UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K/A

Amendment No. 1

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

For the fiscal year ended December 31, 2004

Commission File Number 333-68632

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Mission Energy Holding Company(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation or organization)                      |  | 95-4867576(I.R.S. Employer Identification No.)
|------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                                            |  |                                               
|2600 Michelson Drive, Suite 1700
Irvine, California(Address of principal executive offices) |  | 92612(Zip Code)                               
|Registrant's telephone number, including area code:(949) 852-3576                          

Securities
registered pursuant to Section 12(b) of the Act:

|None             |  | Not Applicable                             
|---------------- |  | -------------------------------------------
|(Title of Class) |  | (Name of each exchange on which registered)

Securities
registered pursuant to Section 12(g) of the Act:

| |  |  |  | None(Title of Class) |  |  |  | 
| |  |  |  | -------------------- |  |  |  | 

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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 ý    NO  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    YES ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act).    YES o    NO  ý

Aggregate market value of the registrant's Common Stock held by non-affiliates of the registrant as of June 30, 2004: $0. Number of shares
outstanding of the registrant's Common Stock as of March 10, 2005: 1,000 shares (all shares held by an affiliate of the registrant).



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EXPLANATORY NOTE

The annual report on Form 10-K/A for the fiscal year ended December 31, 2004 is being filed to include in Part IV, Item 15,
financial statements with respect to PT Paiton Energy, which were omitted from the annual report on Form 10-K for the year ended December 31, 2004 filed on March 16,
2005.

This
Amendment No. 1 does not update any other disclosures to reflect developments since the original date of filing.

The
following item of the original filing is amended by this Amendment No. 1:

Item
15. Exhibits and Financial Statement Schedules

Unaffected
items have not been repeated in this Amendment No. 1.

1

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES





PageInvestment in Unconsolidated Affiliates Financial Statements:PT Paiton Energy Financial Statements as of December 31, 2004, 2003 and 2002

3




The financial statements with respect to PT Paiton Energy are being filed in this report pursuant to Rule 3-09 of
Regulation S-X.

2

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Independent Auditors' Report

To
the Shareholders,
Board of Commissioners and Board of Directors of
PT Paiton Energy

We
have audited the accompanying balance sheet of PT Paiton Energy (the "Company") as of 31 December 2004, and the related statement of income, comprehensive income,
changes in shareholders' equity, and cash flows the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of PT Paiton Energy as of 31 December 2003 and for the years ended 31 December 2003 and 2002 were
audited by an other independent auditor whose report dated 23 January 2004 expressed an unqualified opinion.

We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PT Paiton Energy as of
31 December 2004, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of
America.

|JAKARTA
15 March 2005                                |  | 
|---------------------------------------------------- |  | 
|KAP Haryanto Sahari & Rekan
(PricewaterhouseCoopers) |  | 

3

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Independent Auditor's Report

No.:
L.03 - 1694 - 04/US.

The
Shareholders,
Board of Commissioners and Board of Directors
PT Paiton Energy:

We
have audited the accompanying balance sheets of PT Paiton Energy as of 31 December 2003 and 2002, and the related statements of income, comprehensive income, changes in shareholders' equity,
and cash flows for each of the years in the three-year period ended 31 December 2003. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PT Paiton Energy as of 31 December 2003 and 2002, and the results
of its operations and its cash flows for each of the years in the three-year period ended 31 December 2003, in conformity with accounting principles generally accepted in the United
States of America.

As
discussed in Note 2j to the financial statements, the Company changed its method of accounting for derivative instruments and hedging activities effective 1 January 2001.

Siddharta
Siddharta & Widjaja
Registered Public Accountants
License No. KEP-232/KM.6/2002

Drs.
Istata T. Siddharta

Public Accountant License No. 98.1.0192

Jakarta,
23 January 2004.

4

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PT PAITON ENERGY  BALANCE SHEETS  31 DECEMBER 2004 AND 2003(In thousands of US Dollars, except per share amounts)

|                              |  | Notes |  | 2004      |  | 2003     
|----------------------------- |  | ----- |  | --------- |  | ---------
|CURRENT ASSETS                |  |       |  |           |  |          
|Cash and cash equivalents     |  | 2a,3  |  | 76,917    |  | 64,217   
|Restricted cash               |  | 9     |  | 32,512    |  | 27,358   
|Accounts receivable           |  |       |  | 92,385    |  | 81,860   
|Fuel inventory and supplies   |  | 2d,5  |  | 16,976    |  | 22,882   
|Prepayments and other         |  |       |  | 15,310    |  | 13,028   
|Deferred tax assets           |  | 2n,13 |  | 5,347     |  |         
|                              |  |       |  |           |  |          
|Total current assets          |  |       |  | 239,447   |  | 209,345  
|                              |  |       |  |           |  |          
|NON-CURRENT ASSETS            |  |       |  |           |  |          
|Plant and equipment, net      |  | 2e,6  |  | 1,828,783 |  | 1,870,750
|Restricted cash               |  | 9     |  | 130,197   |  | 133,002  
|Long-term receivable          |  | 2l,4  |  | 443,962   |  | 447,378  
|Deferred charges, net         |  | 2g,7  |  | 235,791   |  | 242,341  
|Deferred financing costs, net |  | 2h    |  | 11,016    |  | 13,407   
|Prepayments and other         |  |       |  | 2,219     |  | 2,917    
|                              |  |       |  |           |  |          
|Total non-current assets      |  |       |  | 2,651,968 |  | 2,709,795
|                              |  |       |  |           |  |          
|TOTAL ASSETS                  |  |       |  | 2,891,415 |  | 2,919,140
|                              |  |       |  |           |  |          

