CE CASECNAN WATER & ENERGY CO INC
10-Q, 1996-11-06
ELECTRIC SERVICES
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               SECURITIES AND EXCHANGE COMMISSION
                                
                     WASHINGTON D.C.  20549
                     ______________________
                                
                            FORM 10-Q
                                
       Quarterly Report Pursuant to Section 13 or 15(d) of
               the Securities Exchange Act of 1934
                                
                 For the quarterly period ended
                                
                       SEPTEMBER 30, 1996
                                
                   COMMISSION FILE NO. 333-608
                                
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
     (Exact name of registrant as specified in its charter)

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

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

Registrant's telephone number, including area code (632) 892-0276

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

Former  name, former address and former fiscal year,  if  changed
since last report.  Not Applicable

767,162 shares of Common Stock, $0.038 par value were outstanding
as of September 30, 1996.


           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                            Form 10-Q
                                
                       September 30, 1996
                          _____________
                                
                         C O N T E N T S
                                
                 PART I:  FINANCIAL INFORMATION             Page

Item 1.   Financial Statements

Report of Independent Accountants                           3

Unaudited Balance Sheet, September 30, 1996 and
  December 31, 1995                                         4

Unaudited Statements of Operations for the Three Months and
  Nine Months Ended September 30, 1996 and for the period
  from inception (September 21, 1994) to September 30,1996  5

Unaudited Statements of Cash Flows for the Nine Months Ended
  September 30, 1996 and 1995 and for the period from
  inception (September 21, 1994) to September 30, 1996      6

Notes to Financial Statements                               7

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations             8-10

  PART II:  OTHER INFORMATION

Item 1. Legal Proceedings                                   11
Item 2. Changes in Securities                               11
Item 3. Defaults on Senior Securities                       11
Item 4. Submission of Matters to a Vote of
        Security Holders                                    11
Item 5. Other Information                                   11
Item 6. Exhibits and Reports on Form 8-K                    11

Signatures                                                  12

Exhibit 27                                                  13


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Stockholders and the Board of Directors
CE Casecnan Water and Energy Company, Inc.

We  have  reviewed the accompanying balance sheet of CE  Casecnan
Water  and  Energy  Company, Inc. (a company in  the  development
stage)  as  of September 30, 1996, and the related statements  of
operations  for the three months and nine months ended  September
30,  1996  and the period from inception (September 21, 1994)  to
September  30,  1996, and cash flows for the  nine  months  ended
September  30,  1996  and  1995 and  the  period  from  inception
(September  21,  1994)  to  September  30,  1996.  The  financial
statements are the responsibility of the Company's management.

A review of interim financial information consists principally of
applying  analytical  procedures to  financial  data  and  making
inquiries  of  persons responsible for financial  and  accounting
matters.   It  is  substantially less  in  scope  than  an  audit
conducted   in  accordance  with  auditing  standards   generally
accepted in the United States of America, 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  financial  statements
referred  to  above for them to be in conformity with  accounting
principles generally accepted in the United States of America.

We  have  audited in accordance with auditing standards generally
accepted in the United States of America, the balance sheet of CE
Casecnan  Water  and  Energy Company,  Inc.  (a  company  in  the
development  stage)  as  of December 31, 1995,  and  the  related
statements  of operations for the year ended December  31,  1995,
changes  in  stockholders' equity for the  period  from  date  of
inception  (September 21, 1994) to December  31,  1995  and  cash
flows  for  the year ended December 31, 1995, three months  ended
December  31,  1994 and for the period from inception  (September
21,  1994) to December 31, 1995 (not presented separately herein)
and,  in  our  report  dated  March  4,  1996,  we  expressed  an
unqualified opinion on those financial statements.


                              SYCIP, GORRES, VELAYO & CO.
                              An Arthur Andersen Member Firm

6760 Ayala Avenue
Makati City, Philippines
October 21, 1996

           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                     UNAUDITED BALANCE SHEET
                       September 30, 1996
           (with comparative audited figures for 1995)
       (in thousands, except share and per share amounts)
                ________________________________
<TABLE>
<CAPTION>
                                
                                     September 30,  December 31,
                                         1996          1995
<S>                                     <C>            <C>
ASSETS
Cash                                    $  1,643       $  1,696
Restricted cash and short-term
  investments                            135,330        235,851
Accrued interest and other receivables     5,755          2,820
Restricted investments                   298,962        238,465
Bond issue costs, net                     12,804         13,342
Development costs                         44,909          8,340
Deferred income tax                        5,179            646

 Total assets                           $504,582       $501,160

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Accounts payable and accrued expenses  $  18,314      $   5,951
Advances from an affiliate                   549          1,073
Notes and bonds payable                  371,500        371,500

