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Enron Says It Won't Issue Release on 4th-Qtr Results Bloomberg, 01/02/2002 Senate Democrats Launch Probe of Enron Collapse With Subpoenas Bloomberg, 01/02/2002 USA: UPDATE 1-Congressional panel turns up heat under Enron. Reuters English News Service, 01/02/2002 Enron's Lay to testify to Congress in Feb after backing out of prior hearings AFX News, 01/02/2002 Enron: CFO Shouldn't Testify At Change-Of Venue Hearing Dow Jones Energy Service, 01/02/2002 Enron protests request that executive testify at change-of-venue hearing Associated Press Newswires, 01/02/2002 IN THE MONEY: Enron DIP Financing Likely To Shrink Dow Jones News Service, 01/02/2002 US Govt Affairs/Enron-2:Enron, Andersen To Get Subpoenas Bloomberg, 01/02/2002 Andersen Announces Results of Audit Quality Peer Review PR Newswire, 01/02/2002 Enron, Economy, Market Woes Weigh On Banks' 4Q <C BK JPM Dow Jones News Service, 01/02/2002 Two state pension funds plan to sue over Enron loses Associated Press Newswires, 01/02/2002 Azurix Extends Waterworks Concession 3mths. Business News Americas, 01/02/2002 ____________________________________________________ Enron Says It Won't Issue Release on 4th-Qtr Results 2002-01-02 16:10 (New York) Bloomberg Houston, Jan. 2 (Bloomberg) -- Enron Corp., the energy trader which filed for bankruptcy last month, won't announce its fourth-quarter results until March, spokeswoman Karen Denne said. The company, once the top energy trader, will include the results in a mandatory quarterly filing with the U.S. Securities & Exchange Commission, known as a 10-Q. ``That's what's required,'' Denne said. ``Earnings and the balance sheet will be out at the same time this year.'' Shares of Houston-based Enron rose 3 cents to 63 cents. They fell 99 percent last year. Enron filed for Chapter 11 bankruptcy protection on Dec. 2. --Margot Habiby in the Dallas newsroom (214) 954-9452 or mhabiby@bloomberg.net/taw Senate Democrats Launch Probe of Enron Collapse With Subpoenas 2002-01-02 15:09 (New York) Bloomberg Washington, Jan. 2 (Bloomberg) -- The Senate Government Affairs Committee launched a probe of Enron Corp.'s collapse by issuing subpoenas for documents from the company's officers, directors and accountants. Senator Joe Lieberman, a Connecticut Democrat who chairs the committee, said the subpoenas kick off ``a search for the truth, not a witch hunt,'' into questions such as whether analysts misled investors by touting Enron after they should have known it was in trouble. ``The suddenness with which this company fell is shocking,'' Lieberman said at news conference. ``Even the savviest investors on Wall Street were blindsided'' by an event that Lieberman said shook ``public confidence in the stock market.'' The first hearing is scheduled for Jan. 24, the second day the Senate will be in session. The hearing will focus on Enron's use of energy derivatives and the lack of regulatory authority over its trading operations, Lieberman said. The subpoenas for documents are being sent to the officers and directors of the company since 1999, as well as Enron's auditors, Arthur Andersen LLP. Several other congressional committees are investigating Enron's bankruptcy, the largest in U.S. history, which sent its shares from $84.06 a year ago to 64 cents in afternoon trading. The Senate probe has political implications because it will be run by Democrats, and Enron Chairman Kenneth Lay is a friend of and fundraiser for Republican President George W. Bush. Lay to Be Called Lay and former Chief Executive Officer Jeffrey Skilling will eventually be called to testify, Lieberman said. Lay thus far has declined to appear before other committees. ``I will not consider the investigation complete without hearing from Mr. Lay and Mr. Skilling,'' Lieberman said. Lieberman, who ran for vice president in the 2000 election as Al Gore's running mate, said he would look into Lay's connections to the Bush administration and the formulation of its energy policy. ``Some executives of Enron had close relationships with people in the Bush administration,'' Lieberman said. Senator Fred Thompson of Tennessee, the top Republican on the committee, has been consulted about how to run the investigation in a nonpartisan fashion, Lieberman said. SEC Investigating The Securities and Exchange is investigating whether Enron Corp. illegally hid the size of its debt from shareholders before collapsing in November. Also conducting probes are the House and Senate energy panels; two subcommittees of the House Financial Services Committee; and the Senate Commerce Committee's consumer affairs subcommittee. Representative Henry Waxman, a California Democrat, has asked Vice President Dick Cheney to provide information ``about secret contacts'' that Cheney's energy task force had with Enron officials. The Government Affairs Committee is the top investigative panel in the Senate and was used by Republicans to probe former President Bill Clinton's Whitewater involvement and 1996 presidential campaign fundraising. --William Roberts in Washington (202) 624-1897 or e-mail wroberts@bloomberg.net/ shg USA: UPDATE 1-Congressional panel turns up heat under Enron. By