<PAGE> 1
Filed pursuant to rule 424(b)(4)
Registration No. 333-50565
PROSPECTUS
MAY 5, 1998
15,000,000 SHARES
[ENRON LOGO]
COMMON STOCK
All of the shares of common stock, no par value (the "Common Stock"), of
Enron Corp. ("Enron") offered hereby are being sold by Enron. Enron's Common
Stock is listed on the New York, Chicago and Pacific Stock Exchanges where it
trades under the symbol ENE. On May 4, 1998, the last reported sales price of
the Common Stock on the New York Stock Exchange was $50 1/16 per share. See
"Price Range of Common Stock and Dividends."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
PRICE TO THE UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) ENRON(2)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share......................... $50.00 $1.50 $48.50
Total(3).......................... $750,000,000 $22,500,000 $727,500,000
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Enron has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting estimated expenses of $510,000 payable by Enron.
(3) Enron has granted to the Underwriters an option, exercisable within 30 days
hereof, to purchase up to an aggregate of 2,250,000 additional shares at the
Price to the Public less Underwriting Discount for the purpose of covering
over-allotments, if any. If the Underwriters exercise such option in full,
the total Price to the Public, Underwriting Discount and Proceeds to Enron
will be $862,500,000, $25,875,000 and $836,625,000, respectively. See
"Underwriting."
The shares are being offered by the several Underwriters when, as and if
delivered to and accepted by the Underwriters and subject to various prior
conditions, including the right to reject orders in whole or in part. It is
expected that delivery of the shares will be made in New York, New York, on or
about May 8, 1998.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED JEFFERIES & COMPANY, INC.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
COMMON STOCK, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Enron (File No. 1-13159) with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1997;
(b) Current Report on Form 8-K dated March 19, 1998; and
(c) The description of Enron's capital stock set forth in Enron's
Registration Statement on Form 8-B filed on July 2, 1997.
Each document filed by Enron pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Common Stock pursuant hereto shall be deemed
to be incorporated herein by reference and to be a part hereof from the date of
filing of such document. Any statement contained herein or in a document all or
a portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Enron will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the request of any such person, a copy of any or all
of the foregoing documents incorporated herein by reference other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into the documents that this Prospectus incorporates). Written or
telephone requests for such copies should be directed to Secretary Division,
Enron Corp., at its principal executive offices, 1400 Smith Street, Houston,
Texas 77002 (telephone: 713-853-6161).
2
<PAGE> 3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial data included elsewhere or incorporated by reference
in this Prospectus. As used in this Prospectus, unless the context otherwise
requires, the term "Enron" means Enron Corp. and its subsidiaries. Unless
otherwise indicated, all share amounts and as adjusted amounts have been
calculated assuming no exercise of the over-allotment option.
ENRON CORP.
Enron Corp., an Oregon corporation, is an integrated natural gas and
electricity company with headquarters in Houston, Texas. Enron's operations are
conducted through its subsidiaries and affiliates which are principally engaged
in the exploration for and production of natural gas and crude oil in the United
States and internationally; the transportation of natural gas through pipelines
to markets throughout the United States; the generation and transmission of
electricity to markets in the northwestern United States; the marketing of
natural gas, electricity and other commodities and related risk management and
finance services worldwide; and the development, construction and operation of
power plants, pipelines and other energy related assets in international
markets.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered......................... 15,000,000 shares(1)
Common Stock outstanding as of April 30,
1998....................................... 311,611,708 shares
Use of proceeds.............................. To repay indebtedness and for general
corporate purposes. See "Use of Proceeds."
New York Stock Exchange trading symbol....... ENE
</TABLE>
- ---------------
(1) Excludes 2,250,000 shares of Common Stock subject to the Underwriters'
over-allotment option.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1997 1996 1995
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................................................... $20,273 $13,289 $9,189
======= ======= ======
Net income
Results from core businesses.............................. $ 585 $ 493 $ 489
Retail energy services(1)................................. (9) -- --
Items impacting comparability(2).......................... (471) 91 31
------- ------- ------
Reported net income......................................... $ 105 $ 584 $ 520
======= ======= ======
Diluted earnings per common share
Results from core businesses.............................. $ 1.98 $ 1.82 $ 1.82
Retail energy services(1)................................. (0.03) -- --
Items impacting comparability(2).......................... (1.60) 0.34 0.12
Effect of anti-dilution................................... (0.03) -- --
------- ------- ------
Reported diluted earnings per common share.................. $ 0.32 $ 2.16 $ 1.94
======= ======= ======
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
-------------------------
ACTUAL AS ADJUSTED(3)
<S> <C> <C>
BALANCE SHEET DATA:
Total assets.............................................. $23,422 $23,422
Long-term debt............................................ 6,254 5,527
Minority interests........................................ 1,147 1,147
Company-obligated preferred securities of subsidiaries.... 993 993
Shareholders' equity...................................... 5,618 6,345
</TABLE>
- ---------------
(1) Includes gain on sale of 7% of Enron Energy Services ($61 million, or $0.21
per diluted share).
