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

375. On 10/19/01, CitiGroup issued a report on Enron. The report continued to rate Enron
a "Buy" and continued to forecast 01 and 02 EPS of $1.80 and $2.15 for Enron as well as 23% long-
term EPS growth rate for Enron. It also stated:
SUMMARY
• We reiterate our Buy rating on Enron after untangling part of a complicated
story involving their balance sheet, cash flow and business practices.
* * *
• ... [C]ash flows appear solid over the balance of the year and 2002; and
their core Merchant Energy operating performance is solid.
376. On 10/20/01, JP Morgan issued a report on Enron. The report rated Enron a "Long
Term Buy" and continued to forecast 01 and 02 EPS of $1.82 and $2.17 for Enron. It also stated:
ENRON'S LIQUIDITY POSITION – STRONG IN THE NEAR- TO MID-TERM
• Enron continues to underperform in the capital markets, but there is scant
evidence of business impairment.
• Liquidity, especially short-term, is not an issue, in our view.
* * *
We see ample liquidity in the near- to medium-term.
377. On 10/23/01, Enron held a conference call for analysts, money and portfolio
managers, institutional investors and large Enron shareholders to discuss Enron's results, its business
and its prospects. During the call – and in follow-up conversations with analysts – Lay, Causey and
Fastow stated:
• Enron was extremely disappointed with its stock price, particularly since its
businesses are performing very well and it was continuing to conduct business as
usual.
• There had been a lot of recent attention to transactions Enron previously entered
into with LJM, a private equity partnership. Enron wanted to reiterate a couple
- 299 -