Message-ID: <2950577.1075852230021.JavaMail.evans@thyme> Date: Fri, 26 Oct 2001 14:08:00 -0700 (PDT) From: c..giron@enron.com To: dgiron1@houston.rr.com Subject: FW: Enron Mentions Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Giron, Darron C. X-To: 'dgiron1@houston.rr.com' X-cc: X-bcc: X-Folder: \DGIRON (Non-Privileged)\Giron, Darron C.\Sent Items X-Origin: GIRON-D X-FileName: DGIRON (Non-Privileged).pst -----Original Message----- From: =09Love, Phillip M. =20 Sent:=09Friday, October 26, 2001 1:12 PM To:=09Giron, Darron C. Subject:=09FW: Enron Mentions just incase you haven't gotten enough to read about us lately PL -----Original Message----- From: =09Simien, Jimmy =20 Sent:=09Friday, October 26, 2001 1:03 PM To:=09Love, Phillip M. Subject:=09FW: Enron Mentions -----Original Message----- From: =09Border, Mary =20 Sent:=09Friday, October 26, 2001 8:18 AM To:=09Anaya, Jessica; Anderson, Peter N.; Boots, Kelly H.; Boyle, Dan; Cast= agnola, Daniel; Delacey, Charles; Heineman, Sarah; Hudler, Shirley A.; Jens= , Felipe; Mckean, George; Mckillop, Gordon; Mills, Jana; Mitchell, David; M= urphy, Brendan J. (Houston); Olivier, Phenicia; Randolph, Trevor; Richardso= n, James; Schnapper, Barry; Simien, Jimmy; Siurek, Ryan; Swinford, Brian; W= alden, Clint; Wenz, Michelle; Wesner-Soong, Sarah; Winfrey, Travis; Wolfe, = Tony Subject:=09FW: Enron Mentions -----Original Message----- From: =09Schmidt, Ann M. =20 Sent:=09Friday, October 26, 2001 8:16 AM Subject:=09Enron Mentions Enron Taps $3 Billion From Bank Lines In Pre-Emptive Move to Ensure Liquidi= ty --- Firm Will Pay Debt, Keep Cash Cushion The Wall Street Journal, 10/26/01 Deals & Deal Makers: Enron Officials Sell Shares Amid Stock-Price Slump The Wall Street Journal, 10/26/01 Enron's Financial Troubles Reverberate to Bonds With Poor Liquidity and Cre= dit-Rating Concerns The Wall Street Journal, 10/26/01 Most Analysts Remain Plugged In to Enron The Wall Street Journal, 10/26/01 Enron Draws Down $3 Bln in Credit to Boost Investor Confidence Bloomberg, 10/26/01 Enron Liked By Analysts Despite Complicated Dealings, WSJ Says Bloomberg, 10/26/01 Enron Draws Down $3 Billion From Its Credit Lines, WSJ Reports Bloomberg, 10/26/01 Action by Enron halts stock's fall Houston Chronicle, 10/26/01 Corporate US on track for bailout The Guardian, 10/26/01 Harvey Pitt's S.E.C.: From Guard Dog to Friendly Puppy? The New York Times, 10/26/01 Enron draws down at least 1 bln usd from credit lines to boost mkt confiden= ce AFX News, 10/26/01 The Five Dumbest Things on Wall Street This Week TheStreet.com, 10/26/01 Stocks Post Gains After A Rough Morning The Washington Post, 10/26/01 Sudhakar will head Enron probe panel The Times of India, 10/26/01 Enron Taps $3 Billion From Bank Lines in Pre-Emptive Move to Ensure Liquidi= ty Dow Jones Business News, 10/25/01 Enron chief executive resigns from board of i2 Technologies Associated Press Newswires, 10/25/01 As Enron's woes unnerve investors about energy sector, analysts say its pro= blems are isolated Associated Press Newswires, 10/25/01 Enron's Credit Outlook Downgraded to Negative by S&P (Update1) Bloomberg, 10/25/01 Enron's Trading Partners Say It's Business as Usual (Update2) Bloomberg, 10/25/01 Enron Broadband Begins Closing London, Singapore Offices Dow Jones Energy Service, 10/25/01 Calpine:No Exposure To Enron; No Calif Pwr Contract Talks Dow Jones Energy Service, 10/25/01 Spector, Roseman & Kodroff, P.C. Files Class Action Suit Against Enron Corp= oration PR Newswire, 10/25/01 TGS Q3 net profit up 22 pct yr-on-yr on higher NGL sales, transport revenue= s AFX News, 10/25/01 Enron Draws Down Credit Facility Dow Jones News Service, 10/25/01 Enron Employees Watch Options Devalue as Shares Fall (Correct) Bloomberg, 10/25/01 Enron Taps $3 Billion From Bank Lines In Pre-Emptive Move to Ensure Liquidi= ty --- Firm Will Pay Debt, Keep Cash Cushion By Wall Street Journal staff reporters John R. Emshwiller, Rebecca Smith an= d Jathon Sapsford 10/26/2001 The Wall Street Journal C1 (Copyright (c) 2001, Dow Jones & Company, Inc.) Enron Corp. drew down about $3 billion, the bulk of its available bank cred= it lines, in a bid to restore confidence in its financial strength and liqu= idity.=20 Enron will use part of the money to offer to redeem about $1.85 billion of = outstanding commercial paper -- short-term corporate IOUs -- according to a= person familiar with the matter, with the remainder providing the energy c= oncern with a cash cushion. Some observers believe the move is a pre-emptiv= e step by Enron to ensure that it had adequate liquidity should its access = to bank lines be interrupted. The person also said Enron was talking to its= banks about a new, multibillion-dollar credit line. Enron insists its business operation and financial condition remain strong.= But, "when the market is reacting as irrationally as it has been the last = few days, we thought that cash was better than a commitment from a bank," s= aid an Enron spokesman. In a statement, the company's new chief financial o= fficer, Jeff McMahon, said that by drawing down the bank lines, "we are mak= ing it clear that Enron has the support of its banks and more than adequate= liquidity to assure our customers that we can fulfill our commitments."=20 The move underscored the tumultuous conditions that have been sweeping over= the Houston energy-trading concern in the past 10 days. Enron is the natio= n's largest energy trader and is a principal in nearly one-quarter of all e= lectricity and natural-gas trades. Yesterday, for example, Enron was involv= ed in about $4 billion of deals through its EnronOnline unit.=20 Since early last week, Enron's share price has plummeted 50%. Last week, it= reported a $618 million third-quarter loss and a reduction in shareholder = equity of $1.2 billion. It also disclosed that the Securities and Exchange = Commission is conducting an inquiry into billions of dollars of transaction= s it did with entities connected to its former chief financial officer, And= rew S. Fastow, who was replaced Wednesday.=20 The draw-down of the credit facilities came as one rating agency, Fitch, pu= t Enron on review for a possible downgrade, while another, Standard & Poor'= s, changed Enron's credit outlook to negative from stable. Moody's Investor= s Service already has said it is looking at a possible downgrade of Enron. = In order to fall below investment grade, Enron's credit rating would have t= o fall several notches.=20 If that were to happen, however, a host of bad consequences could follow. T= ogether with the sharp decline in its stock price, a noninvestment-grade ra= ting would throw the company into default on obligations involving billions= of dollars of borrowings. In that event, Enron could be forced to issue mi= llions of shares of stock to holders of that debt, diluting the value of ex= isting shares. At 4 p.m. in New York Stock Exchange composite trading, Enro= n was down six cents at $16.35.=20 Liquidity is a key issue for Enron, which handles energy-trading volumes mo= re than triple its next-biggest competitor, American Electric Power Co. Enr= on's EnronOnline Internet-based trading platform has transacted more than $= 884 billion of trades since it was created in November 1999.=20 The company's wildly successful wholesale unit has been dragged down by und= erperforming assets elsewhere in the company, chiefly the approximately $6.= 5 billion of international assets such as its Dabhol power project in India= . Raising cash and retiring debt largely is a timing issue. The cash needs = of its trading operation are immediate; it takes time to sell assets, parti= cularly in today's slower economy.=20 The company also is suffering from a string of disclosure controversies tha= t have damaged its credibility, particularly in connection with its dealing= s with Mr. Fastow, the former chief financial officer. Internal documents r= elated to one of the Fastow partnerships disclose that Enron also did as mu= ch as hundreds of millions of dollars of business with an entity connected = to another company official, who has since left Enron. While Enron disclose= d its Fastow-related transactions in SEC filings, a computerized search of = the SEC's database of public filings produced no reference to this other em= ployee-related entity known as Chewco.=20 Chewco was established in 1997 "with approximately $400 million in capital = commitments" to buy an interest in Enron assets, according to one of the pa= rtnerships documents. The document didn't further specify what assets were = purchased, and it didn't disclose the financial impact of the transactions = for either Chewco or Enron. Chewco was being run by Michael Kopper, a manag= ing director in Enron's Global Equity Markets Group, according to the docum= ent.=20 Enron, which has maintained that its complex financial transactions with em= ployee-related entities were legal and properly disclosed, didn't have any = comment regarding its dealings with Chewco.=20 Mr. Kopper, who Enron says left the company this year to focus on helping t= o run the Fastow-related partnerships, didn't return phone calls. A person = at his office in Houston yesterday said Mr. Kopper was traveling. In respon= se to questions about Chewco, an Enron spokesman would say only that "Micha= el Kopper was never an executive officer of Enron." Mr. Fastow repeatedly h= as declined interview requests. He severed his relationships with the partn= erships in July.=20 This statement is an apparent reference to SEC disclosure regulations regar= ding related-party transactions. Under SEC rule S-K, a company has to repor= t any transaction that exceeds $60,000 and involves "any director or execut= ive officer." By contrast, Mr. Fastow, as CFO, would have fallen into that = category, but Mr. Kopper, as managing director of a business unit, presumab= ly wouldn't have.=20 However, reporting guidance issued by the Financial Accounting Standards Bo= ard seems to have a broader definition, one that might include Mr. Kopper. = According to FAS Statement 57, a related-party transaction involves a "mate= rial" piece of business between the company and a member of management. The= statement defines management as directors, top officers, vice presidents i= n charge of major business units and "other persons who perform similar pol= icy-making functions. Persons without formal titles may also be members of = management." Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Deals & Deal Makers: Enron Officials Sell Shares Amid Stock-Price Slump By Theo Francis and Cassell Bryan-Low Staff Reporters of The Wall Street Journal 10/26/2001 The Wall Street Journal C14 (Copyright (c) 2001, Dow Jones & Company, Inc.) Officials at Enron Corp., whose unusual transactions with its chief financi= al officer are under regulatory scrutiny, have steadily sold sizable amount= s of their holdings of company stock as the share price has fallen this yea= r.=20 Corporate officials had sold 1.8 million shares valued at about $106 millio= n through July, as the stock fell to less than $45 a share from $83 at the = start of the year. Since July, the stock has plummeted an additional 63% to= $16.35, including a 50% plunge since the beginning of last week. Kenneth Lay, chief executive of the Houston energy-trading company, cashed = in shares for $25.7 million so far this year, usually in transactions paire= d with options exercises. He sold 429,614 shares, leaving him with some 2.8= million shares as of July, the latest data available on his sales, accordi= ng to Thomson Financial/Lancer Analytics.=20 The dollar amount for his 2001 sales is approaching the total for all Mr. L= ay's sales of Enron shares for 2000, which reached $30.7 million. In 1999, = he sold shares for a total of $26 million.=20 In Houston, an Enron spokeswoman declined to comment on the figures, saying= the company doesn't keep a running tally of stockholdings by corporate off= icials. Enron also wouldn't comment on the number of options held by compan= y insiders and called the sales "a personal decision." Many sales by Enron = insiders were concurrent with options exercises or sales followed soon afte= r option exercises.