-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HrL/J6paQwPaO9Vg6skCF3jrzx66f+UItzIV1QSqC80+xBwRbRiTqwB3wNFGwHXu 6XrXzUTpYpJ+DF6cJUF7TQ== 0000928576-96-000016.txt : 19960814 0000928576-96-000016.hdr.sgml : 19960814 ACCESSION NUMBER: 0000928576-96-000016 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960813 SROS: BSE SROS: CSX SROS: NYSE SROS: PSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: IES INDUSTRIES INC CENTRAL INDEX KEY: 0000789943 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 421271452 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09187 FILM NUMBER: 96611022 BUSINESS ADDRESS: STREET 1: 200 FIRST ST SE CITY: CEDAR RAPIDS STATE: IA ZIP: 52401 BUSINESS PHONE: 3193984411 FORMER COMPANY: FORMER CONFORMED NAME: IE INDUSTRIES INC DATE OF NAME CHANGE: 19910707 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MIDAMERICAN ENERGY CO CENTRAL INDEX KEY: 0000928576 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 421425214 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: 666 GRAND AVE STREET 2: P O BOX 657 CITY: DES MOINES STATE: IA ZIP: 50306-9244 BUSINESS PHONE: 5152424300 MAIL ADDRESS: STREET 1: 666 GRAND AVENUE POST OFFICE BOX 9244 STREET 2: 666 GRAND AVENUE POST OFFICE BOX 9244 CITY: DES MOINES STATE: IA ZIP: 50306-9244 DFAN14A 1 SOLICTING MATERIALS PURSUANT TO RULE 14A-12 - -------------------------------------------------------------------------------- SCHEDULE 14A (Rule 14A-101) Information Required in Proxy Statement SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [ ] Filed by a Party other than the Registrant [X] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only [ ] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Additional Materials [X] Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12 IES INDUSTRIES INC. (Name of Registrant as Specified in Its Charter) MIDAMERICAN ENERGY COMPANY (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [X] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: - -------------------------------------------------------------------------------- -1- [The following is the slide presentation from an analyst presentation given by Stanley J. Bright, President and Chief Executive Officer of MidAmerican Energy Company in New York, New York on August 13, 1996.] [Slide #1] MIDAMERICAN ENERGY COMPANY PRESENTATION TO ANALYSTS AUGUST 1996 [Slide #2] Forward-Looking Statements From time to time during this presentation, we will make forward-looking statements. * These statements may include: - Cost reduction strategies and anticipated outcomes - Pricing strategies - Changes in utility industry - Planned capital expenditures - Financing needs and availability - Future plans and strategies - Anticipated events * These statements are subject to risks and uncertainties - Results could differ from those expressed in statements * Some of these risks and uncertainties include: - General economic conditions - Competition factors - Regulatory actions - Potential weather effects on sales and revenue - Others [Slide #3] MidAmerican Energy Company * Gas and electric utility with unregulated subsidiaries * Result of 1995 merger of IIGE and Midwest Resources * Largest utility in Iowa * Strategic intent is to be a regional energy and communications provider [Slide #4] Merger Experience 1990 Midwest Energy and Iowa Resources Midwest Resources - First Iowa utility merger, completed without FERC approval - Community presence model developed - Exceeded modest savings targets [Slide #5] Merger Experience (continued) 1995 Midwest Resources and IIGE MidAmerican Energy Company - Fastest modern utility merger to date - 11 months - First multi-state ICC merger approval - First market based pricing plan in Iowa or Illinois - Exceeded significant savings targets [Slide #6] MEC Strategic Development Mid 1994 Merge for size, low cost, financial strength Mid 1995 Achieve merger savings