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

is up 40%, earnings per share up about 32%. In the last five years, [Enron] had 20%
per year compound annual growth and earnings per share. If anything, there seems
to be even a little acceleration in the company's both financial performance and
operational performance.... I see absolutely no change in our business direction
or our business strategy."
• Lay stated: "You can go back over a ten-year period, the income before interest and
taxes has, in fact, been increasing at about 30% per year, compounded and that
growth has been stronger in the last couple of years as you also know.... Retail or
Enron Energy Services, of course, in recent, fairly new business, only started about
five years ago ... but in that business, over the last two or three years, we have been
doubling revenue and doubling income quarter-on-quarter, year-on-year for now
about the last three years. We expect that to continue to grow very, very strong....
[T]he company believe[s] that the Enron Energy Services component could become
as large or larger than Enron's wholesale business within a five or six year period or
so."
• Lay stated: "The company is very strong, we have very deep talent, very broad
talent and we think, in fact, there should be no change in the performance or the
outlook for the company going forward."
344. During the 8/14/01 conference call, the following question was asked of Lay and he
answered as shown below:
QUESTION: Yes, this question is for Ken Lay. I just, underlying investor concerns
anytime an executive leaves and I just wondered, was hopeful that
you could confirm that there are no accounting issues ... that had
anything to do with the decision of Mr. Skilling to depart.
LAY: Jeff, there is absolutely no problems that had anything to do with
Jeff's departure. There are no accounting issues, no trading issues,
no reserve issues, no previously unknown problem issues. And,
indeed, we just finished our two day regular August Board meeting
with our Board and all the committees and as we always do, we go
through a lot of things into detail, including the gentlemen around
the table making presentations to those various groups but I think
I can honestly say that the company is probably in the strongest and
best shape that it has probably ever been in.... [T]he company is
strong and has tremendous momentum inside the company.
345. On 8/14/01, CS First Boston issued a report on Enron. It retained CS First Boston's
"Strong Buy" rating on Enron with a price target of $84. It continued to forecast 01 and 02 EPS of
$1.80 and $2.25 for Enron. It also stated:
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