=20 Strong selling by company officers and directors amid share-price declines = should raise red flags for investors, says Jonathan Moreland, research dire= ctor of InsiderInsights.com, who uses insider-trading data to zero in on in= vestment ideas.=20 Among other insiders selling during the year, Kenneth Rice, former chairman= and CEO of Enron's broadband unit, sold shares for $23.7 million. Mr. Rice= has sold 456,966 shares of the 1.5 million shares he was listed as owning = in Enron's March proxy filing. Former Enron Chief Executive Jeffrey Skillin= g -- who resigned in August -- sold 160,000 shares for $9.8 million during = the year. In March, Mr. Skilling owned 1.9 million shares.=20 Messrs. Rice and Skilling couldn't be reached to comment.=20 Overall, Enron's insiders were busier selling shares last year, when they s= old 5.8 million shares for about $449 million. During 1999, insiders sold 3= .4 million shares for $123.1 million.=20 Since December 1999, only one Enron executive has reported buying company s= hares. The buyer was Andrew Fastow, who was ousted during the week as Enron= 's chief financial officer after the company disclosed it was under a Secur= ities and Exchange Commission investigation into financial ties between the= company and Mr. Fastow.=20 Mr. Fastow reported purchasing 10,000 Enron shares in August at $36.98 each= , or a total of $369,800. Today, those shares are valued at $163,500, based= on Enron's stock price of $16.35 in 4 p.m. New York Stock Exchange composi= te trading. After the purchase, Mr. Fastow owned 110,586 shares, Thomson Fi= nancial/Lancer Analytics says.=20 Enron said Mr. Fastow wasn't available to comment.=20 On Monday, a New York law firm filed suit in U.S. District Court in Houston= , alleging that Enron misrepresented its performance by failing to disclose= problems with its broadband division and failing to properly write down th= e value of investments in limited partnerships managed by Mr. Fastow. The s= uit, which seeks class-action status, also says Enron insiders sold $73 mil= lion of their own Enron holdings during parts of 2000 and 2001. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Credit Markets Enron's Financial Troubles Reverberate to Bonds With Poor Liquidity and Cre= dit-Rating Concerns By Jathon Sapsford and Suzanne McGee Staff Reporters of The Wall Street Journal 10/26/2001 The Wall Street Journal C15 (Copyright (c) 2001, Dow Jones & Company, Inc.) NEW YORK -- Enron Corp.'s bonds have held up better than its battered stock= amid escalating financial woes at the energy-trading powerhouse.=20 Not for long, some bond traders say. In trading yesterday, the Houston company's five-year bond, a $250 million = issue due in July 2006 carrying a coupon of 6.4%, was quoted at 82 cents on= the dollar, down from a bid of 88 late Wednesday, and representing a 16% d= rop during the past two weeks.=20 That is far less than the 50% decline in Enron's stock price since the Oct.= 16 disclosure of a $1.01 billion charge linked to soured investments, resu= lting in a $618 million third-quarter loss. But the fall in the bond's pric= e translates to a yield of 7.7 percentage points above bellwether U.S. gove= rnment bonds, which is a widening from about three percentage points two we= eks ago. Although Enron still is an investment-grade credit, that kind of "= spread" is more characteristic of a junk bond with a credit rating of singl= e B or lower.=20 Enron sought to assure the markets that its finances were sound, disclosing= late yesterday that it drew down more than $1 billion on its bank credit l= ines to shore up its finances. Yet even as Enron was tapping its lifeline, = investors were finding it difficult to trade big blocks of Enron bonds. Yes= terday's 82 bid, for instance, was for a block of less than $2 million in b= onds, a small percentage of a typical trade.=20 Fueling the uncertainty surrounding Enron were fears that credit-rating con= cerns will lower ratings on Enron debt after it recently conceded a slew of= troubles, including losses, a Securities and Exchange Commission investiga= tion, and the sudden resignation of its chief financial officer.=20 "Even at these levels, there's very little buying interest," said Harold Ri= vkin, a principal at distressed-debt trader H. Rivkin & Co. in Princeton, N= .J.=20 In one sign of the ripple effects, the price investors pay to protect thems= elves from losses on Enron debt was surging. The cost of a "default swap" -= - in which an investor pays another investor to take a chunk of debt at fac= e value in the event of default -- rose to 10% of the size of the credit be= ing insured. That was up from 8% a day earlier, and more than holders of Lu= cent Technologies Inc. debt had to pay at the height of that technology com= pany's troubles earlier during the year.=20 Even with its woes, Enron remains an investment-grade company. Most credit-= rating agencies rate Enron's senior unsecured debt at several notches above= the noninvestment-grade level.=20 Yet Fitch said yesterday it put Enron's credit rating on watch for a possib= le downgrade, following a similar move by Moody's Investors Service last we= ek. (Standard & Poor's, a division of McGraw Hill Cos., stopped short of pu= tting the company on its Creditwatch list, opting instead to revise its lon= g-term ratings outlook to "negative," citing concerns about the company's f= inancial flexibility.)=20 Meanwhile, the weak bond prices are a sign that the markets are bracing for= the worst. "These are investment-grade bonds that are migrating toward dis= tressed levels," said Glenn Reynolds, an analyst at Credit Sights Inc., an = independent fixed-income research firm in New York. "They aren't distressed= yet, but they are headed in that direction."=20 If Enron's credit ratings fall, it would have implications far beyond the c= ompany's ability to raise money. For an energy trader, a credit downgrade s= ends a signal to other participants in crucial markets about its ability to= make good on its commitments.=20 Enron makes markets in a variety of commodities. Though it is best known fo= r trading electricity and natural gas, the company also is a huge force in = the markets for other commodities such as lumber, metals, bandwidth capacit= y and steel. As a market maker matching buyers and sellers, Enron handles a= bout a quarter of all the trading in the nation's energy and gas markets.= =20 Enron's credit-worthiness is hugely important. The better its credit rating= , the cheaper it can hedge, or offset, its positions in all these commoditi= es markets through derivatives and pass on savings to customers. Without th= at credit rating, the cost of this high-margin, high-volume business starts= to rise. A derivative is an instrument whose value is linked to, or derive= d from, that of an underlying security or asset, such as a stock, bond or c= ommodity.=20 "Even if the company does retain its investment-grade rating, the perceptio= n that this might be at risk will start to affect their core businesses," s= aid Mr. Reynolds at Credit Sights Inc. "Any prudent risk [manager] at Enron= 's counterparties" -- any institution on the other end of a financial agree= ment with Enron -- "is going to be examining their exposure to Enron, and l= ooking for ways to minimize it or offset it," Mr. Reynolds said.=20 To be sure, Enron, despite its recent woes, remains a strong company, credi= t analysts said. "I don't think anyone's seriously thinking that this is a = company that would ever default," Mr. Reynolds said.=20 "So far, our research shows that their counterparties and their banks are s= ticking with them," said Ron Barone, managing director of Standard & Poor's= utility energy project finance group. "No one has cut credit lines or aske= d for additional collateral that we have identified. And customers have pub= licly stated that it's business as usual."=20 Yet analysts say the arrival of distressed-debt traders on the scene could = make life more difficult for Enron and its management. Traders expect Enron= 's new Chief Financial Officer Jeffrey McMahon and Chairman Kenneth Lay to = make the rounds of Wall Street next week, meeting with rating agencies, deb= t-trading desks, big bond holders and banks, including J.P. Morgan Chase & = Co. and Citigroup Inc.=20 Treasurys=20 Treasurys rallied on optimism that the Federal Reserve may cut interest rat= es more than previously expected after a spate of economic reports that doc= umented how weak the economy was after the Sept. 11 terrorist attacks.=20 Prices also gained as the market finished digesting the week's flood of Tre= asury, corporate and agency debt issues.=20 At 4 p.m. EDT, the benchmark 10-year Treasury note was up 13/32 point, or $= 4.0625 per $1,000 face value, at 103 20/32. Its yield fell to 4.537% from 4= .588% Wednesday, as yields move inversely to prices.=20 The 30-year Treasury bond's price was up 22/32 point at 101 11/32 to yield = 5.284%, down from 5.330% Wednesday.=20 Fed policy makers are slated to meet on Nov. 6. Also providing support for = longer maturities, the Treasury Department made another repurchase of issue= s outstanding. It received offers for $5.04 billion in callable 30-year bon= ds, of which it accepted $1 billion. The offer-to-cover ratio, an indicatio= n of demand, was 5.04.=20 TREASURY BUYBACK Par Par High Wtd Avg Coupon Mat Amt Amt Accept Accept % Date Offer Accept Price Price 7.125 02/23 807 0 N/A N/A 11.750 02/10 235 0 N/A N/A 10.000 05/10 490 0 N/A N/A 12.750 11/10 471 0 N/A N/A 13.875 05/11 104 0 N/A N/A 14.000 11/11 203 0 N/A N/A 10.375 11/12 587 0 N/A N/A 12.000 08/13 974 0 N/A N/A 13.250 05/14 473 0 N/A N/A 12.500 08/14 725 39 3152.20 152.19 11.750 11/14 7826 0 7148.25 148.13 Amounts in millions, prices in decimals. *Amount outstanding after operation. Calculated using amounts reported on announcement.=20 Corporate Bonds=20 Motorola Inc.'s offering of three-year mandatory convertible securities, ex= pected late yesterday was boosted from a planned $875 million and could tot= al as much as $1.15 billion (proceeds) if investors exercise their overallo= tment option.=20 The securities were expected to have a dividend of between 6.75% and 7% and= a conversion premium of 20% to 22%. Earlier indications were a dividend of= 7% to 7.5% and a conversion premium of 18% to 22%. The deal was to come th= rough Goldman Sachs, J.P. Morgan Chase and Salomon Smith Barney.=20 Separately, LSI Logic Corp. repriced an offering of $450 million of five-ye= ar convertible subordinated notes, lowering the price to 99 from par, peopl= e familiar with the Rule 144a private placement said.=20 The notes have a 4% coupon and a 41% conversion premium and now offer a yie= ld-to-maturity of 4.22%. They were quoted lower at 98 1/2 early yesterday, = a sign that the deal wasn't well-received after being brought overnight by = Lehman Brothers.=20 ---=20 John Parry and Tom Barkley contributed to this article. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Heard on the Street Most Analysts Remain Plugged In to Enron By Susanne Craig and Jonathan Weil Staff Reporters of The Wall Street Journal 10/26/2001 The Wall Street Journal C1 (Copyright (c) 2001, Dow Jones & Company, Inc.) Enron: Rarely have so many analysts liked a stock they concede they know so= little about.=20 In recent years, Wall Street researchers have been overwhelmingly -- critic= s would say blindly -- enthusiastic about Enron, even as they acknowledge n= ot always understanding the complex financial transactions that accounted f= or its soaring profits. Now, Enron is reporting steep losses from some of i= ts most complicated transactions, which many on Wall Street still can't fig= ure out. In a research note Wednesday, Goldman Sachs analyst David Fleischer concede= d that scant corporate disclosure at the Houston energy trader makes it dif= ficult to value the company. The company's "lack of disclosure and transpar= ency," he says, is "a longstanding Enron hallmark."