EXHIBIT 99.1




                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 11-K



(Mark One)
[x]      ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended      December 31, 1996
                         -------------------------------

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934 [NO FEE REQUIRED]
For the transition period from             to
                               -----------     -----------
Commission file number      1-12459
                       ------------------


             MIDAMERICAN ENERGY COMPANY EMPLOYEE STOCK PURCHASE PLAN
-------------------------------------------------------------------------------
(Full title of the plan)



                       MIDAMERICAN ENERGY HOLDINGS COMPANY
-------------------------------------------------------------------------------
          (Name of Issuer of the securities held pursuant to the plan)

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

<PAGE>



                           MIDAMERICAN ENERGY COMPANY
                          EMPLOYEE STOCK PURCHASE PLAN
                        STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>

                                     ASSETS
                                     ------


                                                           As of December 31
                                                        ------------------------
                                                           1996          1995
                                                        ----------    ----------
<S>                                                     <C>           <C>    
INVESTMENTS
  MidAmerican Energy Holdings Company 
     common stock held by nominee - 
     558,323 and 486,319 shares, respectively
          Cost at date of purchase                      $8,508,522    $7,189,938
          Unrealized appreciation in market value          354,859       955,908
                                                        ----------    ----------

          Market value                                   8,863,381     8,145,846

CONTRIBUTIONS RECEIVABLE                                     2,857         2,854
                                                        ----------    ----------

          Total                                         $8,866,238    $8,148,700
                                                        ==========    ==========


                       LIABILITIES AND OWNERSHIP INTEREST
                       ----------------------------------

OWNERSHIP INTEREST                                      $8,866,238    $8,148,700
                                                        ==========    ==========
</TABLE>


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


                                       -2-

<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                          EMPLOYEE STOCK PURCHASE PLAN
                   STATEMENTS OF CHANGES IN OWNERSHIP INTEREST

<TABLE>
<CAPTION>


                                              Year Ended   Period From Inception
                                              December 31,    (July 3, 1995) to
                                                  1996          December 31, 1995
                                             -------------  --------------------

<S>                                             <C>                   <C>      
BALANCE, beginning of period                    $8,148,700            $       -
                                                ----------            ---------

TRANSFER OF OWNERSHIP INTEREST
   FROM OTHER PLANS                                      -             6,302,994
                                                ----------            ----------

CONTRIBUTIONS
   Participants                                  2,129,815             1,192,809
   Company                                         375,850               210,495
                                                ----------            ------------
                                                 2,505,665             1,403,304
                                                ----------            ----------

PLAN INCOME
   Dividends on shares held by the Plan            612,650               275,721
   Realized gain on distributed shares             137,597                41,459
   Unrealized appreciation (depreciation)
     in market value of investments               (601,049)              955,908
                                                ----------            ----------
                                                   149,198             1,273,088
                                                ----------            ----------

DISTRIBUTIONS TO PLAN PARTICIPANTS
  Shares distributed                             1,324,675               554,965
  Dividends paid                                   612,650               275,721
                                                ----------            ----------
                                                 1,937,325               830,686
                                                ----------            ----------

BALANCE, end of period                          $8,866,238            $8,148,700
                                                ==========            ==========


</TABLE>

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


                                       -3-
<PAGE>

                           MIDAMERICAN ENERGY COMPANY
                          EMPLOYEE STOCK PURCHASE PLAN
                          NOTES TO FINANCIAL STATEMENTS

(1)  THE PLAN

     The following brief description of the MidAmerican  Energy Company Employee
Stock  Purchase  Plan (the Plan) is provided  for general  information  purposes
only.  Participants  should  refer  to  the  Plan  document  for  more  complete
information.

     (a) General and Plan Participants

     On July 1, 1995,  Iowa-Illinois  Gas and Electric Company  (Iowa-Illinois),
Midwest Resources Inc. (Resources) and its wholly owned subsidiary Midwest Power
Systems Inc. merged with and into MidAmerican Energy Company (MidAmerican).  The
Plan became effective on July 3, 1995, at which time the ownership  interest and
shares of the Resources and  Iowa-Illinois  employee  stock  purchase plans were
transferred  to the Plan. The Resources and  Iowa-Illinois  plans ceased at that
time.

     On April 24,  1996,  MidAmerican  shareholders  approved a proposal to form
MidAmerican  Energy  Holdings  Company  (Holdings  or the  Company) as a holding
company for MidAmerican and its subsidiaries.  Effective  December 1, 1996, each
share of MidAmerican common stock was exchanged for one share of Holdings common
stock.

     Under the Plan, eligible employees,  as defined by the Plan, of the Company
and its  subsidiaries  who are enrolled in the Plan may  purchase  shares of the
common stock of the Company  (Common  Stock) at 85% of their fair market  value.
Purchases  are made on the last business day of each monthly  investment  period
with fair market value being the average of the high and low prices per share of
Common Stock on the New York Stock Exchange - Composite Transactions on such day
or, if there is no sale of Common Stock on that day, then on the next  preceding
day on which there was a sale. The Company  contributes the remaining 15% of the
fair market value.