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

5

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PT PAITON ENERGY  BALANCE SHEETS  31 DECEMBER 2004 AND 2003(In thousands of US Dollars, except per share amounts)

|                                                                                                             |  | Notes   |  | 2004      |   | 2003      |  
|------------------------------------------------------------------------------------------------------------ |  | ------- |  | --------- | - | --------- | -
|CURRENT LIABILITIES                                                                                          |  |         |  |           |   |           |  
|Accounts payable to related parties                                                                          |  |         |  | 36,409    |   | 111,296   |  
|Taxes payable                                                                                                |  |         |  | 10,239    |   | 6,368     |  
|Accrued finance costs                                                                                        |  |         |  | 124,026   |   | 68,286    |  
|Other liabilities                                                                                            |  |         |  | 21,347    |   | 19,438    |  
|Current maturities of long-term loans                                                                        |  | 2i,9,15 |  | 140,851   |   | 140,851   |  
|Current maturities of derivative financial instruments                                                       |  | 2j,10   |  | 17,822    |   |          |  
|                                                                                                             |  |         |  |           |   |           |  
|Total current liabilities                                                                                    |  |         |  | 350,694   |   | 346,239   |  
|                                                                                                             |  |         |  |           |   |           |  
|NON-CURRENT LIABILITIES                                                                                      |  |         |  |           |   |           |  
|Deferred tax liability, net                                                                                  |  | 2n,13   |  | 78,736    |   | 42,705    |  
|Long-term loans                                                                                              |  | 2i,9,15 |  | 1,933,684 |   | 2,061,117 |  
|Provision for employee benefits                                                                              |  | 2m      |  | 955       |   |          |  
|Derivative financial instruments                                                                             |  | 2j,10   |  | 34,882    |   | 72,915    |  
|                                                                                                             |  |         |  |           |   |           |  
|Total non-current liabilities                                                                                |  |         |  | 2,048,257 |   | 2,176,737 |  
|                                                                                                             |  |         |  |           |   |           |  
|SHAREHOLDERS' EQUITY                                                                                         |  |         |  |           |   |           |  
|Share capital  authorized, issued and fully paid 30,600 common shares with par value of US$10,000 per share |  | 12      |  | 306,000   |   | 306,000   |  
|Share premium                                                                                                |  |         |  | 7,000     |   | 7,000     |  
|Retained earnings                                                                                            |  |         |  | 216,357   |   | 134,205   |  
|Accumulated other comprehensive loss                                                                         |  | 2k      |  | (36,893   | ) | (51,041   | )
|                                                                                                             |  |         |  |           |   |           |  
|Total shareholders' equity                                                                                   |  |         |  | 492,464   |   | 396,164   |  
|                                                                                                             |  |         |  |           |   |           |  
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                   |  |         |  | 2,891,415 |   | 2,919,140 |  
|                                                                                                             |  |         |  |           |   |           |  

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

6

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PT PAITON ENERGY  STATEMENTS OF INCOME  FOR THE YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002(In thousands of US Dollars, except per share amounts)

|                                                    |  | Notes |  | 2004     |   | 2003     |   | 2002     |  
|--------------------------------------------------- |  | ----- |  | -------- | - | -------- | - | -------- | -
|Revenues:                                           |  | 2c    |  |          |   |          |   |          |  
|Net dependable capacity                             |  |       |  | 365,237  |   | 371,353  |   | 359,757  |  
|Net electrical output                               |  |       |  | 133,354  |   | 113,665  |   | 91,416   |  
|                                                    |  |       |  |          |   |          |   |          |  
|                                                    |  |       |  | 498,591  |   | 485,018  |   | 451,173  |  
|                                                    |  |       |  |          |   |          |   |          |  
|Cost and expenses:                                  |  |       |  |          |   |          |   |          |  
|Fuel                                                |  |       |  | (122,432 | ) | (99,162  | ) | (79,338  | )
|Plant operations                                    |  |       |  | (43,211  | ) | (39,124  | ) | (27,173  | )
|Depreciation and amortization                       |  |       |  | (58,583  | ) | (58,340  | ) | (83,115  | )
|General and administrative                          |  |       |  | (12,697  | ) | (17,186  | ) | (59,936  | )
|                                                    |  |       |  |          |   |          |   |          |  
|                                                    |  |       |  | (236,923 | ) | (213,812 | ) | (249,562 | )
|                                                    |  |       |  |          |   |          |   |          |  
|Operating income                                    |  |       |  | 261,668  |   | 271,206  |   | 201,611  |  
|                                                    |  |       |  |          |   |          |   |          |  
|Other income/(expenses):                            |  |       |  |          |   |          |   |          |  
|Interest income                                     |  |       |  | 47,947   |   | 47,437   |   | 47,938   |  
|(Loss)/gain on foreign currency exchange            |  |       |  | (1,606   | ) | 645      |   | (2,158   | )
|Interest expense and other financing costs          |  |       |  | (190,463 | ) | (193,857 | ) | (154,607 | )
|Other income                                        |  |       |  |         |   | 61       |   | 40       |  
|                                                    |  |       |  |          |   |          |   |          |  
|                                                    |  |       |  | (144,122 | ) | (145,714 | ) | (108,787 | )
|                                                    |  |       |  |          |   |          |   |          |  
|Profit before income tax                            |  |       |  | 117,546  |   | 125,492  |   | 92,824   |  
|Income tax expense                                  |  | 2n,13 |  | (35,394  | ) | (39,293  | ) | (28,573  | )
|                                                    |  |       |  |          |   |          |   |          |  
|Net income                                          |  |       |  | 82,152   |   | 86,199   |   | 64,251   |  
|                                                    |  |       |  |          |   |          |   |          |  
|Weighted-average shares of common stock outstanding |  |       |  | 30,600   |   | 27,624   |   | 25,000   |  
|Basic earnings per share                            |  |       |  | 2,685    |   | 3,120    |   | 2,570    |  

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

7

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PT PAITON ENERGY  STATEMENTS OF COMPREHENSIVE INCOME  FOR THE YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002(In thousands of US Dollars)

|                                                                                                                                                   |  | 2004   |   | 2003    |   | 2002    |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | - | ------- | - | ------- | -
|Net income                                                                                                                                         |  | 82,152 |   | 86,199  |   | 64,251  |  
|Other comprehensive income/(loss), net of tax                                                                                                      |  |        |   |         |   |         |  
|Unrealized loss on derivative financial instruments, net of tax benefit of US$1,639, US$1,340 and US$15,421 for 2004, 2003 and 2002, respectively  |  | (3,825 | ) | (3,126  | ) | (35,982 | )
|Reclassification adjustment for losses included in net income, net of tax of US$7,702, US$8,954 and US$9,244 for 2004, 2003 and 2002, respectively |  | 17,973 |   | 20,892  |   | 21,570  |  
|                                                                                                                                                   |  |        |   |         |   |         |  
|                                                                                                                                                   |  | 14,148 |   | 17,766  |   | (14,412 | )
|                                                                                                                                                   |  |        |   |         |   |         |  
|Comprehensive income                                                                                                                               |  | 96,300 |   | 103,965 |   | 49,839  |  
|                                                                                                                                                   |  |        |   |         |   |         |  