(2) Includes a charge in 1997 primarily to reflect the impact of the amended
J-Block gas contract ($463 million, or $1.57 per diluted share).
(3) Reflects application of the estimated net proceeds of the offering, as
described under "Use of Proceeds." See "Capitalization."
FORWARD LOOKING STATEMENTS
This Prospectus includes forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E
of the Exchange Act. All statements other than statements of historical facts
included or incorporated by reference in this Prospectus, including, without
limitation, statements regarding Enron's future financial position, business
strategy, budgets, reserve estimates, projected costs and plans and objectives
of management for future operations, are forward looking statements. Although
Enron believes its expectations reflected in such forward looking statements are
based on reasonable assumptions, no assurance can be given that such
expectations will prove to have been correct. Important factors that could cause
actual results to differ materially from the expectations reflected 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, other actions taken by regulatory
authorities, the timing and extent of changes in commodity prices for crude oil,
natural gas, electricity, interest rates and foreign currencies, the extent of
success in acquiring oil and gas properties and in discovering, developing and
producing reserves, the timing and success of efforts to develop international
power, pipeline and other infrastructure projects, and the conditions of the
capital markets and equity markets. All subsequent written or oral forward
looking statements attributable to Enron or persons acting on its behalf are
expressly qualified in their entirety by the foregoing cautionary statements.
4
<PAGE> 5
BUSINESS
Enron is an integrated natural gas and electricity company with
headquarters in Houston, Texas. Enron's operations are conducted through its
subsidiaries and affiliates, which are principally engaged in the exploration
for and production of natural gas and crude oil in the United States and
internationally; the transportation of natural gas through pipelines to markets
throughout the United States; the generation and transmission of electricity to
markets in the northwestern United States; the marketing of natural gas,
electricity and other commodities and related risk management and finance
services worldwide; and the development, construction and operation of power
plants, pipelines and other energy related assets in international markets.
CORE BUSINESSES
EXPLORATION AND PRODUCTION
Enron's natural gas and crude oil exploration and production operations are
conducted by Enron Oil & Gas Company ("EOG"). Enron currently owns approximately
55% of the outstanding common stock of EOG. EOG is an independent
(non-integrated) oil and gas company engaged in the exploration for, and
development, production and marketing of, natural gas and crude oil primarily in
major producing basins in the United States, as well as in Canada, Trinidad and
India. At December 31, 1997, EOG's estimated net proved reserves were 4.5
trillion cubic feet equivalent. At such date, approximately 67% of EOG's
reserves (on a natural gas equivalent basis) were located in the United States,
10% in Canada, 8% in Trinidad and 15% in India. EOG's reserves were 90% natural
gas and 10% crude oil and other.
TRANSPORTATION AND DISTRIBUTION
Enron's transportation and distribution business is comprised of Enron's
North American interstate natural gas transportation systems and its electricity
transmission and distribution operations in Oregon.
Interstate Transmission of Natural Gas. Included in Enron's domestic
interstate natural gas pipeline operations are Northern Natural Gas Company
("Northern"), Transwestern Pipeline Company ("Transwestern") and Florida Gas
Transmission Company ("Florida Gas") (indirectly 50% owned by Enron). Northern,
Transwestern and Florida Gas are interstate pipelines and are subject to the
regulatory jurisdiction of the Federal Energy Regulatory Commission. Each
pipeline serves customers in a specific geographical area: Northern, the upper
Midwest; Transwestern, principally the California market and pipeline
interconnects on the east end of the Transwestern system; and Florida Gas, the
State of Florida. In addition, Enron holds an interest in Northern Border
Partners, L.P., which owns a 70% interest in the Northern Border Pipeline
system. An Enron subsidiary operates the Northern Border Pipeline system, which
transports gas from Western Canada to delivery points in the midwestern United
States.
