCE SHEETS
                                (IN THOUSANDS)

                                                                        AS OF
                                                          --------------------------------
                                                          SEPTEMBER 30         DECEMBER 31
                                                          ------------         -----------
                                                        1995         1994         1994
                                                     ----------   ----------   ----------
                                                          (Unaudited)
<S>                                                  <C>          <C>          <C>
ASSETS

UTILITY PLANT
Electric . . . . . . . . . . . . . . . . . . . . . . $3,853,520   $3,743,239   $3,765,004
Gas. . . . . . . . . . . . . . . . . . . . . . . . .    689,209      664,004      663,792
                                                     ----------   ----------   ----------
Gross plant. . . . . . . . . . . . . . . . . . . . .  4,542,729    4,407,243    4,428,796
Less accumulated depreciation and amortization . . .  1,984,797    1,872,435    1,885,870
                                                     ----------   ----------   ----------
Utility plant, net . . . . . . . . . . . . . . . . .  2,557,932    2,534,808    2,542,926
Construction work in progress. . . . . . . . . . . .     91,286       89,126      101,252
                                                     ----------   ----------   ----------
  Total. . . . . . . . . . . . . . . . . . . . . . .  2,649,218    2,623,934    2,644,178
                                                     ----------   ----------   ----------

POWER PURCHASE CONTRACT. . . . . . . . . . . . . . .    223,183      241,861      221,998
                                                     ----------   ----------   ----------

INVESTMENT IN DISCONTINUED OPERATIONS. . . . . . . .         --       17,603       15,249
                                                     ----------   ----------   ----------

CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . . . . . .     31,979       24,386       33,778
Receivables. . . . . . . . . . . . . . . . . . . . .    172,635      161,959      204,554
Inventories. . . . . . . . . . . . . . . . . . . . .     90,200       99,763       92,248
Other. . . . . . . . . . . . . . . . . . . . . . . .     35,959       25,386       27,383
                                                     ----------   ----------   ----------
  Total. . . . . . . . . . . . . . . . . . . . . . .    330,773      311,494      357,963
                                                     ----------   ----------   ----------

INVESTMENTS. . . . . . . . . . . . . . . . . . . . .    828,024      783,825      752,428
                                                     ----------   ----------   ----------

OTHER ASSETS . . . . . . . . . . . . . . . . . . . .    414,409      377,603      423,958
                                                     ----------   ----------   ----------

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . $4,445,607   $4,356,320   $4,415,774
                                                     ----------   ----------   ----------
                                                     ----------   ----------   ----------

CAPITALIZATION AND LIABILITIES

CAPITALIZATION
Common shareholders' equity. . . . . . . . . . . . . $1,231,588   $1,210,348   $1,204,112
Nonredeemable preferred shares . . . . . . . . . . .     89,955       89,981       89,955
Redeemable preferred shares. . . . . . . . . . . . .     50,000       50,000       50,000
Long-term debt (excluding current portion) . . . . .  1,385,281    1,368,492    1,398,255
                                                     ----------   ----------   ----------
  Total. . . . . . . . . . . . . . . . . . . . . . .  2,756,824    2,718,821    2,742,322
                                                     ----------   ----------   ----------

CURRENT LIABILITIES
Notes payable. . . . . . . . . . . . . . . . . . . .    135,700      128,332      124,500
Current portion of long-term debt and
  power purchase contract. . . . . . . . . . . . . .     86,239       82,541       84,952
Accounts payable . . . . . . . . . . . . . . . . . .    125,642       99,932      110,175
Taxes accrued. . . . . . . . . . . . . . . . . . . .     85,671      119,098       91,653
Interest accrued . . . . . . . . . . . . . . . . . .     24,103       21,778       30,659
Other. . . . . . . . . . . . . . . . . . . . . . . .     64,942       59,388       54,473
                                                     ----------   ----------   ----------
  Total. . . . . . . . . . . . . . . . . . . . . . .    522,297      511,069      496,412
                                                     ----------   ----------   ----------

OTHER LIABILITIES
Power purchase contract. . . . . . . . . . . . . . .    125,729      140,655      125,729
Deferred income taxes. . . . . . . . . . . . . . . .    732,692      673,337      725,665
Investment tax credit. . . . . . . . . . . . . . . .     96,819      102,648      100,871
Other. . . . . . . . . . . . . . . . . . . . . . . .    211,246      209,790      224,775
                                                     ----------   ----------   ----------
  Total. . . . . . . . . . . . . . . . . . . . . . .  1,166,486    1,126,430    1,177,040
                                                     ----------   ----------   ----------

TOTAL CAPITALIZATION AND LIABILITIES . . . . . . . . $4,445,607   $4,356,320   $4,415,774
                                                     ----------   ----------   ----------
                                                     ----------   ----------   ----------

</TABLE>

The accompanying notes are an integral part of these statements.

                                      -4-
<PAGE>
<TABLE>
<CAPTION>


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

                                                                Three Months Ended     Nine Months Ended
                                                                   September 30          September 30
                                                                ------------------     -----------------
                                                                  1995      1994        1995      1994
                                                               ---------  --------  ---------  ---------
<S>                                                               <C>        <C>       <C>        <C>
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $  37,457  $ 37,889  $ 102,224  $ 108,742
Adjustments to reconcile net income to net cash provided:
  Depreciation, depletion and amortization . . . . . . . . . .    46,961    45,088    138,025    133,747
  Amortization of Cooper Nuclear Station capital
    improvement advances . . . . . . . . . . . . . . . . . . .     2,494     2,755      7,481      8,265
  Amortization of Quad-Cities Nuclear Power Station fuel . . .     2,046     1,796      5,700      5,447
  Net increase (decrease) in deferred income taxes and
  investment tax credit. . . . . . . . . . . . . . . . . . . .    (8,061)      556     (7,446)     1,594
  Non-cash change in deferred assets . . . . . . . . . . . . .     7,171     1,744     14,761      5,218
  Loss (earnings) from equity method investments . . . . . . .      (284)    2,139         34     (1,270)
  Capitalized cost of real estate sold . . . . . . . . . . . .       334       543        969      2,478
  Loss (income) from discontinued operations . . . . . . . . .        --     4,236       (516)     5,598
  Loss (gain) on sale of assets and long-term investments. . .        94    (2,064)    (9,618)    (4,328)
  Provision for unrealized loss on property and long-term
    investments. . . . . . . . . . . . . . . . . . . . . . . .    14,497        --     14,848         --
  Cash flows resulting from changes in working capital,
    net of effects from discontinued operations . . . . . . . .   15,442   (17,738)    38,789     20,628