 Total liabilities                       390,363        378,524

Commitments and contingencies

Stockholders' equity:
Common stock - par value $0.038
 per share, authorized 2,148,000
 shares, issued and outstanding
 767,162 shares at September 30, 1996
 and December 31, 1995, respectively          29             29
Additional paid in capital               123,807        123,807
Accumulated deficit                      (9,617)        (1,200)

 Total stockholders' equity              114,219        122,636

 Total liabilities and stockholders'
   equity                               $504,582       $501,160

</TABLE>

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

           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
               UNAUDITED STATEMENTS OF OPERATIONS
       (in thousands, except share and per share amounts)
                ________________________________

<TABLE>
<CAPTION>
                           Three Months   Nine Months      From Inception
                               Ended         Ended      (September 21, 1994)
                           September 30,  September 30,    to September 30,
                                1996          1996               1996
<S>                        <C>             <C>              <C>
Revenues:
Interest and other income  $     6,438     $  19,706        $  22,200

Total revenues                   6,438        19,706           22,200

Costs and expenses:

Interest expense                11,439       34,307         38,657
Less interest capitalized       (1,164)      (2,362)        (2,447)
Amortization of bond issue
  costs                            238          710            786

Total cost and expenses         10,513       32,655         36,996

Loss before income taxes        (4,075)     (12,949)       (14,796)

Deferred income tax benefit      1,426        4,532          5,179

Net loss to common
  stockholders               $  (2,649)   $  (8,417)     $  (9,617)

Net loss per share - primary $   (3.45)   $  (10.97)     $  (14.97)

Average number of common and
  common equivalent shares
  outstanding                   767,162      767,162       642,498

</TABLE>

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

             CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                  
                 UNAUDITED STATEMENTS OF CASH FLOWS
                           (in thousands)
                  ________________________________

<TABLE>
<CAPTION>
                                  
                                        Nine Months     Nine Months       From Inception
                                           Ended           Ended        (September 21, 1994)
                                        September 30,   September 30,    to September 30,
                                           1996             1995                 1996
<S>                                      <C>           <C>            <C>
Cash flows from operating activities:
Net loss                                 $ (8,417)     $        -     $ (9,617)
Adjustments to reconcile net cash
 flow from operating activities:
  Provision  for  deferred income
    tax benefit                            (4,532)              -       (5,179)
 Amortization of bond issue costs             710               -          786
 Increase in accrued interest and
   other receivables                       (2,935)              -       (5,755)
 Increase in accounts payable and
   accrued expenses                        11,450               -       15,715
Net cash flows from operating activities   (3,724)              -       (4,050)

Cash flows from investing activities:
Additions to development costs            (36,569)          (2,480)    (44,909)
Decrease (increase) in restricted
 cash and short-term investments100,521         -         (135,330)
Increase in restricted investments        (60,497)               -    (298,962)
Increase in accounts payable and accrued
  expenses related to development
  activities                                1,193                -       2,599

Net cash flows from investing activities    4,648           (2,480)   (476,602)

Cash flows from financing activities:
Issuance of bonds payable                       -                -     371,500
Proceeds from issuance of capital stock         -                -          29
Additional paid-in capital                      -                -     123,807
Bond issue costs                             (173)               -     (13,590)
Accrued expense related to financing
  activities                                 (279)              25           -
Advances from (to) an affiliate              (525)           1,955         549

Net cash flows from financing activities     (977)           1,980     482,295

Net increase (decrease) in cash and
 cash equivalents                             (53)            (500)      1,643

Cash and cash equivalents at beginning
 of period                                  1,696              550           -

Cash and cash equivalents at end
  of period                          $      1,643      $        50  $    1,643

</TABLE>
   The accompanying notes are an integral part of these financial statements.


           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
                  NOTES TO FINANCIAL STATEMENTS
            (in thousands, except per share amounts)
                ________________________________
                                
                                
1.   General:

In  the  opinion  of  management  of CE  Casecnan  Water  and  Energy
Company,   Inc.   (the   "Company"),   the   accompanying   unaudited
financial  statements  contain all adjustments  (consisting  only  of
normal   recurring   accruals)  necessary  to  present   fairly   the
financial  position  as  of September 30, 1996  and  the  results  of
operations  for  the  three months and nine  months  ended  September
30,  1996,  and  the period from inception (September  21,  1994)  to
September  30,  1996,  and  cash flows  for  the  nine  months  ended
September   30,   1996  and  1995  and  the  period  from   inception
(September 21, 1994) to September 30, 1996.