and utility operational success Enhance unregulated performance Late 1995 Enhance utility performance Restructure unregulated unit Develop market centered competitive company Mid 1996 Maximize utility cash flow and optimize earnings Align unregulated business to market strategy Assess mergers based on competitive advantage [Slide #7] Pre-Offer Communication August 1993 IES - IIGE discussion August 1995 Verbal contact October 1995 Written correspondence including request to make proposal November 1995 Wisconsin deal announced [Slide #8] Company Comparisons - 1995 MidAmerican IES Combined Headquarters Des Moines, IA Cedar Rapids, IA Des Moines, IA Assets $4.50 B $2.00 B $6.50 B Revenue $1.72 B $0.85 B $2.57 B Earnings $123 M $64 M $187 M Equity Market $1,612 M $997 M $2,609 M Value* MW Capacity 4,311 MW 2,080 MW 6,391 MW Customers Electric 631,000 332,000 963,000 Gas 595,000 173,000 768,000 *August 9, 1996 [Slide #9] MEC - IES Merger Transaction * Unique strategic and operational fit * Substantial opportunity for synergies * Financially compelling offer for shareholders * Ability to quickly consummate a combination * Creates powerful regional provider of energy and communications products and services * Everybody wins: shareholders, customers and employees [Slide #10] Strategic Elements of Combination * Natural Fit - System integration relatively seamless - Joint ownership of 1,078 megawatts of generation - No new regulatory jurisdictions - Similar production costs and rates - Contiguous and overlapping territory spans most of Iowa [Slide #11] Strategic Elements of Combination (continued) [GRAPHIC] Geographical map of State of Iowa depicting MidAmerican Energy Service Area, IES Industries Service Area and Service Area Overlaps. [MidAmerican Logo] [Slide #12] Strategic Elements of Combination (continued) * Synergy opportunities would benefit customers and shareholders alike - Preliminary savings estimate exceeds $500 million over 10 years - Lower rates for customers, with proposed regulatory plan - Higher potential returns to shareholders through retention of portion of synergies - Stronger regional competitive position [Slide #13] Strategic Elements of Combination (continued) * Merged entity would have resources to focus on core business - Redeployment of non-strategic, unregulated assets which do not meet performance criteria - Provides financial flexibility required in a competitive environment - Proceeds to be used for non-utility investment, debt repayment or stock buy-back [Slide #14] Strategic Elements of Combination (continued) * Combined company could more aggressively pursue strategy in a competitive environment - Natural linkage of telecommunication with electric products and services - Financial ability to develop and invest in products and services which complement the core business - Low cost production status reduces competitive risks [Slide #15] Strategic Elements of Combination (continued) * Creates low cost regional service provider based in Iowa - Committed to communities and economic development - Committed to successful partnership with other providers of related products and services [Slide #16] MidAmerican's Proposal * $39 per IES share * IES shareholders can elect cash or common stock - Cash component up to 40%, or approximately $467 Million - Common stock component tax-free - Exchange ratio for common stock component of 2.346 MidAmerican shares for each IES share * Purchase accounting - Allows flexibility in deal structure and pre-merger actions - Reduces common stock issuance [Slide #17] Financial Consideration * MidAmerican's proposal is compelling and demonstrably superior - 31% premium to market (before announcement) - 21% premium to Wisconsin transaction - 42% higher dividend than the Wisconsin Transaction which proposes a 5% decrease - Election to receive stock or cash - More than 25% increase in earnings per IES