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<SEC-DOCUMENT>0000950144-01-502498.txt : 20010516
<SEC-HEADER>0000950144-01-502498.hdr.sgml : 20010516
ACCESSION NUMBER:		0000950144-01-502498
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSOLIDATED WATER CO LTD
		CENTRAL INDEX KEY:			0000928340
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			E6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		
		SEC FILE NUMBER:	000-25248
		FILM NUMBER:		1639569

	BUSINESS ADDRESS:	
		STREET 1:		TRAFALGAR PL
		STREET 2:		WEST BAY RD
		CITY:			GRAND CAYMAN BWI CAY
		STATE:			E9
		BUSINESS PHONE:		8099474277

	MAIL ADDRESS:	
		STREET 1:		TRAFALGAR PLACE, WEST BAY ROAD, P.O. BOX
		STREET 2:		GRAND CAYMAN, CAYMAN ISLANDS, BWI

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CAYMAN WATER CO LTD
		DATE OF NAME CHANGE:	19941212
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>g69387e10-q.txt
<DESCRIPTION>CONSOLIDATED WATER CO. LTD.
<TEXT>

<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(MARK ONE)

       [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934

              For the quarterly period ended MARCH 31, 2001

                                       OR

       [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

            For the transaction period from __________ to __________

                         Commission File Number: 0-25248

                           CONSOLIDATED WATER CO. LTD.
     ----------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

            CAYMAN ISLANDS                                         N/A
- ----------------------------------------------              -------------------
(State or other jurisdiction of incorporation                (I.R.S. Employer
or organization)                                            Identification No.)

   TRAFALGAR PLACE, WEST BAY ROAD, P.O. BOX 1114GT,
                 GRAND CAYMAN, B.W.I.                               N/A
- ---------------------------------------------------         -------------------
       (Address of principal executive offices)                 (Zip Code)

Registrant's Telephone number, including area code:  (345) 945-4277

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 [ ]

As at May 11, 2001, there were 3,882,943 of the registrant's ordinary shares of
common stock, with CI$ 1.00 par value, outstanding.


<PAGE>   2


EXCHANGE RATES

Unless otherwise indicated, all dollar amounts are in United States Dollars and
references to "$", "U.S.", or "U.S. $" are to United States Dollars.

The official fixed exchange rate for conversion of CI$ into U.S. $, as
determined by the Cayman Islands Monetary Authority, has been fixed since April
1974 at U.S. $1.20 per CI$1.00.

The official fixed exchange rate for conversion of BZE$ into U.S. $, as
determined by the Central Bank of Belize, has been fixed since 1976 at U.S.$
0.50 per BZE$ 1.00.



<PAGE>   3





                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


SECTION     DESCRIPTION                                                                     PAGE
- -------     -----------                                                                     ----
<S>                                                                                            <C>
PART I      FINANCIAL INFORMATION

  Item 1.   Financial Statements

            Condensed Consolidated Balance Sheets as of March 31, 2001 and
               December 31, 2000......................................................         1

            Condensed Consolidated Statements of Income for each of the Three
               Months ended March 31, 2001 and 2000 ..................................         2

            Condensed Consolidated Statements of Cash Flows for each of the
               Three Months ended March 31, 2001 and 2000.............................         3

            Notes to Condensed Consolidated Financial Statements......................         4

  Item 2.   Management's Discussions and Analysis of Financial Condition and
               Results of Operations..................................................         7

  Item 3.   Quantitative and Qualitative Disclosures about Market Risk................         9

PART II     OTHER INFORMATION

  Item 6.   Exhibits and Reports on Form 8-K..........................................         10

SIGNATURES ...........................................................................         11


</TABLE>

FORWARD-LOOKING STATEMENTS

This Form 10-Q for Consolidated Water Co. Ltd. (the "Company") includes
statements that may constitute "forward-looking" statements, usually containing
the words "believe," "estimate," "project," "intend," "expect" or similar
expressions. These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
inherently involve risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. Factors that would cause
or contribute to such differences include, but are not limited to, continued
acceptance of the Company's products and services in the marketplace, changes in
its relationship with the governments of the jurisdictions in which it operates,
the ability to successfully secure contracts for water projects in other
countries, the ability to develop and operate such projects profitably, and
other risks detailed in the Company's other periodic report filings with the
Securities and Exchange Commission. By making these forward-looking statements,
the Company undertakes no obligation to update these statements for revisions or
changes after the date of this Form 10-Q.


