CONFIDENTIAL To: Distribution Date: January 17, 2000 From: Paula Rider RE: Enron Corp. Fourth Quarter i999 Earnings Release Draft Attached is a draft of the earnings release scheduled to be released tomorrow morning, Tuesday, January 18. Please provide your comments by 2:00 pan. today. Please call meat ext. 37209 to discuss, or fax your comments to 7131646-3002. Thank you in advance for your prompt response. Distribution: Jim fl annan tine Carolyn Barrett Cliff Baxter Sanjay Bhalnagar Bob Butts Rick Buy Rick Causey Diomedes Christodoulou Wanda Curry Jim Derrick Fernicy Dyson John Echols Andy Pastaw Peggy Fowler Mark Frevert Kevin Hannon Ken Harrison David Haug Rod Hayslett Toe H?lrko Stan Horton Kurt Huneke ~2aw(a~ Larry Izzo Steve Kean Mark Koenig Ken Lay Tod Lindholm Rebecca Mark Mike McConnell - Rebecca McDonald Jeff McMahon Mark Metts Cindy Olson Lou Pai Mark Palmer Ken Rice Rex Rogers John Sherriff Jeff Sherrick Jeff Skifling Joe Sutton Mary Turina Rob Walls Greg Whalley Toni White EC 002791319 -I GOVERNMENT EXHIBIT 4613 CrimNo 1104-0025 ENRON CORP. CONTINUES STRONG EARNINGS GROWTH: REPORTS FOURTH OUARTER 1999 EARNINGS OF $0.30 PER DILUTED SHARE FOR IMMEDIATE RELEASE: Tuesday, January 18,2000 HOUSTON - Enron Corp. announced today very strong financial and operating results for the full year 1999, including: * a 30 percent increase in revenues to $41 billion; * a 37 percent increase in net income to $953 million; * a 17 percent increase in earnings per diluted share to $1.17; * a 19 percent increase in marketed volumes to 32 trillion British thermal units per day (TBtue/d); and * a more than doubling of new retail energy services contracts to $8.5 billion. The financial results exclude nonrecurring items. "Our strong results in both the fourth quarter and the full year 1999 reflect excellent performance in all of our operating businesses. Our wholesale business again registered strong profitability and growth in the rapidly expanding, deregulating energy industry worldwide. Our retail business in now prcfitable. This business has reached critical mass in contracting activity and service capabilities, and profitability is expected to accelerate rapidly," said Kenneth L. Lay, Baron chairman and chief executive officer. "In addition, Enron continues to develop innovative, high-growth new businesses that capitalize on our core skills, as demonstrated by the early success of our new broadband services business. Overall, a great year - one in which our shareholders received a total return of 58 percent." Eaton also announced a very successful fourth quarter of 1999, generating earnings of $0.30 per diluted share, an increase of 25 percent from $0.24 a year ago. FULL YEAR RESULTS Eaton's businesses include Wholesale Energy Operations and Services (including broadband services), Retail Energy Services, and Transportation and Distribution. Wholesale Energy Operations and Services: Enron's wholesale group consists of two primary lines of business: Commodity Sales and Services (marketing energy commodities and services and managing the associated contract portfolios) and Energy ------------- I EC 002791380 Assets and Investments (investing in, developing, constructing and operating energy and other assets.) The.wholesale group increased income before interest, minority interests and taxes (IBIT) 36 percent in 1999 to $1.3 billion. Strong earnings in Commodity Sales and Services were reflected in a 55 percent increase in BIT to $636 million for 1999. Total deliveries of energy commodities increased 19 percent to 32 TBtue/d, including increases in North America and Europe of 17 percent and 48 percent, respectively. Volume growth reflects expanding, comprehensive supply management contracts for large, regional gas and power utilities. Natural gas volumes increased 22 percent, largely driven by the North American operations. Total power volumes worldwide declined slightly to 391 million megawatt hours due to a single period of unusual activity in the U.S. during the third quarter of 1998. Enron's strong early lead in large, key power markets and the succesaflul launch during 1999 of EnronOnline, Lion's innovative global Internet-based transaction system, are expected to continue contributing significantly to growth in Commodity