     The Plan will  terminate  when the maximum number of shares of Common Stock
to be sold  under  the Plan has been  purchased  or by  action  of the  board of
directors of the Company.  The maximum number of shares of Common Stock which is
currently  authorized to be purchased  pursuant to the Plan is 1,000,000 subject
to adjustment as the result of a stock dividend, split-up or combination. During
1996,  the Company  purchased  shares of Common Stock in the open market to meet
share  obligations  under the Plan. Such share purchases do not  proportionately
reduce the shares available for issuance.

     At  December  31, 1996 and 1995,  there were 2,020 and 2,022  participants,
respectively in the Plan.

     (b) Administration

     The Plan is administered by the Company at the Company's expense.

     (c) Contributions

     Participants' contributions to the Plan are made through payroll deductions
which are  credited  to a purchase  account  established  for each  participant.
Participants may authorize contributions up to the lesser of

                                       -4-

<PAGE>



15% of base pay, as defined in the Plan, or $21,250 annually.

     (d) Ownership Interest

     Shares  of  Common  Stock  purchased  for  all  participants  each  monthly
investment period are issued on the last day of that period to a nominee for the
benefit of the  participants.  A separate  account is  maintained to reflect the
Common  Stock  balance of each  participant.  The Company is the nominee for the
Plan.

     (e) Dividends

     Cash  dividends  on  shares of Common  Stock  earned on each  participant's
account are paid to the  participant  by the  Company  or, at the  participant's
election,  reinvested in Common  Stock.  Such Common Stock is held in, and under
the terms of, the Company's Shareholder Options Plan.

     (f) Vesting and Withdrawal of Shares

     Participants  have a vested right to all shares of Common Stock credited to
their accounts. Shares of Common Stock held in the Plan cannot be withdrawn from
the Plan until the shares  have been held under the Plan for at least six months
except that, in the event of a participant's  death or termination of employment
or  eligibility,  a  participant's  account  will be totally  distributed.  Upon
withdrawal  from the Plan, all whole shares in a  participant's  account will be
deposited in safekeeping under the Company's Shareholder Options Plan unless the
participant  requests that a certificate  be issued,  and a cash payment will be
made for fractional shares.

     (g) Legal and Income Tax Status

     The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974. The Company believes that the Plan qualifies under Section
423 of the Internal  Revenue Code (the Code) as an employee stock purchase plan.
An  employee's  federal  income  tax  status  with  respect to the Plan would be
determined  by such  section  of the Code.  The Plan is not  subject  to federal
income tax.

(2)  ACCOUNTING POLICIES

     (a) Basis of Accounting

     The  statements  are  presented  on the accrual  basis of  accounting,  and
accordingly,  contributions of participants and the Company are reflected in the
year in which the participants  earned the related wages. The Plan's  obligation
to  purchase  Common  Stock  with the  accrued  contributions  is  reflected  in
Ownership  Interest.  The  cost  of  Common  Stock  distributed  by the  Plan is
determined on an average cost basis.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
changes in ownership interest. Actual results could differ from those estimates.

     (b) Valuation of Investments

     Common Stock held under the Plan is reported at market value as  determined
by the  closing  price at  year-end  on the New York Stock  Exchange - Composite
Transaction  listing.  The market  value as of  December  31,  1996 and 1995 was
$15.875 and $16.75, respectively.

                                       -5-

<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To MidAmerican Energy Holdings Company:

     We have audited the accompanying  statements of financial  condition of the
MidAmerican  Energy Company Employee Stock Purchase Plan as of December 31, 1996
and 1995,  and the related  statements of changes in ownership  interest for the
twelve month period ended December 31, 1996 and from inception (July 3, 1995) to
December 31, 1995.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the  financial  position of the  MidAmerican  Energy
Company  Employee  Stock Purchase Plan as of December 31, 1996 and 1995, and the
changes in ownership  interest  for the twelve  month period ended  December 31,
1996, and from inception (July 3, 1995) to December 31, 1995, in conformity with
generally accepted accounting principles.




                                                    /s/ ARTHUR ANDERSEN LLP

Chicago, Illinois
March 21, 1996



                                       -6-

<PAGE>
 
                                   SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, MidAmerican
Energy  Holdings  Company has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.



                                                   MIDAMERICAN ENERGY COMPANY
                                                   EMPLOYEE STOCK PURCHASE PLAN



Date  March 28, 1997                               By /s/ P. G. Lindner
    ----------------                                  --------------------------
                                                      P. G. Lindner
                                                      Senior Vice President and
                                                        Chief Financial Officer

                                      -7-
<PAGE>


EXHIBITS INDEX

The following exhibit is filed herewith:

         23    Consent of Independent Public Accountants





                                       -8-


<PAGE>

                                                                    EXHIBIT 23


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



     As independent public  accountants,  we hereby consent to the incorporation
of our report  included  in this Form 11-K,  into  MidAmerican  Energy  Holdings
Company's previously filed Registration Statement, File No. 33-60849.





Chicago, Illinois                                       /s/ ARTHUR ANDERSEN LLP
March 28, 1997