share equivalent for those holders receiving common stock [Slide #18] Regulatory Realities * Strong MEC track record of rapid merger approval * Easier application process - No Wisconsin or Minnesota approvals required - Merger climate good in Iowa - Avoid Registered Holding Company issue [Slide #19] MidAmerican Merger Time Line [CHART] Time line bar chart representing the time (in months) it took MidAmerican to obtain approval of shareholders, IUB, ICC, FERC, and NRC from date of announcement of the merger until date of completion (less than 12 months later). Detail of time required: Entity Months Shareholders 4-5 IUB 4-6 ICC 4-10 FERC 7-11 NRC 7-11 [Slide #20] MidAmerican Merger Time Line With the "Wisconsin" Time Line Time line bar chart representing the time (in months) it took MidAmerican to obtain approval of shareholders, IUB, ICC, FERC and NRC from date of announcement of the merger until date of completion for the MidAmerican merger as compared to the WPL, IES and Interstate merger. MidAmerican Time Line "Wisconsin" Time Line Shareholders 4-5 9-16 IUB 4-6 4-14 ICC 4-10 4-16 FERC 7-11 4-16+ NRC 7-11 4-16+ [Slide #21] Regulatory Realities (continued) * Fully integrated system - Contiguous and overlapping service territory - Jointly owned and operated coal-fired generation - Interconnections already in place [Slide #22] 345 kV Transmission System [GRAPHIC] Geographical map of Iowa and parts of neighboring States showing MidAmerican's 345 kV transmission system in comparison with IES', Interstate's and other transmission systems within Iowa and such States. [MidAmerican Logo] [Slide #23] Regulatory Realities (continued) * MidAmerican's pricing proposal could easily be applied to IES customers - Moves away from rate-based regulation and towards market based pricing - Provides opportunity for shareholders to benefit from synergies and effective cash flow management - Positive public reaction (political leaders, community leaders and co-ops) [Slide #24] Preliminary Cost Savings 1998 - 2007 Time Frame [PIE CHART*] * Virtually all operating cost savings * Based entirely on public information * MidAmerican projected approximately $30 million annual O&M savings in its 1994 merger announcement. Has actually achieved $50 million. * Estimated 10 year savings over $500 million: Energy supply and dispatch $57M Procurement $74M Avoided capital cost $29M Labor $278M Other $82M [MidAmerican Logo] [Slide #25] Earnings Impact * Objective of neutral impact in first year (1998) - Requires aggressive pursuit of cost savings - Incorporates unregulated asset redeployment * Confident break-even earnings impact can be achieved second year after merger (1999) * Target dividend payout ratio of approximately 80% in 2000 [Slide #26] Earnings / Issues * Earnings enhancement strategies - Exceed synergy goals - Cash generation from underperforming unregulated businesses - Cash generated from reduced utility construction and via pricing plan - Additional cash utilized to: * Invest in core business * Reduce debt * Buy back stock - Revenue enhancement via new and additional products and services [Slide #27] Pro Forma Cash Flow Impact ($ millions, except per share) IES cash flow (latest twelve months 3/31/96) $201.4 Interest expense on new debt (22.2) Acquired cash flow 179.2 MEC cash flow (latest 12 twelve months 3/31/96) 424.4 After-tax synergies to shareholders 14.8 Combined cash flow 618.4 Combined shares outstanding (million) 142 Pro forma cash flow per share $4.35 per share Notes: Assumes 40% of total consideration is cash. Assumes $50 million synergies are split 50/50 between ratepayers and shareholders. [Slide #28] McLeod Inc. * Iowa based full service regional telecommunications company * Management team from prior Telecom USA company. Sold to MCI in 1990 for $1.25 billion. * McLeod IPO @$20/share in May, 1996. Current price $26/share * Market capitalization of