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ENRON REPORTS 12 PERCENT INCREASE IN
1996 EARNINGS PER SHARE, TO $2.31 PER SHARE
FOR IMMEDIATE RELEASE: Tuesday, January 21, 1997
HOUSTON -- ENRON today reported a 12 percent increase in 1996
earnings per share, to $2.31 per share after preferred dividends, compared to $2.07 in 1995. Total net income in 1996 was $584 million compared to $520 million in 1995 and revenues in 1996 were $13.3 billion compared to $9.2 billion in 1995.
For the fourth quarter of 1996, ENRON reported earnings per
share of $0.52 per share after preferred dividends compared to $0.52 for the same period in 1995. Total net income in the fourth quarter of 1996 was $132 million compared to $130 million in 1995 and revenues in the fourth quarter of 1996 were $4.0 billion compared to $2.5 billion for the same period in 1995.
"ENRON achieved its earnings and operational goals in 1996,
the first year of our ENRON 2000 initiative to reach net income in excess of $1 billion and achieve a minimum double digit growth in annual earnings per share," said Kenneth L. Lay, chairman and chief executive officer of ENRON. "In addition, we are pleased that the approval process on our proposed merger with Portland General Corporation is moving at a pace that addresses the needs of both the regulatory agencies and our companies. In November, both companies' shareholders voted in favor of the merger and late last week the Oregon Public Utility Commission (OPUC) staff recommended approval of the merger. While there are conditions attached to this approval, we look forward to working through this process in meetings with the staff beginning tomorrow. We expect to receive all necessary state and federal approvals by mid-year 1997."
Enron Gas Pipeline Group/Enron Ventures Corp.
- Earnings from the former Enron Operations Corp. are represented by earnings from two newly formed business units. Enron Gas Pipeline Group (GPG) consists of ENRON's North American interstate natural gas pipeline systems, and Enron Ventures Corp. (EVC) consists of ENRON's engineering and construction activities, as well as ENRON's interests in clean fuels and EOTT Energy Partners, L.P.
- GPG/EVC reported earnings before interest and taxes of $570 million in 1996, which includes $18 million of pretax income in the fourth quarter from the favorable settlement of litigation, compared to earnings of $442 million in 1995 prior to an $83 million fourth quarter charge primarily related to reserves established for litigation and regulatory matters.
- The 1996 results include pretax gains of $90 million from the sale of gathering assets. The 1995 results include pretax gains of $67 million from the sale of gathering assets and a processing facility, partially offset by a $19 million pretax charge related to a writedown of EOTT's West Coast operations.
"ENRON's pipelines are well positioned to maximize expansion
opportunities in 1997," Lay said. "Northern Natural Gas Company (Northern) filed with the FERC for an expansion project that will increase peak day firm transportation service into the U.S. upper midwest markets by approximately 350 million cubic feet of gas per day (MMcf/d) between 1997 and 2001. Enron Ventures Corp. is providing engineering and construction assistance on this pipeline project while also making excellent progress on power plants in Turkey and Italy and serving as a third-party construction contractor on a compressor station in Severnaya, Russia.
Enron Capital & Trade Resources (ECT)
- ECT's earnings are derived from the marketing, purchasing and financing of natural gas, natural gas liquids and power as well as the company's non-regulated pipelines, storage and electricity facilities. - ECT reported earnings before interest and taxes of $280 million in 1996 compared to 1995 earnings of $232 million prior to a $75 million fourth quarter charge related to its clean fuels plant operations.
- Physical volumes marketed in 1996 increased 18 percent to 9.0 trillion British thermal units of energy equivalent per day (TBtue/d) compared to 7.6 TBtue/d a year ago.
- ECT's U.S. power marketing business reflected significant growth in 1996, with 60.2 million megawatt hours (MMmwhs) sold, compared to 7.8 MMmwhs sold in 1995. Power marketing volumes in the fourth quarter of 1996 totaled 20.6 MMmwhs sold compared to 3.1 MMmwhs sold for the same period in 1995.
"ECT's finance group enjoyed a solid year of earnings growth,
completing five significant equity-based transactions with upstream companies in 1996," Lay said. "All of ECT's core businesses expanded their activities in 1996 and are positioned for significant growth in 1997 and beyond."
Enron International
- International earnings consist of earnings from the development and promotion of integrated energy projects, commercial power generation and pipeline activities outside of North America and Europe, and earnings from Enron Global Power & Pipelines (EPP).
- International reported earnings before interest, minority interest and taxes of $152 million in 1996 compared to $142 million a year ago. - ENRON resumed construction on the Dabhol power project in India, closed financing and started construction on power projects in Turkey and Italy and completed a natural gas pipeline in Colombia and power projects in the Dominican Republic and China.
- ENRON signed a power purchase agreement for a 500-megawatt power project in East Java, Indonesia and, together with its partners, acquired a 50 percent stake in the transportation assets of Bolivia's state oil and gas company.
"ENRON is well positioned for future international growth and
maintains a significant backlog of development projects, including a 500-megawatt power project and LNG facility in Puerto Rico that is expected to reach financial close in the first quarter of 1997, an 85-megawatt power project in Guam, a 110-megawatt power project in Poland and a 180-megawatt power project in Croatia," Lay said.
Exploration and Production
- Exploration and Production (E&P) earnings before interest, minority interest and taxes in 1996 were $200 million compared to $241 million for the same period a year ago. The impact of ENRON's hedging commodity positions not held by EOG was a reduction in E&P earnings of $4 million in 1996 as compared to an increase of $45 million in 1995. - EOG sold significantly less crude oil and natural gas reserves and related assets in 1996, realizing pretax gains of $20 million ($8 million after tax and minority interest) in 1996 compared to $63 million ($33 million after tax and minority interest) in 1995.
- Total 1996 natural gas production averaged 830 MMcf/d, up 12 percent compared to 743 MMcf/d in 1995. EOG North America wellhead natural gas volumes averaged 706 MMcf/d in 1996, up 11 percent compared to 636 MMcf/d in 1995.
"EOG's total reserves increased approximately 10 percent to
over 4 trillion cubic feet of natural gas equivalent," Lay said. "EOG's total all-sources production replacement of 201 percent included 164 percent reserve replacement from drilling additions alone."
Corporate and Other
ENRON reported 1996 earnings in Corporate and Other of $18
million, including income of $178 million ($90 million after tax) on the sale of 12 million shares of EOG common stock, of which $122 million ($61 million after tax) was realized in the fourth quarter. The full-year and fourth quarter 1996 results also reflect the establishment of an $83 million pretax reserve related to the required disposition of certain assets in connection with the planned merger with Portland General. The 1996 results compare to earnings of $249 million in 1995, including a gain of $367 million ($161 million after tax) on the sale of 31 million shares of EOG stock held by ENRON, fully offset by charges of $74 million related to non-recurring compensation related costs and other corporate items and charges in ENRON's other businesses referred to above.
ENRON, one of the world's largest integrated natural gas and
electricity companies with approximately $15 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas in the world and the largest non-regulated marketer of electricity in North America; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital in the energy market; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns a majority interest in Enron Global Power & Pipelines L.L.C., which is owner and manager of operating power plants and natural gas pipelines around the world; and is one of the largest independent developers and producers of electricity in the world. ENRON is traded under the ticker symbol, "ENE."
For additional information please contact:
Carol Hensley
(713) 853-6498
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