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

423. In fact, Enron's restatement did not correct the Company's abuse of mark-to-market
accounting, which accelerated or fabricated profits, including for its broadband business. The
Company, with the assistance of certain of the banking defendants, also engaged in false forward
sales contracts which concealed hundreds of millions of dollars in loans, none of which are part of
the restatement. Had Enron properly reported its results, its broadband efforts would have been
shown to be a complete failure and its debt-to-equity ratios would have been much worse than even
the restated amounts. The Raptors transactions were restated only as to the balance sheet effect but
not as to $1.1 billion in pretax earnings that had been improperly recorded. Note the impact the
Raptors transactions had on Enron's results (which was not restated):
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
$0
Enron Corp.
Pre Tax Income
Q3 00 Q4 00 Q1 01 Q2 01
As originally reported Excluding Raptor Transactions
424. During the Class Period, Enron painted a false picture of profitability and liquidity.
This included the amounts reported on the Company's financial statements. Enron reported the
following financial results for 97-01:
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