  Other . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (3,514)      503      1,553     12,186
                                                               ---------  --------  ---------  ---------
    Net cash provided . . . . . . . . . . . . . . . . . . . . .  114,637    77,447    306,804    298,305
                                                               ---------  --------  ---------  ---------

NET CASH FLOWS FROM INVESTING ACTIVITIES
Utility construction expenditures. . . . . . . . . . . . . . .   (52,211)  (49,399)  (132,000)  (130,879)
Cooper Nuclear Station capital improvement advances. . . . . .    (2,871)   (1,783)    (8,600)    (5,302)
Deferred energy efficiency expenditures. . . . . . . . . . . .    (7,699)   (6,054)   (18,561)   (17,152)
Quad-Cities Nuclear Power Station fuel expenditures  . . . . .        --    (1,735)       (15)    (8,027)
Quad-Cities Nuclear Power Station decommissioning trust fund .    (2,159)   (2,286)    (6,519)    (6,758)
Nonregulated capital expenditures. . . . . . . . . . . . . . .   (13,975)  (18,818)   (49,758)   (56,013)
Purchase of assets and long-term investments . . . . . . . . .   (44,993)  (35,168)  (100,337)  (100,148)
Proceeds from sale of assets and long-term investments . . . .    17,616    49,023     78,287    107,789
Other investing activities, net. . . . . . . . . . . . . . . .    (1,725)     (147)     9,311      3,774
                                                               ---------  --------  ---------  ---------
  Net cash used. . . . . . . . . . . . . . . . . . . . . . . .  (108,017)  (66,367)  (228,192)  (212,716)
                                                               ---------  --------  ---------  ---------
NET CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . .   (31,902)  (31,372)   (94,845)   (93,740)
Long-term debt proceeds, net of issuance cost. . . . . . . . .    27,608    51,129    199,362     86,087
Retirement of long-term debt, including reacquisition cost . .   (39,452)  (52,614)  (211,215)   (53,634)
Issuance of common shares. . . . . . . . . . . . . . . . . . .        --     7,836     15,087     20,498
Net increase (decrease) in notes payable . . . . . . . . . . .    33,400    11,660     11,200    (44,703)
                                                               ---------  --------  ---------  ---------
  Net cash provided. . . . . . . . . . . . . . . . . . . . . .   (10,346)  (13,361)   (80,411)   (85,492)
                                                               ---------  --------  ---------  ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . .    (3,726)   (2,281)    (1,799)        97
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . . . . .    35,705    26,667     33,778     24,289
                                                               ---------  --------  ---------  ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . . . . .  $ 31,979  $ 24,386   $ 31,979  $  24,386
                                                               ---------  --------  ---------  ---------
                                                               ---------  --------  ---------  ---------

ADDITIONAL CASH FLOW INFORMATION:
  Interest paid, net of amounts capitalized. . . . . . . . . .  $ 32,967  $ 36,019   $ 88,878  $  86,990
                                                               ---------  --------  ---------  ---------
                                                               ---------  --------  ---------  ---------
  Income taxes paid (benefits received). . . . . . . . . . . .  $ 23,299  $  9,376   $ 60,059  $  29,825
                                                               ---------  --------  ---------  ---------
                                                               ---------  --------  ---------  ---------

</TABLE>

The accompanying notes are an integral part of these statements.

                                      -5-


<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A)  GENERAL:

     The consolidated financial statements included herein have been
prepared by MidAmerican Energy Company (Company or MidAmerican), 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 the Company, all adjustments have been
made to present fairly the financial position, the results of operations
and the changes in cash flows for the periods presented.  Although the
Company 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 supplemental financial statements and the
notes thereto included in the Company's Form 8-K dated July 1, 1995.

     On July 1, 1995, Iowa-Illinois Gas and Electric Company
(Iowa-Illinois), Midwest Resources Inc. (Resources), and Midwest Power
Systems Inc. (Midwest Power) merged with and into the Company.  The merger
was accounted for as a pooling-of-interests and the financial statements
included herein are presented as if the companies were merged as of the
earliest period shown. MidAmerican is a utility company with two wholly
owned nonregulated subsidiaries:  InterCoast Energy Company (InterCoast)
and Midwest Capital Group, Inc. (Midwest Capital).

     Pursuant to the merger, each outstanding share of preferred and
preference stock of the predecessor companies was converted into one share
of a similarly designated series of MidAmerican preferred stock, no par
value.  Each outstanding share of common stock of Resources and
Iowa-Illinois was converted into one share and the right to receive 1.47
shares, respectively, of MidAmerican common stock, no par value.

     Iowa-Illinois' utility operating revenues and net income for the six
months prior to the merger  were $270.2 million and $27.1 million,
respectively.  Resources' operating revenues, as reclassified to reflect
only utility revenues as operating revenues consistent with MidAmerican's
presentation, and net income for the six months prior to the merger were
$487.0 million and $37.7 million, respectively.

B)  ENVIRONMENTAL MATTERS:

     The United States Environmental Protection Agency (EPA) and state
environmental agencies have determined that contaminated wastes remaining
at certain decommissioned manufactured gas plant (MGP) 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.

     The Company is evaluating 26 properties which were, at one time,
sites of gas manufacturing plants in which it may be a potentially
responsible party (PRP).  The purpose of these evaluations is to
determine whether waste materials are present, whether such materials
constitute an environmental or health risk, and whether the Company has any
responsibility for remedial action.  The Company is currently conducting
field investigations at

                                      -6-

<PAGE>

five sites and has completed investigations at three sites.  In addition,
the Company is currently removing contaminated soil at three sites, and has
completed removals at two sites.  The Company is continuing to evaluate
several sites to determine the future liability, if any, for conducting
site investigations or other site activity.

     The Company's present estimate of probable remediation costs for the
sites discussed above is $22 million.  This estimate has been recorded as a
liability and a regulatory asset for future recovery through the regulatory
process.  The Illinois Commerce Commission has approved the use of a rider
which permits recovery of the actual costs of litigation, investigation and
remediation relating to former MGP sites.  The Company's present rates in
Iowa provide for a fixed annual recovery of MGP costs.  The Company is
pursuing recovery of the remediation costs from other PRPs and its
insurance carriers.