The  results  of  operations for the three  months  and  nine  months
ended  September  30,  1996  are not necessarily  indicative  of  the
results  to  be  expected for the full year.   The  Company  did  not
have any revenues or expenses until the fourth quarter of 1995.

2.   Other Footnote Information:

Reference  is  made  to  the  Company's  December  31,  1995  audited
financial  statements included in Amendment No. 3  to  the  Form  S-4
dated   April  30,  1996  that  included  information  necessary   or
useful   to   the  understanding  of  the  Company's   business   and
financial  statement  presentations.  In  particular,  the  Company's
significant  accounting  policies and  practices  were  presented  as
Note 3 to the financial statements included in that report.

           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
            (in thousands, except per share amounts)
                ________________________________


Results of Operations:

The  Company  is  in the construction stage and has not  yet  started
commercial  operations  as of September 30, 1996.   The  quarter  and
year  to  date  revenue  ended  September  30,  1996  of  $6,438  and
$19,706  consists  of interest income from cash  received  from  bond
proceeds  and  equity contributions.  The quarter and  year  to  date
interest  expense  ended September 30, 1996 of  $11,439  and  $34,307
less  amounts  capitalized of $1,164 and $2,362 and  amortization  of
bond  issue  costs  of $238 and $710 are related  to  the  notes  and
bonds  payable  issued  by  the Company  in  the  fourth  quarter  of
1995.

Liquidity and Capital Resources:

The   Company   has  a  contract  with  the  Philippine   Government,
through   the   National   Irrigation  Administration    ("NIA")   (a
government-owned  and controlled corporation),  for  the  development
and   construction  of  a  hydroelectric  power  plant  and   related
facilities     under    a    build-own-operate-transfer     agreement
("Agreement"),  covering  a 20-year cooperation  period  with  "take-
or-pay"  obligations for water and electricity.  At the  end  of  the
20-year  cooperation  period,  the Casecnan  Multipurpose  Irrigation
and  Power  Project  (the  "Project")  will  be  transferred  to  the
Philippine  Government  at no cost.  The Philippine  Government  also
signed  a  performance undertaking which, among others,  affirms  and
guarantees    the   obligations   of   NIA   under   the   Agreement.
Construction  of  the Project commenced in 1995 and  such  costs  are
included  in  the  development  costs  account.   The  total  project
cost  for  the  facility  is approximately $495,000.   The  draws  on
the  notes  and  bonds  payable excluding interest  expense  payments
were  $17,712  and  $34,012  for the three  months  and  nine  months
ended September 30, 1996, respectively.

The  Project  is  being  constructed by Hanbo Corporation  and  Hanbo
Engineering   &   Construction   Co.,   Ltd.   (formerly   You    One
Engineering   &   Construction   Co.,   Ltd.)   (collectively,    the
"Contractor"),  both  of which are South Korean  corporations,  on  a
joint  and  several  basis, pursuant to a fixed price  (approximately
$236,000),   date-certain,   turnkey   construction   contract   (the
"Turnkey   Construction  Contract").   The  Contractor's  obligations
under  the  Turnkey  Construction Contract are  guaranteed  by  Hanbo
Steel  Company,  Ltd.   In  addition,  the  Contractor's  obligations
under  the  Turnkey Construction Contract are collateralized  by  the
unconditional,  irrevocable  standby  letter  of  credit  issued   by
Korea  First  Bank  in  the  amount of approximately  $118,000.   The
Company  entered  into  an  agreement for engineering  services  with
Knight  Piesold.  Ltd.  for a fee based on  the  provisions  of  that
agreement.

The  Company's  ability to make payments on any of its  existing  and
future  obligations  is dependent on NIA's and the  Republic  of  the
Philippines'  performance of their obligations  under  the  Agreement
and  the  performance  undertaking, respectively.   No  shareholders,
partners or
                                
           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
            (in thousands, except per share amounts)
                ________________________________


Liquidity and Capital Resources: (continued)

affiliates  of  the Company, including CalEnergy and Kiewit,  and  no
directors,  officers or employees of the Company  will  guarantee  or
be  in  any  way  liable  for  payment of the  Company's  obligations
except  to  the extent that the Company's stockholders  have  pledged
their  capital  stock in the Company as security for  the  notes  and
bonds   issued  by  the  Company.   As  a  result,  payment  of   the
Company's  obligations  depends upon the availability  of  sufficient
revenues   from   the  Company's  business  after  the   payment   of
operating expenses.