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

8

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PT PAITON ENERGY  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY  FOR THE YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002(In thousands of US Dollars)

|                            |  | Shares
capital |  | Share
premium |  | Accumulated
other
comprehensive
loss |   | Retained
earnings/
(deficit) |   | Total
shareholders'
equity |  
|--------------------------- |  | -------------- |  | ------------- |  | ------------------------------------ | - | ---------------------------- | - | -------------------------- | -
|Balance at 31 December 2001 |  | 306,000        |  | 7,000         |  | (54,395                              | ) | (16,245                      | ) | 242,360                    |  
|Net income for the year     |  |               |  |              |  |                                     |   | 64,251                       |   | 64,251                     |  
|Other comprehensive loss    |  |               |  |              |  | (14,412                              | ) |                             |   | (14,412                    | )
|                            |  |                |  |               |  |                                      |   |                              |   |                            |  
|Balance at 31 December 2002 |  | 306,000        |  | 7,000         |  | (68,807                              | ) | 48,006                       |   | 292,199                    |  
|Net income for the year     |  |               |  |              |  |                                     |   | 86,199                       |   | 86,199                     |  
|Other comprehensive income  |  |               |  |              |  | 17,766                               |   |                             |   | 17,766                     |  
|                            |  |                |  |               |  |                                      |   |                              |   |                            |  
|Balance at 31 December 2003 |  | 306,000        |  | 7,000         |  | (51,041                              | ) | 134,205                      |   | 396,164                    |  
|Net income for the year     |  |               |  |              |  |                                     |   | 82,152                       |   | 82,152                     |  
|Other comprehensive income  |  |               |  |              |  | 14,148                               |   |                             |   | 14,148                     |  
|                            |  |                |  |               |  |                                      |   |                              |   |                            |  
|Balance at 31 December 2004 |  | 306,000        |  | 7,000         |  | (36,893                              | ) | 216,357                      |   | 492,464                    |  
|                            |  |                |  |               |  |                                      |   |                              |   |                            |  

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

9

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PT PAITON ENERGY  STATEMENTS OF CASH FLOWS  FOR THE YEARS ENDED 31 DECEMBER 2004, 2003 AND 2002  (In thousands of US Dollars)

|                                                                                       |                                                              | 2004     |         | 2003     |         | 2002    |        
|-------------------------------------------------------------------------------------- | ------------------------------------------------------------ | -------- | ------- | -------- | ------- | ------- | -------
|CASH FLOWS FROM OPERATING ACTIVITIES                                                   |                                                              |          |         |          |         |         |        
|Net income                                                                             |                                                              | 82,152   |         | 86,199   |         | 64,251  |        
|Adjustment to reconcile net income to net cash flows provided by operating activities: |                                                              |          |         |          |         |         |        
|                                                                                       | Depreciation and amortization                                |          | 58,583  |          | 58,339  |         | 83,115 
|                                                                                       | (Gain)/loss on retirement or disposal of plant and equipment |          | (41     | )        | (26     | )       | 3,553  
|                                                                                       | Provision for deferred income taxes                          |          | 24,622  |          | 39,293  |         | 28,573 
|                                                                                       | Provision for employee benefits                              |          | 955     |          |        |         |       
|                                                                                       | Amortization of deferred financing costs                     |          | 2,391   |          |        |         |       
|Changes in assets and liabilities:                                                     |                                                              |          |         |          |         |         |        
|                                                                                       | Accounts receivable                                          |          | (7,109  | )        | 7,236   |         | (53,940
|                                                                                       | Fuel inventory and supplies                                  |          | 5,906   |          | 1,684   |         | (16,123
|                                                                                       | Prepayments and other                                        |          | (1,584  | )        | (2,048  | )       | (618   
|                                                                                       | Taxes payable and other liabilities                          |          | 5,780   |          | (46,842 | )       | 32,705 
|                                                                                       | Accounts payable to related parties                          |          | (74,887 | )        | (68,947 | )       | 7,071  
|                                                                                       | Accrued finance costs                                        |          | 69,157  |          | 45,457  |         | (910   
|                                                                                       |                                                              |          |         |          |         |         |        
|Net cash flows provided by operating activities                                        |                                                              | 165,925  |         | 120,345  |         | 147,677 |        
|                                                                                       |                                                              |          |         |          |         |         |        
|CASH FLOWS FROM INVESTING ACTIVITIES                                                   |                                                              |          |         |          |         |         |        
|Additions to restricted cash                                                           |                                                              | (2,349   | )       | (160,360 | )       |        |        
|Acquisition of plant and equipment                                                     |                                                              | (10,764  | )       | (3,837   | )       | (2,046  | )      
|Proceeds from sale of plant and equipment                                              |                                                              | 739      |         | 2,571    |         | 50      |        
|                                                                                       |                                                              |          |         |          |         |         |        
|Net cash flows used in investing activities                                            |                                                              | (12,374  | )       | (161,626 | )       | (1,996  | )      
|                                                                                       |                                                              |          |         |          |         |         |        
|CASH FLOWS FROM FINANCING ACTIVITIES                                                   |                                                              |          |         |          |         |         |        
|Repayment of long-term loans                                                           |                                                              | (140,851 | )       | (126,989 | )       | (20,000 | )      
|Proceeds from subordinated loans                                                       |                                                              |         |         | 15,882   |         |        |        
|Repayment of subordinated loans                                                        |                                                              |         |         | (8,790   | )       |        |        
|Payment of financing costs                                                             |                                                              |         |         | (8,316   | )       |        |        
|                                                                                       |                                                              |          |         |          |         |         |        
|Net cash flows used in financing activities                                            |                                                              | (140,851 | )       | (128,213 | )       | (20,000 | )      
|                                                                                       |                                                              |          |         |          |         |         |        
|Net increase/(decrease) in cash and cash equivalents                                   |                                                              | 12,700   |         | (169,494 | )       | 125,681 |        
|Cash and cash equivalents at the beginning of the year                                 |                                                              | 64,217   |         | 233,711  |         | 108,030 |        
|                                                                                       |                                                              |          |         |          |         |         |        
|Cash and cash equivalents at the end of the year                                       |                                                              | 76,917   |         | 64,217   |         | 233,711 |        
|                                                                                       |                                                              |          |         |          |         |         |        
|Supplemental cash flow disclosures:                                                    |                                                              |          |         |          |         |         |        
|Cash paid for interest                                                                 |                                                              | 113,682  |         | 135,963  |         | 155,517 |        
|Cash paid for income taxes                                                             |                                                              | 4,982    |         | 4,025    |         |        |        
|Conversion of accounts payable to related parties to long term loans                   |                                                              |         |         |         |         | 2,974   |        