Kevin Drawbaugh 01/02/2002 Reuters English News Service (C) Reuters Limited 2002. WASHINGTON, Jan 2 (Reuters) - Fallen energy giant Enron Corp. faced further scrutiny on Capitol Hill on Wednesday with another committee announcing a probe of the company's collapse, possibly looking at connections between Enron and the White House. The Senate Governmental Affairs Committee's permanent subcommittee on investigations said it will subpoena documents next week and scheduled a hearing into the matter for Jan. 24. "Enron's unexpected collapse raises some troubling questions that the governmental affairs committee will be asking," said Sen. Joseph Lieberman, the Connecticut Democrat who chairs the full committee. A Wall Street darling just a few months ago, Enron on Dec. 2 made the largest bankruptcy court filing in U.S. history after a rescue takeover by rival Dynegy Inc. fell apart amid investor concerns about Enron's murky finances. Houston, Texas-based Enron is now under investigation in Washington by the market-regulating Securities and Exchange Commission, the departments of Justice and Labor and at least five congressional committees. In response to questioning at a briefing, Lieberman said he would not rule out the committee looking into ties between Enron and the administration of President George W. Bush. "It's a matter of public record that executives of Enron had close relationships with people who are now in the Bush administration. They also had close relations with some Democrats," Lieberman said. Several of Enron's top executives were major backers of Bush's election campaign, as well as those of other Washington politicians. Enron Chairman Kenneth Lay "and others played an active role in the formulation of energy policy by the Bush administration," Lieberman said. "We've got to ask whether the advice rendered was at all self-serving," he said. "There are some interconnections here with the Bush administration but that is not the focus of this investigation." Sen. Carl Levin, the Michigan Democrat who chairs the permanent subcommittee, said the investigation would focus on the role of Enron's directors in the collapse, the accounting firm Andersen in its audit of Enron's financial statements, and the company's use of complex financial partnerships. Once ranked No. 7 on the Fortune 500 list of top companies, Enron's stock was trading up 4 cents, or 6.7 percent, at 64 cents a share on the New York Stock Exchange in early afternoon trading on Wednesday, off from an August 2000 high of $90.56. Thousands of Enron employees lost their jobs and much of their savings. A 401(k) retirement plan that made many of them heavily dependent on company stock came under fire at a congressional hearing last month when employees said they were unable to sell their holdings when the stock price plunged. "I'm particularly concerned with reports that top executives at Enron were selling their shares of company stock at very high profits while lower-level employees were forbidden from selling theirs," said Sen. Susan Collins, a Maine Republican and ranking minority member of the permanent subcommittee. The Wall Street Journal, citing internal company documents, reported on Wednesday that top Enron officials knew about financial partnerships involved in the company's downfall and were aware of possible conflicts of interest. "Something was very rotten in the state of Enron," Levin said, adding that his subcommittee would look into what appeared to be "layer upon layer of conflicts of interest." Lieberman said no decision had been made on whether to subpoena Lay or other Enron executives. Asked whether SEC Chairman Harvey Pitt would be called before the committee, he said, "We will be calling Mr. Pitt." Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron's Lay to testify to Congress in Feb after backing out of prior hearings 01/02/2002 AFX News © 2002 by AFP-Extel News Ltd WASHINGTON (AFX) - Enron Corp chairman and chief executive officer Kenneth Lay has informed Senate lawmakers that he will appear before Congress in February to testify on the energy group's collapse after he failed to attend two similar hearings in December, Congressional aides told AFX News. Lay has been invited to Congress to answer lawmakers questions on the events surrounding Enron's collapse -- the largest corporate bankruptcy in US history -- before the Senate Commerce Committee which is due to hold a hearing into the affair on Feb 4. "Enron's chairman has indicated that he will be testifying," said a spokesman for Democratic Senator Byron Dorgan, who is scheduled to chair the hearing after Congress returns from its winter break in late January. At two previous hearings in December, Lay declined to appear before Congress to testify at the last minute, prompting several lawmakers to caution him in his absence that Congress has the power to subpoena witnesses if it desires. Congress is trying to discover if Enron withheld any material information from its auditors. Lawmakers also want Enron to answer questions about the freezing of its employees' pension funds, and they are also seeking to find out why Lay divested millions of dollars of Enron stock earlier this year prior to