=20 So is this a stock to avoid, in his view? Hardly. Goldman on Wednesday did = bump Enron off its "U.S. Select List," which consists of a few dozen top st= ock picks -- but Mr. Fleischer continued to keep the stock on the firm's la= rger but prestigious "Recommended List" of 200 or so favored stocks, where = it has been since he joined Goldman in 1993.=20 "Just because I can't be specific in being able to create a simple model . = . . doesn't mean that you write off that industry and say `I can't analyze = it' or `I can't figure it out,' " says Mr. Fleischer, who owns an undisclos= ed number of Enron shares. "If that were the case, there would be an awful = lot of industries we couldn't follow."=20 Enron's shares have dropped about 50% since last week.=20 "Every sell-side analyst we spoke to early in 2001 admitted that this was a= black box," says Jim Chanos, principal of Kynikos Associates in New York, = who has been selling Enron stock short -- trading it with an eye to profiti= ng from its fall -- throughout this year. "It was really a trust-me story, = when all the evidence was mounting that there was reason to question that l= evel of trust."=20 True, no stock picker is immune from bad calls. And Wall Street analysts lo= ng have been criticized for their overwhelmingly bullish bias, particularly= on stocks in hot sectors with lots of investment-banking deals to be had.= =20 But Enron stands apart, precisely because so many of the analysts still rec= ommending the stock have acknowledged that the company's disclosure practic= es are lacking. Which raises the question: How can an analyst recommend tha= t others purchase a stock when key information about the company's operatio= ns is so often either unavailable or indecipherable?=20 Concerns about the way that Enron runs its business aren't new. Many of the= issues now plaguing Enron's stock were first raised more than a year ago b= y bearish hedge-fund managers and independent accounting experts. Yet time = and again, Wall Street analysts dismissed as unimportant many of the linger= ing questions about the company's various partnership transactions.=20 Besides those partnerships, Enron also has been dogged by concerns about th= e secretive valuation techniques it uses to record its assets and earnings.= =20 Through it all, most analysts have stuck by this onetime stock-market darli= ng, publicly dismissing questions about the firm's accounting practices and= level of disclosure. As of yesterday, of the 17 analysts who following the= stock, 10 had a "strong buy" or equivalent rating on the stock, according = to Thomson Financial/First Call. Five others rated the stock a "buy," thoug= h not strongly.=20 Only Prudential Securities, which downgraded the stock this week, has a "se= ll" rating on Enron.=20 The bullish treatment is the latest and one of the most high-profile exampl= es of Wall Street taking a glass half-full stance, despite what in retrospe= ct seems to be ample warning that a less-enthusiastic approach was warrante= d.=20 Over the past year in the wake of the Nasdaq Composite Index's general coll= apse, analysts have been widely assailed for a lack of independence -- part= icularly those who, like Goldman's Mr. Fleischer, own shares in the compani= es they cover. Regulators have raised concerns that analysts have compromis= ed themselves to help their firms land lucrative investment-banking fees an= d other revenue.=20 Enron has spread the wealth across many Wall Street firms. For instance, fo= r one $865 million equity offering in 1999 led by `Credit Suisse First Bost= on, Enron retained seven co-managers, including Donaldson Lufkin & Jenrette= , Lehman Brothers and Merrill Lynch.=20 "Enron is a big company, and I don't think you're going to find a firm that= hasn't been involved," says Credit Suisse First Boston analyst Curt Launer= , who still rates the stock a "strong buy" with a $40 price target. "They p= ay a lot of investment-banking fees to Wall Street."=20 He adds, "We do our analysis every day based on the information we have. Ar= e we here strictly to defend companies? That's ludicrous. We're here to pro= vide information to investors. . . . Yes, I have the wrong recommendation o= n the stock. I don't think my analysis has been as wrong as the stock has p= erformed."=20 Mr. Fleischer, whose firm also has served as an investment banker to Enron,= calls his holding "a meaningful investment" that is "not small." But he di= sputes any suggestion that his objectivity is compromised. Mr. Fleischer sa= ys his clients "are happy to know" he has a stake in Enron, because it show= s he puts his money where his mouth is.=20 In his research note Wednesday, Mr. Fleischer called for complete disclosur= es of Enron's off-balance sheet partnerships. Despite the resulting difficu= lty he acknowledged facing in developing financial models for the company, = he wrote that he and many other investors historically "have given Enron th= e benefit of doubt because of its strong growth in earnings" and position a= s an industry leader.=20 "There's not information to really model this and be able to predict accura= tely where revenues are going to come from and where they're going to make = their money, but every quarter they do," he says. "It's hard to get inside = to know all the transactions, but they do deliver."=20 CSFB's Mr. Launer also has been a longtime defender of the company, occasio= nally issuing research reports to rebut critical stories about Enron in the= financial press. On Monday, he wrote that he expects questions about Enron= 's partnerships and accounting disclosures to continue, but that he remains= "confident in the businesses and operating growth prospects for [Enron] an= d an ultimate recovery in the share price."=20 "I know I'm wrong on the stock," Mr. Launer says. But he says that at these= prices, he isn't ready to throw in the towel because he figures that even = in a worst-case scenario -- under which he envisions Enron having to issue = as much as $2 billion worth of shares, diluting current holders -- the stoc= k doesn't have much further to fall.=20 Clearly, Messrs. Launer and Flesicher aren't alone. "Even in relative terms= , analysts remain very bullish on this stock," says Chuck Hill, director of= research at Thomson Financial/First Call. The average rating for a stock o= n Wall Street is 2.2, or slightly shy of a "buy" rating. Enron scores a 1.6= . "This may turn into a classic case of locking the barn door after the bad= news is out," Mr. Hill says.=20 In downgrading the stock this week, Prudential analyst Carol Coale bumped i= t to "sell" from "buy," with a brief stop at "hold." While she is the only = analyst to recommend investors sell the stock, she openly concedes her rece= nt downgrades come "too little, too late."=20 Ms. Coale says Enron has been difficult to cover for years. She says the co= mpany's disclosure practices fall far short of ideal, and senior executives= are often evasive, even when presented with direct questions. For instance= , she says three weeks ago she asked Enron management if the company was un= der investigation by the Securities and Exchange Commission. They said "no,= " she says.=20 In light of the company's acknowledgment this week of an SEC "inquiry," she= asked Enron about the previous denial. "They told me it is an inquiry, not= an investigation," she says. An Enron spokeswoman says the company learned= of the SEC's inquiry only last Wednesday. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron Draws Down $3 Bln in Credit to Boost Investor Confidence 2001-10-26 08:52 (New York) Enron Draws Down $3 Bln in Credit to Boost Investor Confidence Houston, Oct. 26 (Bloomberg) -- Enron Corp., whose stock has fallen on concern about the largest energy trader's transactions with affiliates, drew down $3 billion in credit to restore confidence in its financial strength. The Houston-based company will use about $2.2 billion to pay off commercial paper obligations and keep the rest as cash, spokesman Mark Palmer said. ``Nothing instils confidence like cash,'' he said. Enron's shares have dropped 52 percent in the past 10 days as investors worry that the company's credit rating will be cut after $1.01 billion in third-quarter losses from failed investments. Enron needs good credit to raise cash daily to keep trading partners from demanding collateral and to settle transactions. Investors say they are worried about $3.3 billion in liabilities from affiliates formed to buy and sell Enron assets. Enron ousted Chief Financial Officer Andrew Fastow on Wednesday amid a Securities and Exchange Commission inquiry into partnerships he ran that cost the company $35 million. Jeff McMahon, head of Enron's industrial markets group, was named CFO in a bid to restore investor confidence, Chairman and Chief Executive Officer Kenneth Lay said in a statement. Enron shares fell 6 cents to $16.35 yesterday. --Mark Johnson in the Princeton newsroom (609) 750-4662, or at Enron Liked By Analysts Despite Complicated Dealings, WSJ Says 2001-10-26 06:12 (New York) Houston, Oct. 26 (Bloomberg) -- Enron Corp. is liked by many Wall Street analysts despite lingering questions about the power trading company's complicated partnership transactions and the techniques used to record earnings, the Wall Street Journal reported in its ``Heard on the Street'' column. Goldman Sachs Group Inc. analyst David Fleischer, who owns an undisclosed number of Enron shares, said that even though inadequate corporate disclosure makes it difficult to value the company, that doesn't mean he will write off the industry or not analyze Enron. Of the 17 analysts who follow the stock, 10 had a ``strong buy'' or equivalent rating, according to Thomson Financial/First Call, the paper said. Five rated it ``buy'' and one had a ``sell'' on Enron. Most analysts have stuck by the company, publicly dismissing questions about Enron's accounting practices and level of disclosure, the Journal said. The Securities and Exchange Commission is inquiring about partnerships run by former Chief Financial Officer Andrew Fastow. Enron Draws Down $3 Billion From Its Credit Lines, WSJ Reports 2001-10-26 00:28 (New York) New York, Oct. 26 (Bloomberg) -- Enron Corp. drew down about $3 billion of its available credit, the bulk of its bank credit lines, to restore confidence in the financial strength of the company, the Wall Street Journal reported. The energy trading company, whose shares have fallen 52 percent since Oct. 16, will use part of the money to redeem about $1.85 billion short-term commercial debt, the Wall Street Journal reported, citing an unidentified person familiar with the matter. Enron is talking to banks about a new, multi-billion line of credit, the paper reported, citing the unidentified person. The steps are seen as an effort by the energy trader to ensure that it has adequate liquidity in case its access to bank credit is disrupted, the paper said. Enron said in a statement distributed by PR Newswire that it drew on its credit lines to provide more than $1 billion in cash liquidity. The steps come a day after Chief Financial Officer Andrew Fastow resigned amid a Securities and Exchange Commission probe of partnerships he ran. --William Selway in the San Francisco newsroom at (415) 743-3511, Oct. 25, 2001, 11:22PM Houston Chronicle Action by Enron halts stock's fall=20 But credit ratings are being reviewed=20 By LAURA GOLDBERG=20 Copyright 2001 Houston Chronicle=20 The recent freefall of Enron Corp.'s stock price stabilized Thursday, a day= after the world's largest energy trader replaced its chief financial offic= er.=20 Enron, under a cloud for a number of reasons, including an Securities and E= xchange Commission inquiry, also made two announcements Thursday night aime= d at reassuring the financial community.=20 In the announcements, Enron said it had drawn more than $1 billion from its= lines of credit and said that energy-trading business done through EnronOn= line on Thursday was above average levels.