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

10

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PT PAITON ENERGY  NOTES TO THE FINANCIAL STATEMENTS  31 DECEMBER 2004, 2003 AND 2002(In thousands of US Dollars, except per share amounts)

1.     General

PT Paiton Energy (the "Company") is an Indonesian domiciled company located at Menara Batavia 8th floor, Jalan K.H. Mas Mansyur Kav.126,
Jakarta, which was established within the framework of Foreign Capital Investment Laws No. 1 year 1967 as amended by Law No. 11 year 1970 based on deed of notary public
Sutjipto SH No. 64 dated 11 February 1994 with the amendments effected by deed of the same notary public No. 56 dated 11 January 1995. These deeds were
approved by the Minister of Justice under decision letter No. C2-1-682.HT.01.01.Th.95 dated 6 February 1995. The Company's Articles of Association were
most recently amended by deed of the same notary public No. 50 dated 20 November 1998; this amendment changed the name of the Company and increased authorized capital. This deed
was approved by the Minister of Justice under decision letter No. C-2340.HT.01.04.Th.99 dated 3 February 1999 and published in Supplement No. 4853 to State Gazette
No. 64 dated 10 August 1999.

In
accordance with Article 3 of the Articles of Association, approval by the Capital Investment Coordination Board and the Power Purchase Agreement (the "PPA"), as amended, the
Company's objective and purpose is to engage in any business and activity in the sector of electric power supply, and to build, own and operate a coal-fired power generating facility (the
"Project") consisting of two units located in East Java.

2.     Summary of Significant Accounting Policies

Presented below are the significant accounting policies adopted in preparing the financial statements of the Company, which are in conformity with accounting
principles generally accepted in the United States of America.







11

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2004 and 2003

2002Plant assets and facilities

38 years

30 yearsFurniture and equipment

4 years

4 years






12

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13

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14

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15

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3.     Cash and Cash Equivalents

2004

2003Cash on hand

4

4Cash in banks

65,046

51,172Call deposits

11,867

13,04176,917

64,217


16

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4.     Long-term Receivable

As discussed in Note 14a, the Company and PLN entered into the amendments to the PPA, which among other matters provides for restructuring settlement
payments for the settlement of arrearages of amounts billed by the Company to PLN. The Company has reflected the present value of the restructuring settlement payments, based on a discount rate of
10%, as a long-term receivable totaling US$443,962 (net of current maturities of US$3,416) and US$447,378 (net of current maturities of US$3,092) at 31 December 2004 and
2003, respectively. The Company billed restructuring settlement payments aggregating US$48,000 in both 2004 and 2003. Interest income recognized on this long-term receivable totaled
US$44,908 and US$45,200 in 2004 and 2003, respectively.

2004

2003Total restructuring settlement payments

1,296,000

1,344,000Less: unamortized discount

(848,622
)
(893,530
)Restructuring settlement receivable

447,378

450,470Less: current maturities

(3,416
)
(3,092
)Long-term receivable

443,962

447,378


5.     Fuel Inventory and Supplies

2004

2003Coal inventory

7,006

15,106Fuel oil inventory

284

111Supplies

9,686

7,66516,976

22,882


17

---



6.     Plant and Equipment

Plant and equipment comprised of the following:

|                            |  | 2 0 0 4   |  
|--------------------------- |  | --------- | -
|
|Cost                        |  |           |  
|Plant assets and facilities |  | 2,168,258 |  
|Furniture and equipment     |  | 8,951     |  
|                            |  |           |  
|                            |  | 2,177,209 |  
|                            |  |           |  
|Accumulated depreciation    |  |           |  
|Plant assets and facilities |  | (300,035  | )
|Furniture and equipment     |  | (6,424    | )
|                            |  |           |  
|                            |  | (306,459  | )
|                            |  |           |  
|Net book value              |  | 1,870,750 |  
|                            |  |           |  

|                            |  | 2 0 0 3   |  
|--------------------------- |  | --------- | -
|
|Cost                        |  |           |  
|Plant assets and facilities |  | 2,168,798 |  
|Furniture and equipment     |  | 7,603     |  
|                            |  |           |  
|                            |  | 2,176,401 |  
|                            |  |           |  
|Accumulated depreciation    |  |           |  
|Plant assets and facilities |  | (249,835  | )
|Furniture and equipment     |  | (5,318    | )
|                            |  |           |  
|                            |  | (255,153  | )
|                            |  |           |  
|Net book value              |  | 1,921,248 |  
|                            |  |           |  

Depreciation
charged to operating expenses amounted to US$52,033, US$51,790 and US$73,721 in 2004, 2003 and 2002, respectively.

Effective
1 January 2003, the Company changed its accounting estimates relating to depreciation of plant assets and facilities as disclosed in Note 2e.

Substantially
all of the Company's assets have been pledged as collateral for the repayment of long-term loans as disclosed in Note 9.

7.     Deferred Charges

|                                  |  | 2004    |   | 2003    |  
|--------------------------------- |  | ------- | - | ------- | -
|Special facilities costs deferred |  | 281,814 |   | 281,814 |  
|Less: accumulated amortization    |  | (46,023 | ) | (39,473 | )
|                                  |  |         |   |         |  
|Net deferred charges              |  | 235,791 |   | 242,341 |  
|                                  |  |         |   |         |  

18

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Deferred
charges represent costs incurred for the design, construction and installation of the Special Facilities in accordance with the terms of the PPA. The Special Facilities
constitute electrical interconnection facilities at the Paiton Complex, the expansion of the Paiton Complex's water intake and discharge canals and site preparation work at the Paiton Complex. The
Company had the care, custody and control, and bore the risk of loss with respect to the Special Facilities until they were accepted by PLN in 1999. The Special Facilities recorded in these financial
statements are owned by PLN; however, the Company has the right to use the Special Facilities throughout the term of the PPA, as amended.

Effective
1 January 2003, the Company changed its accounting estimates relating to amortization of the Special Facilities as disclosed in Note 2g. Amortization
charged to operating expenses amounted to US$6,550, US$6,549 and US$9,394 in 2004, 2003 and 2002, respectively.

8.     Related Party Transactions



19

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9.     Long Term Loans

2004

2003Senior debt facilitiesUSEXIM facilitytranche A

310,010

339,265USEXIM facilitytranche B

88,894

101,907JBIC facilitytranche A

495,272

496,300JBIC facilitytranche B

188,177

253,308OPIC facilitytranche A

44,638

49,717OPIC facilitytranche B

120,476

134,4031,247,467

1,374,900Senior debt funding loan

180,000

180,000Subordinated loansEdison Mission Energy Asia Pte., Ltd.