investors losing billions of dollars in the failed company. jjc/lj Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron: CFO Shouldn't Testify At Change-Of Venue Hearing 01/02/2002 Dow Jones Energy Service (Copyright © 2002, Dow Jones & Company, Inc.) NEW YORK (AP)--A lawyer for Enron Corp. (ENE) argued in bankruptcy court Wednesday that the Houston-based energy company's chief financial officer, Jeffrey McMahon, shouldn't have to answer questions at a hearing next week to decide whether to move the trial from New York to Houston. "It's not a subject on which he's competent to testify," said Howard Comet of the law firm Weil, Gotshal and Manges LLP. Judge Arthur J. Gonzalez delayed any ruling until Friday, giving Comet time to try and convince lawyers representing Dynegy Inc. (DYN), as well as others seeking to move the trial, that no Enron executives should have to testify at the hearing scheduled Monday. Dynegy, an Enron rival, backed out of a deal to buy the company after once-mighty Enron said it was in worse financial straits than it had originally disclosed. A lawyer for Dynegy, H. Rey Stroube, said he wants at least one Enron executive to explain why the company believed it was important for the case to be heard in New York instead of Houston and whether money could be saved if the case were administered in Texas. Comet told the judge that he would try to answer that question, and others, by Friday afternoon, when the parties reconvene in a conference call to discuss the matter, although he said it would be a "practical impossibility" to do so. Analysts say that Dynegy and other parties suing Enron believe they would get a more favorable hearing in Houston, whose economy has suffered greatly as a result of Enron's demise. If Stroube were still unsatisfied Friday and the judge sided with him, Comet said he would be willing on Monday to call into court the chief counsel of Enron North America, Mark Haedicke, to explain why the parent company filed for bankruptcy in New York. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron protests request that executive testify at change-of-venue hearing By BRAD FOSS AP Business Writer 01/02/2002 Associated Press Newswires Copyright 2002. The Associated Press. All Rights Reserved. NEW YORK (AP) - A lawyer for Enron Corp. argued in bankruptcy court Wednesday that the Houston-based energy company's chief financial officer, Jeffrey McMahon, should not have to answer questions at a hearing next week to decide whether to move the trial from New York to Houston. "It's not a subject on which he's competent to testify," said Howard Comet of the law firm Weil, Gotshal and Manges LLP. Judge Arthur J. Gonzalez delayed any ruling until Friday, giving Comet time to try and convince lawyers representing Dynegy Inc., as well as others seeking to move the trial, that no Enron executives should have to testify at the hearing scheduled for Monday. Dynegy, an Enron rival, backed out of a deal to buy the company after once-mighty Enron said it was in worse financial straits than it had originally disclosed. A lawyer for Dynegy, H. Rey Stroube, said he wants at least one Enron executive to explain why the company believed it was important for the case to be heard in New York versus Houston and whether money could be saved if the case were administered in Texas. "What factors were considered?" he asked. Comet told the judge that he would try to answer that question, and others, by Friday afternoon, when the parties reconvene in a conference call to discuss the matter, although he said it would be a "practical impossibility" to do so. Analysts say that Dynegy and other parties suing Enron believe they would get a more favorable hearing in Houston, whose economy has suffered greatly as a result of Enron's demise. If Stroube were still unsatisfied on Friday and the judge sided with him, Comet said he would be willing on Monday to call into court the chief counsel of Enron North America, Mark Haedicke, to explain why the parent company filed for bankruptcy in New York. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. IN THE MONEY: Enron DIP Financing Likely To Shrink By Carol S. Remond 01/02/2002 Dow Jones News Service (Copyright © 2002, Dow Jones & Company, Inc.) A Dow Jones Newswires Column NEW YORK -(Dow Jones)- Enron Corp. (ENE)'s $1.5 billion rescue package may be scaled back amid lingering apathy among bankers recruited to take part in the loan. Enron's better-than-anticipated cash position, now that the company has stopped servicing its debt, coupled with the lack of appetite of banks tapped to help syndicate Enron's debtor-in-possession, or DIP, financing is likely to result in a smaller loan, people familiar with the matter said. The interim financing was first negotiated by Enron's two lead lenders, J.P. Morgan Chase & Co. (JPM) and Citigroup (C) in early December shortly after the energy trader filed by Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York. Final approval of the DIP was first scheduled for Jan. 7, but has since been postponed to the end of the month. DIP financing is crucial to allow bankrupt companies to continue operating. Enron's original loan package was approved by