=20 Houston-based Enron banked the money and has no plans to spend it, a spokes= woman said.=20 "We are making it clear that Enron has the full support of its banks and mo= re than adequate liquidity to assure our customers that we can fulfill our = commitments in the ordinary course of business," Jeff McMahon, who took ove= r Wednesday as chief financial officer, said in a written statement.=20 Enron said it recorded more than 8,300 transactions through EnronOnline on = Thursday.=20 Ken Lay, chairman and chief executive officer, said: "Enron continues to be= the market-maker of choice in wholesale and gas power markets, our custome= rs continue to put their confidence in us, and our core businesses are stro= ng and performing well."=20 Earlier Thursday, two credit rating agencies took actions regarding Enron's= ratings, which J.P. Morgan Securities analyst Anatol Feygin described as "= just more negative sentiment."=20 At one point in Thursday morning trading on the New York Stock Exchange, sh= ares in Enron were up more than $1.50, but they closed down 6 cents at $16.= 35. As recently as Oct. 16, the stock closed at $33.84.=20 Before the market closed, international credit-rating agency Fitch put Enro= n, which currently holds investment-grade credit ratings, on review for a p= ossible downgrade. Then after the market closed, Standard & Poor's took two= steps: It affirmed Enron's current ratings, but it also revised its long-t= erm ratings outlook to negative.=20 Moody's Investors Service put all of Enron's long-term debt on review for p= otential downgrade last week.=20 Enron, which noted that losing its investment-grade rating would take downg= rades of three notches, said Thursday it will do everything in its power to= defend its current rating.=20 In the SEC inquiry, federal securities regulators are reviewing transaction= s between Enron and two private investment partnerships formerly run by And= rew Fastow, who was removed as Enron's chief financial officer Wednesday. E= nron removed Fastow as part of its bid to repair its damaged credibility.= =20 Wall Street is also questioning certain of Enron's financing vehicles and i= s wondering whether the company will face hits to its balance sheet in the = months ahead.=20 S&P said it was concerned that the sizable drop in Enron's market capitaliz= ation has negatively affected its financial flexibility and could hurt the = company's plans to rebuild its balance sheet.=20 But it also noted that the "fundamental strength" of Enron's energy marketi= ng and trading business has remained steady.=20 Unless Enron's rebuilds confidence among investors and business partners, F= itch said, it could "impair Enron's financial flexibility and access to cap= ital markets," which would hurt its ability to conduct business.=20 Carol Coale, an analyst at Prudential Securities in Houston, said the actio= ns by S&P and Fitch might make some of Enron's energy customers skittish.= =20 Corporate US on track for bailout DAVID GOW IN NEW YORK 10/26/2001 The Guardian Copyright (C) 2001 The Guardian; Source: World Reporter (TM) Battered corporate America will receive an immediate Dollars 25bn (pounds 1= 8bn) tax rebate under a Dollars 100bn eocnomic stimulation package just app= roved by the Republican-controlled House of Representatives.=20 The controversial package, worth an estimated Dollars 212bn over three year= s, includes Dollars 70bn for companies next year alone. It was approved by = the House late on Wednesday by 216 votes to 214, but faces significant amen= dment in the Senate, which is now under Democrat control. It has reopened a wide ideological rift between Republicans, who favour cor= porate and individual tax cuts to reboot an economy mired in recession, and= Democrats - who, in a reprise of the Roosevelt "new deal", prefer to see i= ncreased public spending on unemployment and infrastructure projects.=20 Liberal lobby groups such as the Citizens for Tax Justice and the Center on= Budget and Policy Priorities claim the bill would hand back Dollars 6.3bn = to the 14 biggest corporations - which, they say, are renowned for paying l= ittle or no tax.=20 The most hotly contested measure is the repeal of the corporate alternative= minimum tax, or AMT, introduced in 1986 to make sure firms could not avoid= all tax payments. This, strongly supported by President Bush, would be mad= e retroactive so that all AMT payments would be refunded.=20 The lobby groups and the non-partisan Congressional Research Service calcul= ate that this would give a Dollars 1.4bn boost to computer group IBM alone,= while General Motors would get back Dollars 833m and General Electric Doll= ars 671m.=20 Others to benefit include TXU, the Texas-based utility that is the US's thi= rd largest energy supplier, which would would be given Dollars 608m. United= Airlines, the US's second largest carrier - which is warning of bankruptcy= - would receive Dollars 371m, and Enron, the energy trading group forced t= o sack its finance director this week, would be given Dollars 254m.=20 Democrat leaders in the Senate are determined to erase this measure and dis= like other proposals to boost firms, which include a 30% tax break for capi= tal investment over three years worth Dollars 39.3bn this year alone. They = say these amount to a "giant corporate giveaway".=20 Mr Bush and other Republican leaders argue these fiscal concessions would h= elp companies making hundreds of thousands redundant avoid further lay-offs= and invest more, prompting an economic recovery that, at best, is likely t= o start in the new year.=20 "Businesses are America's employers. They're the hardware store, the diner = down the street, the gas station on the corner. They're not the enemy of wo= rking families," the author of the plan, Representative Bill Thomas of Cali= fornia, said.=20 Democrats are especially incensed with the alleged paucity of the package's= provisions for the growing numbers of jobless, arguing that much of the Do= llars 12bn foreseen would not go to individuals but into the reserves of st= ates.=20 * A fresh round of global trade talks is essential to revitalise the world = economy after the terrorist attacks on the US, trade secretary Patricia Hew= itt said yesterday, writes Charlotte Denny=20 As a new report predicted that global trade growth will collapse this year,= Ms Hewitt warned that the world must not retreat into protectionism or iso= lationism in the wake of the attacks. WTO trade ministers are gathering in = Doha, Qatar, in two weeks' time to discuss launching a new round of talks, = the first since the collapse of their meeting in Seattle, nearly two years = ago.=20 Full coverage of the downturn at www.guardian.co.uk/recession/ Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Business/Financial Desk; Section C Harvey Pitt's S.E.C.: From Guard Dog to Friendly Puppy? By FLOYD NORRIS 10/26/2001 The New York Times Page 1, Column 2 c. 2001 New York Times Company CAN the new, friendlier Securities and Exchange Commission enforce the laws= and assure investors that corporate financial reports are trustworthy?=20 Harvey L. Pitt, the new S.E.C. chairman, set out this week to show that he = is not like his predecessor, Arthur Levitt. In a speech to the American Ins= titute of Certified Public Accountants -- an organization whose senior lead= ership led a bitter and ultimately unsuccessful fight against Mr. Levitt's = reform efforts -- Mr. Pitt praised his listeners and took a few swipes at h= is predecessor.=20 From now on, he promised, ''the commission will make sound decisions, in a = respectful, affirmative way, not in a demeaning, demanding or demonizing wa= y.'' He spoke favorably of ''pro forma'' earnings reports, in ways that no = doubt heartened accountants who have worked so hard to find ways to make ev= en the worst profit figures look pretty. There was no mention of Mr. Levitt= 's concerns about improper management of earnings. On the heels of Mr. Pitt's speech, the S.E.C. used a minor enforcement acti= on to herald a policy of not cracking down on companies that come forward t= o report their own errors. The decision itself was reasonable, although one= could wonder if top management did something wrong in failing to detect a = fraud that went on for years. But the way the S.E.C. trumpeted it raised qu= estions about whether the agency is turning into a friendly puppy rather th= an a guard dog. ''Is this amnesty for financial fraud?'' Jane Adams, the ac= counting analyst at Credit Suisse First Boston and a former S.E.C. staff me= mber, asked in a report to clients. She was not sure of the answer.=20 In an interview yesterday, Mr. Pitt dismissed such worries. ''No one is goi= ng to get away with anything,'' he said. ''What we are trying to do is crea= te an environment where people feel comfortable'' and can talk to the S.E.C= . ''without feeling we are looking for a big splash.''=20 A major embarrassment for accountants is having the S.E.C. force a client t= o restate its numbers. Mr. Pitt and his chief accountant, Robert Herdman, a= re sending signals that fewer such demands will be made. ''I am very much i= n favor of a vigorous enforcement program,'' Mr. Pitt said in the interview= , ''but I am not in favor of having investors barraged by conflicting state= ments and restatements.''=20 Mr. Pitt talks of companies ''getting it right the first time,'' which woul= d certainly be nice. But there is a risk that companies will become more ag= gressive in their accounting, figuring there will be no real penalty, like = a restatement, if they are caught. That would make life harder for auditors= who try to resist misleading accounting.=20 In trying to sound comforting to the accountants' group -- an organization = that, as he noted, he had represented as a lawyer for two decades -- Mr. Pi= tt has done little to reassure investors of his independence.=20 The proof, of course, will come in the performance. Fortunately, the mess a= t Enron gives the S.E.C. a golden opportunity to counter the puppy image. I= t will take time for the commission to determine if the company's accountin= g was proper. But there need be no delay in forcing Enron to clearly explai= n -- rather than obfuscate as it has so far -- the strange deals it made wi= th partnerships run by the executive just ousted as chief financial officer= .=20 ''This could,'' a former S.E.C. staff member said, ''focus the issue on whe= ther companies can make completely correct but totally misleading disclosur= es.'' And it would indicate that this watchdog still has a bite. Photo: Harvey L. Pitt=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron draws down at least 1 bln usd from credit lines to boost mkt confiden= ce 10/26/2001 AFX News (c) 2001 by AFP-Extel News Ltd HOUSTON (AFX) - Enron Corp said it drew on committed lines of credit to pro= vide cash liquidity in excess of 1 bln usd as part of moves to restore mark= et confidence in the company.=20 "We are making it clear that Enron has the support of its banks and more th= an adequate liquidity to assure our customers that we can fulfill our commi= tments in the ordinary course of business," said newly appointed Chief Fina= ncial Officer Jeff McMahon. "This is an important step in our plan to restore investor confidence in En= ron. Additionally, we will update investors over the next several days rega= rding our plans to maintain our long-term credit rating."=20 According to the Wall Street Journal, Enron drew down about 3 bln usd and w= ill use part of the money to offer to redeem about 1.85 bln usd of outstand= ing commercial paper, with the remainder providing the energy concern with = a cash cushion. The newspaper cited a person familiar with the matter.=20 It quoted observers as saying the move may be is a pre-emptive step by Enro= n to ensure that it had adequate liquidity should its access to bank lines = be interrupted.=20 The source also said Enron is talking to its banks about a new, multi-billi= on-dollar credit line.