176,004

176,004Paiton Power Financing B.V.

143,018

143,018Capital Indonesia Power I C.V.

54,978

54,978374,000

374,000Series B subordinated loansEdison Mission Energy Asia Pte., Ltd.

128,506

128,506Paiton Power Financing B.V.

104,421

104,421Capital Indonesia Power I C.V.

40,141

40,141273,068

273,068Total

2,074,535

2,201,968Current maturities of long-term loans

(140,851
)
(140,851
)Non-current portion

1,933,684

2,061,117


Senior debt facilities

On 14 February 2003, the Company entered into a certain second amended and restated common agreement (the "Common Agreement"), with the following lenders:
The Export-Import Bank of the United States ("USEXIM"), Japan Bank for International Cooperation ("JBIC"), as successors in interest to the Export-Import Bank of Japan ("JEXIM") and Overseas Private
Investment Corporation ("OPIC"), Wells Fargo Bank Minnesota, N.A. (as the Commercial Bank Tranche A Facility Agent and Indenture Trustee), ING Capital LLC (as the USEXIM Construction Facility
Agent), JP Morgan Chase Bank (as the Trustee), Mizuho Corporate Bank, Ltd. (as the Collateral Agent) and JP Morgan Chase Bank (as Intercreditor Agent).

The
principal effect of the Common Agreement is to establish certain uniform terms which are applicable to all senior debt facilities provided such as funding, payments and prepayments,
conditions precedent, representations and warranties, affirmative and negative covenants, and events of default. Separate financing agreements for the senior debt facilities have been entered into
with each of the lenders who were to provide an aggregate of US$1,820,000. The senior debt facilities are comprised of variable-rate-based loans and
fixed-rate-based loans. The Company has entered into interest rate swap agreements on a portion of its debt to reduce the impact of changes in interest rates on its floating
rate long-term debt as disclosed in Note 10.

20

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The
obligations of the Company are collateralized by pledges of all of the Company's capital stock and liens on and security interests in substantially all of the Company's assets
(including plant assets), its rights under various agreements, all of the Company's revenues and all insurance proceeds payable to the Company. The financing agreements contain restrictions, which,
among other items, require the Company to comply with various administrative requirements. The agreements with lenders also require the Company to pay certain fees.

Interest
on loans is due on a quarterly basis, in arrears, and payments coincide with the scheduled principal payments dates. Repayment of the loan principal was originally due over a
period of twelve
years commencing from 1999. None of the scheduled repayments of principal totaling approximately US$453,761 as of 31 December 2002 were made during 1999, 2000 and 2001, and only
US$20,000 was repaid in 2002.

In
response to PLN's failure to pay invoices submitted to it under the PPA (see Note 14a), on 15 October 1999, the Company entered into an Interim Arrangement Agreement
(the "Interim Arrangement"), as amended on 30 December 2002 with the senior lenders. Under this agreement, the parties agreed to enter into certain waivers pursuant to the Financing Agreements,
and amendments to the Common Agreement, in order to establish an interim arrangement under the Financing Agreements. These waivers included events of default that may exist solely as a result of the
failure of the Company to repay principal amounts on the scheduled dates therefore which occur during the term of the Interim Arrangement. Interest and fees continued to be paid on a timely basis.
This Interim Arrangement terminated on 13 February 2003, when the Company and all the lenders reached an agreement on restructuring the terms of the senior debt facilities as disclosed in
Note 15.

In
addition, pursuant to the terms of section 8.3 of the Common Agreement, the lenders waived all defaults, Events of Default and Potential Events of Default existing under the
Financing Documents as of 13 February 2003. No interest was incurred in 2003 and 2002.

As
discussed in Note 15, on 14 February 2003, the Company and its lenders executed the Second Amended and Restated Common Agreement. The terms and conditions of the
Company's senior debt facilities pursuant to the provisions of the Second Amended Restated Common Agreement can be summarized as follows:



|                      |  | USEXIM A                            |  | USEXIM B                           
|--------------------- |  | ----------------------------------- |  | -----------------------------------
|Principal outstanding |  | US$380,911                          |  | US$126,971                         
|Period                |  | 15 February 2003 - 15 November 2013 |  | 15 February 2003 - 15 November 2011
|Interest              |  | Fixed rate 7.5% p.a.                |  | Fixed rate 7.5% p.a.               



|                      |  | JBIC A                              |  | JBIC B                             
|--------------------- |  | ----------------------------------- |  | -----------------------------------
|Principal outstanding |  | US$506,398                          |  | US$337,603                         
|Period                |  | 15 February 2003 - 15 November 2013 |  | 15 February 2003 - 15 November 2011
|Interest              |  | LIBOR plus margin                   |  | LIBOR plus margin                  

21

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|                      |  | OPIC A                              |  | OPIC B                                                           
|--------------------- |  | ----------------------------------- |  | -----------------------------------------------------------------
|Principal outstanding |  | US$52,799                           |  | US$144,681                                                       
|Period                |  | 15 February 2003 - 15 November 2013 |  | 15 February 2003 - 15 November 2013                              
|Interest              |  | Fixed rate 7.5% p.a.                |  | Three-month Treasury Bill-based OPIC-guaranteed paper plus margin

Pursuant
to the debt restructuring, the Company is required to allocate funds into restricted bank accounts for which use is restricted. The accounts are restricted as to use for taxes,
plant maintenance, debt service and settlement of fuel supply and EPC liabilities (the "Restructuring Settlements Account"). The balances of these respective accounts as of
31 December 2004 were as follows:

Tax payment account

52Debt service account

31,328Restructuring settlements account

1,132Current

32,512Major maintenance reserve account

6,810Debt service reserve account

123,387Non-current

130,197Total

162,709


Senior debt funding loan

On 28 March 1996, Paiton Energy Funding B.V., a Netherlands corporation (the "Issuer") issued US$180,000 of senior secured bonds (the "Bonds") to
certain institutional investors. The net proceeds from the sale of the bonds were used by the Issuer to acquire certain senior indebtedness which consisted of loans made to the Company by various
commercial banks and financial institutions under the Commercial Banks FacilityTranche A in place as of 31 March 1996. Upon closing of the offering for the Bonds,
such senior indebtedness was replaced by the Senior Debt Funding Loan and the payment terms and the interest rate which applied to such indebtedness were amended to contain terms which are identical
to the Bonds. The Bonds bear interest at 9.34% per annum with interest payable on a quarterly basis commencing in May 1996. Principal payments on the Bonds commence in 2008, and the Bonds
mature in 2014.

