1 / 28

Enron Energy Services

Enron Energy Services. Financial Highlights ($ in Millions). Year to Date. Total Year. Retail Segment Reported. 2001E. 2000. 2001E. 2000. Earnings Before Interest & Taxes 172.0 78.5 247.0 110.8* Net Income 89.4 14.4 127.3 58.9

kaden-cole
Download Presentation

Enron Energy Services

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Enron Energy Services

  2. Financial Highlights($ in Millions) Year to Date Total Year Retail Segment Reported 2001E 2000 2001E 2000 Earnings Before Interest & Taxes 172.0 78.5 247.0 110.8* Net Income 89.4 14.4 127.3 58.9 Cash Flow from Operations (101.6) (255.2) (44.9) (344.2) Capital Deployed 1,102.7 682.5 1,097.1 871.2 Return on Equity 16.4% 5.4% 23.4% 18.7% Capital Deployed including Retail Risk Management 2,740.9 1,715.3 2,816.4 2,116.9 * Non-recurring EBIT of $62.0MM

  3. Capital DeployedIncluding Retail Risk Management Year to Date Total Year 2001E 2000 2001E 2000 Accounts Receivable 1402.0 926.7 1,402.0 1,157.2 P/X Receivables 513.0 109.5 513.0 272.4 Accounts Payable (303.0) (280.0) (303.0) (356.9) Other Working Capital, Net 93.6 87.9 93.6 102.7 Price Risk Management, Net 671.9 506.3 842.6 698.4 PP&E, Net 158.3 126.9 167.0 152.4 Investments 99.6 120.1 91.6 103.6 Other 105.5 117.9 9.6 (12.9) Total Capital Deployed 2,740.9 1,715.3 2,816.4 2,116.9

  4. Quarterly Results EBIT (Millions) Total Contract Value (Billions) $247 $30 $225 $75 $23.1 $172 $5.0 $18.1 $72 $5.0 $13.1 $100 $7.2 $60 $5.9 $40 1Q01 2Q01 3Q01E 2001 Plan 1Q01 2Q01 3Q01E 4Q01E 2001 Plan 4Q01E

  5. Pace of Deregulation is Choppy Continued Deregulation is Important to Long-Term Strategy Planned Openings in 2001-2003 Adequate to Meet Near-Term Goals California Crisis Has Reduced Acquisition Cost and Increased Urgency in Marketplace Deregulation Status – U.S. Power 01/01 (NH) 01/04 (VT) 03-00 WA 07/07 ND 01/98 (MA) MN 01/98 3/02 WI 01/98 (RI) SD ID 01/01 01/00 (CT) WY 01/99 IA 11/99 (NJ) NE 01/01 04/02 (C&I) 11/00 (DE) IN 10/99 01/10 UT 01/02 07/00 (MD) CO KS MO KY NC Suspended TN 7/02 SC 1/03 1/01 01/08 GA AL MS LA 7/01 FL Restructuring Legislation/Order Enacted Restructuring Enacted, Delay Implemented Commission and/or Legislative Investigation No Significant Activity/Restructuring Denied • Total Market Open = $76.5 Billion • Total Market Open = 35% • Market Size = $219.0 Billion Status current as of 10/01

  6. Deregulation Status – U.S. Gas NH WA ME VT • Consumer response has been mixed with participation varying drastically • Choice varies greatly by customer class • Lack of urgency in the market MT ND MN OR * NY WI MA SD ID RI MI * WY CT PA IA NJ OH NE DE NV IN IL WV MD UT VA CO KY KS MO CA NC TN SC OK AR AZ NM GA AL MS LA TX FL States with legislation passed or comprehensive PUC order issued for all customers; however, the quality of access may vary States with access for some commercial customers States considering reform Competitive bidding for customer No activity • Total Market Open = $31.0 Billion • Total Market Open = 51% • Market Size = $61.0 Billion Status current as of 6/01 Note: Industrial open nationwide

  7. Deregulation Status – Europe Power • Differential Market Opening and Regulatory Regimes Facilitate Market Distortions • Incumbents With Market Power Joined by Consolidated Groupings Threaten Competition in Generation and Supply • Proposed EU Acceleration Directive Would Provide Significant Boost to Market Opening • Proposed EU Regulation in Cross-border Trade in Electricity Would Enhance Integrated Network Access • Market Size = $141.3 Billion • Theoretical Opening = 67% • Actual Opening = 30% • Theoretically Open Market = $94.7 Billion • Actually Open Market = $42.4 Billion • (All Figures Exclude Norway) EU Directive Not Yet In Force In Practice Some Competition But Barriers Remain for New Entrants Some Competition – On the Way to Full Liberalisation Fully Liberalised Sources: CERA 2000 volumes, DTI Energy Trends prices (excl. taxes) for 2000 (or earlier where necessary)

  8. Deregulation Status – Europe Gas • New Directive Will Not be Adopted Before 2002; Regulation on Cross-border Trading and Information Possible • GTE and Eurogas Staunchly Defending Role of Incumbents • Madrid Forum at Impasse with GTE • EU Investigations into Long-term Restrictive Gas Contracts • Total Market = $70.5 Billion • Theoretical Opening = 79% • Actual Opening = 30% • Theoretically Open Market = $55.7 Billion • Actually Open Market = $21.2 Billion • (All Figures Exclude Norway and Portugal) EU Directive Not Yet in Force in Practice Some Competition – No Near Term Plans for Full Liberalisation Some Competition – On the Way to Full Liberalisation Fully Liberalised Sources: CERA 2000 volumes, DTI Energy Trends prices (excl. taxes) for 2000 (or earlier where necessary)