     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 the Company 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 are accrued.  Once the investigation is completed
and if it is determined remedial action is required, the best estimate of
remediation costs is accrued.  If necessary, the estimate is revised when a
consent order is issued.

     The estimated recorded liabilities for these properties are based upon
data available at the time the estimate is made.  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.  In addition, insurance
recoveries for some or all of the costs may be possible, but the
liabilities recorded have not been reduced by any estimate of such
recoveries.

     Although the timing of incurred costs, recoveries and the inclusion of
provision for 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 the Company's financial position
or results of operations.

C)  DISCONTINUED OPERATIONS:

     All construction activities of the Company's construction subsidiaries
were reflected as discontinued operations by the Company at September 30,
1994.  A subsidiary that constructs generating facilities and essentially
all of the assets of a subsidiary that constructs electrical distribution
and transmission systems have been sold as of September 30, 1995.

     Midwest Capital has guaranteed performance on a joint venture turnkey
engineering, procurement and construction contract for a cogeneration
project. The Company has provided a support agreement to Midwest Capital
related to this project. In October 1995, the project received preliminary
acceptance from the owner, which, pursuant to the construction contract,
eliminates the potential for any liquidated damages being incurred. In
addition, Midwest Capital under the terms of certain sale agreements, has
indemnified the purchasers of the construction subsuidiaries for specified
losses or claims relating to construction projects which occurred prior to
the date of their sale. Management believes that the liklihood of a
material adverse impact to the Company under any of the damages provisions of
the sale agreements or the construction contracts, or a material cash payment
by the Company under the support agreement is remote.

                                      -7-


<PAGE>


     Net assets of the construction subsidiaries are separately presented
on the Consolidated Balance Sheets as Investment in Discontinued
Operations.  Proceeds received from the disposition of the construction
investments through September 30, 1995, were $4.1 million.  Revenues from
discontinued activities, as well as the results of operations and the
estimated income (loss) on the disposal of discontinued operations for the
three, nine and twelve months ended September 30 are as follows (in
thousands):

<TABLE>
<CAPTION>


                                  THREE MONTHS       NINE MONTHS       TWELVE MONTHS
                                  ------------       -----------       -------------
                                 ENDED SEPT. 30     ENDED SEPT. 30     ENDED SEPT. 30
                                 --------------     --------------     --------------
                                  1995      1994      1995     1994      1995      1994
                                 ------   --------   ------  --------   -------  --------
<S>                              <C>      <C>        <C>     <C>        <C>      <C>
OPERATING REVENUES               $   --   $ 16,678   $7,334  $ 44,909   $32,383  $ 70,127
                                 ------   --------   ------  --------   -------  --------
                                 ------   --------   ------  --------   -------  --------

INCOME (LOSS) FROM DISCONTINUED
  OPERATIONS
Income (Loss) from discontinued
  operations before income taxes $   --   $   (735)  $  880  $ (2,787)  $   879  $ (1,794)
Income tax benefit (expense)         --        264     (364)      954      (410)      768
                                 ------   --------   ------  --------   -------  --------
 Income (Loss) from discontinued     --       (471)     516    (1,833)      469    (1,026)
   operations                    ------   --------   ------  --------   -------  --------

LOSS ON DISPOSAL
Loss on disposal before income
    taxes                        $   --   $(11,576)  $   --  $(11,576)  $    --  $(11,576)
Income tax benefit                   --      7,811       --     7,811        --     7,811
                                 ------   --------   ------  --------   -------  --------
  Loss on disposal                   --     (3,765)      --    (3,765)       --    (3,765)
                                 ------   --------   ------  --------   -------  --------
  Total                          $   --   $ (4,236)  $  516  $ (5,598)  $  469    $(4,791)
                                 ------   --------   ------  --------   -------  --------
                                 ------   --------   ------  --------   -------  --------

</TABLE>

D)  RESTRUCTURING COSTS:

     The Company has recorded expenses of $30.5 million related to its
restructuring plan including $12.2 million of actual costs paid and an
accrual of $18.3, recorded during the third quarter of 1995, for the
estimated remaining costs.  Costs paid and the accrual for the remaining
costs related to the utility are included in Other Operating Expenses.  The
restructuring plan will result in the termination and relocation of
management, salaried, non-salaried staff and union employees.  The Company
has identified positions that will be eliminated as a result of the
restructuring plan and the liability recorded was based on a total of
approximately 700 employees receiving severance or early retirement
benefits.  The Company has notified non-union employees of the new
structure and the termination benefit arrangements and has reached
termination agreements with the unions.  As of October 1, 1995,
approximately 300 employees have terminated with severance or early
retirement benefits.   The Company anticipates completing the restructuring
plan during the fourth quarter of 1995.

                                      -8-

<PAGE>


E)  OTHER INCOME:

     Expenses of the subsidiaries include interest expense and income taxes
for the three, nine and twelve months ended September 30 as follows:

<TABLE>
<CAPTION>

                       THREE MONTHS         NINE MONTHS         TWELVE MONTHS
                       ------------         -----------         -------------
                      ENDED SEPT. 30       ENDED SEPT. 30       ENDED SEPT. 30
                      --------------       --------------       --------------
                      1995      1994       1995       1994      1995       1994
                    --------   -------   --------   -------   --------   --------
<S>                 <C>        <C>       <C>        <C>       <C>        <C>
Interest expense    $  7,252   $ 8,386   $ 23,120   $23,699   $ 31,061   $ 31,097
Income tax benefit  $(10,132)  $(2,709)  $(11,490)  $(3,374)  $(12,526)  $(17,799)

</TABLE>


     During the third quarter of 1995, the Company recognized,
other-than-temporary declines in the value of  certain nonregulated
investments of $14.4 million.  The declines are reflected in Other Income
of the subsidiaries on the Consolidated Statements of Income.  The
investments are primarily alternative energy projects.   The adjustments
reflect certain industry events that result in changed facts and
circumstances and the declining  financial condition of the investees
during the quarter.