judge Arthur J. Gonzalez on Dec. 3. A first $250 million installment was made available to Enron but has yet to be tapped by the company. People familiar with the matter said Enron provided its two lead lenders with a business plan this past weekend. That should, upon review and approval by J.P. Morgan Chase and Citigroup, open the door for the release of another $250 million. But it's now unclear whether all or any of the remaining $1 billion will be made available to Enron. Under the original DIP package, the $1 billion is contingent on a number of conditions, including full syndication of the loan and the filing for bankruptcy of Enron's Transwestern Pipeline to secure the return of $550 million to J.P. Morgan Chase and Citigroup. (The $550 million is part of a separate $1 billion financing deal put together by the two banks in mid-November as they rushed to try to keep Enron out of bankruptcy.) J.P. Morgan Chase and Citigroup floated a syndication term sheet to other large banks in mid-December but found that most were reluctant to take on more exposure to Enron. The DIP loan carries a 350 basis points (3.5 percentage points) over the London Interbank Offered Rate (LIBOR), interest rate. Banks traditionally agree to provide DIP financing as a way to assure they'll be able to recoup some of their existing exposure to a company that has filed for bankruptcy. Those loans are seen as safe because, under bankruptcy law, they're most senior and are repaid ahead of anything. In the case of Enron, however, worries about how much of the company's outstanding loans can be recouped and the relatively large exposure of some financial firms, have many rethinking more Enron financing. It's unclear whether the Transwestern Pipeline, one of Enron's prized assets, will file for bankruptcy if the DIP is cut back. If not, J.P. Morgan and Citigroup will likely have to keep the $550 million revolver loan they made to Enron in November on their books, instead of getting that cash back. That means the banks will likely end up owning at least part, if not all, of the TransWestern Pipeline which is used to collateralize the loan. -By Carol S. Remond; Dow Jones Newswires; 201 938 2074; carol.remond@dowjones.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. =DJ US Govt Affairs/Enron-2:Enron, Andersen To Get Subpoenas 2002-01-02 15:26 (New York) Bloomberg At a Capitol Hill press conference Wednesday, Lieberman and Levin promised a sweeping probe of the company's internal decision making and potential conflicts of interest, and why auditors and Wall Street analysts failed to warn investors of the company's problems. Ultimately, the committee aims to determine what changes in federal regulations and oversight are needed to prevent a recurrence of Enron's financial implosion. "The suddenness of this company's fall was shocking. Even the savviest experts on Wall Street were blindsided," Lieberman said. After emerging in the 1990s as a Wall Street darling, the company's stock price was trading at more than $80 a share a year ago. But Enron's equity value collapsed after it became known how the company overstated its earnings by nearly a half billion dollars since 1997. The company reduced its equity value by $1.2 billion in the fall, and Enron filed for bankruptcy protection Dec. 2 with shares selling for less than a dollar. The collapse cost investors billions of dollars and wiped out the retirement savings of thousands of Enron employees while top executives collectively sold stock worth about $1 billion. The committee will hold its first hearing Jan. 24, one day after Congress convenes, Lieberman said. The investigation will seek to uncover "the flaws in our system that allowed so many people to be victimized by Enron's collapse," he said. Lieberman said the committee's probe is intended to identify what steps government agencies should take to prevent another financial collapse like Enron's. The investigation will be "a search for the truth, not a witch hunt," he pledged. Nevertheless, Lieberman acknowledged concerns about Enron's political influence with the Bush administration, particularly Enron Chairman Ken Lay's role in helping frame the White House's energy-policy blueprint issued last May. The committee is engaged in "a search for the truth" that "will go where the investigation takes us," he said. Still, Lieberman noted Enron's "close relations with some Democrats" and emphasized that political influence wielded by Enron won't be a focus of the probe. Levin said his subcommittee would issue subpoenas Wednesday to Enron's board of directors and top company executives seeking documents related to decisions involving the establishment of offshore partnerships the company formed, with the involvement of key company executives. Those special-purpose entities engaged in stock and energy derivatives trading at the core of Enron's financial problems. Next week, the subcommittee will issue subpoenas to Arthur Andersen, Enron's outside auditor, Levin said. The subcommittee will delve into "what appears to be layer upon layer of conflicts of interest" involving the transfer of Enron debt to the partnerships, Levin said. "Something was very rotten in the