Sales and Services. Energy Assets and Investments reported a 19 percent increase in IBIT to $846 million. The earnings reflect a balanced contribution ftom Enron's growing energy networks worldwide, diverse energy and communications investments, and sales of power plants developed and constructed to meet energy demands worldwide. In 1999, Enron began commercial operations often wholesale power plants - r a totaling aver 4,000 megawatts of capacity. Certain of these new facili complement Enron's power marketing capabilities and provide customers in North America and Europe with valuable power in periods of high demand. Enron's plants also deliver new sources of electricity to developing markets, such as South America and India. Retail Energy Services: Enron Energy Services offers comprehensive products to reduce energy costs for business customers throughout the U.S. and Europe. Enron Energy Services has built a strong sales and implementation team to capture the lead position in the energy outsource market and now manages over 16,500 facilities worldwide. During 1999, Enron Energy Services entered into contracts representing $8.5 billion of customers' fUture expenditures for natural gas, power and energy services, EC002191881 more than double the $3.8 billion contracted in 1998. The loss before interest and taxes of $68 million for 1999 represents a significant improvement over the $1 19 million loss for the prior year and reflects the results of the increased delivery of energy commodity services under outsource contracts. Enron Energy Services was profitable in the fourth quarter of 1999 ($7 million of BIT) and is expected to generate significantly increased profits in 2000 and beyond. Transportation and Distribution: This group includes Enron's Gas Pipeline Group and Portland General Electric. During 1999, Transportation and Distribution generated $685 million of WIT versus $635 million last year. The Gas Pipeline Group reported ~IT of $380 million forte fbll year 1999, compared to $351 million in 1998. Total volumes transported increased by 4 percent to aver 9 billion cubic feet per day. Northern Natural Gas settled its rate case, providing volume and rate flexibility for its customers. Florida Gas Transmission Company filed its application with the Federal Energy Regulatory Commission for the proposed Phase V expansion, which will increase firm transportation by 400 million cubic feet per day to 2.1 billion cubic feet per day including Phase N. During the fourth quarter of 1999, Enron entered into an agreement to sell Portland General Electric. The transaction is expected to close in late 2000. FOURTH OUARTER RESULTS Enron earned $0.30 per diluted share in the fourth quarter of 1999, an increase of 25 percent from $0.24 last year. Revenues increased significantly to $12 billion. Earnings for the fourth quarter of 1999 were led by: * a 36 percent increase in wholesale IBIT as marketed volumes increased 20 percent to 34 TBtue/d; and * $7 million IBIT ft am Enron Energy Services, compared to a loss of $26 million in the fourth quarter a year ago. In addition, new contracts of $2.6 billion were originated in the most recent quarter. OTHER INFORMATION For the full year 1999, Enron reported $1.09 of earnings per diluted share compared to $1.01 in 1998, after nonrecurring items. I EC002191382 ~ The results for 1999 include nonrecurring charges totaling $0.08 per diluted share. The net result included after-tax income of $345 million, or $0.45 per diluted share, reflecting Enron's sale of its ownership in Briron Oil & (las Company. After-tax charges included $278 million and $131 million, or $0.36 and $0.17 per diluted share, related to Enron's MTBE asset and the cumulative effect of accounting changes, respectively. Please see attached tables for additional financial information. This press release includes forward looking statements within the meaning of Section 27A of the Securities Act at' 1933 and Section 2IE of the Securities Exchange Act of 1934. Although Huron 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 ability to penetrate new retail natural gas and electricity markets in the United States and Europe, the timing and extent of changes in prices for crude oil, natural gas, electricity and interest