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

Relative to retail energy services, it was a good quarter.... [It] is on track to breakeven
in the fourth quarter of 1999.
164. On 7/23/99, Enron filed a Form S-3 with the SEC to the register 10 million
exchangeable notes which contained Enron's 2ndQ 99 results and incorporated Enron's Form 10-K
for 98. As described in 418-611, these financial results were false. The Registration Statement
was signed by Lay, Causey, Fastow, Belfer, Blake, Chan, John Duncan, Foy, Gramm, Harrison,
Jaedicke, LeMaistre, Mark-Jusbasche, Mendelsohn, Meyer, Skilling, Urquhart, Wakeham and
Winokur.
165. On 8/10/99, Enron sold $222 million of 7% Exchangeable Notes due 7/31/02, with
Bank America and CitiGroup acting as underwriters. The Prospectus also included Enron's 2ndQ
99 results. In fact, these financial results were false. Enron used the proceeds of this securities
issuance to pay down its short-term debt – commercial paper and/or bank debt to JP Morgan and
CitiGroup.
166. On 8/20/99, CitiGroup issued a report on Enron, rating Enron a "Buy." It increased
Enron's forecasted 00 EPS to $1.20 and stated:
[W]e increased our 1999 earnings estimate to $1.20 from $1.15 per share to reflect
the strength of Enron's growing communications business.... [W]e are increasing our
12-month price target.
167. On 9/2/99, CS First Boston issued a report on Enron, rating Enron a "Buy,"
forecasting 00 EPS of $1.35 for Enron and stating:
Meeting with management highlights a strong EDSing of Energy ... and reaffirms
earnings.
Wholesale energy marketing remains strong .... We expect continued operating
profit growth in the upper end of the 15-20% range.
Retail energy marketing is on pace for a profitable fourth quarter ....
* * *
- 161 -