=20 jms For more information and to contact AFX: www.afxnews.com and www.afxpre= ss.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 The Five Dumbest Things on Wall Street This Week By K.C. Swanson Staff Reporter 10/26/2001 07:08 AM EDT URL: TheStreet.com 1. United Airlines Just a Little Too Honest Rule No. 1 in CEO school: Never say that your company may soon collapse.=20 Seems kind of obvious, but that rule was flouted by United Airlines chief J= ames Goodwin, who warned in a letter to employees that the company "will pe= rish" next year unless it can stanch its tremendous losses, which have wors= ened since the terrorist attacks. "Today, we are literally hemorrhaging mon= ey," he wrote.=20 In raising concerns about the financial viability of United, a unit of UAL = (UAL:NYSE - news - commentary) , Goodwin only put into words what outsiders= have speculated about. Since Sept. 11, the airline has laid off about 20,0= 00 of its 100,000 employees and cut flights by as much as 25%. It's expecte= d to announce massive losses when it reports third-quarter earnings.=20 But in response to the disclosure, Goodwin has been roundly attacked. Feeli= ng that he had been all too honest, investors have knocked an additional 24= % off the stock's value. The shares are down 54% since Sept 11. Meanwhile, = UAL union leaders reportedly say Goodwin has exaggerated company difficulti= es to gain bargaining leverage in union negotiations. The leaders of one un= ion have petitioned the company's board of directors to have him sacked.=20 Bottom line: CEOs may get pilloried when they try to dodge the truth, but s= ometimes it doesn't pay to be too candid about worst-case scenarios, either= . Especially when that scenario is the company's own demise.=20 2. Forget the Victory Gardens; Let's Have a Comfortable War=20 Sure, we're at war with a band of cave-dwelling outlaws hell bent on our an= nihilation. But would all freedom-loving Americans please go out and buy so= me DVD players? Maybe even a nice new car?=20 That was basically the message from the Treasury Department, on news that C= ongress had voted for the creation of war bonds to finance antiterrorism ef= forts and rebuilding following the attacks. Officials at Treasury applauded= the sentiment, then politely suggested it would be even better for the eco= nomy if Americans just went to stores and bought stuff. "The economy is per= haps our greatest asset as we move forward in these efforts to fight the wa= r on global terrorists," says Betsy Holahan, a department spokesperson. "Wa= r bonds are an additional way for Americans to show their patriotism."=20 For the record, we don't think an issue of war bonds would be dumb, just su= perfluous. After all, nothing's stopped Americans from buying generic savin= gs bonds -- or better yet, Treasuries -- all of which finance spending by t= he federal government.=20 In the meantime, it's a little dislocating to hear politicians talk up war = bonds -- which most people associate with hardship and sacrifice -- at the = same time top economic gurus are practically begging people to shop. War bo= nds notwithstanding, we're a long way off from the era of ration books.=20 3. Enron Again Last week, we noted the extent of alarm about Enron's (ENE:NYSE - news - co= mmentary) revelation that its shareholder equity had dropped $1.2 billion, = following some unusual and possibly inappropriate high-level transactions. = Following that disclosure, besieged CFO Andrew Fastow has finally left the = company on what's delicately termed a "leave of absence."=20 In July, Fastow exited a limited partnership, from which he had reportedly = reaped large profits, after shareholders and analysts objected to his invol= vement. Concerns about those dealings and others had increased in the wake = of the disclosure about the charge to equity until even management acknowle= dged Fastow would have to go as a prerequisite to restoring investor confid= ence.=20 But that won't be an easy task, given the resentment about Enron's disincli= nation to explain its problems. One analyst called Fastow's departure "unse= ttling," noting that management had given the CFO its endorsement only the = day before. Sounding a note of exasperation, analysts at J.P. Morgan Chase,= Banc of America Securities and Prudential all downgraded the stock. And th= ere could be more trouble to come: The Securities and Exchange Commission h= as issued Enron a letter of inquiry related to some of its transactions.=20 4. Gold Diggers=20 It's understandable that investors felt panicky in September. Unfortunately= , some reacted by shoving their hard-earned money into gold funds. Accordin= g to Financial Research Corp., which tracks fund flows, the specialty preci= ous-metals category was the best-selling equity category during September, = with net inflows of $101 million.=20 Granted, that's not a huge sum in the mutual fund world. By comparison, dur= ing the same month, large growth funds saw net redemptions of $7.4 billion.= But the fact that so many people are jumping into precious metals is notew= orthy, given that gold funds have performed so badly for so long.=20 Sure, under the bizarre circumstances of late, they've enjoyed somewhat of = a pop. According to Morningstar, the average precious-metals fund is up 10.= 08% year to date. But over the past five years, the same category lost an e= mbarrassing 14.68%. By comparison, even large-cap growth funds -- everybody= 's favorite whipping boy -- managed to post a positive return. In the same = period, they were up 7.13%.=20 Moreover, circumstances that would seem to be the most favorable in decades= -- a combination of attacks on the U.S. government and war -- still don't = seem to have boosted gold prices significantly. Despite an initial surge in= prices after the terrorist attacks, they're again approaching their pre-Se= pt. 11 levels. It's too early to say, but it's likely the gold bugs will co= nfront disappointment once again.=20 5. Amazon Amazes Once Again Amazon (AMZN:Nasdaq - news - commentary) still maintains it will become pro= fitable by the fourth quarter. Well, at least it will post a pro forma oper= ating profit.=20 OK, so maybe that wouldn't include Amazon's service on $2.17 billion in lon= g-term debt or extraordinary charges. In fact, a pro forma operating profit= is basically just an accounting concept that would lend a fuzzy, meaningle= ss aura of minor triumph. The company still hasn't said when it will turn a= n economic profit.=20 For that matter, even the fourth-quarter prediction is iffy. After announci= ng the company expected to turn the pro forma operating profit, CFO Warren = Jenson added the humble qualifier, "There are no guarantees." Amazon simult= aneously lowered its forecast for fourth-quarter revenue, predicting that s= ales would be somewhere between flat and up by 10% compared with a year ago= .=20 Third-quarter trends weren't encouraging. Though sales overall were up slig= htly in the third quarter from a year ago, revenue from the company's core = books and music business actually fell 12%. At least the company has made p= rogress in cutting costs: A spokesperson says pro forma operating expenses = have decreased by 20% over the past year.=20 Incidentally, in the wake of Amazon's earnings report, two analysts made th= e belated decision to cut their ratings on the stock, which has fallen 93% = from its high back in December 1999. Merrill Lynch analyst Henry Blodget an= d SG Cowen analyst Scott Reamer downgraded the stock to "neutral" from prev= ious buy ratings. "We thought there might be upside to our estimates," note= d Blodget. "There wasn't."=20 Financial Stocks Post Gains After A Rough Morning Associated Press 10/26/2001 The Washington Post FINAL E03 Copyright 2001, The Washington Post Co. All Rights Reserved NEW YORK, Oct. 25 -- Selected buying of technology and energy shares pulled= the stock market higher today, reversing a morning slide triggered by a pa= ir of grim economic reports.=20 Shares of semiconductor makers and equipment manufacturers did particularly= well, as did energy traders, led by a surprisingly strong performance from= Williams Cos., a Tulsa-based energy firm that had an 83 percent jump in th= ird-quarter net earnings. The Dow Jones industrial average closed rose at 9448.78, up 103.16, reversi= ng an earlier deficit of 167 points. The Nasdaq composite index rose 36.29,= to 1767.83, and the Standard & Poor's 500 index was rose 12.79, to 1097.99= .=20 Earlier, a pair of dismal economic reports had compounded worries about the= fallout from last month's terrorist attacks to send stocks lower. As in re= cent sessions, however, investors absorbed the bad news and focused on good= news regarding individual companies.=20 Williams Cos. surpassed analysts' estimates for the third quarter and raise= d its forecasts for full-year earnings for 2001 and 2002. Investors rewarde= d the company by driving its shares up $1.42, to $27.32, bringing several o= ther parts of the energy sector along with it.=20 Even the shares of Enron rose, a day after the embattled company dismissed = its chief financial officer and replaced him with an another executive from= within the company. Enron rose 28 cents, to $16.69.=20 Semiconductor shares also rebounded, led by industry bellwether Intel, up 4= 4 cents at $25.92, and Applied Materials, up $1.35 at 36.69. Leading data-s= torage maker EMC rose $1.06, to $13.54.=20 Traders said the Senate's passage this afternoon of an anti-terrorism measu= re also helped lift investor sentiment. Late Wednesday, the House passed a = $100 billion economic stimulus package to combat the effects of the terrori= st attacks on the economy.=20 A surprisingly large drop in orders for durable goods had weighed heavily o= n the market in the morning, as did poor earnings results from American Int= ernational Group and WorldCom.=20 The Commerce Department reported orders plunged in September for the fourth= consecutive month. The 8.5 percent decline was far worse than the 1.3 perc= ent dip many analysts had forecast.=20 The Labor Department also reported that the number of newly laid-off Americ= ans filing for unemployment benefits rose by 8,000 last week, to 504,000, t= he second-highest figure in nearly a decade and a level that is generally a= ssociated with recessions.=20 Other Indicators=20 * The New York Stock Exchange composite index rose 5.88, to 562.96; the Ame= rican Stock Exchange index rose 5.10, to 828.67; and the Russell index of 2= ,000 small stocks rose 8.31, to 435.96.=20 * Advancing issues outnumbered declining ones by 9 to 7 on the NYSE, where = trading volume rose to 1.38 billion shares, from 1.35 billion on Wednesday.= On the Nasdaq, advancers outnumbered decliners by more than 3 to 2 and vol= ume totaled 2.2 billion, up from 1.84 billion.=20 * The price of the Treasury's 10-year note rose $4.38 per $1,000 invested, = and its yield fell to 4.54 percent, from 4.59 percent late Wednesday.=20 * The dollar rose against the Japanese yen and the euro. In late New York t= rading, a dollar bought 122.87 yen, up from 122.76 yen late Wednesday, and = a euro bought 89.25 cents, down from 89.42 cents.=20 * Light, sweet crude oil for December delivery settled at $22.01 a barrel, = up 32 cents, on the New York Mercantile Exchange.=20 * Gold for current delivery rose to $277.80 a troy ounce, from $275.90 on W= ednesday, on the New York Mercantile Exchange's Commodity Exchange. http://www.washingtonpost.com=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Sudhakar will head Enron probe panel 10/26/2001 The Times of India Copyright (C) 2001 The Times of India; Source: World Reporter (TM) MUMBAI: Retired supreme court judge Sudhakar Kurdukar will head the judicia= l panel set up by the Maharashtra government to investigate into the contro= versial Enron deal.