Electricity Transmission and Distribution Operations. Enron's electric
utility operations are conducted through its wholly-owned subsidiary, Portland
General Electric Company ("PGE"). PGE is engaged in the generation, purchase,
transmission, distribution and sale of electricity in the State of Oregon. PGE
also sells energy to wholesale customers throughout the western United States.
PGE's Oregon service area is approximately 3,170 square miles. At December 31,
1997, PGE served approximately 685,000 customers.
WHOLESALE ENERGY OPERATIONS AND SERVICES
Enron's wholesale energy operations and services business operates in North
America, Europe and evolving energy markets in developing countries. Activities
are conducted primarily by Enron Capital & Trade Resources and Enron
International. These businesses provide integrated energy-related products and
services to wholesale customers worldwide, including the development,
construction and operation of power plants, natural gas pipelines and other
energy-related assets, energy commodity sales and services, risk management
products and financial services. Enron also provides comprehensive engineering
and construction expertise for power and pipeline projects, serving as turnkey
contractor or project manager for such projects.
Wholesale energy operations and services can be categorized into four
business lines: (i) Asset Development and Construction, (ii) Cash and Physical,
(iii) Risk Management and (iv) Finance and
5
<PAGE> 6
Investing. Products and services related to these business lines are offered to
varying degrees in North American, European and evolving international markets.
Asset Development and Construction. This business includes the development
and construction of power plants, pipelines and other energy infrastructure.
Cash and Physical. The cash and physical operations include the purchase,
sale, marketing and delivery of natural gas, electricity, liquids and other
commodities under contracts of one year or less and the management of Enron's
contract portfolios. Enron's cash and physical business also includes the
management of operating assets of this segment, including domestic intrastate
pipelines and storage facilities and international pipelines and power plants.
Risk Management. The risk management activities consist of long-term energy
commodity contracts (transactions greater than one year) and restructuring of
existing long-term contracts. Enron provides risk management products and
services to energy customers that hedge movements in price and location-based
price differentials. Enron's risk management services are designed to provide
stability to customers in markets impacted by commodity price volatility.
Finance and Investing. Enron's financing and investing activities provide
capital to energy-related businesses seeking debt or equity financing, including
volumetric production payments, loans and equity investments, either directly or
through Enron affiliates. Additionally, the finance and investing business
results include changes in the composition and market value of these capital
investments, as well as certain of Enron's equity investments.
NEW BUSINESS
RETAIL ENERGY SERVICES
Enron Energy Services ("EES") provides direct sales of energy products and
services to end-use customers. This includes sales of natural gas and
electricity and energy management services directly to commercial and light
industrial customers, as well as investments in related businesses. In
deregulated markets such as California, products can include electricity and
natural gas and related metering and billing. EES provides end-users with a
broad range of energy products and services at competitive prices.
RECENT DEVELOPMENTS
On April 14, 1998, Enron announced earnings results for the first quarter
of 1998. In the first quarter of 1998, Enron's core businesses generated
after-tax earnings of $0.71 per diluted share, compared to $0.60 for the same
period a year ago. The retail energy services business segment incurred an
after-tax loss of $0.06 per diluted share in the first quarter, compared to an
after-tax loss of $0.03 per diluted share for the same period a year ago. Enron
reported a non-recurring gain of $0.24 per diluted share on the sale of liquids
properties in the first quarter of 1997. Enron reported total diluted earnings
per share of $0.65 and $0.81 and total net income of $214 million and $222
million for the first quarter of 1998 and 1997, respectively. Revenues were $5.7
billion for the first quarter of 1998, compared to $5.3 billion for the same
period a year ago.
USE OF PROCEEDS
The net proceeds to Enron from the sale of Common Stock offered hereby are
estimated to be $727 million ($836 million if the over-allotment option is
exercised in full), after deducting underwriting discounts and commissions and
estimated expenses of the offering. Such proceeds will be used to repay short-
term indebtedness and for general corporate purposes, including capital
expenditures. As of May 4, 1998, the weighted average interest rate on such
outstanding short-term indebtedness was approximately 5.66%.
6
<PAGE> 7
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The following table presents the high and low sales prices for the Common
Stock as reported on the New York Stock Exchange composite transactions
reporting system and dividends paid per share for the calendar quarters
indicated. The Common Stock is also listed for trading on the Chicago Stock
Exchange and the Pacific Stock Exchange, as well as the London Stock Exchange
and the Frankfurt Stock Exchange.
