1081316--3/1/2007--MIDAMERICAN_ENERGY_HOLDINGS_CO

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{operation, natural, condition}

{cost, regulation, environmental}

{operation, international, foreign}

{cost, contract, operation}

{investment, property, distribution}

{gas, price, oil}

{regulation, change, law}

{capital, credit, financial}

{financial, litigation, operation}

{debt, indebtedness, cash}

{loan, real, estate}

{acquisition, growth, future}

{loss, insurance, financial}

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We are a holding company and depend on distributions from subsidiaries, including joint ventures, to meet our obligations. We are substantially leveraged, the terms of our senior and subordinated debt do not restrict the incurrence of additional indebtedness by us or our subsidiaries, and our senior and subordinated debt is structurally subordinated to the indebtedness of our subsidiaries, each of which could have an adverse impact on our financial results. A downgrade in our credit ratings or the credit ratings of our subsidiaries could negatively affect our or our subsidiaries access to capital, increase the cost of borrowing or raise energy transaction credit support requirements. Our majority shareholder, Berkshire Hathaway, could exercise control over us in a manner that would benefit Berkshire Hathaway to the detriment of our creditors. Much of our growth has been achieved through strategic acquisitions, and additional acquisitions may not be successful. Our regulated businesses are subject to extensive regulations that affect their operations and costs. These regulations are complex, dynamic and subject to change. Recovery of costs by our energy subsidiaries is subject to regulatory review and approval, and the inability to recover costs may adversely affect their financial results. Through energy subsidiaries, we are actively pursuing, developing and constructing new or expanded facilities, the completion and expected cost of which is subject to significant risk, and our electric utility subsidiaries have significant funding needs related to their planned capital expenditures. Our subsidiaries are subject to numerous environmental, health, safety and other laws, regulations and other requirements that may adversely affect our financial results. Our subsidiaries are exposed to credit risk of counterparties with whom they do business and failure of their significant customers to perform under or to renew their contracts could reduce our operating revenues materially. Inflation and changes in commodity prices and fuel transportation costs may adversely affect our financial results. A significant decrease in demand for natural gas in the markets served by our subsidiaries pipeline and gas distribution systems would significantly decrease our operating revenues and thereby adversely affect our business and financial results. Our public utility subsidiaries financial results may be adversely affected if they are unable to obtain adequate, reliable and affordable access to transmission service. Our subsidiaries are subject to market risk, counterparty performance risk and other risks associated with wholesale energy markets. Our operating results may fluctuate on a seasonal and quarterly basis. Our subsidiaries are subject to operating uncertainties that may adversely affect our financial results. Potential terrorist activities or military or other actions could adversely affect us. MidAmerican Energy is subject to the unique risks associated with nuclear generation. We own investments and projects located in foreign countries that are exposed to increased economic, regulatory and political risks. We are exposed to risks related to fluctuations in currency rates. Cyclical fluctuations in the residential real estate brokerage and mortgage businesses could adversely affect HomeServices. We and our subsidiaries are involved in numerous legal proceedings, the outcomes of which are uncertain and could negatively affect our financial results. Potential changes in accounting standards might cause us to revise our financial results and disclosure in the future, which may change the way analysts measure our business or financial performance.

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1081316--3/1/2007--MIDAMERICAN_ENERGY_HOLDINGS_CO_/NEW/