Enron Has Banner Year; 37% Net Income Hike
Significant strategic changes at Enron, including the sale of
Enron Oil & Gas and planned divestiture of Portland General
Electric, made the headlines in 1999, but its traditional
operations more than carried the company flag.
Enron posted a whopping 37% increase in net income to $957
million and an 18% rise in earnings per share to $1.18 for the
year. Its revenues rose 28% to $40 billion and its marketed volumes
jumped 19% to 32 trillion Btue/d. North American gas sales volumes
reached 13 Bcf/d up from 10.6 Bcf/d while U.S. power sales fell
slightly to 380.5 million MWh from 401.8 million MWh in 1998.
It was a more active than average year for the company as it
unloaded its capital intensive exploration and production unit,
Enron Oil & Gas, and prepared to part company with Portland
General Electric through a $2.1 billion sale to Sierra Pacific
Resources. The company also gained a foothold in the broadband
Internet services business and took a big step forward last week
with new agreement with Sun Microsystems. Its retail energy arm
made its first annual profit. The company more than doubled the
number of retail energy services contracts to $8.5 billion. It now
manages energy for 16,500 facilities worldwide. And its wholesale
operations continued to grow significantly.
"Our strong results in both the fourth quarter and the full year
1999 reflect excellent performance in all of our operating
businesses. Our wholesale business again registered strong
profitability and growth in the rapidly expanding, deregulating
energy industry worldwide. Our retail business is now profitable.
This business has reached critical mass in contracting activity and
service capabilities, and profitability is expected to accelerate
rapidly," said CEO Kenneth L. Lay. "In addition, Enron continues to
develop innovative, high-growth new businesses that capitalize on
our core skills, as demonstrated by the early success of our new
broadband services business. Overall, a great year - one in which
our shareholders received a total return of 58%." Enron also
announced fourth quarter earnings of $0.31 per diluted share, an
increase of 29% from $0.24 a year ago.
Strong earnings in Enron's commodity sales and services division
were reflected in a 53% increase in IBIT to $628 million for 1999.
Its energy assets and investments unit reported a 20% increase in
IBIT to $850 million. In 1999, Enron began commercial operations of
11wholesale power plants totaling over 4,300 MW of capacity.
Transportation and distribution, which includes Enron's gas
pipeline group and Portland General Electric, generated $685
million of IBIT versus $637 million last year.
The pipeline group reported IBIT of $380 million, compared to
$351 million in 1998. Total volumes transported increased by 4% to
over 9 Bcf/d. During the year, Northern Natural Gas settled a major
rate case, which extends firm contracts with a majority of its
customers. Florida Gas Transmission experienced record deliveries
on its system and is processing two large expansions, which will
add new capacity of 600 MMcf/d and will bring total capacity to 2.1
During the fourth quarter, Enron entered into an agreement to
sell Portland General Electric to Sierra Pacific Resources for $2.1
billion. The transaction is expected to close in late 2000.
Net results for the year also included after-tax income of $345
million, or $0.45 per diluted share, from the sale of its ownership
in Enron Oil & Gas Co. After-tax charges for the year included
$278 million and $131 million, or $0.36 and $0.17 per diluted
share, related to Enron's MTBE asset and the cumulative effect of
accounting changes, respectively.
©Copyright 2000 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.