<TABLE>
<CAPTION>
PRICE RANGE
------------
HIGH LOW DIVIDEND
<S> <C> <C> <C>
1996
First Quarter............................................ $40 $34 5/8 $.2125
Second Quarter........................................... 42 3/8 36 3/8 .2125
Third Quarter............................................ 43 39 1/8 .2125
Fourth Quarter........................................... 47 1/2 40 1/4 .2250
1997
First Quarter............................................ 45 1/8 37 7/8 .2250
Second Quarter........................................... 42 3/8 35 5/8 .2250
Third Quarter............................................ 42 35 .2250
Fourth Quarter........................................... 41 15/16 35 15/16 .2375
1998
First Quarter............................................ 48 38 1/8 .2375
Second Quarter (through May 4, 1998)..................... 52 1/8 45 9/16 .2375
</TABLE>
On May 4, 1998, the last reported sales price for the Common Stock on the
New York Stock Exchange was $50 1/16 per share.
Although Enron expects to continue to pay dividends on its Common Stock,
future dividend payments will depend on Enron's results of operations, cash
flow, anticipated capital requirements and such other factors as the Board of
Directors of Enron deems relevant.
CAPITALIZATION
The following table sets forth the unaudited summary capitalization of
Enron and its consolidated subsidiaries as of December 31, 1997 and as adjusted
to give effect to the issuance of 15,000,000 shares of Common Stock offered by
Enron in this offering, and the application of the net proceeds to Enron
therefrom, assuming all of such transactions occurred on December 31, 1997. See
"Use of Proceeds." The table should be read in conjunction with Enron's
consolidated financial statements and notes thereto and other financial data
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
------------------------
ACTUAL AS ADJUSTED
(IN MILLIONS)
<S> <C> <C>
Short-term debt............................................. $ -- $ --
------- -------
Long-term debt
Enron Corp................................................ 3,487 2,760
Subsidiary companies...................................... 1,975 1,975
Amount reclassified from short-term debt.................. 825 825
Unamortized debt discount and premium..................... (33) (33)
------- -------
Total long-term debt.............................. 6,254 5,527
------- -------
Minority interests.......................................... 1,147 1,147
------- -------
Company-obligated preferred securities of subsidiaries...... 993 993
------- -------
Shareholders' equity
Convertible preferred stock............................... 134 134
Common equity............................................. 5,484 6,211
------- -------
Total shareholders' equity........................ 5,618 6,345
------- -------
Total capitalization.............................. $14,012 $14,012
======= =======
</TABLE>
7
<PAGE> 8
SELECTED CONSOLIDATED FINANCIAL DATA
The audited consolidated financial statements of Enron and related notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," included in Enron's Annual Report on Form 10-K for the
year ended December 31, 1997, are incorporated by reference in this Prospectus.
The following should be read in conjunction with Enron's consolidated financial
statements and notes thereto and other financial data incorporated by reference
herein. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------
1997 1996 1995 1994 1993
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.............................................. $20,273 $13,289 $ 9,189 $ 8,984 $ 7,986
Costs and expenses
Cost of gas, electricity and other products......... 17,311 10,478 6,733 6,517 5,567
Operating expenses.................................. 1,406 1,421 1,218 1,124 1,146
Oil and gas exploration expenses.................... 102 89 79 84 76
Depreciation, depletion and amortization............ 600 474 432 441 458
Taxes, other than income taxes...................... 164 137 109 102 108
Contract restructuring charge....................... 675 -- -- -- --
------- ------- ------- ------- -------
Total costs and expenses.................... 20,258 12,599 8,571 8,268 7,355
------- ------- ------- ------- -------
Operating income...................................... 15 690 618 716 631
Other income and deductions
Equity in earnings of unconsolidated subsidiaries... 216 215 86 112 73
Other, net.......................................... 334 333 461 116 94
------- ------- ------- ------- -------
Income before interest, minority interests and income
taxes............................................... 565 1,238 1,165 944 798
Interest and related charges, net..................... 401 274 284 273 300
Dividends on company-obligated preferred securities of
subsidiaries........................................ 69 34 32 20 2
Minority interests.................................... 80 75 44 31 28
Income tax expense (benefit).......................... (90) 271 285 167 135
------- ------- ------- ------- -------
Net income............................................ 105 584 520 453 333
Preferred stock dividends............................. 17 16 16 15 17