The
Company has unconditionally guaranteed the payment obligations of the Issuer in respect of the Bonds. The Senior Debt Funding Loan and the guarantee will be secured, on a pari passu
basis with the other senior debt, by pledges of the Company's capital shares and liens on, and security interests in, substantially all of the assets of the Company. The maximum potential amount of
undiscounted future payments that the Company could be required to make under the guarantee is US$180,000, which is the current carrying amount of the Senior Debt Funding Loan reflected in these
financial statements.

Subordinated loans

On 31 March 1995, the Company entered into a subordinated loan agreement with Edison Mission Energy Asia Pte., Ltd., Paiton Power Financing
B.V., and Capital Indonesia Power I C.V. (the "Subordinated Lenders"). Each of the Subordinated Lenders is affiliated with shareholders of the Company. Under this agreement, the
Subordinated Lender or their affiliates are obligated to make

22

---



subordinated
loans to the Company in a maximum aggregate amount of US$487,438. The subordinated loans bear no interest prior to the last day of the availability period (such day has been established
as 15 October 1999). After the availability period, interest on the outstanding principal amount is determined at 15%, per annum. The repayment of any outstanding principal will not
commence until 27 years after the completion of the Project. The Company incurred interest of US$61,095 and US$47,609 for the year 2004 and the period from 1 April to
31 December 2003, respectively. The Subordinated Lenders cancelled the Company's interest obligation for the three-month period ended 31 March 2003 and for the years ended
31 December 2002 and 2001 on or before the commencement of each of the respective periods.

Series B subordinated loans

In 2001, the Company entered into the 1999 Series B Subordinated Loan Agreement with the Subordinated Lenders. Under this agreement, the Subordinated
Lenders shall make loans to the Company in a maximum aggregate amount of US$300,000. The 1999 Series B Subordinated Loans bear no interest until such time as the Company and Subordinated
Lenders agree otherwise in writing. The repayment of any outstanding principal is not required to commence until 27 years after the completion of the Project. No interest was incurred in 2004,
2003 and 2002.

The
subordinated loans referred to in the two preceding paragraphs are subordinated to the senior debt facilities provided under the Common Agreement and the Senior Debt Funding Loan.

The
following table presents the approximate annual maturities of long-term debt for the five years after 31 December 2004:

2005

140,8512006

140,8512007

140,8512008

153,0012009

166,051Thereafter

1,353,1232,094,728Deferred financing costs prior to debt restructuring

(38,569
)Accrued financing costs relating to interest rate levelization

18,3762,074,535


10.   Derivative Financial Instruments

The Company has entered into interest rate swap agreements on a portion of its debt to reduce the impact of changes in interest rates on its floating rate
long-term debt. Under the agreements, the Company will receive or pay interest on the differential of notional amounts based on the London Interbank Offering Rate ("LIBOR") and the same
notional amounts based on a weighted average fixed interest rate of 7.3% from July 1995 until August 1999 and 9% from August 1999 through August 2011. At
31 December 2004, LIBOR was 2.29% per annum. Payments are made at the end of calculation periods (scheduled three-month periods) which commence primarily in 1995 and 1999 and end in 1999
and 2011. The notional amounts vary over the calculation periods; however, they were intended to correspond with anticipated borrowing levels over the period of the long-term financing.
All interest rate swap agreements continue to be fully effective after the restructuring of debt discussed in Note 15.

In
accordance with SFAS No. 133, as amended, the Company recorded a liability for the loss on these interest rate swap agreements of US$52,704 and US$72,915, before income taxes,
as of 31 December 2004 and 2003, respectively. This amount has been reflected in other comprehensive loss

23

---



as
the Company has designated these agreements as cash flow hedges. The estimated unrealized losses of US$52,704 at 31 December 2004 include approximately US$17,822 that is expected to
be reclassified into earnings in 2005.

Under
the agreements, the aggregate notional amount was at its highest level (approximately US$1,100,000) in 1999. As of 31 December 2004, the total notional amount subject
to the swap agreements totaled approximately US$315,000, bearing fixed interest at a weighted average rate of approximately 9%.

By
using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the
counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the
Company. When the fair value of a derivative contract is negative, the Company owes the counterparty and, therefore, it does not possess credit risk. The Company minimizes the credit risk in
derivative instruments by entering into transactions with creditworthy counterparties whose credit quality are reviewed regularly.

Market
risk is the adverse effect on the value of financial instruments that results from a change in interest rates. The market risk associated with interest-rate contracts
is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The
following table represents the derivatives in place as of 31 December 2004:

|                         |  | Notional
amount |  | Maturity
date  |  | Pay swap
rate |  | Fair market
value at
31 December 2004 |  
|------------------------ |  | --------------- |  | -------------- |  | ------------- |  | ------------------------------------- | -
|Interest rate swap       |  | 56,250          |  | 15 August 2011 |  | 8.980%        |  | (9,383                                | )
|Interest rate swap       |  | 56,250          |  | 15 August 2011 |  | 8.995%        |  | (9,410                                | )
|Interest rate swap       |  | 101,250         |  | 15 August 2011 |  | 9.035%        |  | (16,841                               | )
|Interest rate swap       |  | 101,250         |  | 15 August 2011 |  | 8.965%        |  | (17,070                               | )
|                         |  |                 |  |                |  |               |  |                                       |  
|                         |  | 315,000         |  |                |  |               |  | (52,704                               | )
|                         |  |                 |  |                |  |               |  |                                       |  
|Less: current maturities |  |                 |  |                |  |               |  | 17,822                                |  
|                         |  |                 |  |                |  |               |  |                                       |  
|Long-term portion        |  |                 |  |                |  |               |  | (34,882                               | )
|                         |  |                 |  |                |  |               |  |                                       |  

11.   Fair Value Of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, "Disclosures
about Fair Value of Financial Instruments". The estimated fair value amounts have been determined by the Company, using available market information
and appropriate valuation methodologies. However, considerable judgment is necessarily required in interpreting market data to develop the estimates indicative of the amounts that the Company could
realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The
following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Cash and cash equivalents, restricted cash, accounts receivable and accounts payable to related parties the carrying amounts
approximate fair value because of the short duration of these instruments.

