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

– $180 million associated with the restructuring of Broadband Services,
including severance costs, loss on the sale of inventory and an impairment to reflect
the reduced value of Enron's content services business; and
– $544 million related to losses associated with certain investments, principally
Enron's interest in The New Power Company, broadband and technology
investments, and early termination during the third quarter of certain structured
finance arrangements with a previously disclosed entity.
365. Publicly, Enron and the banks tried to minimize the impact of the write-offs and
shareholder equity dilution and to assure investors that Enron had cleaned up its balance sheet, taken
all necessary losses and was positioned now to achieve strong profitable going forward due to the
strength of its core wholesale and retail energy businesses.
366. On 10/16/01, Enron held a conference call for analysts and investors to discuss
Enron's 3rdQ 01 results and its business. During the call – and in follow-up conversations with
analysts – Lay, Frevert, Whalley, Koenig, Causey, Fastow and Kean stated:
• For the third quarter of 01, Enron reported strong recurring operating
performance which included a 35% increase in recurring net income to $393
million versus $292 million a year ago and a 26% increase in diluted recurring
earnings per share to $.43 a share compared to $.34 a share a year ago. As these
numbers show, Enron's core energy business fundamentals were excellent.
• Enron reaffirmed that it was on track to meet its previously stated targets for
recurring earnings per diluted share. That is, $.45 for the 4thQ of this year, $1.80
for the full year 01 and $2.15 for the full year 02.
• Retail services had an outstanding 3rdQ with IBIT of $71 million representing
more than 3.5 times that of the 3rdQ, last year. Enron continued to experience
high demand for its retail products and was expanding its market share at a very
rapid pace as the only nationwide provider of energy management services to
commercial and industrial customers of all sizes. Enron had completed over 50
large consumer transactions, including the recent signing of contracts with
Walmart, Northrop Grumman, the City of Chicago, Equity Office Properties and
Wendy's in the U.S. and with Sainsbury and Guinness Brewery in the U.K.
• Enron continued to actively participate in the intermediation market. Although
the overall market had contracted recently, Enron entered into 405 intermediation
transactions during the quarter.
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