CE CASECNAN WATER & ENERGY CO INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2005

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________to_______

Commission File No. 001-12995

CE CASECNAN WATER AND ENERGY COMPANY, INC.

(Exact name of registrant as specified in its charter)

Philippines		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

24^th Floor, 6750 Building, Ayala Avenue Makati, Metro Manila, Philippines		Not Applicable
(Address of principal executive offices)		(Zip Code)

	011 63 2 892-0276
	(Registrant’s telephone number, including area code)


	(Former name, former address and former fiscal year, if changed since last report)

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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

All of the shares of common equity of CE Casecnan Water and Energy Company, Inc. are privately held by a limited group of investors. As of April 29, 2005, the number of outstanding common stock was 767,162 shares, $0.038 par value.

TABLE OF CONTENTS

Item 1. Financial Statements.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

CE Casecnan Water and Energy Company, Inc.

We have reviewed the accompanying balance sheet of CE Casecnan Water and Energy Company, Inc. (the "Company") as of March 31, 2005, and the related statements of operations and cash flows for each of the three-month periods ended March 31, 2005 and 2004. These interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical review procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with standards of the Public Company Accounting Oversight Board (United States), the balance sheet as of December 31, 2004, and the related statements of operations, changes in stockholders’ equity and of cash flows for the year then ended (not presented herein), and in our report dated February 11, 2005, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 2004, is fairly stated in all material respects in relation to the balance sheet from which it has been derived.

/s/ Joaquin Cunanan & Co.

JOAQUIN CUNANAN & CO.

A PricewaterhouseCoopers Member Firm

Makati City, Philippines

CE CASECNAN WATER AND ENERGY COMPANY, INC.

BALANCE SHEETS

(Amounts in thousands of U.S. Dollars, except share data)

	As of
	March 31,		December 31,
	2005		2004
	(Unaudited)

ASSETS
Current assets:
Cash and cash equivalents	$	44,168	$	16,732
Restricted cash and investments		39,707		39,444
Trade receivable, net		19,075		25,242
Accrued interest and other receivables		930		1,986
Prepaid insurance and other current assets		4,731		4,831
Total current assets		108,611		88,235
Restricted cash and investments		16,158		16,063
Bond issue costs, net		2,445		2,678
Property, plant and equipment, net		359,750		365,132
Deferred income tax		5,371		5,371
Total assets	$	492,335	$	477,479

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	11,245	$	12,185
Dividends payable		15,900		15,900
Accrued interest		14,877		8,482
Other accrued expenses		295		295
Payable to affiliates		35,113		35,148
Current portion of long-term debt		54,753		54,753
Total current liabilities		132,183		126,763

Notes payable		51,263		51,263
Deferred revenue		7,767		6,120
Long-term debt, net of current portion		142,345		142,345
Total liabilities		333,558		326,491

Commitments and contingencies (Note 4)

Stockholders’ equity:
Capital stock - authorized 2,148,000 shares, one Philippine peso ($0.038) par
value; 767,162 shares issued and outstanding		29		29
Additional paid-in capital		123,807		123,807
Retained earnings		34,941		27,152
Total stockholders’ equity		158,777		150,988
Total liabilities and stockholders’ equity	$	492,335	$	477,479

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

CE CASECNAN WATER AND ENERGY COMPANY, INC.

STATEMENTS OF OPERATIONS

(Amounts in thousands of U.S. Dollars)

	Three Months
	Ended March 31,
	2005			2004
	(Unaudited)
Revenue:
Lease rentals and service contracts	$	21,149		$	19,915
Operating expenses:
Depreciation		5,434			5,713
Plant operations and other operating expenses		2,018			1,981
Total operating expenses		7,452			7,694

Operating income		13,697			12,221

Other income (expense):
Interest expense		(6,628	)		(7,560	)
Interest income		570			650
Other		150			(120	)
Total other expense, net		(5,908	)		(7,030	)

Net income	$	7,789		$	5,191

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

CE CASECNAN WATER AND ENERGY COMPANY, INC.

STATEMENTS OF CASH FLOWS

(Amounts in thousands of U.S. Dollars)

	Three Months
	Ended March 31,
	2005		2004
	(Unaudited)

Cash flows from operating activities:
Net income	$	7,789	$	5,191

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	14
Item 2.	Unregistered Sales of Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Submission of Matters to a Vote of Security Holders	14
Item 5.	Other Information	14
Item 6.	Exhibits	14
Signatures		15
Exhibit Index		16