Long-term receivable the fair value of the long-term receivable is estimated based on discounting
the future cash flows using the interest rate at which a similar restructuring settlement payment would be agreed with a customer with a similar credit rating similar remaining maturity.

Long-term loans the fair value of long-term loans is estimated by discounting the future cash flows
of each instrument at rates currently offered to the Company for similar debt instruments of comparable maturities by the Company's bankers.

24

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Interest rate swap contracts the fair value of interest rate swaps (used for hedging purposes) is the estimated amount the
Company would receive (or pay) to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties.

|                                    |  | 2004       |   | 2003       |  
|----------------------------------- |  | ---------- | - | ---------- | -
|
|Financial assets:                   |  |            |   |            |  
|Cash and equivalents                |  | 76,917     |   | 76,917     |  
|Restricted cash                     |  | 162,709    |   | 162,709    |  
|Accounts receivable                 |  | 92,385     |   | 92,385     |  
|Long-term receivable                |  | 443,962    |   | 443,962    |  
|Financial liabilities:              |  |            |   |            |  
|Accounts payable to related parties |  | (36,409    | ) | (36,409    | )
|Long-term loans                     |  | (2,074,535 | ) | (2,043,918 | )
|Derivative financial instruments    |  | (52,704    | ) | (52,704    | )

12.   Share Capital

The Company's authorized, issued and paid up share capital as of 31 December 2004 and 2003 were US$306,000 (30,600 common shares at par value of
US$10,000 per share). The composition of shareholders as of 31 December 2004 and 2003 was as follows:

|                                 |  | 31 December 2004
|-------------------------------- |  | ----------------
|
|MEC Indonesia, B.V.              |  | 13,680          
|Paiton Power Investment Co. Ltd. |  | 11,115          
|Capital Indonesia Power I C.V.   |  | 4,275           
|PT Batu Hitam Perkasa            |  | 1,530           
|                                 |  |                 
|                                 |  | 30,600          
|                                 |  |                 

|                                 |  | 31 December 2003
|-------------------------------- |  | ----------------
|
|MEC Indonesia, B.V.              |  | 12,240          
|Paiton Power Investment Co. Ltd. |  | 9,945           
|Capital Indonesia Power I C.V.   |  | 3,825           
|PT Batu Hitam Perkasa            |  | 4,590           
|                                 |  |                 
|                                 |  | 30,600          
|                                 |  |                 

A
circular resolution of the shareholders of the Company dated 10 April 2003 approved the increase of issued and paid-up share capital of the Company from US$250,000
to US$306,000. The circular resolution was effected by deed of notary public Popie Savitri Martosuhardjo Pharmanto SH No. 78 dated 23 May 2003.

25

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A
circular resolution of the shareholders of the Company dated 4 June 2003 approved the transfer of 3,060 shares owned by PT Batu Hitam Perkasa to MEC Indonesia, B.V. (1,440
shares), Paiton Power Investment Co. Ltd. (1,170 shares) and Capital Indonesia Power I C.V. (450 shares). The circular resolution was effected by deed of notary public Popie Savitri
Martosuhardjo Pharmanto SH No.12 dated 4 July 2003. The deed was approved by the Capital Investment Coordination Board under No. 29/III/PMA2004 on 14 January 2004 and the
contemplated transfers were effected on 21 January 2004.

On
17 December 2004, Edison Mission Energy, a sponsor of the Company, sold its interests in the Company to IPM Eagle LLP, a United Kingdom partnership between International Power
(Impala) Limited (a wholly owned subsidiary of International Power plc of the United Kingdom) and Mitsui Power Ventures limited (a wholly owned subsidiary of Mitsui of Japan). The transfer was at an
intermediate holding company level and thus has not affected the shareholder entity, which remains MEC Indonesia, B.V., nor the subordinated debt issuer, which remains as Edison Mission Energy Asia
Pte., Ltd. Such transfer also resulted in a transfer of ownership of the Operator at the power plant, PT Edison Mission Operation and Maintenance Indonesia.

13.   Income Tax

Income tax expense attributable to income from operations consists of:

|         |  | 2004    |   | 2003    |   | 2002    |  
|-------- |  | ------- | - | ------- | - | ------- | -
|Current  |  | (10,772 | ) |        |   |        |  
|Deferred |  | (24,622 | ) | (39,293 | ) | (28,573 | )
|         |  |         |   |         |   |         |  
|         |  | (35,394 | ) | (39,293 | ) | (28,573 | )
|         |  |         |   |         |   |         |  

The
Company's income tax expenses differed from the amount computed by applying the Indonesian tax rate of 30% to profit before income tax as follows:

|                                                |  | 2004    |   | 2003    |   | 2002    |  
|----------------------------------------------- |  | ------- | - | ------- | - | ------- | -
|Indonesian income tax expense at statutory rate |  | (35,262 | ) | (37,648 | ) | (27,847 | )
|Items not deductible for tax purposes           |  | (349    | ) | (1,645  | ) | (726    | )
|Adjustment relating to prior year               |  | 217     |   |        |   |        |  
|                                                |  |         |   |         |   |         |  
|                                                |  | (35,394 | ) | (39,293 | ) | (28,573 | )
|                                                |  |         |   |         |   |         |  

Accumulated
other comprehensive loss for the years ended 31 December 2004 and 2003 is net of US$15,811 and US$21,874 tax expense, respectively, of deferred income taxes
which is not reflected above.

26

---



The
items that give rise to significant portions of the deferred tax assets and deferred tax liability as of 31 December 2004 and 2003 are presented below:

|                                                                                                                   |  | 2004    |   | 2003    |  
|------------------------------------------------------------------------------------------------------------------ |  | ------- | - | ------- | -
|Deferred tax assets:                                                                                               |  |         |   |         |  
|Derivative financial instruments                                                                                   |  | 15,811  |   | 21,874  |  
|Deferred financing costs                                                                                           |  | 8,506   |   | 4,934   |  
|Provision for employee benefits                                                                                    |  | 356     |   |        |  
|Accrued liabilities                                                                                                |  |        |   | 2,143   |  
|Net operating loss carryforwards                                                                                   |  |        |   | 6,118   |  
|                                                                                                                   |  |         |   |         |  
|                                                                                                                   |  | 24,673  |   | 35,069  |  
|Less: current portion of deferred tax assets                                                                       |  | (5,347  | ) |        |  
|                                                                                                                   |  |         |   |         |  
|                                                                                                                   |  | 19,326  |   | 35,069  |  
|Deferred tax liability:                                                                                            |  |         |   |         |  
|Plant and equipment, and deferred charges, principally due to differences in depreciation and capitalized interest |  | (98,062 | ) | (77,774 | )
|                                                                                                                   |  |         |   |         |  
|Deferred tax liability, net                                                                                        |  | (78,736 | ) | (42,705 | )
|                                                                                                                   |  |         |   |         |  

Realization
of the Company's deferred tax assets is dependent upon its profitable operations. Although realization is not assured, the Company believes that it is more probable that
these deferred tax assets will be realized through the offset of future taxable income. Despite all the amount of deferred tax assets is considered realizable, however, it could be reduced if actual
future taxable income is lower than estimated.