<PAGE>   4



                         PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

                           CONSOLIDATED WATER CO. LTD.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                      (Expressed in United States Dollars)

                                                   MARCH 31,      DECEMBER 31,
                                                     2001           2000
                                                 -----------      -----------
ASSETS

CURRENT ASSETS
     Cash and cash equivalents                       330,592          250,837
     Accounts receivable                           1,607,001        1,488,729
     Spares inventory                                191,861          120,014
     Inventory of water                               47,669           34,219
     Prepaid expenses and other assets               442,414          299,499
                                                 -----------      -----------
Total current assets                               2,619,537        2,193,298

     Property, plant and equipment                17,831,831       17,643,891
     Intangible asset                              1,960,962        2,008,483
                                                 -----------      -----------

Total assets                                     $22,412,330      $21,845,672
                                                 ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Bank overdrafts                                 892,557          703,331
     Dividends payable                               401,477          401,965
     Accounts payable and other liabilities        1,335,052        1,448,364
     Current portion of long term debt               219,580          219,580
                                                 -----------      -----------
Total current liabilities                          2,848,666        2,773,240

     Long term debt                                1,131,986        1,131,986
     Security deposit                                 52,763           52,763
     Advances in aid of construction                  41,090           41,090
                                                 -----------      -----------
Total liabilities                                  4,074,505        3,999,079
                                                 -----------      -----------

STOCKHOLDERS' EQUITY
     Common stock                                  4,655,774        4,635,774
     Additional paid-in capital                    6,756,749        6,726,749
     Vested redeemable preferred stock                11,983           11,983
     Non-vested redeemable preferred stock            28,378           28,378
     Retained earnings                             6,884,941        6,443,709
                                                 -----------      -----------
Total stockholders' equity                        18,337,825       17,846,593
                                                 -----------      -----------

Total liabilities and stockholders' equity       $22,412,330      $21,845,672
                                                 ===========      ===========


                  The accompanying information and notes are an
       integral part of these condensed consolidated financial statements


                                       1
<PAGE>   5


                           CONSOLIDATED WATER CO. LTD.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                      (Expressed in United States Dollars)

                                              THREE MONTHS     THREE MONTHS
                                             ENDED MARCH 31,   ENDED MARCH 31,
                                                  2001              2000
                                             ---------------   ---------------

Water sales                                     2,857,204         2,563,052
Cost of water sales                            (1,483,389)       (1,368,365)
                                              -----------       -----------

Gross profit                                    1,373,815         1,194,687
                                              -----------       -----------

Indirect expenses                                (647,360)         (444,859)
                                              -----------       -----------

Income from operations                            726,455           749,828
                                              -----------       -----------

Other income:
     Interest income                                   30               118
     Other income                                 104,405           115,211
                                              -----------       -----------

                                                  104,435           115,329
                                              -----------       -----------

Net income                                    $   830,890       $   865,157
                                              ===========       ===========


Basic earnings per share                      $      0.21       $      0.28
                                              ===========       ===========

Diluted earnings per common share             $      0.21       $      0.27
                                              ===========       ===========

Dividends declared per share                  $      0.10       $      0.08
                                              ===========       ===========

Weighted average number of common shares
     used in the determination of:

Basic earnings per share                        3,866,921         3,076,961
                                              ===========       ===========

