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

• Enron expects this sector ... to grow 100%+ per year over the foreseeable
future.
* * *
• Other important comments included management's conviction in Enron
Energy Services' ability to turn profitable in 4Q99 and increase its contribution going
forward.
174. On 10/1/99, Bloomberg News reported:
Enron Corp. ... is negotiating energy-service contracts valued at about $22
billion, and may top its goal of signing $8 billion in agreements this year, Chairman
Kenneth Lay said.
"We fully expect to hit the $8 billion number and possibly exceed it," Lay
said in an interview ....
175. On 10/1/99, CFO Magazine ran an article on Enron stating:
How Enron financed its amazing transformation from pipelines to piping hot.
When Andrew S. Fastow, the 37-year-old CFO of Enron Corp., boasts that "our story
is one of a kind," he's not kidding. In just 14 years, Enron has grown from a heavily
regulated domestic natural-gas pipeline business to a fully integrated global energy
company ... much of that growth has been fueled by unique financing techniques
pioneered by Fastow.
"When I came here in 1990, Enron was a company with a $3.5 billion market
capitalization," says Fastow. "Today, we're around $35 billion, and that's without
issuing a whole lot of equity. We've increased shareholder value, grown the
balance sheet, maintained a stable outlook from the rating agencies, and achieved
a low cost of capital."
... [W]hen energy stock analysts ... seek how to explain how Enron has remade itself
so completely, they emphasize the "remarkably innovative financing." Says Ted A.
Izatt, senior vice president at Lehman Brothers Inc. in New York: "Thanks to
Andy Fastow, Enron has been able to develop all these difference businesses,
which require huge amounts of capital, without diluting its stock price or
deteriorating its credit quality-both of which actually have gone up. He has
invented a groundbreaking strategy."
"Fastow's expert balancing act, in fact, has earned him the 1999 CFO Excellence
Award for Capital Structure Management" ... says Jeffrey K. Skilling, Enron
president and chief operating officer. "[Fastow] deserves every accolade tossed his
way."
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