------- ------- ------- ------- -------
Earnings on common stock.............................. $ 88 $ 568 $ 504 $ 438 $ 316
======= ======= ======= ======= =======
After-tax results
Results from core businesses........................ $ 585 $ 493 $ 489 $ 440 $ 380
Retail energy services(1)........................... (9) -- -- -- --
Items impacting comparability(2).................... (471) 91 31 13 (47)
------- ------- ------- ------- -------
Reported net income................................... $ 105 $ 584 $ 520 $ 453 $ 333
======= ======= ======= ======= =======
Basic earnings per common share....................... $ 0.32 $ 2.31 $ 2.07 $ 1.80 $ 1.32
======= ======= ======= ======= =======
Diluted earnings per common share
Results from core businesses........................ $ 1.98 $ 1.82 $ 1.82 $ 1.65 $ 1.43
Retail energy services(1)........................... (0.03) -- -- -- --
Items impacting comparability(2).................... (1.60) 0.34 0.12 0.05 (0.18)
Effect of anti-dilution............................. (0.03) -- -- -- --
------- ------- ------- ------- -------
Reported diluted earnings per common share............ $ 0.32 $ 2.16 $ 1.94 $ 1.70 $ 1.25
======= ======= ======= ======= =======
BALANCE SHEET DATA:
Total assets.......................................... $23,422 $16,137 $13,239 $11,966 $11,504
Long-term debt........................................ 6,254 3,349 3,065 2,805 2,661
Minority interests.................................... 1,147 755 549 290 196
Company-obligated preferred securities of
subsidiaries........................................ 993 592 377 377 214
Shareholders' equity.................................. 5,618 3,723 3,165 2,880 2,623
Book value per share.................................. $ 17.26 $ 13.81 $ 12.01 $ 10.94 $ 10.01
</TABLE>
- ---------------
(1) Includes gain on sale of 7% of EES ($61 million, or $0.21 per diluted
share).
(2) Includes a charge in 1997 primarily to reflect the impact of the amended
J-Block gas contract ($463 million, or $1.57 per diluted share).
8
<PAGE> 9
UNDERWRITING
Subject to certain conditions contained in the Underwriting Agreement, a
syndicate of underwriters named below (the "Underwriters"), for whom Donaldson,
Lufkin & Jenrette Securities Corporation, Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, PaineWebber Incorporated and Jefferies & Company,
Inc. are acting as representatives (the "Representatives"), have severally
agreed to purchase from Enron an aggregate of 15,000,000 shares of Common Stock.
The number of shares of Common Stock that each Underwriter has agreed to
purchase is set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......... 1,875,000
Credit Suisse First Boston Corporation...................... 1,875,000
Goldman, Sachs & Co. ....................................... 1,875,000
Lehman Brothers Inc. ....................................... 1,875,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 1,875,000
PaineWebber Incorporated.................................... 1,250,000
Jefferies & Company, Inc. .................................. 625,000
CIBC Oppenheimer Corp. ..................................... 300,000
Credit Lyonnais Securities (USA) Inc. ...................... 300,000
A.G. Edwards & Sons, Inc. .................................. 300,000
Howard, Weil, Labouisse, Friedrichs Incorporated............ 300,000
J.P. Morgan Securities Inc. ................................ 300,000
NationsBanc Montgomery Securities LLC....................... 300,000
Prudential Securities Incorporated.......................... 300,000
SBC Warburg Dillon Read Inc. ............................... 300,000
Schroder & Co. Inc. ........................................ 300,000
Societe Generale Securities Corporation..................... 300,000
Gerard Klauer Mattison & Co., Inc. ......................... 300,000
Edward D. Jones & Co., L.P. ................................ 150,000
Neuberger & Berman, LLC..................................... 150,000
Sanders Morris Mundy........................................ 150,000
----------
Total.......................................... 15,000,000
==========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase the shares of Common Stock offered hereby are subject
to approval of certain legal matters by their counsel and to certain other
conditions. If any of the shares of Common Stock are purchased by the
Underwriters pursuant to the Underwriting Agreement, the Underwriters are
obligated to purchase all such shares (other than those covered by the
over-allotment option described below).
The Underwriters propose to offer the shares of Common Stock to the public
initially at the price to the public set forth on the cover page of this
Prospectus and to certain dealers (who may include the Underwriters) at such
price, less a concession not in excess of $0.90 per share. The Underwriters may
allow, and such dealers may re-allow, a concession not in excess of $0.10 per
share to certain other dealers. After the public offering of the shares, the
price to the public, the concession and the discount to dealers may be changed
by the Representatives without notice.