=20 An announcement in this regard was made by chief minister Vilasrao Deshmukh= at a press conference held at Mantralaya on Wednesday. The ruling Democratic Front (DF) coalition had differences over the appoint= ment of the judge, with the Nationalist Congress Party (NCP) demanding that= a retired judge of the Bombay high court head the judicial panel. The Cong= ress and the Left Front partners in the DF, however, insisted on a supreme = court judge.=20 The issue was hotly debated in the coordination committee of the DF. The NC= P members in the DF finally left the decision to Mr Deshmukh. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron Taps $3 Billion From Bank Lines in Pre-Emptive Move to Ensure Liquidi= ty 10/25/2001 Dow Jones Business News (Copyright (c) 2001, Dow Jones & Company, Inc.) Embattled Enron Corp. drew down about $3 billion, the bulk of its available= bank credit lines, in a bid to restore confidence in its financial strengt= h and liquidity, Friday's Wall Street Journal reported.=20 Enron (ENE) will use part of the money to offer to redeem around $1.85 bill= ion in outstanding commercial paper -- short-term corporate IOUs -- accordi= ng to a person familiar with the matter, with the remainder used to provide= a cash cushion. This person also said that Enron was talking to its banks = about a new multibillion-dollar credit line. Some observers thought the mov= es were a pre-emptive step by Enron to ensure that it had adequate liquidit= y should its access to bank lines be interrupted. Enron insists its business operation and financial condition remain strong.= But "when the market is reacting as irrationally as it has been the last f= ew days, we thought that cash was better than a commitment from a bank," sa= id an Enron spokesman. In a prepared statement, the company's new chief fin= ancial officer, Jeff McMahon, said that by drawing down the bank lines, "we= are making it clear that Enron has the support of its banks and more than = adequate liquidity to assure our customers that we can fulfill our commitme= nts."=20 The move underscored the tumultuous conditions that have been sweeping over= the Houston energy-trading firm in the past 10 days. Enron is the nation's= largest energy trader and is a principal in nearly one-quarter of all elec= tricity and natural-gas trades. Thursday, for example, Enron was involved i= n about $4 billion worth of deals through its EnronOnline unit.=20 Since early last week, Enron's share price has plummeted 50%. It has report= ed a $618 million third-quarter loss and a reduction in shareholder equity = of $1.2 billion. It also disclosed that the Securities and Exchange Commiss= ion is conducting an inquiry into billions of dollars of transactions it di= d with entities run by its former chief financial officer, Andrew S. Fastow= , who was replaced Wednesday.=20 The draw-down of the credit facilities came as a major rating agency, Fitch= , put Enron on review for a possible downgrade while Standard & Poors chang= ed Enron's credit outlook to negative from stable. Moody's Investors Servic= e has already said it is looking at a possible downgrade. In order to fall = below investment grade, Enron's credit rating would have to fall several no= tches.=20 If that were to happen, however, a host of bad consequences could follow. T= ogether with the sharp decline in its stock price, a noninvestment grade ra= ting would throw the company into default on obligations involving billions= of dollars of borrowings. In that event, Enron could be forced to issue mi= llions of shares of stock to holders of that debt, diluting the value of ex= isting shares. As of 4 p.m. in New York Stock Exchange composite trading, E= nron shares were down six cents at $16.35.=20 Copyright (c) 2001 Dow Jones & Company, Inc.=20 All Rights Reserved. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron chief executive resigns from board of i2 Technologies 10/25/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. DALLAS (AP) - Kenneth Lay, the chairman and chief executive of embattled En= ron Corp., has resigned from the board of software company i2 Technologies.= =20 "This is a very painful decision," Lay said in a statement issued Thursday = by Dallas-based i2 Technologies. "But now that I am again taking on the CEO= responsibilities at Enron, I must reduce my outside activities." Lay resumed the chief executive's job at Enron in August after Jeff Skillin= g surprised investors by leaving the Houston-based energy company.=20 Enron officials did not immediately return calls from The Associated Press.= =20 In the past week, Enron has been rocked by questions surrounding partnershi= ps that did business with Enron while they were managed by the company's ch= ief financial officer. The official was replaced on Tuesday.=20 Enron's stock price has fallen nearly 50 percent since interest in the part= nerships intensified, and the company acknowledged that the U.S. Securities= and Exchange Commission was investigating the arrangements=20 I2 makes software to help companies manage their supply chains, and its cli= ents include Texas Instruments, Ford Motor Co. and Dell Computer Corp.=20 I2 stock plunged nearly 25 percent on Oct. 17 after the company reported a = $5.53 billion third-quarter loss and said it would cut 1,000 jobs, about on= e-fifth of the work force.=20 Lay joined the board in October 2000. No replacement was announced.=20 In trading Thursday, i2 shares rose 24 cents to $4.95, and Enron shares fel= l 6 cents to $16.35. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 As Enron's woes unnerve investors about energy sector, analysts say its pro= blems are isolated By BRAD FOSS AP Business Writer 10/25/2001 Associated Press Newswires Copyright 2001. The Associated Press. All Rights Reserved. NEW YORK (AP) - As it grew over the past decade into the country's largest = natural gas and power marketing company, Enron Corp. became the de facto ba= rometer of health within the energy trading sector.=20 Wall Street buoyed the stock prices of Enron's competitors based in part on= the huge success of the Houston-based company's business model. Now, execu= tives and industry analysts hope to prevent Enron's internal tumult and fre= e-falling stock price from undermining investors' confidence in the sector.= They say the Houston-based company's problems should be viewed in isolatio= n and not as a broader indicator of the marketplace. "The marketplace for natural gas and power trading is as vibrant as it was = yesterday, a week ago or a month ago," said Jim Donnell, president of Duke = Energy North America, a division of Duke Energy Corp. that generates and tr= ades power.=20 That opinion appeared to gain acceptance on Thursday as shares of Dynegy In= c., El Paso Corp. and Duke Energy Corp. rebounded from losses on Wednesday,= when Enron's latest woes appeared to spill over into the stock prices of i= ts rivals.=20 Enron's stock has fallen about 50 percent in the past week (and nearly 80 p= ercent since January) and analysts said its recovery is not expected anytim= e soon.=20 The latest troubles began Oct. 16 when Enron reported third quarter earning= s, and a longtime concern among Wall Street analysts that executives were n= ot entirely forthcoming only got worse.=20 First came reports that some of the company's losses stemmed from partnersh= ips managed by Enron's chief financial officer at the time, Andrew Fastow. = That raised concerns about a potential conflict of interest and touched off= an inquiry by the Securities and Exchange Commission.=20 Then on Wednesday, one day after Enron Chairman Kenneth Lay defended Fastow= , the company ousted him and said he would take a leave of absence.=20 "They created an environment in which their credibility was put to the test= and they didn't come through with flying colors," said Christopher Ellingh= aus, an analyst at Williams Capital Group in New York.=20 Enron shares have been falling all year for reasons new and old, which have= little to do with the company's wholesale energy business, which accounts = for roughly 80 percent of profits.=20 Analysts insist wholesale energy marketing can be profitable even in the fa= ce of an economic downturn and falling natural gas and electricity prices.= =20 "Even though (Enron) shot themselves in the foot, the basic business is sti= ll sound and not likely to disappear," Ellinghaus said.=20 UBS Warburg analyst Ronald Barone echoed that sentiment.=20 "The collateral damage to the rest of the space - Dynegy and El Paso - is o= verdone," Barone said.=20 On Thursday, Williams Companies Inc. of Tulsa, Okla., reported net income o= f $760 million and Reliant Resources Inc. of Houston reported $133 million = in profits.=20 "It's business as usual," said Dynegy spokesman Steve Stengel.=20 Not for Enron, whose stock price began a steady descent 10 months ago when = its nascent high-speed Internet unit failed to live up to the hype. The dow= nward momentum was further propelled by difficulties collecting money from = power customers in India and the surprise departure in August of then-chief= executive Jeff Skilling was considered another bad sign.=20 On Oct. 16, Enron reported a net loss of $638 million in the third quarter,= taking a one-time charge of $1.01 billion attributed to investment losses,= troubled assets and unit restructurings. Excluding the charge, Enron earne= d $393 million on $47.6 billion in revenues for the three months ending Sep= t. 30.=20 Ellinghaus said the stocks of Enron's competitors were brought down Wednesd= ay because of "dire" speculation that Enron's troubles might be so bad that= it could have difficulty paying hundreds of millions of dollars worth of r= eceivables to companies such as Duke and Dynegy.=20 "All I'm hearing is doomsday type stuff and doomsday is not reality," Ellin= ghaus said.=20 Enron did not return calls seeking comment Thursday.=20 Donnell of Duke Energy said the Charlotte, N.C.-based company is paying clo= se attention to the Enron situation and that there has been no indication o= f receivables not being paid.=20 "They continue to be one of the best functioning companies as it relates to= credit," he said. "They've never missed a deadline." AP Graphic ENERGY STOCKS=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron's Credit Outlook Downgraded to Negative by S&P (Update1) 2001-10-25 18:59 (New York) Enron's Credit Outlook Downgraded to Negative by S&P (Update1) (Adds analyst comment in fourth paragraph.) Houston, Oct. 25 (Bloomberg) -- Enron Corp.'s long-term credit ratings outlook was changed to negative from stable by Standard & Poor's after the largest energy trader's shares fell 49 percent in the past week. S&P affirmed the Houston-based company's ratings of ``BBB+/A2,'' which are investment grade. The ratings company cited lost market capitalization and the possibility that Enron won't generate enough money from selling assets outside the main trading business to repay debt. S&P did say that ``the strategic direction of the company is likely to become more credit-positive in the wake of recent management changes.'' Enron reported $1.01 billion in losses from investments outside the principal business of trading commodities such as electricity and natural gas. Chief Financial Officer Andrew Fastow resigned yesterday as the U.S. Securities and Exchange Commission asks for information about related-party transactions he conducted. ``The S&P write up was very positive,'' said Dorothea Matthews, an analyst at CreditSights Inc., a research firm. ``It seems that the ratings company went out of its way to tray and calm things down.'' Shares of Enron fell 6 cents to $16.35. --Russell Hubbard in the Princeton newsroom, 609-750-4651 or Enron's Trading Partners Say It's Business as Usual (Update2) 2001-10-25 19:38 (New York) Enron's Trading Partners Say It's Business as Usual (Update2) (Adds new Enron CFO in 14th paragraph.) Houston, Oct. 25 (Bloomberg) -- Concerns Enron Corp. will run short on cash haven't prevented commodities traders from doing business with the largest energy broker, customers say. The company handles about 25 percent of U.S. power and natural-gas trading, said John Kilduff, vice president of energy risk management for Fimat USA. It's also a leader