approximately $1.1 billion * Merged company will hold approximately 41% of total shares * Carrying value for MidAmerican is approximately $36M [Slide #29] Unrecognized Value Pro forma cash flow per share $4.35 Typical midwest utility multiple* 5-6 times $21.75-$26.10 Pro forma McLeod holdings $451 million Pro forma shares outstanding (million) 142 Pro forma McLeod holdings per share $3.18 Total implied value per share $24.93 - $29.28 *Examples: Illinova 5.1x Western Resources 5.0x NIPSCO 5.8x [Slide #30] Strategic Transition Combination is a logical step in MidAmerican's strategy for a competitive future * Evaluation and possible redeployment of non-strategic, unregulated assets - InterCoast Energy - Preferred stock portfolio - Other existing non-regulated investments - IES has significant investments that MidAmerican would evaluate closely (Whiting Petroleum, railroad operation, international and other investments) * Focus on core businesses and strengths, including communications [Slide #31] This is a unique strategic opportunity for MidAmerican. Our resolve is absolute. [Slide #32] QUESTIONS [The following is a newspaper advertisement by MidAmerican Energy Company] An Important Message For IES Industries Shareholders MidAmerican Energy's Merger Proposal Means More Value For You. On August 4, 1996, MidAmerican Energy Company proposed a merger to the IES Industries Board of Directors that would give you a substantial premium over the consideration you would receive in a merger with WPL Holdings, Inc. And Interstate Power Company (the "Wisconsin deal"). In addition, the MidAmerican merger proposal provides you with a significant dividend increase, as opposed to the dividend decrease you would receive in the Wisconsin deal. The MidAmerican proposal also provides IES shareholders with the opportunity to receive $39 per share in cash for up to 40% of all outstanding IES shares. The MidAmerican numbers speak for themselves: Better Value Higher Dividend IES Stock Price on 8/2/96 $29.75 Current IES Dividend: $2.10 Value of IES stock in the Proposed IES Dividend Wisconsin deal:* $32.19 the Wisconsin deal: $1.99 (no cash offered) Value of IES stock in Proposed IES Dividend MidAmerican's proposal:* $39.00 in MidAmerican's proposal: $2.82 (up to 40% in cash) Added value of Added dividend value of MidAmerican's proposal +21% MidAmerican's proposal +42% over the Wisconsin deal:* Over the Wisconsin deal:* *based on August 2, 1996 closing stock prices In addition, a merger if IES and MidAmerican would create a stronger Iowa-based company, better positioned to succeed in the competitive utility environment. The service territories of the two companies are contiguous and overlapping, offering opportunities for cost savings that would not be available in the Wisconsin deal. We will soon be mailing you MidAmerican's proxy materials containing further information about our proposed merger. We urge you not to return any green or white proxy card sent to you by IES regarding the Wisconsin deal. If you have already returned your proxy card to IES, you will have every chance to change your vote simply by signing, dating and returning MidAmerican's BLUE proxy card. The MidAmerican Proposal: Higher Price, Higher Dividend, Greater Value: Important For more information about the MidAmerican Energy merger proposal, please call this toll-free phone number 1-888-776-4692 SHARES OF IES INDUSTRIES INC. ("IES") COMMON STOCK HELD BY MIDAMERICAN ENERGY COMPANY ("MIDAMERICAN"), ITS DIRECTORS AND EXECUTIVE OFFICERS AND CERTAIN EMPLOYEES, OTHER REPRESENTATIVES OF MIDAMERICAN AND CERTAIN OTHER PERSONS WHO MAY SOLICIT PROXIES, AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND IES MidAmerican may solicit proxies against the IES/WPL Holdings, Inc./Interstate Power Company merger. The participants in this solicitation may include MidAmerican, the directors of MidAmerican (John