Tuesday, May 17, 2005

Good Press: In reaction to a pretty entertaining story about one man's exposure to an Enron song-and-dance number in 1999, including multiple trips on one of Enron's corporate jets, I started looking at the corporate press releases of the company, and found them to be pretty entertaining as well (in the sense that you can't look away) . Reading the tone of the releases, the double-talk, the scripting, even the standard SEC required langauge, is amazingly telling. Here's a short walk through 2001:

January, 2001
: Enron announces increased EPS (earnings per share) forecast of $1.70 to $1.75. Remember those numbers.

February, 2001: Enron named one of the country's most innovative companies, for the sixth year running. Who's doing the naming? Why, Fortune Magazine, a trusted name if there ever was one.

April, 2001
: Enron announces an increase in DEPS (Diluted EPS) for the first quarter 2001 over 2000 of $.07/share. Not only that, it is once again increasing forecasted EPS for 2001 in the $1.75 to $1.80 range. Things are looking up!

May, 2001: Vice-Chairman, Cliff Baxter resigns, but will continue to work as a consultant. Hmmm, well, people do move on. Plus, as the press release reassuringly notes, consistently:
Enron is one of the world?s leading electricity, natural gas and communications companies. The company, with revenues of $101 billion in 2000, markets electricity and natural gas, delivers physical commodities and financial and risk management services to customers around the world, and has developed an intelligent network platform to facilitate online business. Fortune magazine has named Enron "America's Most Innovative Company" for six consecutive years.

June, 2001: Enron reassures the world that it will meet earnings expectations. And who wouldn't believe? After all, this comes from Jeffrey Skilling:
"Our business continues to be extremely strong. Interest in our energy delivery and energy management capabilities has never been higher," said Jeffrey K. Skilling, Enron president and CEO. ?Having reviewed the recent FERC action on price controls in the western U.S., we remain very confident that we will meet the market?s consensus recurring earnings estimates of $0.42 and $1.79 per share, respectively, for both the second quarter and full year 2001."

August, 2001: Oops, Skilling resigned.

October, 2001: Hmmm, the SEC is casually interested in Enron's earnings, etc. But, this is purely voluntary, says Ken Lay. Note the slight change to the tag description of the company at the end:
Enron is one of the world?s leading energy, commodities and services companies. The company markets electricity and natural gas, delivers energy and other physical commodities, and provides financial and risk management services to customers around the world.
No more "$101 billion" in revenues - hmmm, wonder why such engraved-in-stone numbers would be removed from the company description? And what about Fortune Magazine? Oh well, as long as my stock holdings keep going up...

October 31, 2001: HEY, WE GOT THIS NEW DIRECTOR ON BOARD! HE'S A LAW PROFESSOR AND EVERYTHING! WOOOOHOOOO! and the sec has changed its inquiry to a formal investigation.

November, 2001:
Okay, not that it means anything, but here's some explanation of all the off balance sheet transactions we've (well, really Skilling) been doing these past years. But, I mean, Andersen okayed it all, so no worries, really.

November 9, 2001
: Big time merger announcement!! See, people want us; they love us. In your face, SEC!!!

November 28, 2001:
Whoops, the merger's off; and we're now a junk-rated credit risk. But umm, hey, have you seen our precious art collection?

December 2, 2001: Annnnd, we're in bankruptcy. Notice how pathetic the tag line is now:
Enron Corp. markets electricity and natural gas, delivers energy and other physical commodities, and provides financial and risk management services to customers around the world.
No leader of this, billion dollar that, Fortune magazine whatever.

December 14, 2001: Annnnd, your 401(k) is screwed. Merry Christmas from all of us at Enron!

2002 is just too depressing to recount...resignations, criminal proceedings, liquidations.

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