state of Enron," Levin said. Either laws and regulations were violated, or those laws and regulations were inadequate to prevent Enron's problems from occurring in the first place, he said. "A lot of people were either duped or didn't care," Levin said of the involvement of company officials, Wall Street analysts and auditors. "Something this massive should never happen again and it shouldn't have happened in the first place," the subcommittee chairman said. While implicitly critical of the failure of government agencies to prevent Enron's debacle, Lieberman noted that government "can't protect from every angle, particularly with a company that was prepared to violate the law, as this company appeared willing to do." The Governmental Affairs Committee investigation marks the fourth congressional panel to initiate a probe of Enron's collapse. The Senate Commerce Committee is delving into the matter, as are the Energy and Commerce and Financial Services committees in the House. Lieberman defended his committee's interest in the matter and pledged to cooperate with other congressional committees in its investigation. The Governmental Affairs Committee was "uniquely created to investigate something like this," Lieberman said. Levin called Enron's financial collapse "a multifaceted problem." With so many aspects to explore, there is "more than enough" room for another panel to weigh in, he said. An Enron spokeswoman Wednesday declined to comment regarding the committee's probe. The company deferred to its outside legal counsel, Robert Bennett, for a response to Lieberman's assertion that Enron was willing to break the law. Bennett, who represented former President William Clinton in the Paula Jones case, was not immediately available. -By Bryan Lee, Dow Jones Newswires; 202-862-6647; Bryan.Lee@dowjones.com Andersen Announces Results of Audit Quality Peer Review 01/02/2002 PR Newswire (Copyright © 2002, PR Newswire) CHICAGO, Jan. 2 /PRNewswire/ -- Andersen today announced that its system of accounting and auditing quality has been deemed to provide reasonable assurance of compliance with professional standards, following the most extensive peer review in the firm's history. Deloitte & Touche's report, which includes an unmodified opinion for the review year ended August 31, 2001, has been accepted by the Peer Review Committee of the American Institute of Certified Public Accountants' (AICPA) SEC Practice and is available at the AICPA, http://www.aicpa.org/members/div/secps/index.htm . Every three years since 1978, major accounting firms, under the oversight of the Public Oversight Board (POB), have been engaged to conduct reviews of the accounting and auditing practices of member firms in the AICPA SEC Practice Section (SECPS). The scope of this year's peer review of Andersen was expanded after financial reporting issues emerged at Enron Corp. Andersen requested, and Deloitte & Touche had separately concluded, that expanded procedures were appropriate. Deloitte & Touche independently determined the scope of the expanded peer review procedures. In total, the peer and Andersen's internal practice review covered 240 Andersen audit engagements in over 30 Andersen offices and the Andersen national office. The engagements reviewed by Deloitte & Touche reviewers and Andersen practice review teams involved some 45 percent of Andersen's U.S. audit partners. The engagements selected for review represented a cross-section of Andersen's accounting and auditing practice with emphasis on higher-risk engagements. It included examining working paper files and reports and interviewing engagement personnel. Deloitte & Touche's opinion was "unmodified," without qualification. However, three issues not deemed significant enough to affect the opinion were raised in an attached comment letter. Such comments are not unusual in peer review reports. The comments related to: documentation of certain auditing procedures on some engagements; communications with audit committees in some instances; and management representation letters that needed more tailoring in some instances. In its response to Deloitte & Touche's comments, Andersen said it had taken, or would take, the steps recommended to improve its accounting and auditing practices. About Andersen Andersen is a global leader in professional services. It provides integrated solutions that draw on diverse and deep competencies in assurance, tax, consulting, corporate finance, and in some countries, legal services. Andersen employs 85,000 people in 84 countries. Andersen is frequently rated among the best places to work by leading publications around the world. It is also consistently ranked first in client satisfaction in independent surveys. Andersen has enjoyed uninterrupted growth since its founding in 1913. Its 2001 revenues totaled US$9.3 billion. Andersen refers to the brand identity adopted by member firms of the Andersen global client service network. Learn more at www.andersen.com . MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X34851027 /CONTACT: David Tabolt, +1-312-931-9000, david.w.tabolt@us.andersen.com , or Patrick Dorton, +1-703-962-2152, patrick.m.dorton@us.andersen.com , both of Andersen/ 15:57 EST Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Enron, Economy, Market Woes Weigh On Banks' 4Q <C BK JPM By Tara Siegel Bernard 01/02/2002 Dow Jones News Service (Copyright © 2002, Dow Jones & Company, Inc.) Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- There are a handful of words that will consistently dot the fourth-quarter earnings statements of the nation's largest banks - the economy, Enron and Argentina. Those are the culprits behind the quarter's feeble profits, reflecting the continued drag of the soft economy on financial firms, exacerbated after the Sept. 11 terrorist attacks on the World Trade Center that shuttered financial markets for four days. A string of banks - including J.P. Morgan Chase & Co. (JPM), Bank of New York Co. (BK), FleetBoston Financial Corp. (FBF) and some smaller institutions - have already prepped investors with announcements that their quarterly results would be light. The banks cited the rising number of loan defaults, weak capital markets, poor returns on venture capital investments and costs tied to restructuring operations. "This outlook incorporates the weak economic backdrop together with the natural tendency for fourth-quarter earnings to include 'clean-up' items," analyst George Bicher of Deutsche Banc Alex. Brown. wrote in a research note. Some of the cleanup involves sweeping bad loans off their books. Enron Corp. (ENE), the beleaguered Houston energy concern, filed for bankruptcy protection on Dec. 2, in a move that shields the company from creditors as it seeks to reorganize. Enron's problems have branched out across Wall Street and the banking industry like tentacles, and some of its largest lenders - including J.P. Morgan Chase, Citigroup and Bank of America Corp. (BAC) - will feel the sting. Adding to the credit quality pressure is Argentina's financial and political crisis, not to mention rising loan losses across the board. "With the consumer continuing to hold up relatively well thus far, the focus is clearly on commercial credit," said analyst Mike Mayo of Prudential Securities Inc. While market-sensitive revenue is likely to rise from the third quarter, it's still weak overall. Merger-and- acquisition activity was still meager, and losses are expected from venture capital portfolios as managers write down investments, analysts noted. Equity underwriting improved and debt underwriting should log healthy results, although it's not expected to hit the record levels of earlier in the year. Citigroup Consumer Unit Helps Results Citigroup, the nation's largest bank, is expected to earn 73 cents a share, up from 63 cents in the third quarter (including a merger charge, it earned 61 cents), and 65 cents in the comparable quarter a year earlier, according to a Thomson Financial/First Call survey. The consumer business, which includes Citigroup's credit-card and consumer finance operations, is expected to post strong results. Though costs to cover bad loans will likely rise modestly, they will be offset by higher fees and improved net interest margin yields - or the difference between the bank's cost of funds and what it charges on loans - as funding costs dropped with falling interest rates. The Enron factor will likely dent results a bit: The unsecured portion - or the amount of the loan not backed by collateral - of Citi's estimated $900 million exposure to Enron is estimated at between $300 million and $400 million, analysts said. On the Argentine front, where Citigroup is one of the two largest foreign banks along with FleetBoston, the company could incur a loss of one to two cents a share, analysts said. J.P. Morgan Chase said that as a result of Enron's failure, it would take a charge of $220 million in the fourth quarter on top of a $235 million reduction in trading revenue. In December, the New York financial services company released more specifics on its exposure to Enron which totals $2.6 billion, up from the $900 million figure J.P. Morgan initially disclosed. About $2 billion of the total is secured. Argentine loan losses may also chip into results. Venture capital is another likely sore spot, as the firm will probably have to write down the value on some investments. Other market-related businesses, including trading, are expected to be weak. J.P. Morgan, the nation's second-largest bank with $712 billion in assets, is expected to earn 36 cents a share, compared with 51 cents in the third quarter (including merger and restructuring costs, it earned 22 cents), and flat with the fourth quarter a year earlier. Bank of America, the nation's third-largest bank with $625 billion in assets, said in November it would meet analysts' fourth-quarter expectations of $1.25 a share. That's slightly below third-quarter earnings of $1.28 (including costs tied to sales of two businesses it earned 51 cents), but ahead of the 85 cents a share in the comparable quarter a year ago. Credit quality will also take center stage at Bank of New York. The company said earlier this month that it would take a $275 million charge, largely to cover costs to dispose of its exposure to 24 emerging telecommunications companies and an energy-trading company (Enron). The bank has a