rates, 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. EC 002791383 ENRON CORP. Table I - Earnings Summary (UnaudiW: in mflflions except per share data) Quarter Ended flec&mbeT3l, 1999 1998 Year Ended December 31, 1999 1998 ReVenues Transportation end Distribution: Gas Pipeflne Group Portland General Wholesale Energy Operations end Services Retail Energy Services Exploration and Production (a) Corporate arid Other (includIng Intercompany eliminations) Total Revenues $ 181 $ 170 377 327 10,774 6,618 468 322 - 230 (145) 35 $ 11,855 $ 7,702 = - $ 653 3 653 1,379 1,196 37,125 27,725 1,720 1,072 526 864 (809) ....2Z2L $ 40,794 $ 31,260 - - After tax results Net Income excluding nonrecurring Items Nonrecurring Items: Gain on sate of EQS stock Charges related to MTEE asset Cumulative effect of accounting changes Net Income $ 255$ 171 $ 953$ - 45 - (40) $ 255$ 176 898 345 45 (278) (40) (131) _________ $ 889 $ 703 Earnings (loss) per share (diluted) (b) EPS (diluted) excluding nonrecurring Items Norvecurring items: Gain on sale of SOS stock Charges related to MTBE asset Cumulative effect of accounting changes EPS (diluted) Average s~arQs outstanding (diluted) (b) $ 0.30 $ 0.24 0.07 - (0.06) $ 0.30 $ 0.25 - - 779.1 716.4 $ 1.17$ too 046 0.07 (0.36) (0.06) (0.17) - $ 1.09 $ 1.01 - - 769.0 695.3 - (a) Reflects results of Enron Oil & Gas tlnugh August16, 1888, date of share exchange transaction. (b) Shares outstanding and EPa amounts have been restated to reflect the tvo4or-one common stock splitthat was effective August 13, 1999. EC 002791384 Fourth Quarter 1999 ENRON CORP. Table 2a - Results by Segment (Unaudited: In n,illions. except per share amounts) Non- Recurring Recurring WIT: Transportation and Distribution: Gas Prpeline Group PorVand General Wholesale Energy Operations and Services Retail Energy Services Exploration and ProducVon (a) Corporate end Other WIT Interest and Related Charges, net DMdends on Preferred Securities of Subsidiaries Minority Interests Income Tax Provision Net Income Preferred DMdends: Second preferred stock Series A and Series S Preferred Stock (I,) Earnings on Common Stock Average Number of Shares Used: (c) Basic Diluted Earnings per Common Sham: (a) Basic Diiuted $ 97 $ 105 267 7 wa_ 471 122 20 41 33 255 4 20 ___________ $ 231 $ - n 7791 7791 - - $ 0.30$ - - - (a) Reflects results of Enron Oil & Gas thmugh August18, 1990, data of share exchange fransaclion. (b) The Series A and Series B Preferred Stock are antidilutive and therefore have been exduded from the calculation of diluted earnings per share. (o) Shares outstanding and EPS amounts have been restated to reflect the two-for-one common stock splltThatwas effective August IS, 1998. ? tc ooii9lSBB Total 97 105 261 7 471 122 20 41 33 255 4 20 $ 231 715.3 779.1 $ 0.32 $ 0.30 Fourth Quarter 1998 ENRON CORP. Table 2b - Results by Segment (Unaudita& in millions, except per shar. amounts) Non- Recurring Recurring lart: Transportation and Olsulbution: Gas flpelMe Group Portland General Wholesni8 Energy Operations and Service Retail Energy Seivices Exploration and Production Corporate and Other IBIT Interest and Related Charges, net OMdends on Preferred Securities of Subsldiafles Minority Interests Income Ta Provision (Benefit) Net Income Preferred Dividends: Second preferred stock Earnings on Common Stock Average Number of Shares Used: Basic Dikjted Earnings per Common Share: Basic Diluted Note: Shares outstanding and EPa effective August13, 1999. $ B4$ 84 201 (26) 3' 28 400 152 19 17 171 5 (39) 7184 718.4 $ 0.24 $ 0.01 $ - - 661 8 7164 $ 0.28 0.25 amounts have beer, restated to reflect the two-for-one common stock split that we EC 002791386 I Total 84 84 201 (26) 31 (13) 381 152 19 17 175 4 - 4 $ 167$ 5$ 172 - - - 1999 Year ~NRON CORP. Table 2c - Results by Segment (Unaudited: In miltions, except per share amounts) Non- Recurring Recurring leST: Transportation and DIst~ibulion: Gas PipeIsis Group Portland General Wholesale Energy Operations and Services Retail Energy Services Exploration and Production (a) Corporate end Other ierr Interest and Rejated Charges, net Dividends on Preferred Securities of Subsidiaries MInority Interests income Tax Prevision (Benefit) Income before Cumulative Accounting Changes Cumulative Effect of Accountino