Diluted earnings per share                      3,973,521         3,183,450
                                              ===========       ===========


                  The accompanying information and notes are an
       integral part of these condensed consolidated financial statements



                                       2
<PAGE>   6



                           CONSOLIDATED WATER CO. LTD.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                      (Expressed in United States Dollars)

<TABLE>
<CAPTION>

                                                           THREE MONTHS      THREE MONTHS
                                                          ENDED MARCH 31,   ENDED MARCH 31,
                                                               2001            2000
                                                          ---------------   ---------------
<S>                                                           <C>             <C>
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES               676,906         843,867
                                                            ---------       ---------

CASH FLOWS USED IN INVESTING ACTIVITIES
   Purchase of property, plant and equipment                 (446,231)       (693,193)
                                                            ---------       ---------

Net cash used in investing activities                        (446,231)       (693,193)
                                                            ---------       ---------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
   Net proceeds from issuance of common stock                  50,000         323,231
   Repurchase of common stock                                      --        (494,375)
   Principal payments of long term debt                            --         (25,004)
   Principal payment under water purchase agreement                --         (86,076)
   Dividends paid                                            (390,146)       (266,512)
   Increase in short term bank overdraft                      189,226         880,061
                                                            ---------       ---------

Net cash provided by (used in) financing activities          (150,920)        331,325
                                                            ---------       ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS                      79,755         481,999

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD              250,837          22,146
                                                            ---------       ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $ 330,592       $ 504,145
                                                            =========       =========

</TABLE>



                  The accompanying information and notes are an
       integral part of these condensed consolidated financial statements



                                       3
<PAGE>   7


                           CONSOLIDATED WATER CO. LTD.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

       (Expressed in United States dollars except where stated otherwise)



The accompanying financial statements should be read in conjunction with the
2000 Annual Report for the Company on Form 10-K. The interim condensed
consolidated financial statements are unaudited, but in the opinion of
management, reflect all adjustments necessary for a fair presentation of results
for such periods. All adjustments are of a normal recurring nature.

1. PRINCIPAL ACTIVITY AND STATUS

Consolidated Water Co. Ltd. (the "Company") and its wholly-owned subsidiaries
(together the "Group") use reverse osmosis technology to produce fresh water
from seawater. The Group processes and supplies water to its customers in Grand
Cayman, Cayman Islands as well as Ambergris Caye, Belize. The Company's
exclusive license in Grand Cayman allows it to process and supply water in
certain areas of Grand Cayman for a period of twenty years from July 11, 1990 in
addition to having a right of first refusal on the extension or renewal thereof.
The Group also has a contract with Belize Water Services Ltd. of Belize to
supply water to Belize Water Services Ltd. in Ambergris Caye expiring in 2011.
At the expiry of the contract, Belize Water Services Ltd. may at its option
extend the term of the agreement or purchase the plant outright. The base price
of water supplied by the Group, and adjustments thereto, are determined by the
terms of the license and contract, which provides for adjustments based upon the
movement in the government price indices specified in the license and contract
respectively, as well as monthly adjustments for changes in the cost of energy.

2. SEGMENTED INFORMATION

On July 21, 2000, the Company acquired a 100% stake in Belize Water Ltd. that
has been consolidated in these condensed financial statements. In addition, on
December 18, 2000, the Company entered into an agreement with South Bimini
International Ltd., a Bahamian company, to provide water to property in South
Bimini Island, Bahamas. Though operations have not yet begun as at March 31,
2001, equipment presently located in the United States, with a carrying value of
$307,395, will be transferred to the Bahamas for use on this project. In
addition, costs to date of $527,530 for deposits on additional equipment and
costs related to construction in progress will be capitalized on this project.