NIA's  payments  of obligations under the Agreement are  expected  to
be  the  Company's  sole source of operating  revenues.   Because  of
the  Company's  dependence on NIA, any material  failure  of  NIA  to
fulfill   its  obligations  under  the  Agreement  and  any  material
failure   of   the  Republic  of  the  Philippines  to  fulfill   its
obligations  under  the performance undertaking  would  significantly
impair  the  ability of the Company to meet its existing  and  future
obligations.   Payments under the Agreement will  be  denominated  in
U.S.  Dollars  except  for  any VAT or other  gross-up  taxes,  which
are paid in Philippine Pesos.

On  November  27, 1995, the Company issued $371,500  worth  of  notes
and  bonds  to  finance  the  construction  of  the  Project.   These
consist  of  $75,000 Senior Secured Floating Rate  Notes  (FRNs)  due
2002,  $125,000  Senior  Secured Series  A  Notes  (Series  A  Notes)
with  interest  at  11.45%  due  2005  and  $171,500  Senior  Secured
Series  B  Bonds (Series B Bonds) with interest at 11.95%  due  2010.
For   the   nine  months  ended  September  30,  1996,   these   debt
securities  had  effective  interest  rates  of  9.85%,  12.95%   and
13.42%  for  FRNs,  Series A Notes and Series B Bonds,  respectively,
inclusive   of   the   effect  of  bond  issue   cost   amortization.
Quarterly  interest  payments  for the  FRNs  commenced  on  February
15,  1996,  and semiannual interest payments for Series A  Notes  and
Series   B   Bonds   commenced   on   May   15,   1996.    Semiannual
installments  for principal payments will commence  on  November  15,
2000,  May  15,  2003 and May 15, 2002 for the FRNs, Series  A  Notes
and Series B Bonds, respectively.

The  securities  are senior debt of the Company and  are  secured  by
a   collateral   assignment  of  all  revenues  received   from   the
Project,  a  collateral  assignment  of  all  material  contracts,  a
lien  on  any  accounts  and funds on deposit  under  a  Deposit  and
Disbursement  Agreement, a pledge of 100% of  the  capital  stock  of
the  Company  and a lien on all other material assets  and  property.
The  securities  rank pari passu with and will share  the  collateral
on a pro rata basis with other senior secured debt, if any.


           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
            (in thousands, except per share amounts)
                ________________________________


Liquidity and Capital Resources (continued):

The   securities  are  subject  to  certain  optional  and  mandatory
redemption schemes as provided for in the offering circular.

The  debt  covenants contain certain restrictions  as  to  incurrence
of   additional  indebtedness;  merger,  consolidation,  dissolution,
or   any   significant  change  in  corporate  structure;   non-arm's
length   transactions   or  agreements  with   affiliates;   material
change  in  the  Turnkey Construction Contract; and sale,  lease,  or
transfer of properties material to the Project, among others.

The  financial  statements of the Company  were  prepared  in  United
States   Dollar  amounts.   Gains  or  losses  from  translation   of
monetary  assets  and  liabilities  in  foreign  currencies  are  not
material.

           CE CASECNAN WATER AND ENERGY COMPANY, INC.
                                

PART II - OTHER INFORMATION


Item 1 -  Legal proceedings.

       Not applicable.

Item 2 -  Changes in Securities.

     Not applicable.

Item 3 -  Defaults on Senior Securities.

     Not applicable.

Item 4 -  Submission of Matters to a Vote of Security Holders.

     Not applicable.

Item 5 -  Other Information.

     Not applicable.

Item 6 -  Exhibits and Reports on Form 8-K.

     Not applicable.
                           SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.



                      CE CASECNAN WATER AND ENERGY COMPANY, INC.


Date:  November 6, 1996     /s/ Gregory E. Abel
                            Gregory E. Abel
                            Executive Vice President and
                            Chief Accounting Officer


                            /s/ John  G. Sylvia
                            John G. Sylvia
                            Senior Vice President and
                            Chief Financial Officer




<TABLE> <S> <C>

<ARTICLE> 5
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                         136,973
<SECURITIES>                                         0
<RECEIVABLES>                                    5,755
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                          44,909
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                                 504,582
<CURRENT-LIABILITIES>                                0
<BONDS>                                        371,500
                                0
                                          0
<COMMON>                                            29
<OTHER-SE>                                     114,190
<TOTAL-LIABILITY-AND-EQUITY>                   504,582
<SALES>                                              0
<TOTAL-REVENUES>                                19,706
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              32,655
<INCOME-PRETAX>                               (12,949)
<INCOME-TAX>                                   (4,532)
<INCOME-CONTINUING>                            (8,417)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (8,417)
<EPS-PRIMARY>                                  (10.97)
<EPS-DILUTED>                                  (10.97)
        

</TABLE>



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