in complex derivatives that allow others to hedge against the risk of fluctuating commodities prices. Enron's credit rating is on watch for possible downgrade at Moody's Investors Service, and Standard & Poor's lowered Enron's long-term credit outlook to negative after $1.01 billion in third- quarter losses from some soured investments. The company needs good credit to raise cash every day to keep trading partners from demanding collateral and to settle transactions. So far, there are no signs that Houston-based Enron is handling less business, Kilduff said. ``If they were unable to perform, it would be a major problem,'' he said. ``It could get like Long-Term Capital if things really broke down because the numbers are that big.'' Long-Term Capital Management, a private investment fund for the wealthy, incurred massive losses making bond trades during the 1998 Russian currency crisis. The fund's portfolio plunged. More than a dozen banks bailed out the fund at a cost of $3.6 billion to avoid a collapse. Needs Cash Daily Enron trades electricity, natural gas, coal and other commodities worldwide, as well as complex financial instruments to hedge against price swings in the goods. ``As of now, Enron is active in the markets,'' Kilduff said. ``No one is cutting trading lines that I can see, or demanding different terms than before.'' Companies that trade as heavily as Enron require cash every day to settle positions, said Kilduff, whose company swaps natural gas and other energy investments with Enron. Some days, Fimat will bet that natural-gas prices will fall, while Enron bets that they will rise. Natural gas usually does one or the other every day, and someone pays the difference. ``The liquidity of your trading partners is a risk factor,'' Kilduff said. ``Someone is paying someone else every day.'' Enron said on a conference call Tuesday that it has enough money to operate normally, and can fall back on $3.4 billion in bank credit lines if necessary. The company is determined to protect the credit rating, Enron has said. ``We aren't even going to entertain worst-case scenarios at this point,'' said Enron spokeswoman Karen Denne. Investor Questions Enron, based in Houston, ousted Chief Financial Officer Andrew Fastow yesterday, two days after the U.S. Securities and Exchange Commission began asking questions about partnerships he ran that invested in company shares. Those trades cost Enron $35 million. Jeff McMahon, head of Enron's industrial markets unit, replaced Fastow, who went on leave of absence. Enron shares have fallen 49 percent in the past week. They fell 6 cents to $16.35 today. Based on Bloomberg composite ratings, most of Enron's long- term debt is rated at BBB2 and BBB1, two or three levels above investment grade. Fitch, Standard & Poor's and Moody's all rate the company's debt at investment grade. The company also faces questions from investors about $3.3 billion in potential liabilities from affiliated companies formed to buy and sell Enron assets such as power plants. The affiliates owe payments to bond investors and plan to meet them by selling assets. Enron doesn't know if the sale proceeds will cover the debt. The company would have to make good on any shortfall. Little Time Enron asked Citicorp Inc. on Tuesday to arrange a $750 million loan to ensure access to credit if the company gets shut out of the money markets. Enron had about $1.85 billion of commercial paper, or short- term unsecured debt, outstanding as of Tuesday, traders said. The company, which has a $3 billion program, has had difficulty finding buyers for new commercial paper sales since the SEC investigation was announced, the traders said. Today, Enron offered two-week commercial paper at a 3 percent yield, 10 to 15 basis points above comparably rated companies. ``There appears to be enough liquidity to give them enough time to get their house in order,'' said Jon Kyle Cartwright, senior energy credit analyst at Raymond James & Associates. ``There's a point where a credibility crisis becomes a self- fulfilling prophecy, so they have less time than they think to pacify the market.'' Ripple Effect Some investors are concerned that Enron's complex book of hedges, swaps, options and other derivative contracts involves so many partners, participants and companies that a failure would pose a risk to the economy, and force a bailout like Long-Term Capital Management's. ``The talk in the financial markets is that some counter party to Enron could fail if Enron can't perform,'' said Jeff Caughron, manager of $400 million in investments for Tinker Federal Credit Union in Oklahoma City. ``If it goes down, there could be a big ripple effect.'' The effect has already spread as investors worry Enron won't be able to pay bills owed to power producers such as Calpine Corp., Dynegy Inc., Mirant Corp. and NRG Inc., said Chris Ellinghaus, an analyst at Williams Capital Group. As a group, shares of the four have fallen 11 percent in the past week. ``Rumors that these companies have receivables with Enron are fueling a sell-off,'' he said. ``Both traders and companies selling power to Enron are suffering.'' All four companies said they're trading with Enron as they have in the past. Market Maker Enron supplies services some customers consider irreplaceable. The Sacramento Municipal Utilities District hedges weather risk through Enron, said risk manager Jim Tracy. The district entered into an agreement that forces it to pay Enron if rainfall is abundant and hydroelectric dams can operate at peak efficiency and capacity; in dry seasons, when the dams can't operate as well, Enron pays the district. ``If Enron's credit went bad, or they folded up, that agreement wouldn't get picked up by someone else,'' Tracy said. Enron also helps many U.S. utilities protect themselves from electricity and natural gas price fluctuations in the same way it helps the Sacramento utility district hedge against too little rainfall. Any impairment on Enron's part to continue doing so would trickle down to Main Street utilities, Tracy said. ``Utilities would start reserving more on their balance sheets for price swings,'' Tracy said. --Russell Hubbard in the Princeton newsroom at 609-750-4651, or at Enron Broadband Begins Closing London, Singapore Offices By Erwin Seba Of DOW JONES NEWSWIRES 10/25/2001 Dow Jones Energy Service (Copyright (c) 2001, Dow Jones & Company, Inc.) HOUSTON -(Dow Jones)- Enron Corp.'s (ENE) telecommunications unit will clos= e down its trading offices in London and Singapore over the next six months= .=20 Enron Broadband Services executives have quietly begun to inform employees = overseas and haven't made a public announcement of plans to consolidate Asi= an and European bandwidth trading operations at the company's Houston headq= uarters. "It's a way to structure the business to fit the opportunities that are out= there in the market now," Enron Broadband Services spokeswoman Terrie Jame= s said in response to questions from Dow Jones Newswires.=20 The London office has 20 or fewer employees, James told Dow Jones. The Sing= apore office has 15 or fewer employees.=20 Americans working in the offices would probably choose to relocate in the U= .S., James said. She didn't know how many of the employees are U.S. citizen= s. She didn't know what options might be offered to the non-American employ= ees.=20 James didn't know how much money Enron might save by closing the offices.= =20 The decision by Enron, the leading bandwidth market-maker, shows that inter= national bandwidth markets are having tough times like the U.S. market.=20 Earlier this year, as the U.S. market went sour, Enron executives had said = that European and Asian telecommunications carriers might be more open to b= andwidth trading, making the markets in those regions ripe for growth.=20 -By Erwin Seba, Dow Jones Newswires; 713-547-9214; erwin.seba@dowjones.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Calpine:No Exposure To Enron; No Calif Pwr Contract Talks 10/25/2001 Dow Jones Energy Service (Copyright (c) 2001, Dow Jones & Company, Inc.) NEW YORK -(Dow Jones)- Calpine Corp. (CPN) has no credit exposure to tradin= g partner Enron Corp. (ENE), Calpine said Thursday in an earnings conferenc= e call. And the company hasn't been contacted by the state of California ab= out renegotiating the billions of dollars in long-term supply contracts the= company signed with the state earlier this year.=20 Calpine's diluted net earnings for the third quarter were 88 cents a share = compared with 48 cents for the same quarter last year. Setting Calpine's co= nsistent earnings growth aside, Wall Street analysts in Thursday's conferen= ce call focused their questions on trouble spots in the energy industry, li= ke Enron, California, and whether the U.S. will have a surplus of electric = power stations in a few years. Moody's has put Enron's credit on watch for possible downgrade, and some of= the company's debt is trading like junk bonds in the secondary market this= week. Trading partners like Calpine have been asked about their exposure t= o Enron.=20 "We continue to assess the situation, but right now don't have any net expo= sure to Enron," said Calpine's vice president of corporate risk management,= Paul Pasoli. "We continue to trade with them. We will adjust our credit th= reshold based on how their bonds are trading and their credit rating."=20 When asked if there would be any exposure to Enron if trading were to be ha= lted immediately, Pasoli said that, in fact, Calpine would owe Enron a litt= le money.=20 In another energy industry area of concern, Calpine was asked about the sta= te of California's stated desire to renegotiate tens of billions of dollars= of long-term power contracts. Calpine is by far the biggest supplier under= those contracts, which on a mark-to-market basis are worth far less now th= an when California bought this past winter and spring.=20 "Nobody has come to us directly or indirectly with regard to the Calif cont= racts. In general, we respect our contracts and expect our counterparties t= o do so as well," said Calpine cheif executive, Peter Cartwright. "If there= are any contract renegotiations that can result in a win-win, we would be = happy to look at that, if California asks. We've done that many times."=20 As for future power prices, Calpine said that it's going forward with its p= rogram to build a portfolio of 70,000 megawatts of generation, which is abo= ut three times its current capacity and would be about 7% of all U.S. capac= ity. The critical determinant of profitability in power generation is the d= ifference between natural gas prices and power prices, and Calpine said tha= t difference, or "spark spread," has grown the past few months. Furthermore= , the company executives said they are holding to a requirement that all pr= ojects generate an after-tax return of 18% on the investment.=20 As a result, the company expects earnings to grow at least 40% annually thr= ough 2005. Calpine will fund near-term cash needs in the debt markets and w= on't issue new stock until its stock price rises substantially.=20 -By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.co= m Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Spector, Roseman & Kodroff, P.C. Files Class Action Suit Against Enron Corp= oration 10/25/2001 PR Newswire (Copyright (c) 2001, PR Newswire) PHILADELPHIA, Oct. 25 /PRNewswire/ -- The law firm of Spector, Roseman & Ko= droff, P.C. announces that a class action lawsuit has been commenced in the= United States District Court for the Southern District of Texas, Houston D= ivision, against defendants Enron Corporation ("Enron" or the "Company") (N= YSE: ENE), Kenneth L. Lay, Jeffrey K. Skilling, and Andrew Fastow, on behal= f of purchasers of the common stock of Enron during the period between Janu= ary 18, 2000 and October 17, 2001, inclusive (the "Class Period").