Enron Corp. - University of California | Office of The President

138. Enron's 98 Annual Report also discussed EES:
[EES] significantly exceeded its contracting objectives and signed contracts
representing $3.8 billion of customers' future energy expenditures. Based on both
the current backlog of prospects and contracting activity, Enron expects to double
the level of new contracts to be added in 1999.... [R]esults for this business ... are
expected to reflect positive earnings in late 1999.
139. With respect to Azurix – Enron's water business – Enron's 98 Annual Report stated:
Azurix is poised to become a major global water company in a $300 billion
market that is ripe for third-party investment and the modernization of water and
wastewater infrastructure.... Azurix's participation in the full spectrum of these
areas will allow it to create enhanced value for shareholders.
140. Enron's 98 Annual Report contained Enron's 97 and 98 financial statements certified
by Andersen, which reported $31.2 billion revenues with net income of $703 million and EPS of
$1.01 for 98 – huge increases over 97. Enron's 98 Annual Report statements also reported the
following balance sheet information (in millions) at 12/31/98 and 12/31/97:
ASSETS
- 145 -
December 31,
1998 1997
Total Current Assets $ 5,933 $4,113
Total Investments and Other Assets 12,760 9,269
Property, Plant and Equipment, net 10,657 9,170
Total Assets $29,350 22,552
LIABILITIES & SHAREHOLDERS' EQUITY
Total Current Liabilities $6,107 3,856
Long-Term Debt 7,357 6,254
Total Shareholders' Equity $7,048 5,618
141. In 3/99, Enron filed its 98 Report on Form 10-K with the SEC which was signed by
Lay, Causey, Fastow, Foy, Gramm, Harrison, Jaedicke, LeMaistre, Meyer, Skilling, Urquhart,
Wakeham, Walker and Winokur. Vinson & Elkins reviewed and collaborated in writing the Form