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

4 years .... We are projecting minimum 30% compound annual growth at this
segment for the next four years....
RETAIL ENERGY IS A UNIQUE FRANCHISE, BACKING UP GROWTH IN
LATER YEARS
Enron Energy Services (Retail Energy) ... is moving ahead at a rapid pace.... [T]he
unit earned $103 million in 2000, and we project will earn more than $200 million
in 2001.... [W]e project rapid growth from these levels, as we look towards the end
of a 2001-2005 forecast period.
Enron Energy Services is a unique franchise ... which should support corporate
earnings growth in the 20%-25% during the last several years of our 2001-2005
forecast period.
BANDWIDTH INTERMEDIATION (TRADING): PROJECT GREATER VALUE
THAN ENERGY WITHIN 5 YEARS
Finally, we see Bandwidth Intermediation as a key growth driver, whose value is
likely to exceed energy within 5 years. The "top line" growth of bandwidth,
approximately 20% per year, provides significantly greater upside potential than the
gas and electricity markets ... we see it as sustaining Enron's growth after the
energy opportunity becomes fully realized.
* * *
The growth in bandwidth transactions validates for us the potential of the
bandwidth commodity market.... For the full year 2001, we expect a 5-10 fold
increase in transactions, with profitability likely in 2002/2003.
BOTTOM LINE: GROWTH INTACT
Bottom line, we see the key growth drivers – Merchant Energy, Retail Energy, and
Bandwidth Intermediation – as solidly intact, and providing 20%-25% annual EPS
growth over the next 5 years. In fact, we project a steady rise in Enron's growth
rate, as Retail Energy and Bandwidth pick up relative to Wholesale Energy (by
2004, we see Enron's corporate EPS growing at 25%, up from today's 20%).
305. After Enron was forced to reveal the termination of the Blockbuster VOD joint
venture and information became more widely circulated that Enron was having increasing difficulties
obtaining payment for electricity sold from the Dabhol power plant by the provincial government,
Enron's stock declined to as low as $51-33/64 on 3/22/01. Enron's insiders, accountants, lawyers and
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