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ENRON CORP. REPORTS FIRST QUARTER 1996 NET INCOME OF $212.8 MILLION, OR $.86 PER
SHARE
FOR IMMEDIATE RELEASE: Thursday, April 11, 1996
HOUSTON -- Enron Corp. today reported net income of $212.8
million for the first quarter of 1996, or $.86 per share after
preferred dividends compared to 1995 first quarter net income
of $195.0 million, or $.79 per share after preferred dividends.
Revenues were $3.1 billion in the first quarter of 1996, compared
to $2.3 billion in the first quarter of 1995.
"While each of our business units performed well in the
first quarter and helped to position Enron for our targeted 10
to 15 percent growth in earnings per share in 1996, Enron Capital
& Trade Resources (ECT) achieved tremendous results with earnings
that nearly doubled to $97.7 million compared to $51.4 million
a year ago," said Kenneth L. Lay, chairman and chief executive
officer of Enron Corp. "The volumes ECT marketed increased
substantially during the first quarter of 1996, and many transactions
involved high value services that are uniquely provided by the
company. ECT's physical infrastructure and assets such as Louisiana
Resources Company, Houston Pipe Line Company and Bammel storage
allow us to take advantage of any prevailing market conditions
and provide our customers price predictability and reliable delivery,
which are particularly important when market conditions are stressed."
ECT marketed 44.2 billion British thermal units of energy equivalent
per day (BBtue/d) of physical and notional quantities in the first
quarter of 1996, compared to 40.9 BBtue/d during the same period
in 1995. ECT's U.S. power marketing business reflected even more
significant growth in the first quarter of 1996, with a total
of 9.9 million megawatt-hours sold, compared to 718 thousand megawatt-hours
sold in the first quarter of 1995 and more than three times the
3.1 million megawatt-hours sold in the fourth quarter of 1995.
"In addition to building on the success of its U.S. power
business, ECT is making significant progress in Europe,"
Lay said. "In the U.K. it has already closed a number of
transactions, ranging in term from three months to ten years,
with regional electricity companies, power generators and a major
industrial. Since the inception of its power marketing activities
in January 1996, Enron has completed contracts with notional volumes
in excess of 6.5 million megawatt-hours settled against the U.K.
electricity pool. We believe these are the first of a growing
number of structured transactions in Europe," Lay said.
Enron Operations reported earnings before interest and taxes
of $232.7 million in the first quarter of 1996, compared to $180.9
million a year ago. Enron Operations' earnings include the commercial
and operational aspects of Enron's U.S. interstate natural gas,
natural gas liquids and crude oil pipelines as well as fees associated
with engineering and construction services provided to third parties
worldwide. The 1996 and 1995 results include pretax gains of $90.2
million and $29.2 million, respectively ($58.6 million and $19.0
million after tax) from the sale of non-strategic gas gathering
and processing related assets.
"During the first quarter of 1996, Enron's natural gas pipelines
provided reliable service to customers across the nation, despite
some of the coldest temperatures in recent history," Lay
said. "In addition, Northern Natural Gas filed a settlement
with the Federal Energy Regulatory Commission (FERC), which if
approved would extend contracts with its market area customers
by two years. "
Enron International reported earnings before interest and taxes
of $40.3 million in the first quarter of 1996 compared to $51.2
million a year ago. Enron International includes earnings from
the development and promotion of integrated energy projects, commercial
power generation activities outside of North America and Enron
Global Power & Pipelines L.L.C. (EPP).
"The first quarter of 1996 was an active period for our
international businesses," Lay said. "We began commercial
operation of the Hainan Island and Dominican Republic power projects
and the Colombia natural gas pipeline and signed a power purchase
agreement (PPA) for a 754-megawatt power project in Pakistan.
We have reached agreement with the state of Maharashtra on all
documents relating to our India power project and, upon receiving
approvals from the central government and project lenders, expect
to restart construction before the end of the second quarter."
International results in the first quarter of 1995 included revenues
of $23.5 million from the promotion of a portion of Enron's interest
in its power assets at Teesside and $12.0 million recognized as
a result of the satisfaction of Enron's support obligations related
to the formation of EPP.
Exploration and Production (E&P) earnings before interest,
minority interest and taxes in the first quarter of 1996 were
$29.7 million compared to $58.3 million a year ago.
"E&P's first quarter results reflect a strategic change
implemented at year-end 1995 that we believe will prove extremely
beneficial in subsequent quarters this year," Lay said. "To
benefit from increasing natural gas prices due to industry conditions
that reflect a more balanced supply/demand environment, Enron
Oil & Gas Company (EOG) and Enron Corp. closed out their NYMEX-related
hedges on EOG's 1996 natural gas production during December and
the first quarter of 1996. EOG recognized a loss on the hedges
of $21.0 million ($8.3 million after taxes and minority interest)
in the first quarter of 1996 compared to a gain of $26.3 million
($13.7 million after taxes and minority interest) in the first
quarter of 1995 from NYMEX-related activities, including trading
transactions. Similarly, Enron Corp. recognized a loss of $1.8
million in the quarter, versus a gain of $16.1 million in the
first quarter of 1995, on its hedge positions. Although EOG
recognized a loss for the first quarter of 1996, EOG has locked
in a gain on its hedges of $17.4 million for the remaining quarters
of 1996. Likewise Enron Corp. has locked in a gain of $2.4 million
on its hedges for the remaining quarters of 1996. This income,
in addition to the company's ability to now benefit from increasing
natural gas prices, should more than offset the losses recognized
in the first quarter."
EOG's total wellhead natural gas delivered volumes averaged 848
million cubic feet per day (MMcf/d) of gas in the first quarter
of 1996, up 18 percent, compared to 716 MMcf/d a year ago, reflecting
increases in North America and Trinidad. Average North America
wellhead natural gas prices received by EOG were $1.74 per thousand
cubic feet (Mcf) for the first quarter of 1996, up 36 percent,
compared to $1.28 per Mcf a year ago. EOG's crude oil and condensate
volumes increased 18 percent to 21.4 thousand barrels per day
(MBD) in the first quarter of 1996 from 18.1 MBD a year ago.
The increase primarily reflects higher volumes in Trinidad that
averaged 7.1 MBD during the most recent quarter.
Enron Corp., the world's first natural gas major with approximately
$13 billion in assets, operates one of the largest natural gas
transmission systems in the world; is the largest purchaser and
marketer of natural gas and the largest non-regulated marketer
of electricity in North America; produces and markets natural
gas liquids worldwide; owns 60 percent of Enron Oil & Gas
Company, one of the largest independent (non-integrated) exploration
and production companies in the United States; owns 52 percent
of Enron Global Power & Pipelines L.L.C., which is owner and
manager of operating power plants and natural gas pipelines in
emerging markets; and is one of the largest independent developers
and producers of electricity in the world. Enron Corp. is traded
under the ticker symbol, "ENE."
This press release includes forward looking statements
within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Although
Enron believes that its expectations are based on reasonable assumptions,
it can give no assurance that its goals will be achieved. Important
factors that could cause actual results to differ materially from
those in the forward looking statements herein include political
developments in foreign countries, the pace of deregulation of
retail natural gas and electricity markets in the United States,
the timing and extent of changes in commodity prices for oil,
gas, electricity and interest rates, the extent of EOG's success
in acquiring oil and gas properties and in discovering, developing
and producing reserves, the timing and success of Enron's efforts
to develop international power, pipeline and other infrastructure
projects and conditions of the capital markets and equity markets
during the periods covered by the forward looking statements.
For additional information please contact:
DIANE BAZELIDES
(713)853-6285
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