     Miscellaneous as shown on the Consolidated Statements of Income
includes the following items for the three, nine and twelve months ended
September 30:

<TABLE>
<CAPTION>

                                THREE MONTHS         NINE MONTHS         TWELVE MONTHS
                                ------------         -----------         -------------
                               ENDED SEPT. 30       ENDED SEPT. 30       ENDED SEPT. 30
                               --------------       --------------       --------------
                               1995      1994      1995       1994      1995       1994
                              -------   -------  -------    -------   -------    -------
<S>                         <C>        <C>       <C>        <C>       <C>        <C>
Allowance for equity funds
  used during construction    $   481   $   257  $   481    $   288   $   193    $   288
Merger costs                   (3,766)   (2,251)  (4,497)    (2,251)   (6,525)    (2,251)
Other                            (995)     (800)    (199)      (546)    3,886      2,931
                              -------   -------  -------    -------   -------    -------
   Total                      $(4,280)  $(2,794) $(4,215)   $(2,509)  $(2,446)   $   968
                              -------   -------  -------    -------   -------    -------
                              -------   -------  -------    -------   -------    -------

</TABLE>

F)   STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 121:

     In March of 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 121 (FAS 121)  regarding
accounting for asset impairments.  This statement, which must be adopted by
the Company by January 1, 1996, requires the Company to review long-lived
assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.  FAS 121 also
requires rate-regulated companies to recognize an impairment for regulatory
assets that are not probable of future recovery.  Adoption of FAS 121 is not
expected to have a material impact on the Company's results of operations or
financial position.

                                      -9-

<PAGE>

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

   OVERVIEW

   MidAmerican Energy Company (the Company or MidAmerican) is a newly
created, regulated public utility company, incorporated in the State of
Iowa.  On July 1, 1995, Iowa-Illinois Gas and Electric Company
(Iowa-Illinois), Midwest Resources Inc. (Resources) and its utility
subsidiary, Midwest Power Systems Inc. (Midwest Power), merged with and
into the Company.  Pursuant to the merger, each outstanding share of
preferred and preference stock of the predecessor companies was converted
into one share of a similarly designated series of MidAmerican preferred
stock, no par value.  Each outstanding share of common stock of Resources
and Iowa-Illinois was converted into one share and the right to receive
1.47 shares, respectively, of MidAmerican common stock, no par value.

   The Company's utility operations (the Utility) consist of two principal
business units: an electric business unit headquartered in Davenport, Iowa,
and a natural gas business unit headquartered in Sioux City, Iowa.  The
Company's corporate headquarters, which includes various staff functions,
is in Des Moines, Iowa. InterCoast Energy Company (InterCoast) and Midwest
Capital Group, Inc. (Midwest Capital) are the nonregulated subsidiaries of
the Company and are headquartered in Des Moines.  InterCoast conducts
various nonregulated activities of the Company, while Midwest Capital
functions as a regional business development company in the utility service
territory.

   Utility retail customers of the Company will continue to be served under
the separate utility service tariffs of Midwest Power and Iowa-Illinois
until such time as merged tariffs are approved by regulators.

   Management anticipates the merger will permit the Company to derive
benefits from more efficient and economic utilization of the combined
facilities and resources of its predecessors. Savings are estimated to be
in excess of $500 million over the next 10 years.  As discussed below, the
Company has incurred, since the announcement of the merger in 1994,
significant costs related to the consummation of the merger and the
Company's plan for restructuring and reducing its work force.  As part of
the restructuring plan and in a continuing effort to eliminate duplicate
functions, the Company is closing 30 customer offices and 25 service
centers.  Through strategic placement of service centers and customer
offices and with technologies now available, the Company believes it will
continue to provide reliable, quality service to its customers.

   The merger is being accounted for as a pooling-of-interests, and the
Consolidated Financial Statements included in this Form 10-Q are presented
as if the merger was consummated as of the beginning of the earliest period
presented.  Portions of the following discussion provide information
related to material changes in the Company's financial condition and
results of operations between the periods presented, based on the combined
historical information of the predecessor companies.  It is not necessarily
indicative of what would have occurred had the merger actually been
consummated at the beginning of the earliest period.

                                     -10-

<PAGE>

RESULTS OF OPERATIONS

   The following table provides a summary of the earnings contribution of
the Company's operations for the three, nine and twelve months ended
periods.

                     ANALYSIS OF EARNINGS ON COMMON STOCK

<TABLE>
<CAPTION>

                                 THREE MONTHS      NINE MONTHS    TWELVE MONTHS
                                ENDED SEPT. 30,  ENDED SEPT. 30,  ENDED SEPT. 30,
                                ---------------  ---------------  ---------------
                                 1995    1994     1995    1994     1995    1994
                                 -----   -----    -----  ------   ------  ------
<S>                              <C>     <C>      <C>    <C>      <C>     <C>
Earnings in Millions of Dollars
   Utility operations            $44.4   $34.2    $98.3  $ 93.5   $115.4  $110.4
   Nonregulated operations        (8.6)    5.3     (2.8)   13.1     (0.7)   15.4
   Income (loss) from
      discontinued operations       --    (4.2)     0.5    (5.6)     0.5    (4.8)
                                 -----   -----    -----  ------   ------  ------
   Consolidated earnings         $35.8   $35.3    $96.0  $101.0   $115.2  $121.0
                                 -----   -----    -----  ------   ------  ------
                                 -----   -----    -----  ------   ------  ------

Earnings Per Common Share
   Utility operations            $0.44  $ 0.35   $ 0.98  $ 0.95   $ 1.15  $ 1.12
   Nonregulated operations       (0.08)   0.05    (0.03)   0.14       --    0.16
   Income (loss) from
     discontinued operations        --   (0.04)    0.01   (0.06)      --   (0.05)
                                 -----   -----    -----  ------   ------  ------
   Consolidated Earnings         $0.36  $ 0.36   $ 0.96  $ 1.03   $ 1.15  $ 1.23
                                 -----   -----    -----  ------   ------  ------
                                 -----   -----    -----  ------   ------  ------
</TABLE>


   As part of the process of merging the operations of MidAmerican's
predecessors, the Company developed a restructuring plan which includes
employee separation, relocation and incentive retirement programs.  The
Company expects to complete the restructuring process by the end of 1995.
The Company's earnings reflect the impact of costs related to the
restructuring plan. In addition, the Company incurred costs throughout the
merger process (transaction costs) to accomplish the requirements for
consummation of the merger.  As of September 30, 1995, the Company has
recorded the following merger-related expenses:

<TABLE>
<CAPTION>

                                 THREE MONTHS      NINE MONTHS    TWELVE MONTHS
                                ENDED SEPT. 30,  ENDED SEPT. 30,  ENDED SEPT. 30,
                                ---------------  ---------------  ---------------
                                 1995    1994     1995    1994     1995    1994
                                 -----   -----    -----  ------   ------  ------
<S>                              <C>     <C>      <C>    <C>      <C>     <C>
In Millions of Dollars,
   Except Per Share Amounts

   Restructuring costs           $24.5   $  --    $30.5  $   --    $30.5  $   --

   Merger transaction costs        3.8     2.4      4.5     2.4      6.6     2.4

   Earnings per share
    reduction                    $0.18   $0.02    $0.22   $0.02    $0.24   $0.02

</TABLE>


   Costs recorded in the third quarter of 1995 included the Company's estimate
of the remaining employee severance, relocation and retirement benefit costs
to be incurred as a result of the restructuring plan.  Restructuring costs
are primarily reflected in Other Operating Expenses

                                     -11-

<PAGE>

on the Consolidated Statements of Income, and merger transaction costs are
included in Other Income, Miscellaneous.  Refer to Note (D) for further
details of the restructuring plan and implementation progress.

   Earnings for each of the 1995 periods reflected on the Company's
Consolidated Statements of Income were also reduced by approximately $8.1
million, or eight cents per average share, for adjustments of certain
nonregulated investments.  The pre-tax amount of the adjustments, which is
included in Other Income of Subsidiaries on the Consolidated Statements of
Income, reflects other-than-temporary declines of $14.4 million in the
value of those nonregulated investments.  The investments are primarily
alternative energy projects. The adjustments reflect changed facts and
circumstances and the declining financial conditions of the investees
during the quarter.

   Hot weather in July and August 1995 resulted in a substantial increase in
sales of electricity for the quarter ended September 30, 1995, compared to
the third quarter of 1994.  The increase in sales was a major contributor to
increases in the electric gross margin for each of the 1995 periods compared
to the corresponding 1994 period.  The electric gross margin contributed
approximately 23 cents per share more to earnings in the quarter ended
September 30, 1995, compared to  the third quarter of 1994.

OPERATING REVENUES

   ELECTRIC:

   Electric operating revenues increased $49.5 million for the third
quarter of 1995 compared to the third quarter of 1994, and $62.2 million
and $68.1 million for the nine months and twelve months ended September 30,
1995, respectively, compared to the corresponding periods in 1994.  An 11%
increase in retail sales of electricity for the 1995 third quarter compared
to the 1994 third quarter was the main cause of the increase in electric
revenues for each of the 1995 periods.  The increase in sales was mostly
the result of warmer temperatures which, measured in cooling degree days,
were 56% warmer in the 1995 third quarter than in the comparable 1994
quarter.

   Various increases in electric service rates also contributed to the
increase in electric revenues.  In October 1994 and January 1995, the
Company implemented rate increases for Iowa energy efficiency cost recovery
filings which allow a total increase in electric revenues of $31.7 million
over a four-year period.  Effective August 8, 1995, the Company began
collection of $18.6 million over a four-year prospective period related to
another energy efficiency cost recovery filing.  A majority of the increase
in revenues from the energy efficiency filings does not affect net income
due to an increase in operating expenses as a result of the amortization of
related deferred costs.

   In connection with an Iowa electric rate filing, the Company began
collecting in January 1995 interim rates representing an increase of $13.6
million in annual electric revenues.  On July 10, 1995, the Iowa Utilities
Board (IUB) approved a final rate increase in the proceeding, representing
an increase of $20.3 million in annual electric revenues.  The final rates
were effective August 11, 1995.  The new rates include a component for the
recovery of other postretirement employee benefit (OPEB) costs on an
accrual basis instead of the pay-as-you-go basis previously used.
Approximately $8 million of the $20.3 million increase in annual

                                     -12-

<PAGE>

revenues relates to additional expensing of OPEB costs.  As a result, net
income was minimally affected by the increase in revenues from this
component.

   Revenues from sales for resale increased $7.6 million, $13.4 million and
$5.8 million for the three, nine and twelve months ended September 30, 1995,
compared to the respective 1994 periods due to a substantial increase in
sales during 1995.  In addition to greater opportunity for sales, increased
availability of nuclear generating facilities in 1995 increased the amount of
energy available for sales for resale.  The Company is a 25% owner in
Quad-Cities Nuclear Power Station (Quad-Cities Station), which is owned and
operated by Commonwealth Edison.  The Company also purchases 50% of the
energy of Cooper Nuclear Station (Cooper), which is owned and operated by
Nebraska Public Power District, through a power purchase agreement.  Coal
delivery uncertainties in 1994 also limited the Company's sales for resale
activity in the 1994 period.

   GAS:

   Gas operating revenues increased $7.3 million for the third quarter of
1995 compared to the third quarter of 1994.  An increase in rate levels and
in sales volumes had a positive impact on gas revenues. Cooler temperatures
in September 1995 contributed to the increase in sales. In addition, an
increase in the amount of purchased gas costs recovered through purchased gas
adjustment clauses (PGAs) increased revenues.  A higher cost of gas per unit
was also a cause of the increase in revenues collected through the PGAs.
Variations in revenues due to PGAs reflect corresponding changes in the cost
of gas per unit sold and, thus, do not affect gross margin or net income.

   Gas operating revenues for the nine months and twelve months ended
September 30, 1995, decreased $47.4 million and $79.7 million,
respectively, compared to the corresponding 1994 periods.  A reduction in
revenues collected through the PGAs throughout most of the periods, due to
a lower cost of gas per unit, was the primary cause of the decrease in
revenues.  As mentioned above, fluctuations in revenues from PGAs do not
affect gross margin or net income due to the corresponding changes in the
cost of gas.  Gas operating revenues were further reduced by a decrease in
sales due to warmer temperatures in the Company's service territory during
the first quarter of 1995.

   In January 1995, the Company implemented a gas service rate increase
resulting from an Iowa energy efficiency cost recovery filing which allows
an increase in gas revenues of $6.7 million over a four-year period.  In
October 1994, the Company began collecting interim rates for an Iowa gas
rate filing representing an increase of $8.2 million in annual gas
revenues.  The IUB allowed the Company a final rate increase of $10.6
million in annual gas revenues.  The final rates were effective August 1,
1995.  Approximately $2.5 million of the $10.6 million increase in annual
revenues relates to the recovery of OPEB costs on an accrual basis.
Increases in revenues due to OPEB and energy efficiency costs have a
minimal impact on net income due to corresponding increases in operating
expenses.