  9. Deregulation Status – Canada Power Restructuring Legislation/Order Enacted Restructuring Enacted, Delay Implemented Commission and/or Legislative Investigation No Significant Activity/Restructuring Denied • Total Market Open = $14.0 Billion • Total Market Open = 50% • Market Size = $28.0Billion

  10. Deregulation Status – Canada Gas Restructuring Legislation/Order Enacted Restructuring Enacted, Delay Implemented Commission and/or Legislative Investigation No Significant Activity/Restructuring Denied • Total Market Open = $10.4Billion • Total Market Open = 70% • Market Size = $14.8Billion

  11. IBM IT-Like Approach Not Scalable Long Lead Time and Sales Cycles Customized Contracts Challenging Executions Dell-Like Approach Very Scalable Standardized Contracts Component Assembly Enables Customization Appropriate Customer Acquisition and Maintenance Costs Evolving Business Model “WAS” “IS” Outsourcing Model Product Model

  12. Product-Based Business Process • Products • Power • Natural Gas • Tariff Commodity • DSM • Facility Services • Construction Services • Sales • Large Consumer • Small Consumer • Europe • Canada • Manufacturing • Services • Energy Asset Management • Risk Management • Define Markets • Target Customers • Originate Business • Create and Manage Sales Channels • Identify Needs • Develop Products • Package Products • Drive Scalability through Standardized Products • Manage Risk • Manage Delivery • Manage Customers • Cost Optimization

  13. Manufacturing Commercial Large Consumer Business – U.S. • Annual Energy Spend >$10MM • Highly Packaged • Enron Sales Force • Dedicated Client Manager $172 34 $84 21 $85 16 $14 5 $88 $71 13 11 00 01 00 01 YTD Transactions YTD Gross Margin (millions)

  14. $70.8 22 $4.6 1 00 01 00 01 Portfolio Origination – U.S. • Upsells and/or Restructures within Existing Contract • Drives Future Investment in New Products YTD Transactions YTD Gross Margin (millions)

  15. Margin # of Transactions Small Consumer Business – U.S. • Annual Energy Spend <$10MM • Standard Products • Enron/Agent Sales Force • Supported by Call Center Regions Channels 10,727 $205 $78 $82 25 $37 1803 $15 $15 $13 6 6.4K 3 3.0K $2 1.3K 00 01 00 01 NE TX CA Direct Telesales Agent

  16. Enron Direct – U.S.Agent-Based Business Metrics Agents at Month End Cumulative Deals Closed Cumulative Margin Deals Closed $9.3 293 2,990 4,515 1,899 $5.6 1,550 133 1,587 $2.6 25 320 13 17 June July Aug Sept June July Aug Sept MA TX NY MA TX NY

  17. Large Consumer Business – Europe • Annual Energy Spend >$10MM • Highly Packaged • Enron Sales Force xx $xx $xx xx 00 01 00 01 Transactions Margin

  18. Small Consumer Business – Europe • Annual Energy Spend <$10MM • Standard Products • Enron/Agent Sales Force xx $xx $xx xx 00 01 00 01 Transactions Margin

  19. Margin # of Transactions Small Consumer Business – EuropeChannels $xx $xx $xx xx $xx xx xx $xx xx xx ND Spain UK Direct Agent

  20. Small Consumer Business – Canada • Annual Energy Spend <$10MM • Standard Products • Enron/Agent Sales Force xx $xx logos $xx xx 00 01 00 01 Transactions Margin

  21. $xx $xx $xx $xx xx xx xx xx Alberta Ontario Direct Agent Margin # of Transactions Small Consumer Business – CanadaChannels

  22. Global Product Mix Q3 Q4 Power Natural Gas Tariff DSM Facility Services Construction Services

  23. Meters Customers 344,588 276,913 xxx xxx xxx xxx xxx xxx 2000 Q101 Q201 2000 Q101 Q201 Q301 Q301 EES U.S. EFS EES Canada EES Europe Services • Client Management • Contract Compliance • Customer Issues Management • Business Center Management • Billing • Customer Enrollment and Set-up

  24. 117 Sq. Feet (Billions) Facilities 99 3.0 80 2.5 70 63 52 52 49 48 2.0 41 41 36 1.5 1.0 As of 3/31/01 As of 6/30/01 As of 9/30/01 0.5 Energy Asset Management • Delivery, Execution and Verification • Performance Measurement • Syndication and Sourcing Completed - NPV Completed - Capital Work in Progress - NPV Work in Progress - Capital

  25. Risk Management Volumes • Risk Management Services • Risk Analysis • Deal Capture and Validation • Global Data Management xxx xxx xxx East Power West Power Natural Gas Canada Europe Q100 Q200 Q300 Q400 Q101 Q201 Q301

  26. Cost Structure Operating Expenditures / Gross Margin Operating Expenditures ($ in Millions) 750 128% 700 5 49 58 99% 523 58 81% 70% 291 530 1999 2000 2001E 2002E 1999 2000 2001E 2002E U.S. EFS Europe TNPC Canada

  27. Closing Remarks

More Related