total of $758 million in loan commitments to the companies and $488 million in loans outstanding. However, the bank said it will record an initial insurance recovery of $175 million from the terrorist attacks - it had several buildings within blocks of the WTC, including its headquarters. The recovery payments will partially offset those credit costs, and so the bank said it expects the items to reduce fourth-quarter earnings by six cents a share. At the time of the announcement, analysts' expected fourth-quarter earnings of 50 cents. The bank expects to meet that number, excluding the charge of 6 cents a share. That compares with 52 cents in the third quarter (including charges of 19 cents a share tied to the Sept. 11 attacks, it earned 33 cents) and 50 cents in the comparable quarter last year. The consensus earnings estimate for the latest quarter is now 47 cents a share. -By Tara Siegel Bernard, Dow Jones Newswires; 201-938-5288; tara.siegel@dowjones.com Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Two state pension funds plan to sue over Enron loses 01/02/2002 Associated Press Newswires Copyright 2002. The Associated Press. All Rights Reserved. INDIANAPOLIS (AP) - Indiana's two largest public pension funds plan to join a federal class-action lawsuit against Enron over millions of dollars the funds lost when the energy giant's stock collapsed. The Public Employees Retirement Fund and the Teachers Retirement Fund report they collectively lost about $24.2 million from the drop in Enron's stock value. Managers hope to recover that money for the pension funds that have a value of about $18 billion. "We will certainly be involved as a plaintiff in this action," William Butler, executive director of the employee fund, told The Indianapolis Star. "As long as there is any prospect for recovery, I think it is incumbent on us to protect our members' money." Several states - including Ohio, Georgia, Washington and Florida - have sought to direct the nationwide lawsuit, which claims that Enron illegally misstated its financial health. Compared with other states, Indiana's funds were not hit hard. The teacher fund lost about $2.25 million of its $6 billion, and the employee fund lost roughly $22 million of its $12 billion. Fund managers said the losses would have no effect on present or future payouts. "Twenty-two million dollars is not insignificant by anyone's measure," Butler said. "But when you look at it in the context of the whole fund, it's thankfully not a very big number." About 150,000 workers, mostly state and local government employees, pay into the employee fund, with about 49,000 retirees or their families are drawing from the fund. The teacher fund includes about 80,000 working teachers and 35,000 retirees. William Christopher, director of the teacher fund, said he expected his board would move to sue the company. "It's our responsibility to do that," he said. "Even though we just weren't exposed (to Enron) a great deal." Indiana's constitution prohibited the government employees fund from investing in stocks until an amendment was approved in 1997. Proponents maintained that investing in the market would increase fund growth over time. Most of Indiana's investment in Houston-based Enron was in stock groupings that mimicked the S&P 500, managers said. Enron, which until recently was the country's seventh biggest company in revenue, filed the largest ever U.S. bankruptcy case Dec. 2 after rival Dynegy Inc. backed out of an $8.4 billion takeover offer. Enron's stock price fell from more than $85 a share a year ago to about 26 cents. New York state, which also is suing Enron, said it lost $58 million of its $112 billion pension fund in the plunge. Ohio's two largest funds, one for public employees and another for teachers, lost a combined $114.5 million. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Azurix Extends Waterworks Concession 3mths. 01/02/2002 Business News Americas Copyright 1996 - 2002 Business News Americas (BNamericas.com) Azurix Corp.AZX Azurix BA, the waterworks concessionaire for Argentina's Buenos Aires province, will continue to provide services for the next three months rather than stepping down this month as announced in October, a provincial official told BNamericas. The Enron-controlled company and the province will use the three-month period to work on a smooth transition and iron out financial differences, said the official, from Buenos Aires' works and public services ministry. Authorities are mulling two possible courses to take when Azurix finally leaves: launching an auction to select a new private operator or turning waterworks services over to the province. Azurix, which has been plagued with quality and service related problems, began its 30-year concession to serve 2.5 million residents of 49 districts in 1999, but called short its tenure due to the province's alleged "serious breaches" of concession terms. http://www.bnamericas.com Copyright 1996 - 2001 Business News Americas (BNamericas.com). Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved. Sarah Palmer Internal Communications Manager Enron Public Relations (713) 853-9843
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