OPERATING EXPENSES

   Changes in the cost of electric fuel, energy and capacity (collectively,
Energy Costs) reflect fluctuations in generation levels and mix, fuel cost
and energy and capacity purchases. Energy Costs for the three, nine and
twelve months ended September 30, 1995, increased compared to the
comparable periods in 1994 due primarily to the increase in sales.  For the
three-month and nine-month periods, the increase in total Energy Costs as a
result of greater sales of electricity

                                     -13-

<PAGE>

was partially offset by a decrease in the average Energy Cost per unit.
Part of the decrease in the average Energy Cost per unit was due to the
availability of nuclear generation in 1995.

   Cost of gas sold increased for the quarter ended September 30, 1995,
compared to the 1994 third quarter due to an increase in sales and in the
average cost of gas per unit sold.  Cost of gas sold for the nine months
and twelve months ended September 30, 1995, decreased compared to the
corresponding 1994 periods due primarily to a decrease in the average cost
of gas per unit sold. The reduction in gas sales for those periods also
contributed to the decrease.

   Other operations and maintenance expenses increased for each of the 1995
periods presented compared to the 1994 periods due primarily to costs
related to the restructuring plan discussed in the opening section of
Results of Operations.  As discussed above, the 1995 periods also include
increases from deferred energy efficiency and OPEB costs.  Expenses for the
1994 nine-month and twelve-month periods were reduced by $3 million due to
capitalizing previously expensed energy efficiency costs to comply with the
IUB regulation of these costs.  The increases for the 1995 periods were
partially offset by reductions in nuclear operating and maintenance costs
totalling $1.7 million, $7.4 million and $6.0 million for the three, nine
and twelve months ended September 30, 1995, respectively.  The timing of
other power plant maintenance also reduced maintenance expenses for the
1995 periods.

   Property and other taxes increased for the nine months and twelve months
ended September 30, 1995, compared to the corresponding 1994 periods due
mostly to changes in property assessment values.

OTHER INCOME

   Revenues and expenses for the Company's subsidiaries decreased for the
three, nine and twelve months ended September 30, 1995, compared to the
corresponding periods in 1994 due primarily to a decrease in the volume and
margins on nonregulated sales of natural gas.  Revenues related to oil and
gas production decreased due to lower gas prices realized on a higher
volume of natural gas production.  Expenses were further reduced by the
income tax effect of the adjustments to nonregulated investments in the
third quarter of 1995.  Reduced interest expense also contributed to the
decrease in expenses of subsidiaries for the third quarter comparison.

   The adjustments to nonregulated investments discussed at the beginning
of Results of Operations were the primary cause of the decrease in other
income of subsidiaries for each of the 1995 periods.  A gain on the sale of
an investment in a leveraged lease in the first quarter 1994 and gains on
the disposition of other investments in 1994 also contributed to the
decrease in other income for the nine months and twelve months ended
September 30, 1995, compared to the corresponding 1994 periods. The 1995
nine-month and twelve-month periods include a gain on the sale of a
partnership interest in a gas marketing organization and a gain on the sale
of a telecommunications venture, in the second quarter of 1995.  These two
gains contributed $5.0 million to earnings in those periods.

UTILITY INTEREST CHARGES

   Increased interest on long-term debt in the 1995 periods compared to the
1994 periods was due primarily to the issuance of $60 million of 7.875%
Series of mortgage bonds in November 1994. The increase in other interest
expense for the nine months and twelve months ended

                                     -14-

<PAGE>

September 30, 1995, compared to the corresponding 1994 periods, was due
primarily to an interest payment to the Internal Revenue Service associated
with the resolution of tax audits for the years 1986 to 1988.

DISCONTINUED OPERATIONS

   In October 1994, the Company announced its intent to divest its
construction subsidiaries.  The sale of certain assets of one of the
subsidiaries was completed in December 1994, and the sale of the other
construction subsidiary was completed in March 1995. Settlement of a
construction receivable in the second quarter of 1995 resulted in $0.5
million of income in the nine months and twelve months ended 1995 periods.
The 1994 periods include the anticipated loss on disposal recorded by the
Company in the third quarter of 1994, as well as losses from operations of
those subsidiaries.

PREFERRED AND PREFERENCE DIVIDENDS

   The decrease in the preferred and preference dividend requirement in the
1995 periods compared to the corresponding periods in 1994 was due mostly
to the redemption of three series of outstanding preferred shares in
December 1994.

   LIQUIDITY AND CAPITAL RESOURCES

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

   For the first nine months of 1995, the Company had net cash provided
from operating activities of $307 million and net cash used of $228 million
and $80 million in investing and financing activities, respectively.

INVESTING ACTIVITIES

   Utility construction expenditures, including allowance for funds used
during construction (AFUDC), Quad-Cities Station nuclear fuel purchases and
Cooper capital improvements, were $141 million for the first nine months of
1995.  Management anticipates actual 1995 construction expenditures will be
less than the $213 million combined forecast of its predecessor companies.

   The Company's board of directors recently approved a 1996 utility
construction expenditures plan in the amount of $166 million including
AFUDC.  The 1996 plan includes $35 million for Cooper capital improvements
and Quad-Cities Station nuclear fuel purchases and construction
expenditures.  For the years 1996 through 2000, the Company forecasts $818
million for utility construction expenditures, $154 million of which is for
nuclear expenditures.

   The Company expects that all utility capital expenditures for 1996
through 2000 will be met with cash generated from utility operations, net
of dividends.

                                     -15-

<PAGE>

   Capital expenditures of nonregulated subsidiaries were $50 million for
the nine months ended September 30, 1995.  For 1996, capital expenditures
of nonregulated subsidiaries are forecasted to be approximately $100
million, primarily related to InterCoast.

   InterCoast invests in a variety of marketable securities which it holds
for indefinite periods of time.  For the nine months ended September 30,
1995, InterCoast had a net increase of $58 million in its investments in
marketable securities.  Realized gains and losses on investments in
marketable securities are reflected in the Gain (Loss) on Sale of Assets
and Long-term Investments line on the Consolidated Statement of Cash Flows.

