
(12)	Subsidiary Debt

MEHC's direct and indirect subsidiaries are organized as legal entities separate and apart from MEHC and its other subsidiaries. Pursuant to separate financing agreements, substantially all of PacifiCorp's electric utility properties, the long-term customer contracts of Kern River, the equity interest of MidAmerican Funding's subsidiary and substantially all of the assets of Cordova Energy Company LLC are pledged or encumbered to support or otherwise provide the security for their related subsidiary debt. It should not be assumed that the assets of any subsidiary will be available to satisfy MEHC's obligations or the obligations of its other subsidiaries. However, unrestricted cash or other assets which are available for distribution may, subject to applicable law, regulatory commitments and the terms of financing and ring-fencing arrangements for such parties, be advanced, loaned, paid as dividends or otherwise distributed or contributed to MEHC or affiliates thereof. The long-term debt of subsidiaries may include provisions that allow MEHC's subsidiaries to redeem it in whole or in part at any time. These provisions generally include make-whole premiums.

Distributions at these separate legal entities are limited by various covenants including, among others, leverage ratios, interest coverage ratios and debt service coverage ratios. As of December 31, 2011, all subsidiaries were in compliance with their long-term debt covenants. However, Cordova Energy Company LLC is currently prohibited from making distributions by the terms of its indenture due to its failure to meet its debt service coverage ratio requirement.

Long-term debt of subsidiaries consists of the following, including fair value adjustments and unamortized premiums and discounts, as of December 31 (in millions):



	Par Value		2011		2010

PacifiCorp	$	6,314	$	6,300	$	6,500
MidAmerican Funding	3,465		3,401		3,350
MidAmerican Energy Pipeline Group	1,665		1,665		1,790
Northern Powergrid Holdings	2,027		2,128		1,962
MidAmerican Renewables	195		193		203
Total subsidiary debt	$	13,666	$	13,687	$	13,805

PacifiCorp

PacifiCorp's long-term debt consists of the following, including unamortized premiums and discounts, as of December 31 (dollars in millions):



	Par Value		2011		2010
First mortgage bonds:
5.0% to 8.8%, due through 2016	$	457	$	457	$	1,043
3.9% to 8.5%, due 2017 to 2021	1,271		1,268		869
6.7% to 8.3%, due 2022 to 2026	404		404		404
7.7% due 2031	300		299		299
5.3% to 6.1%, due 2034 to 2036	850		848		848
5.8% to 6.4%, due 2037 to 2039	2,150		2,142		2,142
Tax-exempt bond obligations:
Variable-rate series (2011-0.05% to 0.11%, 2010-0.28% to 0.41%):
Due 2013⁽¹⁾⁽²⁾	41		41		41
Due 2014 to 2025⁽²⁾	325		325		325
Due 2016 to 2024⁽¹⁾⁽²⁾	221		221		221
Variable-rate series, due 2014 to 2025⁽¹⁾⁽³⁾	68		68		68
5.6% to 5.7%, due 2021 to 2023⁽¹⁾	71		71		71
6.2%, due 2030	13		13		13
Capital lease obligations - 8.8% to 15.7%, due through 2036	143		143		156
Total PacifiCorp	$	6,314	$	6,300	$	6,500


(1)	Secured by pledged first mortgage bonds registered to and held by the tax-exempt bond trustee generally with the same interest rates, maturity dates and redemption provisions as the tax-exempt bond obligations.


(2)	Supported by $601 million of letters of credit issued under committed bank arrangements. These letters of credit were undrawn as of December 31, 2011 and expire periodically through November 2012.


(3)	Interest rates are currently fixed at 3.9% to 4.1% and are scheduled to reset in 2013.

The issuance of PacifiCorp's first mortgage bonds is limited by available property, earnings tests and other provisions of PacifiCorp's mortgage. Approximately $22 billion of PacifiCorp's eligible property (based on original cost) was subject to the lien of the mortgage as of December 31, 2011.

In January 2012, PacifiCorp issued $350 million of its 2.95% First Mortgage Bonds due February 1, 2022 and $300 million of its 4.10% First Mortgage Bonds due February 1, 2042. The net proceeds were used to repay short-term debt, fund capital expenditures and for general corporate purposes.