Enron has granted to the Underwriters an option, exercisable for 30 days
from the date of this Prospectus, to purchase up to 2,250,000 additional shares
of Common Stock at the initial price to the public less underwriting discounts
and commissions, solely to cover over-allotments. To the extent that the
Underwriters exercise such option, each of the Underwriters will be committed,
subject to certain conditions, to purchase a number of option shares
proportionate to such Underwriter's commitment as indicated in the preceding
table.
In the Underwriting Agreement, Enron has agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.
9
<PAGE> 10
Enron has agreed, subject to certain exceptions, not to (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, in cash or
otherwise) or (iii) file any registration statement with respect to the
registration of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, in each case for a period of 90
days after the date of this Prospectus, without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate short covering transactions and penalty bids in accordance with
Regulation M under the Exchange Act. Over-allotment involves syndicate sales in
excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchase of shares of the Common Stock in the open market
after distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the Underwriters to reclaim a selling concession
from a syndicate member when the shares of Common Stock originally sold by such
syndicate member are purchased in a syndicate covering transaction to cover
syndicate short positions. Such stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the Common Stock to be
higher than it would otherwise be in the absence of such transactions.
In the ordinary course of their respective businesses, the Underwriters or
their affiliates engage in or have provided investment banking and financial
advisory services to Enron, its subsidiaries or affiliates in the past, for
which they have received customary compensation and expense reimbursement, and
may do so again in the future.
AVAILABLE INFORMATION
Enron is subject to the informational requirements of the Exchange Act, and
in accordance therewith files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at
the following Regional Offices of the Commission: Midwest Regional Office, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates or from the site maintained by the Commission on the Internet
World Wide Web at http://www.sec.gov. Enron's Common Stock is listed on the New
York, Chicago and Pacific Stock Exchanges. Reports, proxy statements and other
information concerning Enron can be inspected and copied at the respective
offices of these exchanges at 20 Broad Street, New York, New York 10005; 120
South LaSalle Street, Chicago, Illinois 60603; and 301 Pine Street, San
Francisco, California 94014.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by Enron with the Commission under the Securities Act, with
respect to the Common Stock offered hereby. This Prospectus does not contain all
of the information set forth in such Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statement and to the exhibits
relating thereto for further information with respect to Enron and the Common
Stock offered hereby. Any statements contained herein concerning the provisions
of any document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission or incorporated by reference herein are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed for a more complete description of the matter involved. Each
such statement is qualified in its entirety by such reference.
10
<PAGE> 11
VALIDITY OF COMMON STOCK
The validity of the Common Stock will be passed upon for Enron by James V.
Derrick, Jr., Esq., Senior Vice President and General Counsel of Enron. Mr.
Derrick owns substantially less than 1% of the outstanding shares of Common
Stock of Enron. Certain legal matters will be passed upon for Enron by Vinson &
Elkins L.L.P. The validity of the Common Stock will be passed upon for the
Underwriters by Bracewell & Patterson, L.L.P. Bracewell & Patterson, L.L.P.
currently provides services to Enron and certain of its subsidiaries and
affiliates as outside counsel on matters unrelated to the issuance of the Common
Stock.
EXPERTS
The consolidated financial statements included in Enron's Current Report on
Form 8-K dated March 19, 1998 and consolidated financial statements and schedule
included in Enron's Annual Report on Form 10-K for the year ended December 31,
1997, incorporated by reference in this Prospectus and elsewhere in the
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
The letter report of DeGolyer and MacNaughton, independent petroleum
consultants, included as an exhibit to Enron's Annual Report on Form 10-K for
the year ended December 31, 1997, and the estimates from the reports of that
firm appearing in such Annual Report, are incorporated by reference herein on
the authority of said firm as experts in petroleum engineering and in giving
such reports.
11
<PAGE> 12
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ENRON OR ANY OF THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SHARES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING THE OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
Business.............................. 5
Recent Developments................... 6
Use of Proceeds....................... 6
Price Range of Common Stock and
Dividends........................... 7
Capitalization........................ 7
Selected Consolidated Financial
Data................................ 8
Underwriting.......................... 9
Available Information................. 10
Validity of Common Stock.............. 11
Experts............................... 11
</TABLE>
======================================================
======================================================
15,000,000 SHARES
[ENRON LOGO]
COMMON STOCK
------------------------
PROSPECTUS
------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
JEFFERIES & COMPANY, INC.
MAY 5, 1998
======================================================