=20 The Complaint alleges that defendants violated Sections 10(b) and 20(a) of = the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder,= by issuing a series of material misrepresentations to the market between J= anuary 18, 2000 and October 17, 2001, thereby artificially inflating the pr= ice of Enron common stock. Specifically, the complaint alleges that Enron i= ssued a series of statements concerning its business, financial results and= operations which failed to disclose (i) that the Company's Broadband Servi= ces Division was experiencing declining demand for bandwidth and the Compan= y's efforts to create a trading market for bandwidth were not meeting with = success as many of the market participants were not creditworthy; (ii) that= the Company's operating results were materially overstated as result of th= e Company failing to timely write-down the value of its investments with ce= rtain limited partnerships which were managed by the Company's chief financ= ial officer; and (iii) that Enron was failing to write-down impaired assets= on a timely basis in accordance with GAAP. On October 16, 2001, Enron surp= rised the market by announcing that the Company was taking non-recurring ch= arges of $1.01 billion after-tax, or ($1.11) loss per diluted share, in the= third quarter of 2001, the period ending September 30, 2001. Subsequently,= Enron revealed that a material portion of the charge related to the unwind= ing of investments with certain limited partnerships which were controlled = by Enron's chief financial officer and that the Company would be eliminatin= g more than $1 billion in shareholder equity as a result of its unwinding o= f the investments. As this news began to be assimilated by the market, the = price of Enron common stock dropped significantly. During the Class Period,= Enron insiders disposed of over $73 million of their personally held Enron= common stock to unsuspecting investors. If you purchased Enron securities during the Class Period, you may, no late= r than December 21, 2001, move to be appointed as a Lead Plaintiff in this = class action. A Lead Plaintiff is a representative, chosen by the Court, th= at acts on behalf of other class members in directing the litigation. The P= rivate Securities Litigation Reform Act of 1995 directs Courts to assume th= at the class member(s) with the "largest financial interest" in the outcome= of the case will best serve the class in this capacity. Courts have discre= tion in determining which class member(s) have the "largest financial inter= est," and have appointed Lead Plaintiffs with substantial losses in both ab= solute terms and as a percentage of their net worth. If you have sustained = substantial losses in Enron securities during the Class Period, please cont= act Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more = thorough explanation of the Lead Plaintiff selection process. If you have r= elatively small losses, your ability to participate in any recovery will be= protected by the Lead Plaintiff(s), and you need take no affirmative steps= at this time.=20 If you wish to discuss this action or have any questions concerning this no= tice or your rights or interests, please contact plaintiff's counsel Robert= M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@srk-law.= com. For more detailed information about the firm please visit its website = at http://www.spectorandroseman.com.=20 Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and= San Diego, California, concentrates its practice in complex litigation inc= luding actions dealing with securities laws, antitrust, contract and commer= cial claims. The firm is active in major litigation pending in federal and = state courts throughout the United States. The firm's reputation for excell= ence has been recognized on repeated occasions by courts which have appoint= ed the firm as lead counsel in numerous major class actions involving viola= tions of the federal securities laws and the federal antitrust laws, and co= nsumer fraud. As a result of the efforts of the firm, and its members, hund= reds of millions of dollars have been recovered on behalf of thousands of d= efrauded shareholders and companies.=20 MAKE YOUR OPINION COUNT - Click Here=20 http://tbutton.prnewswire.com/prn/11690X17742762 /CONTACT: Robert Roseman of Spector, Roseman & Kodroff, P.C., +1-888-844-58= 62/ 19:00 EDT=20 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 TGS Q3 net profit up 22 pct yr-on-yr on higher NGL sales, transport revenue= s 10/25/2001 AFX News (c) 2001 by AFP-Extel News Ltd BUENOS AIRES (AFX) - Perez Companc SA and Enron Corp pipeline joint venture= , Transportadora de Gas del Sur SA, said its net profit in the three months= to September rose 22 pct year-on-year to 37 mln pesos on the back of stron= g growth in sales of natural gas liquids (NGL) and increased revenue from t= ransport.=20 Total revenue grew 24 pct year-on-year to 147 mln pesos, as "TGS continues = to grow its revenues in all of its business segments," CEO Eduardo Ojea Qui= ntana said. NGL sales surged 86 pct year-on-year to 31.1 mln pesos, after a partial tak= eover of the Cerri complex's production at Bahia Blanca, although volumes d= eclined as a result of the start-up of the Mega project at the beginning of= 2001, Ojea Quintana said.=20 Gas transport revenue rose 11 pct year-on-year to 109.6 mln pesos as averag= e gas transportation contracted capacity rose 6 pct to 62.5 mln cubic metre= s daily, following a capacity expansion completed in June.=20 However, he also noted "important challenges, mostly associated with the re= levant regulatory issues that remain unresolved, as well as the deep econom= ic crisis that Argentina is currently undergoing."=20 "These negative factors have adversely affected our investment plans for th= e current year and for 2002," Ojea Quintana added.=20 lac/zr For more information and to contact AFX: www.afxnews.com and www.afx= press.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron Draws Down Credit Facility 10/25/2001 Dow Jones News Service (Copyright (c) 2001, Dow Jones & Company, Inc.) HOUSTON -(Dow Jones)- Enron Corp. (ENE) drew on committed lines of credit t= o provide cash liquidity of more than $1 billion.=20 In a press release Thursday, the energy company said it has "more than adeq= uate" liquidity to fulfill business commitments. Enron said the credit action is a step to restore investor confidence, and = it plans to update investors in several days regarding plans to maintain it= s long-term credit rating.=20 Earlier Thursday, Standard & Poor's revised its long-term ratings outlook f= or Enron to negative due to concerns that the company's significant drop in= market capitalization has hurt the company's flexibility and could impair = plans to rebuild the balance sheet.=20 Over the past week, Enron's shares have fallen more than 40% amid negative = news from the company.=20 The company's New York Stock Exchange-listed shares closed Thursday at $16.= 35, down 6 cents, or 0.4%, on composite volume of 39,212,300 shares. Averag= e daily volume is 7,832,606 shares.=20 Early last week, the company reported a $618 million third quarter loss, re= sulting from $1.01 billion in write-offs. Enron also disclosed a $1.2 billi= on reduction in shareholder equity for the quarter as a result of terminati= ng certain transactions related to a partnership that for a time was headed= by Chief Financial Officer Andrew Fastow.=20 On Wednesday, Enron replaced Fastow with Jeff McMahon, effective immediatel= y.=20 The Wall Street Journal reported Thursday that some bond traders believe En= ron's bonds won't continue to hold up better the company's stock.=20 The company's five-year bond has decreased about 16% in the past two weeks,= much less than the 50% decline in Enron's stock price since the Oct. 16 di= sclosure of the $1.01 billion charges.=20 But the fall in the bond's price translates to a yield of 7.7 percentage po= ints above bellwether U.S. government bonds, which is widening from about 3= percentage points two weeks ago. Although Enron is still an investment-gra= de credit, that kind of "spread" is more characteristic of a junk bond with= a credit rating of single B or lower, the Journal said.=20 On Wednesday, Fitch put Enron's credit rating on watch for a possible downg= rade, following a similar move by Moody's Investor Service earlier this wee= k.=20 Several energy trading companies said Thursday that although they have conc= erns about Enron's credit quality, they have made almost no changes in poli= cy concerning the company.=20 Dynegy Inc. (DYN), Williams Cos. (WMB) and Aquila Inc. (ILA) said they have= n't changed their credit policy concerning Enron, which accounts for about = a quarter of the trade in U.S. power and gas markets.=20 The Journal reported that bond traders expect Enron executives to meet with= rating agencies, debt-trading desks, big bond holders and banks next week.= =20 Company Web site: http://www.enron.com=20 -Susan Willetts; Dow Jones Newswires; 201-938-5388 Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =09 Enron Employees Watch Options Devalue as Shares Fall (Correct) 2001-10-25 18:41 (New York) Enron Employees Watch Options Devalue as Shares Fall (Correct) (Company corrects structure of standard compensation package in second paragraph.) Houston, Oct. 25 (Bloomberg) -- Enron Corp. prided itself on sharing the wealth with employees when the company was posting record profits last year. Now, from the boardroom to the mailroom, employees are sharing the pain. Enron, the largest energy trader, grants stock options to the bulk of its 20,000 employees. Under Enron's standard compensation package, most employees get stock options equal to 5 percent of their annual base salary, spokeswoman Meredith Philipp said. Employees held 46.8 million exercisable options as of the end of 2000, all at average prices above the company's current share price. The stock has dropped 80 percent this year. ``Virtually every option is under water right now,'' Enron spokeswoman Karen Denne said. Enron's board sets the strike price for the options in December or January. Employees can't cash the options in and make a profit unless the stock is trading above the strike price. At the end of 2000, Enron shares were trading at $83.13. In December, the board set a strike price of about $80. Shares of Houston-based Enron fell 6 cents to $16.35 today. They have lost 37 percent of their value so far this week. Enron said Monday that the Securities and Exchange Commission was asking questions about partnerships run by Andrew Fastow, who was ousted as Enron's chief financial officer yesterday. One partnership cost the company $35 million, and Enron bought back 62 million shares from a partnership at a cost of $1.2 billion. Enron named Jeff McMahon, head of its industrial markets group, as CFO late yesterday. Unvested Options Another 96.1 million options granted to Enron employees hadn't vested as of the end of last year. About 15.4 million of them, or 16 percent, were at prices ranging from $6.88 to $20 a share. The rest vest at levels well above the current share price. Experts who have watched the devaluation of stock options in other industries, such as technology and telecommunications, say it becomes demoralizing for workers to watch share prices fall below their options. ``It looks bad,'' said Mark Edwards, chairman of IQuantic Buck, a Mellon Financial Corp. unit that provides compensation consulting. ``Employees look at (the stock price) every day, and it's a continued disincentive to them.'' While Denne said Enron doesn't have any plans to reprice its employees' options, the company did issue a one-time stock option grant at $36.88 in August, when Ken Lay resumed his former role as the company's chief executive. Lay, who had held the job for 15 years, turned the position over to Jeffrey Skilling in February. Skilling quit in August, citing family reasons. The August grant, which was equivalent to 5 percent of employees' base salary, didn't require a vesting period, but was exercisable immediately. Enron's shares haven't closed above $36.88 since Aug. 29. --Margot Habiby in the Dallas newsroom (214) 954-9452, or