FINANCING ACTIVITIES

   As of October 31, 1995, the Utility had bank lines of credit of $250
million to provide short-term financing for utility operations.  Commercial
paper borrowings of the Utility are backed by the lines of credit and,
correspondingly, commercial paper outstanding reduces the amount of
available lines of credit.  The Utility currently has authority from the
Federal Energy Regulatory Commission (FERC) to issue short-term debt in the
form of commercial paper and bank notes aggregating $400 million.  The
Utility also has lines of credit and revolving credit facilities which are
dedicated to provide liquidity for outstanding pollution control revenue
bonds that are periodically remarketed.

   The Utility has $237 million of long-term debt maturities and cash
sinking fund requirements for 1995 through 1999, of which $236 million is
after 1996.

   The Utility does not currently anticipate issuing additional long-term
debt in 1995 or 1996.  As of December 31, 1994, the Utility had the
capability to issue approximately $1 billion of bonds under the current
indentures of Midwest Power and Iowa-Illinois, should the need arise.

   During the first six months of 1995, Resources and Iowa-Illinois issued
original issue shares of common stock through certain of their employee
stock purchase and dividend reinvestment plans.  On a MidAmerican share
basis, 1,065,240 shares of common stock were issued.  The Company has a
registration statement on file with the Securities and Exchange Commission,
and has authority from the FERC and the Illinois Commerce Commission, to
issue up to 6,000,000 shares of MidAmerican common stock through its
Shareholder Options Plan (the Company's dividend reinvestment and stock
purchase plan). Since the effective date of the merger, the Company has
used open market purchases of its common stock rather than original issue
shares to meet share obligations under its Employee Stock Purchase Plan and
the Shareholder Options Plan.

   Subsequent to the consummation of the merger, the Company made a $55
million equity contribution to InterCoast.  The equity contribution was used
to extinguish all of Midwest Capital's Senior Notes and its variable interest
rate Notes Payable.  The remaining support agreement between the Utility and
Midwest Capital is expected to expire in October 1997 and relates to a
performance guarantee by Midwest Capital of a joint venture turnkey
engineering, procurement and construction contract for a cogeneration
project. In October 1995, the project received preliminary acceptance from
the owner, which pursuant to the construction contract, eliminates the
potential for any liquidated damages being incurred related to the project.

    InterCoast's aggregate amounts of maturities and cash sinking fund
requirements for long-term debt outstanding at September 30, 1995, are $9
million for 1995 and $245 million for

                                     -16-

<PAGE>


the years 1996 through 1999.  Amounts due in 1996 are expected to be repaid
or refinanced with debt instruments.  All of Midwest Capital's $26 million
of long-term debt outstanding at September 30, 1995, matures in 1996.

   During the third quarter of 1995, InterCoast entered into a $64 million
unsecured revolving credit facility agreement which matures in 1998.  The
facility was used primarily to refinance maturing Senior Notes.  InterCoast
also has a $110 million unsecured revolving credit facility agreement which
matures in 1999.  Borrowings under these agreements may be at a fixed rate,
floating rate or competitive bid rate basis.  All borrowings under these
agreements are without recourse to the Utility.  At September 30, 1995,
InterCoast had $110 million of debt outstanding under these two revolving
credit facility agreements.

   In addition, InterCoast has entered into two fixed rate to floating
interest rate swaps each in the amount of $32 million. One swap was entered
into in September 1995 and the second in October 1995.  The fixed rates are
6.00% and 5.97%, respectively, and are for two and three years,
respectively, in duration.

OPERATING ACTIVITIES

   The Utility is subject to oversight by several utility regulatory
agencies.  The operating environment and the recoverability of costs from
utility customers are significantly influenced by the regulation of those
agencies.  In the past several years, the utility industry has become
increasingly competitive.  The Company is continually evaluating strategies
that will enable  it to successfully operate in a more competitive
environment.  The merger-related cost reductions, a new transmission
tariff, and new marketing strategies, including the use of nonregulated
energy subsidiaries, are all part of the Company's efforts to continue to
enhance its competitive position.  Due to the evolving nature of the
utility industry, the extent and nature of the impact of competition on the
Company's operations and profitability cannot be determined.

   In 1992, the FERC issued Order No. 636, directing a restructuring by
interstate pipeline companies for their natural gas sales and
transportation services.  The Company's Consolidated Balance Sheet as of
September 30, 1995, includes a $45 million noncurrent liability and
regulatory asset recorded for transition costs incurred by interstate
natural gas pipelines for their compliance with Order 636.  These costs
will be paid to the pipeline companies over the next several years.  The
Company may incur other future billings for transition costs; however, the
Company does not expect these billings to have a material impact on the
cost of gas.  The Company is currently recovering costs related to Order
636 from its customers.

   Electric and gas utilities in Iowa are required to spend 2% and 1.5%,
respectively, of their annual Iowa jurisdictional revenues on energy
efficiency activities.  In October 1994 and in January 1995, the Company
began collecting over a four-year prospective period $19.7 million and
$18.7 million, respectively, related to prior energy efficiency cost
recovery filings.  A recent district court ruling was issued which affirmed
in all respects the IUB decisions allowing such recovery.  In another cost
recovery filing, the IUB issued an order on August 7, 1995, approving the
collection over a four-year prospective period of $18.6 million.
Collection related to this filing began August 8, 1995.  As of September
30, 1995, the Company had approximately $50 million of energy efficiency
costs deferred on its Consolidated Balance Sheet for which recovery will be
sought in future energy efficiency filings.

                                     -17-

<PAGE>

   Under a long-term power purchase contract with Nebraska Public Power
District (NPPD), the Company purchases one-half of the output of Cooper.
NPPD took Cooper out of service on May 25, 1994.  Pending satisfaction of
the concerns of the Nuclear Regulatory Commission (NRC), Cooper remained
out of service until February 1995 when it returned to service following
NRC approval to restart.  In May 1995, the Company filed a lawsuit seeking
unspecified damages from NPPD related to the 1994-95 Cooper outage.

   In June 1995, the NRC removed Cooper and the Quad-Cities Station from
its list of adversely trending plants.  The Quad-Cities Station and Cooper
had been on the NRC list of adversely trending plants since January 1994.

   The United States Environmental Protection Agency (EPA) and state
environmental agencies have determined that contaminated wastes remaining
at certain decommissioned manufactured gas plant (MGP) 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.