                                       4
<PAGE>   8




                           CONSOLIDATED WATER CO. LTD.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

       (Expressed in United States dollars except where stated otherwise)



2. SEGMENTED INFORMATION (CONTINUED)

Under FAS 131 `Disclosure about Segments of an Enterprise and Related
Information' the supply of water to Cayman Islands, Belize and Bahamas are
considered by management as separate business segments. Previously the Group's
operations in the Cayman Islands was the only reportable business segment and as
such, segmented information for the three months ended March 31, 2000 has not
been reproduced below. The basis of measurement of segment information is
similar to that adopted for the financial statements.

<TABLE>
<CAPTION>

                                           AS AT MARCH 31, 2001 AND FOR THE THREE MONTHS THEN ENDED
                                      -----------------------------------------------------------------
                                      CAYMAN ISLANDS           BELIZE           BAHAMAS           TOTAL
                                      --------------           ------           -------           -----
<S>                                       <C>                 <C>             <C>             <C>
  Water sales                             2,537,292           319,912               --        2,857,204
  Other income                              104,435                --               --          104,435
  Cost of water sales                     1,311,384           172,005               --        1,483,389
  Indirect expenses                         608,186            39,174               --          647,360
  Net income                                722,157           108,733               --          830,890
  Property, plant and equipment          15,366,563         1,630,343          834,925       17,831,831


</TABLE>

During the year expenses totaling $9,557 were paid by the parent Company and
expensed in the Belize subsidiary.

3. CONTINGENCIES AND COMMITMENTS

The license that the Company has with the government of the Cayman Islands (the
"Government") requires it to obtain approval from the Government for an issuance
or transfer of shares which (a) exceeds 5% of the issued shares of our company,
or (b) would, upon registration, result in any shareholder owning more than 5%
of the issued share capital of the Company.

More than 5% of the ordinary shares of common stock are registered in the name
of Cede and Co., the nominee for the Depository Trust Company, which is a
clearing agency for shares held by participating banks and brokers. The Company
does not believe that these shareholdings by Cede and Co. constitute a breach of
the intent of the license. The Company believes that the purpose of this clause
of the license is to allow the Government to approve significant shareholders of
the Company. Cede and Co. and Depository Trust Company, however, act solely as
the nominee for banks and brokers, and have no beneficial ownership in the
ordinary shares of common stock. Nevertheless, the Company's Cayman Islands
legal counsel ("Legal Council") has advised it that the shareholdings by Cede &
Co. are probably a technical breach of our license.



                                       5
<PAGE>   9





                           CONSOLIDATED WATER CO. LTD.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

       (Expressed in United States dollars except where stated otherwise)



3. CONTINGENCIES AND COMMITMENTS (CONTINUED)

In August and September 1994, the Company completed an offering of 400,000
ordinary shares of common stock under Rule 504 of Regulation D of the Securities
Act of 1933. In September 1995, the Company completed a private placement of
100,000 ordinary shares of common stock plus warrants to subscribe for an
additional 100,000 ordinary shares of common stock under Regulation S of the
Securities Act 1933. In April 1996 and May 2000, the Company completed a public
offering of 515,000 and 773,000 ordinary shares, respectively. Based upon the
advice of Legal Counsel, the Company determined that the license did not require
the Government's approval to complete these offerings. However, if a court
determined that the Government's approval of these offerings was required under
the license, the Company would be in breach of the license. Legal Counsel has
advised the Company that in order to make this determination, a court would have
to disagree with the Company's interpretation of the license and dismiss several
defenses that would be available to the Company. These defenses include
acquiescence and waiver on the part of the Government with respect to these
offerings.

Further, the Company received a letter dated June 1, 2000, from an official in
the Government, stating that a public offering of the ordinary shares of common
stock that was completed in 1996 was a breach of the license. The letter is not
clear as to whether the Government views the public offering completed in 2000
as a breach of our license. The Company responded to this letter and stated that
we do not believe that it is in breach of the license. A meeting with officials
of the Government, to discuss this matter, was held on June 16, 2000 in
accordance with the Government's suggestion in the June 1st letter. The Company
has been advised by Legal Counsel that the June 1st letter from the Government
does not constitute a formal "notice of breach of the license" as contemplated
in the license. In November 2000 the Cayman Islands elected a new government. We
met with a representative of the new government in December 2000 and discussions
regarding this matter are ongoing. Other than pursuing discussions of this
matter with the new Government, no other actions are presently being pursued by
the Company to "cure" any such alleged breaches.