Under
the Indonesian tax laws, the Company submits its tax returns on the basis of self-assessment. The taxation authorities may assess or amend taxes within ten years after
the date the tax became payable. The Company is, and may in the future be, under examination by the Indonesian tax authority with respect to positions taken in connection with the filing of tax
returns. Matters raised upon audit may involve substantial amounts, which, if resolved unfavorably, an event not currently anticipated, could possibly be material. However, in the Company's opinion,
it is remote that the resolution of any such matters will have a material adverse effect upon the Company's financial condition or results of operations.

14.   Commitments And Contingencies



27

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28

---







29

---







30

---









31

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15.   Debt Restructuring

As discussed in Note 9, the Company had violated certain covenants on its loans and the Company was in default under the terms of financing agreements with
Senior Lenders and the Common Agreement. On 14 February 2003, the Company completed its debt restructuring negotiations with its lenders. In connection with the successful completion of these
negotiations, the Company executed the Common Agreement between the Company and its lenders. The Company has accounted for the debt restructuring as a troubled debt restructuring in accordance will
SFAS No. 15 on the basis that the Company was experiencing financial difficulty through PLN's failure to pay according to the original terms of the PPA, and the Senior Lenders granted a
concession to the Company. This concession is in the form of the effective borrowing rate on the restructured debt being less than the effective rate on the debt immediately prior to restructuring.
Further, under the Common Agreement and the related Facility Credit Agreements, the original maturities of each of the senior debt facilities were lengthened. The carrying amount of the senior debt
facilities at the time of restructuring amounted to approximately US$1,501,889. The Company did not recognize a gain on the debt restructuring as the total payments of principal and interest over the
remaining term of the debt exceeded the carrying amount of the senior debt facilities.

In
accordance with the provisions of SFAS No. 15, the deferred financing costs of US$75,225 and accrued finance costs of US$27,751 relating to levelizing of interest rates under
the term of the Common Agreement at the time of the restructuring were adjusted to the outstanding loan balances for purposes of financial statement presentation. The effective interest rates
applicable to each facility are the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the payable. Certain debt
restructuring costs qualified for deferral totaling US$8,316. All other costs were expensed in the period incurred.

16.   Concentrations of Risk

The Company's operations are currently conducted in Indonesia, and it is accordingly subject to special considerations and significant risks not typically
associated with companies incorporated in the United States of America and Western European countries.

The
Company's results may be adversely affected by changes in the political and social condition in Indonesia and by changes in governmental policies with respect to laws and
regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and method taxation, among other things.

Indonesia
has been experiencing a prolonged period of economic difficulty. Indonesia's return to economic stability is dependant to a large extent on the effectiveness of measures taken
by the government, decisions of international lending organisations, changes in global economic conditions and other factors including regulatory and political developments, which are beyond the
Company's control. These circumstances give rise to continued economic and political uncertainties.

The
economic crisis in Indonesia during 1998 necessitated a restructuring of the PPA with PLN Company's sole customer. PLN's inability pay to the Company a portion of the amounts due the
PPA resulted in the Company not being able to make repayments of the senior debt in accordance with the original debt amortization schedules which was an event of default under the senior debt
agreements. In

32

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December 2002,
the PPA was amended as discussed in Note 14a. PLN has paid all invoices and all Restructuring Settlement Payments for 2004 and 2003, on time, as required and in the
amended PPA.

As
discussed in Note 9 and 15, the senior debt was restructured in February 2003. In connection with the restructuring of the senior debt, amortization schedule for
repayment of the Company's loans was extended to take into account the effect upon the Company of the lower cash flow resulting from the
restructured electricity tariff set forth in the PPA as amended. The Company believes that it will have sufficient cash flows to meet its obligations for repayment of debt, interest and other
liabilities as and when they come due in 2005.

The
generation of electricity by the plant requires the use of coal for fuel that must meet a certain quality standard. The Company purchases coal from a limited number of suppliers,
however, the Company believes that other suppliers could provide similar quality coal on comparable terms. The time required to locate and qualify other coal suppliers, however, could cause a delay in
electricity generation that may be disruptive to the Company.

17.   LIQUIDITY

The Company's management has undertaken a detailed analysis of the cash flows of the Company for the twelve months ended 31 December 2005. Based on
the forecast for the new twelve months, management has determined that sufficient liquidity exist to fund the operations of the business during that period. In preparing the forecast, management has
reviewed historic cash requirements of the Company as well as key factors which may impact the operations of the Company during next twelve-month period, and are of the opinions that the assumptions
and sensitivities which are included in the cash flow forecast are reasonable. However, as with all assumptions in regard to future events, these are subject to inherent limitations and uncertainties
and some or all of these assumptions may not be realized.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 on
Form 10-K/A to its annual report on Form 10-K for the year ended December 31, 2004 to be signed on its behalf by the undersigned, thereunto duly
authorized.

| |  | MISSION ENERGY HOLDING COMPANY(REGISTRANT)
| |  | ------------------------------------------
| |  |                                           
| |  | By:                                       
| |  |                                           
| |  | Date:                                     

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

|Signature                               |  | Title                                                                         |  | Date          
|--------------------------------------- |  | ----------------------------------------------------------------------------- |  | --------------
|                                        |  |                                                                               |  |               
|/s/THOMAS R. MCDANIELThomas R. McDaniel |  | Director, President and Chief Executive Officer (Principal Executive Officer) |  | March 29, 2005
|/s/MARK C. CLARKEMark C. Clarke         |  | Vice President and Controller (Controller or Principal Accounting Officer)    |  | March 29, 2005
|/s/JOHN E. BRYSONJohn E. Bryson         |  | Director and Chairman of the Board                                            |  | March 29, 2005
|/s/BRYANT C. DANNERBryant C. Danner     |  | Director                                                                      |  | March 29, 2005

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