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Enron Overview
Jeff SkillingApril 3, 2001
2UB-SMETHODIST-0301
Enron Annual Revenues
1997 1998 1999 2000
20.3B31.3B
100.8B
40.1B
+ 54% + 28% + 151%
3UB-SMETHODIST-0301
1997 1998 1999 2000
$0.87$1.00
$1.47
$1.18
+ 15% + 18% + 25%
Earnings Performance(Recurring Per Diluted Share)
4UB-SMETHODIST-0301
Management Efficiency
Source: msn-MoneyCentral © 2001
55,000
32,000
43,836
5.6 Mil
894,0941.1 Mil
Income per Employee Revenue per Employee
Enron Industry S&P Utilities Enron Industry S&P Utilities
5UB-SMETHODIST-0301
Enron Market Value*
1997 1998 1999 2000
12.8B
18.9B
62.5B
31.8B
*Uses basic shares outstanding at 12/31
6UB-SMETHODIST-0301
Enron Price/Earnings Ratio
1997 1998 1999 2000
23.928.5
37.6
56.6
7UB-SMETHODIST-0301
Total Return to ShareholdersJan 1, 1990 to February 28, 2001
200
1600
1400
1200
1000
800
600
400
-200
0
Dec 97Dec 96Dec 95Dec 94Dec 93Dec 92Dec 91Dec 90
Enron Corp.
S&P 500
Pipeline Avg.
Utility Avg.
E&P Avg.
1,151%
354%
571%
246%
183%
Dec 00Dec 99Dec 98
Note: Calculated to February 28, 2001
Jan 01 Feb 01
8UB-SMETHODIST-0301
Enron Corp
Enron Transportation Services
Enron Wholesale Services
Enron Energy Services
Enron Broadband Services
9UB-SMETHODIST-0301
Enron Opportunity
Traditional Model
New Model
• Asset intensive• Vertically integrated• Slow moving and rigid• Hierarchical
• Brain power intensive• Networked• “Real options” oriented• Fast moving & entrepreneurial
10UB-SMETHODIST-0301
Changes in the Marketplace• Interaction costs declining due to streamlining,
standardization and automation
• Cost/benefit of vertical integration and consolidation significantly reduced
• Efficient sourcing and packaging produces lowest cost product
–Legal
–Research
–Documentation
–Logistics
– Sales
– Procurement
– Credit
– Inventory
– Settlement
11UB-SMETHODIST-0301
Enron’s Network Advantages
Significant Competitive Advantages for Entering New Markets
• Access to Physical Product
• Delivery Logistics Expertise
• Leading Market-Making Capabilities
• Risk Management Expertise
• Ability to Structure Complex Customized Solutions
• Well-Developed E-commerce
12UB-SMETHODIST-0301
• Robust, Flexible Network
• Scope and Scale
• Liquidity
• Market-Making
• Risk Management
• Technology
• Finance
Enron’s Advantage
Wholesale Merchant Opportunities
• Commodity Risk Management
• Benefits of Regional Arbitrage
• Cross Commodity Arbitrage
• Long-Term Origination
• Wholesale Outsourcing
• Asset Restructurings
• Structured Finance
Enron’s Capabilities Enable Unique Value Creation
High Value Applications
13UB-SMETHODIST-0301
17,970
Power and Other Gas
Physical Volumes(BBtue/d)
99,337
Financial Settlements(BBtue/d)
1997 1997
27,30832,429
51,715
196,148
75,266
49,082
Wholesale Services
1998 1999 2000 1998 1999 2000
14UB-SMETHODIST-0301
Expansion of Existing Business
Weather
• Over 7,500 TBtue Avg. Daily Deliveries
• 240 Customers in 46 Countries
• Over 100,000 Tonnes Avg. Daily Deliveries
• 190 Customers in 17 Countries
• Over $1.5 Million (Notional) Average Daily
Contracts
• 30 Customers in 8 Countries
1997 1998 1999 2000
16
305 321
1,629
Crude and Products
5,099
7,4358,305
9,158
1997 1998 1999 2000
(Transactions)
Coal
1997
46250
715
3,111
1998 1999 2000
(Transactions) (Transactions)
15UB-SMETHODIST-0301
Enron–Accelerating Market Development
1985 1990 1995 20001991 1992 1993 1994 1996 1997 1998 19991986 1987 1988 1989
Commodity
Product
Financial
Australian Power & Gas
Bandwidth
Metals
NaturalGas
Electricity
UK Power & Gas
Financials (interest rate, equity)
Emissions
Plastics
Scandinavian Power & Gas
Weather
Coal
Pulp & Paper
Currencies
* Lighter shading indicates a developing market Darker shading indicates a mature market
16UB-SMETHODIST-0301
ConsultantsConsultants
Software VendorSoftware Vendor
Controls Manufacturers
Architects
Engineers
Mechanical ContractorsMechanical Contractors
HVAC Svc CompaniesHVAC Svc Companies
Specialty ContractorsSpecialty Contractors
UtilitiesUtilities
Internal TreasuryInternal Treasury
LendersLenders
Electrical ContractorsElectrical Contractors
In-house Coordination
EnronOutsourcing
Approach
Equipment Manufacturers
Commodity ManagementCommodity Management
Energy Information
Management
Energy Information
Management
CapitalManagement
CapitalManagement
Energy AssetManagement
FacilitiesManagement
FacilitiesManagement
• Improved Core Business Focus
• Redeployment of Capital
• Reduced Operating Costs
• Access to World-Class Capabilities
CustomerReceives
• Conditioned Air
• Light
• Managed Facilities
Enron Energy Services
17UB-SMETHODIST-0301
1997 1998 1999 2000
$1.2B
$3.8B
$8.5B
$16.0B
Enron Energy ServicesExecuted Contracts
18UB-SMETHODIST-0301
Enron Energy ServicesExecuted Contracts
StructureStructure
TodayToday
19971997
19UB-SMETHODIST-0301
EnronOnline – Changing the Way Energy Is Traded
Free, Reliable Transaction System with Enron as Principal
Transactions per day
11/29/99
12/10/99
12/21/99
01/01/00
01/12/00
01/23/00
02/03/00
02/14/00
02/25/00
03/07/00
03/18/00
03/29/00
04/09/00
04/20/00
05/01/00
05/12/00
05/23/00
06/03/00
06/14/00
06/25/00
07/06/00
07/17/00
07/28/00
08/08/00
08/19/00
08/30/00
09/10/00
09/21/00
10/02/00
10/13/00
10/24/00
11/04/00
11/15/00
11/26/00
12/07/00
01/31/01
02/28/01
Free, Reliable TransactionSystem with Enron as Principal
20UB-SMETHODIST-0301
EnronOnline Efficiency Gains
Marginal Cost Per Transaction
(Indexed)
25
100
Transactions Per Market Maker
1999 2000
672
3,084
1999 2000
EnronOnline
Enron Net Works
®
Clickpaper.com
Deal Bench
CommodityLogic
EnronOnline V2.0
Enron Credit
22UB-SMETHODIST-0301
Commitment to Technology
1,380
1,882
$358
$522
1999
People Expenditures (Millions)
2000 2001E
1,154
1999 2000 2001E
$291
New E-commerce Initiatives
®