                                       6
<PAGE>   10



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

WATER SALES AND OTHER INCOME ("TOTAL INCOME")

Total income increased by 10.6% from $2,678,381 to $2,961,639 for the three
months ended March 31, 2000 and 2001, respectively. Total income increased as a
result of several factors. The automatic inflation adjustment on our operations
in the Cayman Islands led to an increase in prices for most of our customers by
an average of 2.7%. The addition of the operations of Belize Water Ltd. as of
July 21, 2000 increased total income $319,912 for the three months ended March
31, 2001. All sales in Belize are to one customer, Belize Water Services Ltd., a
public company that recently acquired the assets of Belize Water and Sewerage
Authority, which was a government statutory corporation. The terms of our
contract have not changed after the privatization of Belize Water and Sewerage
Authority.

Total water sales increased by 11.5% from $2,563,052 to $2,857,204 for the three
months ended March 31, 2000 and 2001, respectively. Water sales from our Cayman
Islands operations were flat when comparing this reporting period to the same
period in 2000. Although tourism arrival figures are not yet available from the
Cayman Islands government for the first quarter of 2001, we believe, based on a
sales analysis of the our largest commercial customers, that tourism slightly
declined when comparing this reporting period to the same period in 2000. We
believe that this decline was due to an overall slow down in the United States
economy during the first quarter of 2001. Tourists from the United States have
historically made up the largest portion of the Cayman Islands tourism market.
In addition, sales to two of our large customers, who use water for irrigation
purposes, were 61.2% lower in January 2001 when compared to January 2000.
Although rainfall data is not published for our license area in the Cayman
Islands, there were periods of heavy rainfall in late December 2000 and the
early part of January 2001 and this, coupled with the lower temperatures
experienced at that time of year, accounted for our lower sales. Sales data for
April 2001 indicates that our sales in the Cayman Islands will meet expected
target levels for that period. The addition of the operations of Belize Water
Ltd. added $319,912 to income for the three months ended March 31, 2001. Water
sales generated by our Belize operations were approximately 36% higher when
comparing this reporting period to the same period in 2000. We believe these
higher sales have resulted because the water production capacity of our reverse
osmosis water plant was less than sales demand prior to April 2000 when the
plant capacity was increased, by the previous owners, from 237,000 to 421,000
U.S. gallons per day. While early 2001 results for Belize indicate an increasing
trend, it may not be indicative of future results because of production
limitations in early 2000.

EXPENSES

Cost of water sales increased by 8.4% from $1,368,365 to $1,483,389 for the
three months ended March 31, 2000 and 2001, respectively. The addition of the
operations of Belize Water Ltd. as of July 21, 2000 increased cost of water
sales $172,005 for the three months ended March 31, 2001. Cost of water sales
increased as a result of higher water sales.

Gross profit margins increased from 46.6% to 48.1% for the three months ended
March 31, 2000 and 2001, respectively. The net impact was gross profit margins
increased as a result of reduced energy expense at our West Bay, Cayman Islands
reverse osmosis water plant. Lower energy expense resulted from the installation
of our new energy recovery system in late March 2000.



