Enron corp organizational meeting
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Enron Corp Organizational Meeting. December 12, 2001 New York, NY.

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Enron Corp Organizational Meeting

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Enron corp organizational meeting

Enron Corp Organizational Meeting

December 12, 2001

New York, NY


Enron corp organizational meeting

This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and that actual results could differ materially as a result of known and unknown risks and uncertainties, including; various regulatory issues, the outcome of the Chapter 11 process, general economic conditions, future trends, and other risks, uncertainties and factors disclosed in the Company’s most recent reports on forms 10-K, 10-Q, and 8-K filed with the Securities and Exchange Commission.

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Overview

Overview

  • What Happened

  • Stabilization of the Business

  • Preliminary Financial Profile

  • Preliminary Business Realignment

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What happened

What Happened


What happened enron 2001 share price

What HappenedEnron 2001 Share Price

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What happened enron daily share price

What HappenedEnron Daily Share Price

3Q Earnings

WSJ Articles Begin

Bond Spreads Gap

SEC Inquiry Begins

CP Market Disappears / CFO Replaced

RC Drawdown

Pipe Financing Announced

8K Filed

10Q Filed

Merger Announced

Chapter 11

Filing

Credit Downgrade / Merger Terminated

DIP Financing

Realignment Commences

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What happened recent events

What HappenedRecent Events

  • Financial statement charges surprised capital markets

  • Loss of investor and creditor confidence

  • Financial market reaction resulted in lack of access to capital markets

    • Without ability to refinance, current maturities greatly exceeded operating cash flow

    • Too much leverage tied to stock price

  • Trade credit markets became nervous – wholesale business adversely impacted

  • Attempt to stabilize business through merger with Dynegy

  • Dynegy pulls out of merger

  • Ratings downgraded

  • Chapter 11 filing

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Stabilization of the business

Stabilization of the Business


Stabilization of the business steps taken to restore investor confidence

Stabilization of the BusinessSteps Taken to Restore Investor Confidence

Pre-Chapter 11 Filing

  • Change in management

  • $3.0B revolver drawdown, $1.0B net

  • $1.0B secured pipeline financing

  • $1.5B Northern Natural Gas Preferred

  • Executed Dynegy merger agreement

  • Private equity initiative

  • Accelerated asset sale program

  • Key employee retention program

Focus on core business

Immediate liquidity for short-term obligations and collateral

Long-term financial stability

Validate business value

Repair the balance sheet

Preserve franchise value of the business

Chapter 11 filing on December 2, 2001

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Stabilization of the business steps taken to restore investor confidence1

Stabilization of the BusinessSteps Taken to Restore Investor Confidence

Post-Chapter 11 Filing

  • $1.5B DIP financing completed

  • Dramatic overhead reductions

  • Centralized cash conservation program implemented

  • Business realignment initiated

  • Maximize cash value of trading book

  • Debt restructuring plan under development

Sufficient liquidity to run operations

Reduce “burn rate”

Back to basics to preserve value of core business and maximize asset value

Generate cash

Recapitalize the company

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Stabilization of the business debtors in possession

Stabilization of the BusinessDebtors in Possession

Enron Corp

  • Enron Corp

  • PBOG Corp

  • Smith Street Land Company

Transportation &

Distribution

Wholesale

Services

Retail Energy

Services

International

Projects

  • Enron North America Corp.

  • Enron Power Marketing, Inc.

  • Enron Metals & Commodity Corp.

  • Enron Industrial Markets LLC

  • Enron Global Markets LLC

  • Enron Broadband Services, Inc.

  • Enron Gas Liquids, Inc.

  • Enron Net Works LLC

  • Enron Transportation Services Company

  • ENA Asset Holdings, LP

  • BAM Leasing Company

  • Enron Energy Services, Inc.

  • Enron Energy Services LLC

  • Enron Energy Services Operations, Inc.

  • Enron Energy Marketing Corp.

  • Operational Energy Corp.

  • Enron Engineering & Construction Company

  • Enron Engineering & Operational Services Company

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Preliminary financial profile

Preliminary Financial Profile


Preliminary business realignment

Preliminary Business Realignment


Preliminary business realignment enron corp historical organizational structure

Preliminary Business RealignmentEnron Corp Historical Organizational Structure

Enron Corp

Transportation &

Distribution

Wholesale

Services

Retail Energy

Services

International

Projects

  • Interstate Gas Pipelines

  • Electric Distribution

  • (Portland General)

  • Commodity Marketing and Delivery

  • Energy Delivery and Services Outsourcing

  • Emerging Market Infrastructure Investments

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Preliminary business realignment enron corp realigned organizational structure

Preliminary Business RealignmentEnron Corp Realigned Organizational Structure

Third Party

Enron Corp

North America

Energy Trading

& Marketing

Regulated

Businesses

Exploration &

Production

Wholesale &

Retail Services

Assets To

Be Sold

X%

1-X%

$346

(13%)

$2,160

(80%)

  • Pipelines

  • Power Assets

  • North America

  • International

  • Maximize cash proceeds of trading book

  • Asset Rationalization

  • Creation of Asset-based Business

  • Emerging Markets Businesses

  • Azurix

  • Wind

  • Merchant Assets

Core Businesses

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Preliminary business realignment netco jv

Preliminary Business RealignmentNETCO JV

Rationale

  • Wholesale business generated significant cash flows and value prior to loss of counterparty confidence

  • Reestablishment of trading operation to preserve maximum value for estate

  • Need to identify third party with strong balance sheet to re-enter trading markets

    Preliminary Structure

  • Enron and third party to establish trading venture with shared ownership

  • Enron to contribute trading expertise and related support systems; third party to contribute strong investment grade balance sheet and working capital

  • Currently negotiating economic splits and related governance issues

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Preliminary business realignment priorities

Preliminary Business RealignmentPriorities

  • Frequent and accurate communication with all stakeholders

  • Focused on value preservation

  • Enhancing cash flow is a top priority

  • Significant value creation opportunity with emergence from Chapter 11

Maximization of value through business realignment and asset sales

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