MidAmerican Funding

MidAmerican Funding's long-term debt consists of the following, including fair value adjustments and unamortized premiums and discounts, as of December 31 (dollars in millions):



	Par Value		2011		2010
MidAmerican Funding:
6.75% Senior Notes, due 2011	$	—	$	—	$	200
6.927% Senior Notes, due 2029	325		286		285
Total MidAmerican Funding	325		286		485

MidAmerican Energy:
Tax-exempt bond obligations -
Variable-rate series (2011-0.15%, 2010-0.43%), due 2016-2038	195		195		195
Notes:
5.65% Series, due 2012	—		—		400
5.125% Series, due 2013	275		275		275
4.65% Series, due 2014	350		350		350
5.95% Series, due 2017	250		250		250
5.3% Series, due 2018	350		349		349
6.75% Series, due 2031	400		396		396
5.75% Series, due 2035	300		300		300
5.8% Series, due 2036	350		349		349
Turbine purchase obligation, 1.46%, due 2013	669		650		—
Other	1		1		1
Total MidAmerican Energy	3,140		3,115		2,865

Total MidAmerican Funding	$	3,465	$	3,401	$	3,350

In conjunction with the construction of wind-powered generating facilities, MidAmerican Energy has accrued as construction work-in-progress amounts it is not contractually obligated to pay until December 2013. The amounts ultimately payable were discounted at 1.46% and recognized upon delivery of the equipment as long-term debt. The discount is being amortized as interest expense over the period until payment is due using the effective interest method. As of December 31, 2011, $650 million of such debt, net of associated discount, was outstanding.

In December 2011, MidAmerican Energy redeemed its 5.65% senior notes due July 2012 at a redemption price in accordance with the terms of the indenture.

MidAmerican Energy Pipeline Group

MidAmerican Energy Pipeline Group's long-term debt consists of the following, including unamortized premiums and discounts, as of December 31 (dollars in millions):



	Par Value		2011		2010
Northern Natural Gas:
7.0% Senior Notes, due 2011	$	—	$	—	$	250
5.375% Senior Notes, due 2012	300		300		300
5.125% Senior Notes, due 2015	100		100		100
5.75% Senior Notes, due 2018	200		200		200
4.25% Senior Notes, due 2021	200		200		—
5.8% Senior Bonds, due 2037	150		150		150
Total Northern Natural Gas	950		950		1,000

Kern River:
6.676% Senior Notes, due 2016	257		257		283
4.893% Senior Notes, due 2018	458		458		507
Total Kern River	715		715		790

Total MidAmerican Energy Pipeline Group	$	1,665	$	1,665	$	1,790

Kern River's long-term debt amortizes monthly. Kern River provides a debt service reserve letter of credit in amounts that approximate the next six months of principal and interest payments due on the loans, which were equal to $62 million and $64 million as of December 31, 2011 and 2010, respectively.

Northern Powergrid Holdings

Northern Powergrid Holdings and its subsidiaries' long-term debt consists of the following, including fair value adjustments and unamortized premiums and discounts, as of December 31 (dollars in millions):



	Par Value⁽¹⁾		2011		2010

8.875% Bonds, due 2020	$	155	$	181	$	184
9.25% Bonds, due 2020	311		355		361
3.901% to 4.586% European Investment Bank loans, due 2018 to 2022	418		418		236
7.25% Bonds, due 2022	311		334		337
7.25% Bonds, due 2028	288		301		303
5.125% Bonds, due 2035	311		307		308
5.125% Bonds, due 2035	233		232		233
Total Northern Powergrid Holdings	$	2,027	$	2,128	$	1,962


(1)	The par values for these debt instruments are denominated in sterling and have been converted to United States dollars at the applicable exchange rate.

MidAmerican Renewables

MidAmerican Renewables long-term debt consists of the following, including fair value adjustments, as of December 31 (dollars in millions):



	Par Value		2011		2010

Cordova Funding Corporation Bonds, 8.48% to 9.07%, due 2019⁽¹⁾	$	161	$	159	$	168
Other	34		34		35
Total MidAmerican Renewables	$	195	$	193	$	203


(1)	Amortizes semi-annually.

Annual Repayments of Long-Term Debt

The annual repayments of MEHC and subsidiary debt for the years beginning January 1, 2012 and thereafter, excluding fair value adjustments and unamortized premiums and discounts, are as follows (in millions):



											2017 and
	2012		2013		2014		2015		2016		Thereafter		Total

MEHC senior debt	$	742	$	—	$	250	$	—	$	—	$	4,375	$	5,367
MEHC subordinated debt	22		—		—		—		—		—		22
PacifiCorp	34		283		275		147		72		5,503		6,314
MidAmerican Funding	—		944		350		1		34		2,136		3,465
MidAmerican Energy Pipeline Group	388		80		81		185		190		741		1,665
Northern Powergrid Holdings	—		—		—		—		—		2,027		2,027
MidAmerican Renewables	12		14		16		15		19		119		195
Totals	$	1,198	$	1,321	$	972	$	348	$	315	$	14,901	$	19,055