                                       7
<PAGE>   11



Indirect expenses increased by 45.5% from $444,859 to $647,360 for the three
months ended March 31, 2000 and 2001, respectively. Of this increase, 85.4% is
due to additional audit, legal and professional fees incurred because of the
increased voluntary SEC reporting, as well as, the addition of the new executive
position, Director of Special Projects and increased costs incurred in this
quarter resulting from the replacement of our former C.F.O., who left the
Company on April 6, 2001. Our Belize operations which were acquired in July 2000
and did not affect the March 31, 2000 amounts, increased indirect expenses
during the reporting period by $29,617. This increase reflects 14.6% of the
total increase. As a percentage of our total income, indirect expenses were at
16.6% and 21.9% for the three months ended March 31, 2000 and 2001,
respectively.

NET INCOME

Net income declined slightly from $865,157 to $830,890 for the three months
ended March 31, 2000 and 2001, respectively. This decline is primarily due to
increased indirect expenses as disclosed in the previous section entitled
"Expenses".

LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

We generate cash from our operations in the Cayman Islands and Belize, from the
sale of our shares, and through our loans and facilities obtained from two
banks. Cash flow is impacted by operating and maintenance expenses, the
timeliness and adequacy of rate increases (excluding automatic adjustments to
our rates for inflation and electricity costs), and various factors affecting
tourism in the Cayman Islands and Belize, such as weather conditions and the
economy. We use cash to fund our operations in the Cayman Islands and Belize, to
make payments under our operating agreement with Ocean Conversion Ltd. for our
Governor's Harbour, Cayman Islands plant, to expand our infrastructure, to pay
dividends, to repay principal on our loans and to repurchase our shares when
appropriate.

OPERATING ACTIVITIES

Cash from operating activities for the three months ended March 31, 2000 and
2001 was $843,867 and $676,906, respectively. This decrease was primarily due to
an increase in our non-cash working capital. When comparing the three months
ended March 31, 2000 and 2001 we had an increase in our trade accounts
receivable due to our increased customer base and extended credit to Belize
Water Services Ltd., and a decrease in our trade accounts payable due to
increased controls and timelier payments of payables.

INVESTING ACTIVITIES

Cash used in investing activities for the three months ended March 31, 2000 and
2001 was $693,193 and $446,231, respectively. This decrease is primarily due to
reduced expenditures for new property, plant and equipment. During the first
quarter of 2001, we commenced construction of our new water production and
distribution system in Bimini, Bahamas. We also continued to expand our water
distribution system in the Cayman Islands by constructing pipelines to service
several new developments within our franchise area. During the similar period in
2000, investing activities consisted primarily of the installation of a new
energy recovery system and the expansion of our water production plant in West
Bay, Cayman Islands, and the completion of a major pipeline extension within our
franchise area in the Cayman Islands.



                                       8
<PAGE>   12



FINANCING ACTIVITIES

Cash generated from financing activities for the three months ended March 31,
2000 was $331,325, compared to cash used of $150,920 for the three months ended
March 31, 2001. During the first quarter 2001, the primary financing activity
was the payment of our interim quarterly dividend of $0.10 per share. This was
offset by a small issuance of ordinary shares of common stock, due to a director
exercising certain options, as well as, an increase in our short term bank
overdraft. During the same period during 2000, we had a substantial increase in
our short term bank overdraft, as well as, an issuance of common stock. These
cash amounts were offset by a repurchase of 79,100 ordinary shares of common
stock at $6.25 per share from a shareholder whose assets were being liquidated
and the payment of our interim quarterly dividend of $0.08 per share.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not use derivative financial instruments for speculative trading purposes
and as of March 31, 2001 have not been a party to any financial instruments or
contracts that expose us to material market risk.



                                       9
<PAGE>   13


                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         EXHIBIT NO.       DESCRIPTION
         -----------       -----------

         None

(b)      Reports on Form 8-K

         None



                                       10
<PAGE>   14


                                   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.

                                       CONSOLIDATED WATER CO. LTD.


                                       By: /s/  Jeffrey M. Parker
                                       ----------------------------------------
                                       Jeffrey M. Parker
                                       Chairman of the board of directors and
                                       Chief Executive Officer

Dated: May 14, 2001



                                       11
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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