W. Aalfs, Stanley J. Bright, Robert A. Burnett, Ross D. Christensen, Russell E. Christiansen, John W. Colloton, Frank S. Cottrell, Jack W. Eugster, Mel Foster, Jr., Nolden Gentry, James M. Hoak, Jr., Richard L. Lawson, Robert L. Peterson, Nancy L. Seifert, W. Scott Tinsman, Leonard L. Woodruff), and the following executive officers and employees of MidAmerican or its subsidiaries: Philip G. Lindner (Group VP and Chief Financial Officer), John A. Rasmussen (Group VP and General Counsel), Ronald W. Stepien (Group VP), Larry M. Smith (Controller), Paul J. Leighton (VP & Corporate Secretary), J. Sue Rozema (VP Investor Relations and Treasurer), Keith D. Hartje (Mgr. Corp. Communications), Alan L. Wells (Mgr. Corp. Dev. & Strategy), Jack L. Alexander (Manager Human Resources), Beverly A. Wharton (President Gas Division), Lynn K. Vorbrich (President Electric Division), David J. Levy (VP & Chief Information Officer), Charlene A. Osier (Mgr. Shareholder Services), Paul A. Bjork (Shareholder Admin.), Jackie A. Fulhart (Senior Shareholder Analyst), Marv E. Kingery (Shareholder Analyst), L. Jene Spurgin (IR Coordinator), Tom C. Foster (Finance & Investment Admin.), James C. Galt (Mgr. Financial Planning), Richard T. Tunning (Mgr. Corp. Acctg.), John P. Palmolea (Sr. Accountant), Merlyn F. Wiese (Senior Financial Analyst), James C. Parker (Senior Bulk Power Engineer), James J. Howard (VP Gas Admin. Services), Patrick A. Kirchner (Attorney), Maureen E. Sammon (Mgr. Benefits), David C. Caris (Manager Governmental Affairs), Garry W. Osborne (Strategic Planner), George L. Phillips (Mgr. Corp. Performance), Thomas C. Watt (Mgr. Waterloo District), Virginia A. Dasso (Mgr. Mississippi Valley), Greg B. Elden (Mgr. Siouxland District), Robert L. Lester (Mgr. Des Moines District), Lester A. Juon (Mgr. Sioux City District), John A. Harvey (Mgr. Distribution Operations Support), Annette J. Johnston (Mgr. Customer Support), Christian M. Swanson (Mgr. Cedar Valley District), Ron E. Unser (Mgr. Quad Cities District), Jeanette I. Lose (Mgr. Credit), Barb J. Anderson (Executive Assistant), William G. Stowe (Mgr. Electric Operations), David L. Graham (Mgr. Electric Energy Services), James E. Wilson (Mgr. Regulatory Affairs), Chuck H. Golliher (Mgr. Purchasing), Sally A. Robinson (Supv. Office Services), John F. McCarroll (Media and IR Coordinator), Kim K. Koster (Regional Communications Coordinator), Kelly I. Sankey (Customer Communications Coordinator), Tim D. Grabinski (Regional Communications Coordinator), Jodi E. Bacon (Manager HR Communications), Suzan M. Stewart (Mgr. Attorney Gas Law Dept.), Charles R. Montgomery (Sr. Attorney), Steven R. Weiss (Sr. Attorney), Terry R. Fox (Attorney), J. Christopher Cook (Attorney), Barb A. Pollastrini (Employee Communications Coordinator), Karen P. Johnson (Communications Specialist), Mary C. Nelson (Labor Relations Attorney), Janet H. Trentmann (Corporate HR Consultant), Tom Sweeney (Supv. Employment & Development), Gary Richardson (Mgr. Electric Operations), John J. Cappello (VP Marketing), Stephen E. Hollonbeck (Sr. VP Gas Operations), Stephen E. Shelton (Sr. VP Electric Distribution), James R. Bull (VP Generation), Mark W. Roberts (Mgr. Elec. Admin. Services), O. Dale Stevens (Mgr. Resource Planning), James Averweg (Mgr. Transmission), William D. Leech (Mgr. Generation), Brent E. Gale (VP Law & Reg. Affairs), Gregory C. Schaefer (Mgr. Elec. Rates & Regulation), Taylor S. Davis (Attorney), Karen M. Huizenga (Attorney), Robert P. Jared (Attorney), Randall B. Palmer (Attorney), Jean F. Stier (Shareholder Representative), L.T. Smith (Mgr. Loess Hills District), John H. Wetzel (Economic Development Consultant), Martha A. Matthews (MIS Analyst), David C. Weiss (Customer Coordinator), Jeffrey J. Gust (Sr. Bulk Power Engineer), Richard J. Singer (Mgr. Nuclear), James M. Howard (Customer Coordinator), Marcia L. Vest (Acct. Assist.), John T. Holmes (IT Training Coord.), Deb L. Calvert (Economic Development Consultant), Thomas H. Hutchins (Gas Engineer), Mark K. Etchen (Supervisor Customer Coordination), Mary J. Brown (HR Analyst), Brian E. Johnson (Mgr. State Gov't Relations), LeAnne 8-13-96(2) S. Turner (Customer Service), Robert M. Ockerman (Customer Coordinator), Connie L. Schwab (Customer Service), Juanita F. Mosher (Customer Coordinator Asst.), Robin B. Fortney (Sr. Environmental Coordinator), Deb J. Kraft (Secretary), Dian E. Nowell (Records Mgmt. Assist.), Joel D. Krusemark (Gas Technician), Mickey G. Sieren (Customer Service), Linda W. Ruble (Employee Communications Coordinator), John L. Mehalovich, Rodney L. Schroeder (Customer Coordinator), Dawn M. Martino (Customer Coordinator), Jane M. Bushbaum (HR Consultant), William G. Nowell (Mgr. Electric Operations), and Eric C. Heikes (Customer Coordinator). As of the date of this communication, MidAmerican had no security holdings in IES. Regina Rae Huggins, a person who will solicit proxies, is the beneficial owner of four (4) shares of common stock, no par value, of IES (the "IES" Common Stock"). John W. Colloton's wife is the beneficial owner of 250 shares of IES Common Stock with respect to which Mr. Colloton disclaims any beneficial ownership. Leonard L. Woodruff is the beneficial owner of 100 shares of IES Common Stock. Jackie A. Fulhart is the beneficial owner of 305 shares of IES Common Stock. Christian M. Swanson's wife is the beneficial owner of 12 shares of IES Common Stock. Other than as set forth herein, as of the date of this communication, neither MidAmerican nor any of its directors, executive officers or other representatives or employees of MidAmerican, or other persons known to MidAmerican who may solicit proxies, has any security holdings in IES except that MidAmerican has not yet been able to obtain any information with respect to the security holdings of IES, if any, of Steve R. Weiss, John J. Cappello, Stephen E. Hollonbeck, Gregory C. Schaefer, Taylor S. Davis, Karen M. Huizenga, Robert P. Jared, L.T. Smith, Deb L. Calvert, Thomas H. Hutchins, Brian E. Johnson, Robin B. Fortney, Mickey G. Sieren, Rodney L. Schroeder or Dawn M. Martino. MidAmerican disclaims beneficial ownership of any securities of IES held by any pension plan of MidAmerican or by any affiliate of MidAmerican. Although Dillon Read & Co. Inc. ("Dillon Read"), financial advisors to MidAmerican, do not admit that they or any of their directors, officers, employees or affiliates are a "participant," as defined in Schedule 14A promulgated under the Securities Exchange Act of 1934 by the Securities and Exchange Commission, or that such Schedule 14A requires the disclosure of certain information concerning Dillon Read, Ken Crews (Managing Director), James Hunt (Managing Director), Jeff Miller (Vice President), Jason Sweet (Managing Director), Forest Williams (Analyst), Jim Brandi (Managing Director), and Elliot Merrill (Analyst), in each case of Dillon Read, who may assist MidAmerican in such a solicitation. Dillon Read engages in a full range of investment banking, securities trading, market-making and brokerage services for institutional and individual clients. In the normal course of their business, Dillon Read may trade securities of IES for their own account and the account of their customers and, accordingly, may at any time hold a long or short position in such securities. As of the most recent practicable date prior to the date hereof as such information was available, Dillon Read did not hold any securities of IES. Except as disclosed above, to the knowledge of MidAmerican, none of MidAmerican, the directors or executive officers of MidAmerican or the employees or other representatives of MidAmerican named above has any interest, direct or indirect, by security holdings or otherwise, in IES. 8-13-96(2) -----END PRIVACY-ENHANCED MESSAGE-----