   The Company is evaluating 26 properties which were, at one time,
sites of gas manufacturing plants in which it may be a potentially
responsible party (PRP).  The purpose of these evaluations is to
determine whether waste materials are present, whether such materials
constitute an environmental or health risk, and whether the Company has any
responsibility for remedial action.  The Company is currently conducting
field investigations at five sites and has completed investigations at
three sites.  In addition, the Company is currently removing contaminated
soil at three sites, and has completed removals at two sites.  The Company
is continuing to evaluate several sites to determine the future liability,
if any, for conducting site investigations or other site activity.

   The Company's present estimate of probable remediation costs for the
sites discussed above is $22 million.  This estimate has been recorded as a
liability and a regulatory asset for future recovery through the regulatory
process.  The Illinois Commerce Commission has approved the use of a rider
which permits recovery of the actual costs of litigation, investigation and
remediation relating to former MGP sites.  The Company's present rates in
Iowa provide for a fixed annual recovery of MGP costs.  The Company is
pursuing recovery of the remediation costs from other PRPs and its
insurance carriers.

   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 the Company 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 are accrued.  Once the investigation is completed
and if it is determined remedial action is required, the best estimate of
remediation costs is accrued.  If necessary, the estimate is revised when a
consent order is issued.

   The estimated recorded liabilities for these properties are based upon
data available at the time the estimate is made.  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.  In addition, insurance
recoveries for some or all of the costs may be possible, but the
liabilities recorded have not been reduced by any estimate of such
recoveries.

                                     -18-


<PAGE>

   Although the timing of incurred costs, recoveries and the inclusion of
provision for 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 the Company's financial position
or results of operations.

ACCOUNTING STANDARDS AND ISSUES

   In March of 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard No. 121 (FAS 121)  regarding
accounting for asset impairments.  This statement, which must be adopted by
the Company in the first quarter of 1996, requires the Company to review
long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable.  FAS 121 also requires rate-regulated companies to recognize
an impairment for regulatory assets that are not probable of future recovery.
Adoption of FAS 121 is not expected to have a material impact on the Company's
results of operations or financial position.

   The staff of the Securities and Exchange Commission has questioned
certain of the current accounting practices of the electric utility
industry, including the Company, regarding the recognition, measurement and
classification of decommissioning costs for nuclear generating stations in
the financial statements of electric utilities.  In response to these
questions, the FASB has agreed to review the accounting for removal costs,
including decommissioning.  If current electric utility industry accounting
practices for such decommissioning are  changed:  (1) annual provisions for
decommissioning could increase, (2) the estimated cost for decommissioning
could be recorded as a liability rather than as accumulated depreciation,
and  (3)  trust fund income from the external decommissioning trusts could
be reported as investment income rather than a reduction to decommissioning
expense.  The Company believes that it is too early in the review to
determine what impact, if any, it would have on the Company's operation and
financial position.

                                     -19-



<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company and its subsidiaries have no material legal proceedings
except for the following:

ENVIRONMENTAL MATTERS

     For information relating to the Company's Environmental Matters,
reference is made to Part I, Note (B) of Notes to Consolidated Financial
Statements.

RATE MATTERS

     For information relating to the Company's general rate and energy
efficiency cost recovery filings, reference is made to Part I, Management's
Discussion and Analysis.

COOPER LITIGATION

     On May 26, 1995, the Company filed a lawsuit naming Nebraska Public
Power District (NPPD) as defendant.  The action is filed in the U.S.
District Court for the Southern District of Iowa and is identified as No.
4-95-CV-70356.  The legal proceeding is based upon a long-term power
purchase agreement between the Company and NPPD, pursuant to which the
Company purchases one-half the output of NPPD's Cooper Nuclear Station
(Cooper) and pays one-half the cost of operating Cooper.  NPPD, in turn, is
obligated to operate the plant in an efficient and economical manner and in
compliance with the terms of its operating license issued to it by the
Nuclear Regulatory Commission (NRC).  In 1993 and 1994, as a response to
NPPD actions, the NRC issued numerous notices of violations to NPPD; as a
result of these violations and other safety issues identified by the NRC
and NPPD, Cooper experienced unplanned outages and outages were unduly
extended. NPPD's failure to meet its obligations with respect to the
operation of Cooper deprived the Company of the benefits it was entitled to
under the power sales contract, causing the Company to lose profits and
incur increased costs of operation, which damages the Company seeks to
collect from NPPD.  Similar litigation has been filed against NPPD by the
Lincoln Electric System (LES), a municipal utility serving the City of
Lincoln, Nebraska, and purchasing one-eighth of the output of Cooper
pursuant to a similar power purchase contract.  The LES legal proceeding is
pending in Nebraska state court.

                                     -20-

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     Exhibits Filed Herewith

     Exhibit 27 - Financial Data Schedule

(b)  Reports on Form 8-K

     On July 3, 1995, the Company filed a report on Form 8-
     K, dated July 1, 1995, regarding the merger of Midwest
     Resources Inc., Midwest Power Systems Inc. and Iowa-
     Illinois Gas and Electric Company with and into the
     Company.  The following items were filed as Exhibits to
     the report:

          1. Consent of Deloitte & Touche LLP.
          2. News Release of MidAmerican Energy Company
             dated as of July 1, 1995.
          3. Unaudited Pro Forma Combined Statements of
             Income for the three months ended March 31, 1995
             and 1994 and the twelve months
             ended December 31, 1994, 1993 and 1992 and
             Balance Sheets as of March 31, 1995 and
             December 31, 1994 and 1993.
          4. Supplemental Consolidated Financial
             Statements for each of the three years in
             the period ended December 31, 1994 and as
             of December 31, 1994 and 1993.
          5. Supplemental Consolidated Quarterly
             Financial Statements for the three months
             ended March 31, 1995 and 1994 and as of
             March 31, 1995.

     On August 11, 1995, the Company filed a report on Form 8-K,
     dated August 11, 1995 regarding the results of the first 31
     days of operations by the Company.

                                     -21-

<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 Energy Company
                                       -------------------------------------
                                                      (Registrant)







Date    November 13, 1995                          L. E. Cooper
        -----------------              -------------------------------------

                                                   L. E. Cooper
                                                   Group Vice President
                                                   Finance and Accounting
                                                   (Chief Financial Officer)

                                     -22-