Changes, net of tax Net income (Loss) Preferred Dlvlden4s: Second preferred stack Series A and Series B Preferred Stock (I,) Earnings (Loss) on Common Stock Average Number of Shares Used: (a) Basic Diluted Earnings (Loss) per Common Share: (c) Baste Diluted $ 350 305 1,321 (68) 65 (23) 1,980 659 77 135 156 953 953 $ 13 13 67 (131) (84) 17 49 ___________ $±L 7690 769.0 C $ 1.17 $ (0.08) - $ 380 - 305 * 1,321 - (68) 65 (10) 1,993 - 659 77 136 102 1,020 (131) 889 17 49 $ 823 705.3 769.0 $ 1.17 $ 1.09 (a) Refl&Aa results of Enron OIL & Gas through P~ust 18,1999, deAs of share exchange kansaction. (b) The Series A end Series B Preferred Stock are entidlutive and therefore have been exchjded from the calculation of diluted earnings per share. (o) Shares outstanding arid EPa amounts have been restated to reflect the two-for-one common stack split that was effectiveAugust 13, 1999. EC 002791381 Total 1998 Year ENRON CORP. Table 2d - Results by Segnient (Unaudited: In mildoris, ex*ept per share amounts) Non- Recurring Recurring jeW: Transportation and Distibution: Gas Pipeline Group Portiand General Whoissie Energy Operations and Services Reid Energy Services Exploration and Produclion' Corporate and Other WIT interest and Related Charges, net DMdonds on Preferred Securities of Subsidiaries Minority interests income Tax Provision (Benefit) Net income Preferred Dividends: Second preferred stock Earnings on Common Stock Average Numbs of Shares Used: Basic Diluted Earnings per Common Share: Basic Diluted $ 351 $ 286 988 (119) 128 1' 1,B21 550 (39) 77 77 698 5 17 ___________ $ 681 $ S 695.3 696.3 $ too $ 0.01 $ 351 286 966 (119) 128 (32) 1,582 550 77 77 175 703 17 $ 688 642 3 695 3 $ 1.07 a 1.01 Note: Shares outstanding and EPS amounts have been restated to reflect the two-for-one common stock split that we effective August13, 1999. - - - -- - -' EC 002791388 Total I Transportation I and Distribution ENRON CORP. Table 3a - Core Business Highlights (Unaudited) Quarter Ended December 31, 1999 1998 Year Ended - December 31. 1999 1998 Gas Pipeline Group (in Millions) Net Revenues Cperathig Expenses Depreciation & Amortization Equfly in Earnings Other Income, net laW Total Volumes Transported (BBtuId) (a) Northern Natural Gas Tranawestem Pipeline Florida Gas Transmission Northern Border Pipeline $ 176$ 167 S 626$ 640 74 71 284 276 14 20 66 70 8 4 38 32 1 4 46 25 $ 97$ 84 $ 360$ 351 - - 3,738 1,460 1,538 2,406 4,252 1,492 1,310 1,781 3,817 1,462 1,493 2,405 4,098 1,607 1.324 1,770 Portland General (In Millions) Revenues Purchased Power & Fuel Operaling Expenses Depreciation & Amortization Other Income, net WiT $ 377 179 81 $ 327 129 65 44 47 32 ~ $ 105$ 84 - - $ 1,379 $ 1,196 639 451 304 295 181 183 50 19 $ 305 $ 286 Reta8 Customers (end of period, thousands) 719 704 - = Electricity Sales (Thousand MWh) Residential CominMoiai Indusbial __________ __________ Total Retail Wholesafa _______ ToteJ Sales (a) Reflects 100% of each entity's tlnughput volumes. 2,004 1,879 1,198 5,081 2222.. 8,381 Z052 1,725 921 4,698 2,237 6.935 719 704 7,404 7,392 19,259 7,101 8,781 17,444 £0 002791389 Wholesale Energy Opemtions and Services ENRON CORP. Table 3b - Core Business Highlights (Unaudited) Quarter Ended December SI, lWhole~ale Energy Operations and Services (In MWlons) Commotfity Sa~ss and CarAcas Enm~y Assets and Investments Unallocated Expenses SIT J 1999 1995 S. 169$ 107 145 140 (37) 1A§2. $ 267 $ 201 Year Ended December 31, 1999 1998 $ 636 $ 411 846 709 (161) (152) $ 1,321 $ 988 - - Commodity Sales and Services Physical Volumes (B8tueld) (a) Gas: United Stales Canada Europe Other Transport Volumes Total Gas Volumes Cii Liquids Electricity (b) Total Physicsj Volumes (BBtue/d) (a) Electricity Volumes Marketed (Thousand MWh) United States Europe I Other Total 10,219 4,406 1,604 26 16,265 693 16,948 5,877 947 33,906 86.666 93230 Financial Settlements (NoticnalXfl8tueld) (a) Includes third-party transactions of Enron Energy Seivices. (bi Represents electilcity kansaction volumes marketed, converted to BBtueld. 7,941 4,101 1,605 4 13,851 510 14,161 4,923 506 8,609 28,279 78,969 242 79.211 79,879 N £C '109, 872 8,982 4,398 1,549 23 14,952 575 15.527 5,407 753 378,930 390 506 99,337 7,418 3,486 1.243 8 12,155 559 12,714 ZSSQ 610 401,843 529 402,372 76,266